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Exhibit 4.3
EXHIBIT A-2
This warrant and any shares
represented by this warrant have not been registered under the
securities act of 1933, as amended, and may not be transferred,
sold or otherwise disposed of except pursuant to an effective
registration under said act or pursuant to an exemption from such
registration.
The voting of the shares of stock
issuable pursuant to this warrant, and the sale, encumbrance or
other disposition of such stock and this warrant are subject to the
provisions of a stockholders agreement dated as of December 16,
1999 (the “stockholders agreement”) to which the issuer
and certain of its stockholders are party. Furthermore, such stock
and this warrant may be sold or otherwise transferred only in
compliance with the stockholders agreement. A complete and correct
copy of the stockholders agreement may be inspected at the
principal office of the issuer or obtained from the issuer without
charge.
KENEXA
CORPORATION
Form of Class A-2 Common
Stock Purchase Warrant
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Wayne, Pennsylvania |
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December 16, 1999 |
THIS CERTIFIES THAT, for
value received, and subject to the conditions on exercise and other
provisions hereinafter set forth,
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or transferees permitted under the Stockholders Agreement (the
“Holder”), is entitled to purchase from KENEXA
CORPORATION, a Pennsylvania corporation (the
“Company”), under the conditions specified in this
Warrant (the “Warrant”),
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shares (subject to adjustment as hereinafter provided) of the duly
authorized, validly issued, fully paid and non-assessable Class A
Common Stock, $0.01 par value per share, of the Company at an
initial exercise price of $0.01 per share (such exercise price, as
from time to time adjusted in accordance with the terms hereof, the
“Warrant Price”). Certain capitalized terms used in
this Warrant are defined in Section 14 below.
This Warrant is one of a
series of warrants (collectively, the “Warrants”)
issued pursuant to clause (b) of Section 2.1 of the Purchase
Agreement. A copy of the Purchase Agreement may be inspected at the
principal office of the Company or obtained from the Company
without charge.
1. EXERCISABILITY. Unless earlier
terminated pursuant to Section 2, this Warrant shall become
exercisable upon the earliest to occur of the following:
1.1. the consummation of a
Qualified Public Offering at a price to the public per share that
results in (i) an IRR on the Purchased Securities of less than the
IRR Hurdle, or (ii) Proceeds on the Purchased Securities of less
than the Proceeds Threshold;
1.2. the consummation of a
Sale Transaction that results in (i) an IRR on the Purchased
Securities of less than the IRR Hurdle, or (ii) Proceeds on the
Purchased Securities of less than the Proceeds
Threshold;
1.3. the determination by a
majority of the Management Stockholders (as defined in the
Stockholders Agreement) that it is not reasonably likely that a
Qualified Public Offering or Sale Transaction will result in (i) an
IRR on the Purchased Securities of at least the IRR Hurdle, and
(ii) Proceeds on the Purchased Securities of at least the Proceeds
Threshold; and
1.4. December 16,
2006.
2. TERMINATION. This Warrant shall
terminate on the earlier of the following:
2.1. the consummation of a
Qualified Public Offering at a price to the public per share that
results in (i) an IRR on the Purchased Securities of at least the
IRR Hurdle, and (ii) Proceeds on the Purchased Securities of at
least the Proceeds Threshold;
2.2. the consummation of a
Sale Transaction or other sale of Purchased Securities that results
in (i) an IRR on the Purchased Securities of at least the IRR
Hurdle, and (ii) Proceeds on the Purchased Securities of at least
the Proceeds Threshold; and
2.3. the written consent to
such termination by the Holders of Warrants to acquire a majority
of the shares of common stock originally subject to the
Warrants.
3. EXERCISE OR CONVERSION OF
WARRANT.
3.1. Manner of Exercise or
Conversion; Payment.
(a) Exercise . This
Warrant may be exercised by the holder hereof, in whole or in part,
during normal business hours on any Business Day on or prior to the
Expiration Date, by surrender of this Warrant to the Company at its
office maintained pursuant to Section 13.2(a) hereof, accompanied
by a subscription in substantially the form attached to this
Warrant (or a reasonable facsimile thereof) duly executed by such
holder and accompanied by payment, in cash or by check payable to
the order of the Company (or by any combination of such methods),
in the amount obtained by multiplying (a) the number of shares of
Class A Common Stock (without giving effect to any adjustment
thereof) designated in such subscription by (b) the Exercise Price,
and such holder shall thereupon be entitled to receive the number
of duly authorized, validly issued, fully paid and nonassessable
shares of Class A Common Stock determined as provided in Section 4
hereof.
