WARRANT PURCHASE AGREEMENT
EXHIBIT
4.2
Mr. Xxxx
Xxxxx
Chief
Financial Officer
St.
Xxxxxxx Software, Inc.
00000
Xxxxxx xx Xxxxxxx
Xxx
Xxxxx, XX 00000
Ladies
& Gentlemen:
This
Warrant Purchase Agreement (the "Agreement") is made as of July 21, 2008 (the
"Closing Date") by and between St. Xxxxxxx Software, Inc., a Delaware
corporation, with its principal place of business at 00000 Xxxxxx xx Xxxxxxx,
Xxx Xxxxx, XX 00000 (the "Company"), and Partners For Growth II, L.P., a
Delaware limited partnership ("Purchaser").
1. Authorization
and Purchase of the Warrant.
(A)
Authorization
of the Warrant. As of the Closing Date, the Company's Board of Directors
has authorized the issuance by the Company and the sale to the Purchaser of a
warrant (the "Warrant") to purchase Four Hundred Fifty Thousand (450,000) shares
of the Company's Common Stock, all as more fully described, and subject to the
conditions set forth below and in the form of Warrant annexed hereto as Exhibit
1. The Common Stock issuable upon exercise of the Warrant are herein
referred to as the "Warrant Stock," and the Warrant and the Warrant Stock are
sometimes together referred to as the "Securities."
(B)
Purchase
of Warrant. Subject to the terms and conditions set forth below and in
the Warrant, the Company shall issue to Purchaser the Warrant in consideration
of the payment of $1,353, which the parties agree is fair consideration for the
Warrant.
2. The
Closing. The closing of the purchase and sale of the Warrant to
Purchaser
(the "Closing") shall be held at the offices of Partners for Growth II, L.P.,
000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, or at such other location as may be
mutually agreed upon by the parties hereto. On the Closing Date, the Company
shall deliver to Purchaser the Warrant registered in the name of
Purchaser.
3. Representations,
Warranties and Covenants of the Company. The Company
represents and warrants to, and covenants with, the Purchaser that, except to
the extent disclosed with particularity in Schedule
A hereto:
(A) Corporate
Power; Authorization. The Company has all requisite corporate power and
has taken all requisite corporate action to execute and deliver each of this
Agreement and the Warrant, to sell and issue the Securities and to carry out and
perform all of its obligations hereunder and thereunder. Each of this Agreement
and the Warrant has been duly authorized, executed and delivered on behalf of
the Company and constitutes
the valid and binding agreement of the Company, enforceable in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) as limited by equitable principles
generally. The person executing this Agreement and the Warrant is a duly
authorized officer of the Company with all necessary legal authority to bind the
Company generally and with the specific legal authority to cause the Company to
enter into this Agreement and to execute and deliver the Warrant.
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(B) Validity
of Securities. The Warrant, when sold against the consideration therefor
as provided therein, will be validly authorized, issued and fully paid. The
issuance and delivery of the Warrant is not subject to preemptive or any similar
rights of the stockholders of the Company (which have not been duly waived) or
any liens or encumbrances except for restrictions on transfer provided for
herein or under applicable federal and state securities laws; and when the
Warrant Stock is issued upon exercise and in accordance with the terms of the
Warrant, and such Warrant Stock is converted into Common Stock, such securities
will be, at each such issuance, validly issued and outstanding, fully paid and
nonassessable and free of any liens or encumbrances except for restrictions on
transfer provided for herein or under applicable federal and state securities
laws.
(C)
Capitalization.
The capitalization of the Company is materially as set forth in Borrower's 10Q
as filed with the Securities and Exchange Commission for the period ending March
31, 2008. All issued and outstanding shares have been duly authorized and
validly issued and are fully paid and nonassessable. A true, correct and current
copy of the Company's Certificate of Incorporation as amended through the date
hereof ("Certificate") is set forth in Schedule
B hereto. Except as specified in this Agreement, there are no other
options, warrants, conversion privileges or other contractual rights presently
outstanding to purchase or otherwise acquire any authorized but unissued shares
of the Company's capital stock or other securities.
