EXHIBIT 10.19
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
This Agreement (the "Agreement"), dated as of the 15th day of May, 1997
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(the "Closing Date"), is entered into by and among TSI International Software
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Ltd., a Delaware corporation (the "Company"), and the investors listed on
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Exhibit 1 hereto (the "Investors"), each of which is herein referred to as an
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"Investor."
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W I T N E S S E T H:
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WHEREAS, the Company has amended its Certificate of Incorporation, as
provided in the Restated Certificate of Incorporation filed with the Delaware
Secretary of State on May 14th, 1997 attached hereto as Exhibit 2 ("Restated
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Certificate"), to authorize the issuance of 50,000 shares of Series E
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Convertible Preferred Stock;
WHEREAS, the Company desires to issue and sell to the Investors 50,000
shares of Series E Convertible Preferred Stock of the Company (the "Series E
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Shares"), and the Investors desire to purchase the Series E Shares from the
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Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereby agree as follows:
1. Purchase and Sale of Shares.
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1.1. Sale of Series E Shares. Upon receipt by the
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Company of the purchase price therefor, the Company hereby issues and sells to
each Investor, and each Investor hereby purchases from the Company that number
of shares of the Company's Series E Stock set forth opposite each Investor's
name on Exhibit 1.
1.2. Purchase Price. The purchase price being paid
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by each Investor for the Series E Shares is $20.00 per share. Each Investor
will pay by noon Eastern Time, on the Closing Date, by wire transfer of same-day
funds to the accounts designated by the Company, or delivery to the Company of
cashier's check(s), payable to the Company, the amount of set forth opposite
each Investor's name on Exhibit 1 (the "Purchase Price").
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2. Representations and Warranties of the Company. The
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Company hereby represents and warrants to each Investor as follows effective as
of the Closing Date.
2.1. Organization. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware. Except as set forth in Schedule 2.1, the Company has all requisite
corporate power and authority and holds all licenses, permits and other required
authorizations from governmental authorities necessary to conduct its business
as it is now being conducted or as proposed to be conducted and to own or lease
the properties and assets it now owns or holds under lease.
2.2. Charter Documents. The Company has heretofore
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delivered to the representative for the Investors true, correct and complete
copies of the Company's Certificate of Incorporation and By-Laws, each as in
full force and effect on the Closing Date.
2.3. Capitalization. As of the date hereof, the
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Company's authorized capitalization consists of 3,888,166 shares of Common
Stock, par value $.01 per share, of which 962,274 shares are outstanding; and
1,638,166 shares of Preferred Stock, par value $.01 per share, of which 297,405
shares have been designated Series A Convertible Preferred Stock, all of which
are outstanding, 115,761 shares have been designated Series B Convertible
Preferred Stock, all of which are outstanding, 725,000 shares have been
designated Series C Convertible Preferred Stock, 447,703 of which are
outstanding, 364,469 shares have been designated as Series D Convertible
Preferred Stock, none of which are outstanding, 50,000 shares have been
designated as Series E Convertible Preferred Stock, none of which are
outstanding and 85,531 shares remain undesignated and unissued. The issuance of
the Series E Shares and the Common Stock issuable upon conversion of the Series
E Shares (collectively, the "Conversion Shares") pursuant to the provisions of
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this Agreement have been duly and validly authorized. No further approval or
authorization of the stockholders or the directors of the Company or of any
governmental authority or agency will be required for the issuance and sale of
the Series E Shares as contemplated by this Agreement. Schedule 2.3 attached
hereto is a list of the aggregate number of outstanding securities of the
Company. Except as set forth on Schedule 2.3 attached
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hereto, no stockholder of the Company or any other person is entitled to any
preemptive rights with respect to the purchase or sale of any securities by the
Company. When issued and sold to the Investors, the Series E Shares will be duly
and validly issued, fully paid and non-assessable, will be free and clear of any
liens, pledges or encumbrances and will have the designations, preferences and
relative, participating, optional and other special rights as set forth in the
Company's Certificate of Incorporation. The Conversion Shares, when issued and
delivered upon conversion of the Series E Shares, will be duly and validly
issued, fully paid and non-assessable. Except as set forth on Schedule 2.3
attached hereto, there are no outstanding options, warrants or other rights,
commitments or arrangements, written or oral, to which the Company is a party or
by which it is bound, to purchase or otherwise acquire any authorized but
unissued shares of capital stock of the Company or any security directly or
indirectly convertible into or exchangeable or exercisable for any capital stock
of the Company.
2.4. Compliance with Other Instruments. Except as
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set forth in Schedule 2.4, to the Company's knowledge, the Company is not in
material default in the performance of any material obligation, agreement,
instrument or undertaking to which it is a party or by which it is bound. The
Company is not in violation of its Certificate of Incorporation or By-Laws.
Neither the sale of the Series E Shares (or the issuance and delivery of the
Conversion Shares), will: (i) conflict with or constitute a breach of, or
constitute a default under or an event which, with or without notice or lapse of
time or each, would be a breach of or default under or violation of the
Certificate of Incorporation or By-Laws of the Company or would be a breach of
or default under or violation of any material agreement, document, indenture,
mortgage or other instrument or undertaking by which the Company is bound or to
which any of its properties are subject, or would be a material violation of any
law, administrative regulation, judgment, order or decree applicable to the
Company; (ii) result in the creation or imposition of any material lien, charge
or encumbrance upon any property or assets of the Company; (iii) result in the
loss of any material license, certificate, legal privilege or legal right
enjoyed or possessed by the Company; (iv) give any party to any material
agreement to
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which the Company is a party a right of termination; or (v) except as provided
for in this Agreement, require the consent of any other person or entity under
any agreement, indenture, mortgage, document or other instrument or undertaking
by which the Company is bound or to which any of its properties are subject.
