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Exhibit 4.5
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, IN A TRANSACTION THAT, IN THE VIEW OF COUNSEL TO THE ISSUER, IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT PURSUANT TO RULE 144 THEREUNDER
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN
EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO
THESE SECURITIES ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED, SUCH EXEMPTION BEING AVAILABLE.
THIS WARRANT IS NOT TRANSFERABLE WITHOUT THE CONSENT OF THE ISSUER.
July 31, 1996
WARRANT TO PURCHASE SERIES E PREFERRED STOCK
This Warrant is issued, for good and valuable consideration of $1.00,
receipt of which is hereby acknowledged, to LINC Capital Management, a division
of Scientific Leasing, Inc., a Delaware corporation (the "Warrantholder"), by
ProBusiness, Inc., a California corporation (the "Company"). Unless otherwise
stated, all capitalized terms herein have the meaning provided in the Master
Lease Financing Agreement No. 6403 between the Warrantholder and the Company
dated as of July 31, 1996.
1. Purchase of Shares. Subject to the terms and conditions hereinafter
set forth, the Warrantholder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall
notify the holder hereof in writing), to purchase from the Company 10,000 fully
paid and nonassessable shares of Series E Preferred Stock of the Company (the
"Shares") at an exercise price of $7.94 per share, subject to adjustment as
provided in Section 7 hereof (the "Warrant Price"), payable in cash or by check
unless exercised pursuant to Section 4 hereof.
2. Exercise Period. The purchase rights represented by this Warrant, to
the extent not previously exercised, shall expire five years from the date of
the Warrant (the "Expiration Date").
3. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 2 above, the Warrantholder may exercise,
in whole or in part, the purchase rights evidenced hereby. Such exercise shall
be effected by:
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(i) the surrender of this Warrant, together with the Form of
Subscription attached hereto as Exhibit 1, duly completed and executed by the
Warrantholder, to the Secretary of the Company at its principal offices; and
(ii) the payment to the Company of an amount equal to the aggregate
purchase price for the Shares being purchased, unless exercised pursuant to
Section 4 hereof.
4. Cashless Exercise. Prior to the Expiration Date and in lieu of
exercising this Warrant as specified in Section 3, the Warrantholder may from
time to time convert this Warrant, in whole or in part (but not for a fraction
of a share), into a number of Shares determined by dividing (a) the aggregate
fair market value of the Shares or other securities otherwise issuable upon
exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b)
the fair market value of one Share. The fair market value of the Shares shall be
determined pursuant to Section 5.
5. Fair Market Value. The fair market value per share of the Shares
shall be equal to: (i) if the Shares or shares of Common Stock issuable upon
conversion of the Shares are traded in a public market, the closing price
(reported for the business day immediately before the Warrantholder delivers its
Form of Subscription to the Company) per Share or the price per share of the
Common Stock multiplied, as applicable, by the quotient of (x) $7.94 divided by
(y) the Series E Conversion Price (as defined in the Company's Articles of
Incorporation), as applicable, or (ii) if the Shares or Common Stock issuable
upon the conversion of the Shares are not traded in a public market, the Board
of Directors of the Company shall determine fair market value per share of the
Shares in its reasonable good faith judgment, which amount shall equal the fair
market value per share of the Common Stock on an as converted basis.
6. Certificates for Shares; Partial Exercise. Upon the exercise of the
purchase rights evidenced by this Warrant, one or more certificates for the
Shares so purchased shall be issued as soon as practicable thereafter. In the
case of a partial exercise, unless the purchase rights evidenced hereby have
expired, the Company shall issue to the Warrantholder a new Warrant for the
number of Shares, if any, which remain exercisable hereunder.
7. Adjustment of Number of Shares and Warrant Price. The number and
kind of securities purchasable upon the exercise of the purchase rights
evidenced by this Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the occurrence of certain events, as follows:
(i) Subdivision or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Series E Preferred Stock, whether by way of stock split, stock
dividend, recapitalization or otherwise, the Warrant Price shall, in the case of
a subdivision, be proportionately decreased or, in the case of a combination, be
proportionately increased.
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(ii) Adjustment of Number of Shares. Upon each adjustment in the
Warrant Price, the number of Shares of Series E Preferred Stock purchasable
hereunder shall, in the case of an increase in the Warrant Price, be
proportionately decreased or, in the case of a decrease in the Warrant Price, be
proportionately increased, in either case to the nearest whole share.
(iii) Reclassification, Consolidation or Merger. In case of any
reclassification or change of outstanding securities of the class purchasable
upon exercise of this Warrant (other than as set forth in Section 7(i)) the
Company shall execute a new Warrant providing that the Warrantholder shall have
the right to exercise such new Warrant for, in lieu of each share of Series E
Preferred Stock theretofore purchasable hereunder at such time, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification or change, by a holder of one share of Series E Preferred
Stock. Such new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
7. The provisions of this Section 7(iii) shall apply similarly to successive
reclassifications and changes.
8. Notice of Adjustments. Whenever the Warrant Price shall be adjusted
pursuant to Section 7 hereof, the Company shall deliver to the Warrantholder a
certificate signed by its chief financial officer describing, in reasonable
detail, the event requiring the adjustment and the Warrant Price and, as
applicable, the kind and amount of shares of stock, other securities, money or
property purchasable hereunder after giving effect to such adjustment.
9. Fractional Shares. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of any such fractional
shares the Company shall make a cash payment therefor upon the basis of the
Warrant Price then in effect.
10. Reservation of Shares. The Company covenants that it will at all
times keep available such number of authorized shares of its Series E Preferred
Stock and Common Stock issuable upon conversion of such Series E Preferred
Stock, free from all preemptive rights with respect thereto, as will be
sufficient to permit the exercise of this Warrant for the full number of Shares
specified herein. The Company further covenants that such Shares, when issued
pursuant to the exercise of this Warrant and Common Stock issuable upon
conversion of the Shares, will be duly and validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issuance thereof.