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(b) Conversion . This
Warrant may be converted by the holder hereof, in whole or in part,
into shares of Class A Common Stock, during normal business hours
on any Business Day on or prior to the Expiration Date, by
surrender of this Warrant to the Company at its office maintained
pursuant to Section 13.2(a) hereof, accompanied by a conversion
notice in substantially the form attached to this Warrant (or a
reasonable facsimile thereof) duly executed by such holder, and
such holder shall thereupon be entitled to receive a number of duly
authorized, validly issued, fully paid and nonassessable shares of
Class A Common Stock equal to the quotient of:
(i) the excess of:
(A) an amount equal to the
sum of (x) the product of (aa) the number of shares of Class A
Common Stock determined as provided in Section 2 hereof which such
holder would be entitled to receive upon exercise of this Warrant
for the number of shares of Class A Common Stock designated in such
conversion notice multiplied by (bb) the Current Market
Price of each such share of Class A Common Stock so designated and
(y) the Current Market Price of any Other Securities and the fair
value of any other property (determined in good faith by the Board
of Directors of the Company) such holder would be entitled to
receive upon exercise of this Warrant for the number of shares of
Class A Common Stock designated in such conversion
notice
over
(B) an amount equal to (x)
the number of shares of Class A Common Stock (without giving effect
to any adjustment thereof) designated in such conversion notice
multiplied by (y) the Exercise Price
divided by
(ii) such Current Market
Price of a share of Class A Common Stock.
For all purposes of this
Warrant (other than this Section 3.1), any reference herein to the
exercise of this Warrant shall be deemed to include a reference to
the conversion of this Warrant into Class A Common Stock in
accordance with the terms of this Section 3.1(b).
3.2. When Exercise
Effective . Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on
the Business Day on which this Warrant shall have been surrendered
to the Company as provided in Section 3.1 hereof, and at such time
the Person or Persons in whose name or names any certificate or
certificates for shares of Class A Common Stock shall be issuable
upon such exercise as provided in Section 3.3 hereof shall be
deemed to have become the holder or holders of record
thereof.
3.3. Delivery of Stock
Certificates, etc. As soon as practicable after each exercise
of this Warrant, in whole or in part, and in any event within three
Business Days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the holder hereof or as such
holder may direct:
(a) a certificate or
certificates for the number of duly authorized, validly issued,
fully paid and nonassessable shares of Class A Common Stock to
which such holder shall be entitled upon such exercise plus, in
lieu of any fractional share to which such holder would otherwise
be entitled, cash in an amount equal to the same fraction of the
Market Price per share on the Business Day next preceding the date
of such exercise; and
(b) in case such exercise is
in part only, a new Warrant or Warrants of like tenor, dated the
date hereof and calling in the aggregate on the face or faces
thereof for the number of shares of Class A Common Stock equal to
the number of such shares (without giving
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effect to any adjustment
thereof) called for on the face of this Warrant minus the number of
such shares designated by the holder upon such exercise as provided
in Section 3.1 hereof.
4. ADJUSTMENT OF COMMON STOCK ISSUABLE
UPON EXERCISE.
4.1. General; Number of
Shares; Warrant Price . The number of shares of Class A Common
Stock which the holder of this Warrant shall be entitled to receive
upon each exercise hereof shall be equal to the product
of:
(a) the number of shares of
Class A Common Stock which would otherwise (but for the provisions
of this Section 4) be issuable upon such exercise, as designated by
the holder hereof pursuant to Section 3.1 hereof, and
(b) a fraction of which (i)
the numerator is the Initial Warrant Price, and (ii) the
denominator is the Warrant Price in effect on the date of such
exercise.
The “Initial Warrant Price”
shall be the Exercise Price. The “Warrant Price” shall
initially be the Initial Warrant Price, shall be adjusted and
readjusted from time to time as provided in this Section 4 and, as
so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by this Section 4.
The “Trigger Price” shall initially be $167 per share
of Class A Common Stock and shall be adjusted and readjusted from
time to time as provided in this Section 4 and, as so adjusted or
readjusted, shall remain in effect until a further adjustment or
readjustment thereof is required by this Section 4.
4.2. Adjustments for
Dividends, Distributions, Stock Splits, etc.
(a) Dividends and
Distributions . In case at any time or from time to time, the
holders of Class A Common Stock shall have received, or (on or
after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive, without
payment therefor:
(i) other or additional stock
or Other Securities or property (other than cash) by way of
dividend, or
(ii) any cash, or
(iii) other or additional
stock or other securities or property (including cash) by way of
spin-off, split-up, reclassification, recapitalization, combination
of shares or similar corporate rearrangement, other
than additional shares of Class A Common Stock issued as a
stock dividend or in a stock-split (adjustments in respect of which
are provided for in Section 4.2(b) below), then and in each such
case the holder of this Warrant, on the exercise hereof as provided
in Section 3, shall be entitled, without the payment of any
additional consideration or the taking of any further action, to
receive the amount of stock, Other Securities and property
(including cash in the cases referred to in subdivisions (ii) and
(iii) of this Section 4.2(a)) which such holder would hold on the
date of such exercise if on the date hereof he had been the holder
of record of the number of shares of Common Stock provided for
herein and had thereafter, during the period from the date hereof
to and including the date of such exercise, retained such shares
and all such other or additional stock and other securities and
property
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(including cash in the cases
referred to in subdivisions (ii) and (iii) of this Section 4.2(a))
receivable by him as aforesaid during such period, giving effect to
all adjustments called for during such period by Section
4.