(D)
No
Conflict. The execution and delivery of this Agreement and the Warrant do
not, and the consummation of the transactions contemplated hereby and thereby
will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or to a loss of a
material benefit, under, any provision of the Certificate or Bylaws, as amended,
or any mortgage, indenture, lease or other agreement or instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company, its properties or
assets, the effect of which would have a material adverse effect on the Company
or materially impair or restrict its power to perform its obligations as
contemplated hereby or thereby.
(E) Governmental
and other Consents. No consent, approval, order or authorization of, or
registration,
qualification, designation, declaration or filing with, any governmental
authority or other person or entity is required on the part of the Company in
connection with the execution, delivery and performance of this Agreement and
the Warrant or the offer, issuance, sale and delivery of the Warrant and the
Warrant Stock, except
such filings as shall have been made prior to and shall be effective on and as
of the Closing and except any notices of sale required to be filed with the
Securities and Exchange Commission under Regulation D of the Securities Act or
such post-closing filings as may be required under applicable state securities
laws, all of which will be filed within applicable periods therefor. Based upon
the representations made by the Purchaser in Section 4 of this Agreement, the
offer and sale of the Warrant and the Warrant Stock to the Purchaser will be
exempt from the registration requirements of the Securities Act and from the
qualification requirements of any applicable state securities laws.
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(F)
Authorized
and Unissued Shares of Common Stock. During the period within
which the Warrant may be exercised, the Company will at all times have
authorized and reserved, for the purpose of issue or transfer upon exercise of
the Warrant, a sufficient number of authorized but unissued shares of Common
Stock when and as required to provide for the exercise of the rights represented
by the Warrant.
(G)
Delivery
of Information; Accuracy. The Company acknowledges its delivery of
certain Representations and Warranties dated July 10, 2008 (the "Representation
Letter"), to the Purchaser, which Representations and Warranties form the basis
for the Purchaser purchasing the Warrant. The information contained in Part B of
the Representation Letter and all documents, instruments and other information
delivered to the Purchaser in connection therewith are true, correct, accurate
and complete in all material respects.
(H) Reporting.
With a view to making available to the Purchaser the benefits of Rule 144 and
other rules or regulations of the SEC that may permit the Purchaser to sell
Warrant Stock to the public without registration, the Company shall, to the
extent it is or becomes subject to reporting requirements under the Securities
Exchange Act of 1934 (the "Exchange Act"), as a continuing obligation: (a) make
and keep public information available, as those terms are understood and defined
in Rule 144, at all times after the Closing; (b) file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act of 1933 (the "Securities Act") and the Exchange Act; and (c)
furnish to the Purchaser, so long as the Purchaser owns any Securities forthwith
upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144 and the Exchange Act, (ii) such other
information as may be reasonably requested in order to avail
the Purchaser of any rule or regulation of the SEC that permits the selling of
any such Securities without registration. Without limiting the foregoing and
regardless of the Company's obligation to file
reports under the Exchange Act, the Company shall
from time to time promptly provide a copy of its most recent annual, quarterly
and other interim reports to Purchaser.
4. Representations
and Warranties of Purchaser. Purchaser hereby represents and
warrants to the Company as of the Closing Date as follows:
(A) Investment
Experience. Purchaser is an "accredited investor" within the meaning of
Rule 501 under the Securities Act, and was not organized for the specific
purpose of acquiring the Securities. Purchaser is aware of the Company's
business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities.
Purchaser has such business and financial experience as is required to give it
the capacity to protect its own interests in connection with the purchase of the
Securities.
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(B)
Investment
Intent. Purchaser is purchasing the Warrant for investment for its own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act. Purchaser
understands that the Warrant has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things,
the bona fide nature of Purchaser's investment intent as expressed
herein.
(C)
Authorization.
Purchaser has all requisite power and has taken all requisite action to execute
and deliver each of this Agreement and to carry out and perform all of its
obligations hereunder. This Agreement has been duly authorized, executed and
delivered on behalf of Purchaser and constitutes the valid and binding agreement
of Purchaser, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) as limited by
equitable principles generally. The consummation of the transactions
contemplated herein and the fulfillment of the terms herein will not result in a
breach of any of the terms or provisions of Purchaser's partnership agreement or
other relevant organizational documents.