11. Rights Prior to Exercise. Prior to exercise of this Warrant, except
as set forth in paragraphs (i) and (ii) below, the Warrant shall not entitle the
Warrantholder to any rights of a shareholder with respect to the Shares,
including (without limitation) the right to vote such Shares, receive preemptive
rights or be notified of shareholder meetings, nor shall the Warrant entitle
such Warrantholder to any notice or other communication concerning the business
or affairs of the Company.
(i) Liquidating Dividends. If the Company declares or pays a dividend
upon the Series E Preferred Stock payable otherwise than in cash out of
earnings or earned surplus (determined in accordance with generally
accepted accounting principles, consistently applied) (a "Liquidating
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Dividend"), then the Company shall pay to the Warrantholder at the time
of payment thereof the Liquidating Dividend which would have been paid
to such Warrantholder on the Shares had this Warrant been fully
exercised immediately prior to the date on which a record is taken for
such Liquidating Dividend, or, if no record is taken, the date as of
which the record holders of Series E Preferred Stock entitled to such
dividends are to be determined.
(ii) Purchase Rights. If at any time the Company grants, issues or
sells any options, convertible securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders
of Series E Preferred Stock (the "Purchase Rights"), then the
Warrantholder shall be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which such
Warrantholder could have acquired if such Warrantholder had held the
number of shares of Common Stock acquirable upon complete exercise of
this Warrant immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Series E
Preferred Stock are to be determined for the grant, issue or sale of
such Purchase Rights.
12. Representations of Warrantholder. The Warrantholder hereby
represents and warrants to the Company, with respect to its purchase of the
Warrant and the underlying securities issuable upon the exercise of the Warrant,
that the representations and warranties made by the Warrantholder to the Company
in the Investment Representation Statement attached hereto as Exhibit 2 are true
and correct in all material respects as of the date of this Warrant.
13. Registration Rights. The registration rights of the Warrantholder
with respect to this Warrant and the underlying securities are set forth in the
Registration Rights Agreement dated December 1, 1989 between the Company and the
persons named therein as amended by the Nineteenth Amendment to the Registration
Rights Agreement, dated as of the date hereof, by and between the Company and
the Warrantholder (collectively the "Registration Rights Agreement").
14. Assignment and Transfer. This Warrant may be assigned or otherwise
transferred by the Warrantholder with prior written notice to the Company,
provided, however, the Company shall have the right to refuse to transfer any
portion of this Warrant to any person who directly competes with the Company,
unless the Company has a class of stock registered under the Securities Exchange
Act of 1934, as amended. The terms and provisions of this Warrant shall inure to
the benefit of, and be binding upon, the Company and its successors and assigns.
15. Governing Law. This Warrant shall be governed by the laws of the
State of California, excluding the conflicts of laws provisions thereof.
16. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the Warrantholder and of the holder of shares of
Series E Preferred Stock issued upon exercise of this Warrant, referred to in
Sections 13 and 14 shall survive the exercise of this Warrant.
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17. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Warrantholder.
18. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Warrantholder hereof or to the Company
shall be delivered or shall be sent by certified mail, postage prepaid, to each
such Warrantholder or the Company at the address indicated therefor underneath
the signatures of the respective parties on the last page of this Warrant or
such other address as either may from time to time provide to the other.
19. Binding Effect on Successors. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Series E Preferred Stock issuable upon the exercise
of this Warrant shall survive the exercise and termination of this Warrant. All
of the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
20. Lost Warrants. The Company represents and warrants to the
Warrantholder hereof that upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant, the Company, at its expense,
will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
21. Legends. This Warrant and the Shares (and the securities issuable
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THE SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT THEREOF UNDER SUCH ACT OR
PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
22. California Corporate Securities Law. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS AN EXEMPTION FROM SUCH
QUALIFICATION IS AVAILABLE. THE RIGHTS
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OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION BEING AVAILABLE.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers, thereunto duly authorized this 31st day of July, 1996.
WARRANTHOLDER: COMPANY:
LINC CAPITAL MANAGEMENT, PROBUSINESS, INC.
A DIVISION OF SCIENTIFIC ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
LEASING, INC. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:___________________________ By:___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Title:________________________
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4.8 Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of California, without
giving effect to its principles regarding conflicts of law.
"COMPANY"
PROBUSINESS CENTERS, INC.
By: /s/
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EXHIBIT 1
FORM OF SUBSCRIPTION
(TO be signed only upon exercise of Warrant)
TO:______________
The undersigned, the Warrantholder, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, _____________, (______)(1) shares of Series E Preferred Stock of
ProBusiness, Inc. (the "Company") and herewith makes payment of _____________
Dollars ($________ ) therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to, ____________, whose address
is __________________.
The undersigned represents that it is acquiring such Series E Preferred
Stock for its own account for investment and not with a view to or for sale in
connection with any distribution thereof and in order to induce the issuance of
such Series E Preferred Stock certifies to the Company that the representation
and warranties made by Warrantholder set forth in the Investment Representation
Statement attached as Exhibit A to the Warrant are true and correct as of the
date hereof.
DATED: ______________
_____________________________________
(Signature must conform in all respects to name of
Warrantholder as specified on the face of the Warrant)
_____________________________________
_____________________________________
_____________
(1) Insert here the number of shares called for on the face of the Warrant
(or, in the case of a partial exercise, the portion thereof as to which
the Warrant is being exercised), in either case without making any
adjustment for additional Series E Preferred Stock or any other stock
or other securities or property or cash which, pursuant to the
adjustment provisions of the Warrant, may be deliverable upon exercise.