(b) Treatment of Stock
Dividends, Stock Splits, etc. In the event that the Company
shall (i) issue Common Stock Equivalents, or securities exercisable
for or convertible into Common Stock Equivalents, as a dividend or
other distribution on outstanding Common Stock Equivalents, (ii)
subdivide its outstanding Common Stock Equivalents, or (iii)
combine its outstanding Common Stock Equivalents into a smaller
number of shares of Common Stock Equivalents, then, in each such
event, the Warrant Price and the Trigger Price shall,
simultaneously with the happening of such event, be adjusted by
multiplying each of the then current Warrant Price and Trigger
Price by a fraction, (a) the numerator of which shall be the number
of shares of Common Stock Equivalents outstanding immediately prior
to such event, and (b) the denominator of which shall be the number
of shares of Common Stock Equivalents outstanding immediately after
such event, and the product so obtained shall thereafter be the
Warrant Price and Trigger Price, respectively, then in effect. The
Warrant Price and Trigger Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive
event or events described herein in this Section 4.2(b). Upon each
adjustment of the Warrant Price or Trigger Price, the holder of
this Warrant shall thereafter be entitled to purchase at the
Warrant Price resulting from such adjustment, the number of shares
obtained by dividing the product of the number of shares
purchasable pursuant hereto immediately prior to such adjustment
and the Warrant Price immediately preceding such adjustment by the
Warrant Price resulting from such adjustment.
4.3. Reorganization,
Consolidation or Merger. In case at any time or from time to
time the Company shall (a) effect a reorganization, (b) consolidate
with or merge into any other person, (c) voluntarily or
involuntarily dissolve, liquidate or wind-up, or (d) transfer all
or substantially all of its properties or assets to any other
person, then in each such case, as a condition thereto, lawful and
adequate provision shall be made so that the holder of this
Warrant, on the exercise or conversion hereof as provided in
Section 1 at any time after the consummation of such
reorganization, consolidation or merger or the effective date of
such dissolution, as the case may be, shall receive, in lieu of the
Class A Common Stock issuable on such exercise immediately prior to
such consummation or such effective date, the stock and other
securities and property (including cash) to which such holder would
have been entitled upon such consummation or in connection with
such reorganization, consolidation, merger or dissolution, as the
case may be, if such holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustments
thereafter as provided in Section 4.
4.4. Adjustment for Issuance
of Common Stock Equivalents Below Trigger Price.
(a) General . In any
case to which Sections 4.2 and 4.3 hereof are not applicable, where
the Company shall issue or sell shares of its Common Stock
Equivalents after February 1, 2001 without consideration or for a
consideration per share less than the Trigger Price in effect
pursuant to the terms of this Warrant at the time of issuance or
sale of such additional shares, except where such shares are issued
or sold pursuant to the exercise of any warrant or option or issued
prior to the date of this Warrant or issued in connection with or
pursuant to documentation entered into in connection with a
financing by the Company in which the Company issues shares of
Series A Redeemable Participating Preferred Stock, then
the
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Warrant Price in effect
hereunder shall simultaneously with such issuance or sale be
reduced to a price determined by multiplying the Warrant Price then
in effect hereunder by a fraction, the numerator of which is the
sum of (i) the product of the total number of shares of Common
Stock Equivalents outstanding immediately prior to such issuance or
sale on a fully diluted basis, after giving effect to the exchange
or conversion of all outstanding Convertible Securities and the
exercise of all Options outstanding multiplied by the Trigger Price
in effect hereunder at the time of such issuance or sale, plus (ii)
the aggregate consideration received by the Company upon such
issuance or sale, and the denominator of which is the product of
the total number of shares of Common Stock Equivalents outstanding
immediately after issuance or sale of such additional shares on a
fully diluted basis, after giving effect to the exchange or
conversion of all outstanding Convertible Securities and the
exercise of all Options outstanding multiplied by the Trigger Price
in effect hereunder at the time of such issuance or
sale.