5. Restrictions
on Transfer of Securities; Registrable Securities. The restrictions on
transfer of the Securities are as set forth in the Warrant.
6. Miscellaneous.
(A)
Waivers
and Amendments. This Agreement and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.
(B)
Governing
Law; Venue. This Agreement and the Warrant shall each be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of California without regard to conflict of laws. The
parties each irrevocably submit to the exclusive jurisdiction of the U.S. state
and federal courts located in San Francisco, California in connection with any
dispute arising under this Agreement or the Warrant.
(C) Survival.
The representations, warranties, covenants and agreements made herein shall
survive any investigation made by the Company or Purchaser and the
Closing.
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(D)
Successors
and Assigns. The provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto (specifically including any person that becomes a holder of
the Warrant through transfer thereof from the Purchaser, and any other
successors in interest to the Securities). In the event of any merger,
consolidation or acquisition involving the Company in which the Company is not
the surviving entity, the Company's obligations hereunder and under the Warrant
shall be expressly or by operation of law assumed by the surviving
entity.
(E)
Entire
Agreement; Construction. This Agreement and the Warrant constitute the
full and entire understanding and agreement between the parties with regard to
the subject hereof. In the event of any conflict between the terms of this
Agreement and the temis of the Warrant (including any Schedule attached
thereto), the terms of the Warrant shall prevail. The term "$" or "dollars"
means United States dollars; the term "including" means "including without
limitation"; "days" means business days in the United States. Any rule of
construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in
the construction or interpretation of this Agreement or the
Warrant.
(F) Notices,
etc. Any notice or other communication given under this Agreement shall
be sufficient if in writing and sent by personal service, facsimile, courier
service promising overnight delivery or registered or certified mail, return
receipt requested, postage prepaid, to a party at its address set forth below
(or at such other address as shall be designated for such purpose by such party
in a written notice to the other party hereto):
if to
Purchaser, at
Partners
for Growth II, L.P.
000
Xxxxxxx Xxxxxx
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxxxx Xxxxx
Fax:
(000) 000-0000
with a
copy to
Xxxxxxxx
Xxxxxxxxx
Xxxxxxxxx
Law Corporation
000
Xxxxxx Xxxx
Xxxx
Xxxxxx, XX 00000
Fax:
(000) 000-0000
Email:
xxx@xxxxxxxxx-xxx.xxx
or
if to the
Company, at
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Mr. Xxxx
Xxxxx
Chief
Financial Officer
St.
Xxxxxxx Software, Inc.
00000
Xxxxxx xx Xxxxxxx
Xxx
Xxxxx, XX 00000
Fax:
(000) 000-0000
Email: XXxxxx@xxxxxxxxx.xxx
with a
copy (not constituting notice) to:
Xxxxx
Xxxxx
0000
Xxxxxx Xxxxxxxx Xxxx
Xxxxx
000
Xxx
Xxxxx, XX 00000
Attn:
Xxxxxx Xxxxxx
Fax:
(000) 000-0000
Email:
XXxxxxx@Xxxxx.xxx
or in any
case at such other address as Purchaser or the Company shall have furnished to
the other in writing. The term "notify" means to give notice in writing as
specified above.
(G)
Severability
of this Agreement. If any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(H)
Titles
and Subtitles. The titles of the paragraphs and subparagraphs of this
Agreement are for convenience of reference and shall not, by themselves,
determine the construction of this Agreement.
(I) Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one
instrument.
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Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
| PARTNERS FOR GROWTH II, L.P. |
| /s/ Xxxxxx X. Xxxx |
| By: Xxxxxx X. Xxxx, Manager of |
| Partners for Growth II, LLC, its General |
| Partner |
AGREED
AND ACCEPTED,
as of the
date first above written:
ST.
XXXXXXX SOFTWARE, INC.
By: /s/ Xxxxxxx X.
Xxxxx
Its:
Chief Executive Officer
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SCHEDULE
A - EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
8
SCHEDULE
B -CERTIFICATE
9
EXHIBIT 1
- FORM OF WARRANT
10