(b) Options; Convertible
Securities . In case the Company shall issue or sell any
Options or Convertible Securities after December 16, 1999 there
shall be determined the price per share for which Common Stock
Equivalents are issuable upon the conversion or exercise thereof,
such determination to be made by dividing (i) the sum of the total
amount received or receivable by the Company as consideration for
the issue or sale of such Options or Convertible Securities plus
the minimum aggregate amount of additional consideration payable to
the Company upon the conversion or exercise thereof, by (ii) the
maximum number of shares of Common Stock Equivalents of the Company
issuable upon the conversion or exercise of all of such Options or
Convertible Securities. If the price per share so determined shall
be less than the applicable Trigger Price, then, for purposes of
Section 4.4(a) hereof, such issue or sale shall be deemed to be an
issue or sale (as of the date of issue or sale of such Options or
Convertible Securities) of such maximum number of shares of Common
Stock Equivalents at the price per share so determined and such
maximum number of shares shall be deemed to be outstanding after
such issuance, provided that, upon the expiration of such rights of
conversion or exercise of such Options or Convertible Securities,
if any thereof shall not have been exercised, the adjusted Warrant
Price shall forthwith be readjusted and thereafter be the price
which it would have been had an adjustment been made on the basis
that the only shares of Common Stock Equivalents so issued or sold
were issued or sold upon the conversion or exercise of such Options
or Convertible Securities, and that they were issued or sold for
the consideration actually received by the Company upon such
conversion or exchange, plus the consideration, if any, actually
received by the Company for the issue or sale of all of such
Options or Convertible Securities which shall have been converted
or exchanged.
(c) Record Date . If
the Company takes a record of the holders of Common Stock
Equivalents for the purpose of entitling them (i) to receive a
dividend or other distribution payable in Common Stock Equivalents,
Options or Convertible Securities, or (ii) to subscribe for or
purchase Common Stock Equivalents, Options or Convertible
Securities, then such record date shall be deemed to be the date of
the issue or sale of the Common Stock Equivalents deemed to have
been issued or sold upon the declaration of such dividend or upon
the making of such other distribution or the date of the granting
of such right of subscription or purchase, as the case may
be.
4.5. Minimum Adjustment of
Warrant Price and Trigger Price . If the amount of any
adjustment of the Warrant Price required pursuant to this Section 4
would be less than one-tenth
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(1/10) of one percent (1%) of the
Warrant Price or Trigger Price, as the case may be, in effect at
the time such adjustment is otherwise so required to be made, such
amount shall be carried forward and adjustment with respect thereto
made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so
carried forward, shall aggregate at least one tenth (1/10) of one
percent (1%) of such Warrant Price or Trigger Price.
4.6. Shares Deemed
Outstanding . For all purposes of the computations to be made
pursuant to this Section 4, treasury shares shall not be deemed to
be outstanding.
4.7. Calculation of
Consideration Received . If any Common Stock Equivalents,
Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received
therefor shall be deemed to be the amount received by the Company
therefor (net of discounts, commissions and related expenses). If
any Common Stock Equivalents, Options or Convertible Securities are
issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be
the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company shall be the Current Market
Price thereof as of the date of receipt. For purposes of this
Warrant, the fair value of any consideration other than cash and
securities shall be determined by the board of directors of the
Company using its good faith discretion.
4.8. Integrated
Transactions . In case any Options are issued in connection
with the issue or sale of Other Securities of the Company, together
comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto,
the Options shall be deemed to have been issued for a consideration
of $1.00 (as adjusted consistent to give effect to the occurrences
set forth in Sections 4.2 and 4.3).
5. REPURCHASE OF WARRANTS.
5.1. Right to
“Put” Warrant . If a Realization Event shall not
have occurred prior to the 66 th month plus one day
anniversary of the date as of which the Amendment of Class A-1 and
Class A-2 Common Stock Purchase Warrants is executed and this
Warrant becomes exercisable within six months of such anniversary,
Investor or any other holder of this Warrant may, at any time and
from time to time during the six month period immediately
thereafter, by notice to the Company (the “Put
Notice”), elect to sell to the Company (and the Company
hereby, agrees to purchase from Investor or any other such holder),
at the Put Purchase Price specified in Section 5.3(a) hereof, such
number of Warrants as are specified in the Put Notice on the
Business Day specified in the Put Notice, which Business Day shall
be not less than 20 days nor more than 30 days after the receipt by
the Company of said Put Notice (the date on which the Company
receives the Put Notice is referred to as the “Put Notice
Date”). The right created by this Section 5.1 shall terminate
upon the occurrence of a Realization Event. Any Warrants not sold
to the Company pursuant to this Section 5 shall automatically
convert into Class A Common Stock in accordance with Section 3.1(b)
(provided that, for purposes of this Section 5, the Current Market
Price shall be the Market Price (defined below)). Notwithstanding
anything contained in this Warrant to the contrary, the holder of
this Warrant shall not have the right to require the Company to pay
the Put Purchase Price pursuant to this Section 5.1 unless and
until
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all of the shares of the Company’s
Series A Redeemable Participating Preferred Stock have been
redeemed in full by the Company.
5.2. Realization
Event. A “Realization Event” shall mean (a) a
Qualified Public Offering, or (b) a tr
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