2.5. Authorization. The Company has the full
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corporate power and authority to enter into this Agreement and to perform all of
its obligations thereunder. The execution, delivery and performance of the
terms of this Agreement by the Company have been duly authorized by all
necessary corporate action. This Agreement constitutes a legal, valid and
binding obligation of the Company enforceable in accordance with its terms. The
Company, in light of its business or proposed business, does not require any
consent, approval, authorization or order of, or declaration, filing or
registration with, any court or governmental or regulatory agency or board in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated thereby.
2.6. Compliance with the Securities Act. Based upon
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the representations of each Investor set forth herein, and assuming the truth of
such representations, the offer, sale and issuance of the Series E Shares (and
the issuance and delivery of the Conversion Shares) are exempt from the
registration requirements of the Securities Act of 1933, as amended ("Securities
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Act of 1933").
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2.7. Reservation of Common Stock. The Company shall
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reserve and keep available out of its authorized but unissued Common Stock the
number of shares of Common Stock required for issuance upon the conversion of
all of the Series E Shares.
2.8. Litigation. Except as set forth on Schedule 2.8
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attached hereto, there is not now pending, and to the knowledge of the Company
there is not threatened in writing, any litigation, action, suit or proceeding:
(i) to which the Company is or will be a party in or before or by any court or
governmental or regulatory agency or body; or (ii) to which any of the officers
or employees of the Company is or will be a party in or before or by any court
or governmental or regulatory agency or body, concerning termination by such
person of his or her
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employment with any of such person's former employers. In addition to the
foregoing, there is no judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or arbitrator
outstanding against the Company having any material adverse effect on the
business or proposed business or operations, properties, assets or condition,
financial or otherwise, of the Company.
2.9. Compliance with Law. To its knowledge, the
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Company is in compliance in all material respects with all applicable statutes
and regulations of the United States and of all states, municipalities and
agencies in respect of the conduct of its business.
2.10. Financial Statements. Attached hereto as
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Schedule 2.10 are the audited balance sheets of the Company at December 31,
1996, and the related statements of income and retained earnings and changes in
financial position, including the notes thereto, of the Company for the period
then ended, and the unaudited balance sheet of the Company at March 31, 1997 and
the related statements of income for the period then ended. The financial
statements referred to above have been prepared in conformity with generally
accepted accounting principles consistently applied subject in the case of the
interim statements to normal year-end audit adjustments, and each balance sheet
fairly presents the financial condition of the Company as of its date and each
statement of income fairly presents the results of operations of the Company for
the period covered thereby.
3. Representations, Warranties and Covenants of the
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Investor. Each Investor hereby represents and warrants to, and agrees with, the
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Company as follows effective as of each Investor's delivery of the Purchase
Price:
3.1. Investment Intent and Restricted Securities.
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Each Investor understands that the Series E Shares (and any Conversion Shares)
have not been registered under the Securities Act of 1933 for the reason that
the sales provided for in this Agreement are exempt from registration pursuant
to Section 4(2) of the Securities Act of 1933, Regulation S and Rule 506 of
Regulation D as promulgated under the Securities Act of 1933 and that the
reliance of the Company on such exemptions is predicated in part on such
Investor's representations set forth
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herein. Each Investor represents that (i) it will acquire the Series E Shares
without being offered or furnished any offering literature or prospectus and
this transaction has not been approved or reviewed by the Securities and
Exchange Commission or by any administrative agency charged with the
administration of the securities law of any state; (ii) it is acquiring the
Series E Shares for its own account, not as a nominee or agent, and not with a
view to the public resale or distribution thereof within the meaning of the
Securities Act of 1933, and such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same; (iii) it is
experienced in evaluating companies such as the Company, is able to fend for
itself, has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment, and has the
ability to suffer the total loss of its investment; (iv) it was not formed
solely for the purpose of investing in the Company; (v) it has had access during
the course of the transaction and prior to its purchase of the Series E Shares
to such information relating to the Company as it has desired and that it has
had the opportunity to ask questions of and receive answers from the Company
concerning the terms and conditions of the offering and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense and without breach of
confidentiality obligations) necessary to verify the accuracy of any information
furnished to it or to which it had access; (vi) it is an "accredited investor"
within the meaning of Regulation D promulgated under Securities Act of 1933; and
(vii) it is not a U.S. Person as defined in Rule 902(o) of Regulation S under
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the Securities Act of 1933 and is not acquiring the Series E Shares (or the
Conversion Shares) for the account or benefit of any U.S. person, as so defined.
Each Investor understands that the Series E Shares (and any Conversion Shares)
may not be sold, transferred or otherwise disposed of without registration under
the Securities Act of 1933 or an exemption therefrom and that in the absence of
an effective registration statement covering the Series E Shares (or the
Conversion Shares) or an available exemption from registration under the 1933
Act, the Series E Shares (and any Conversion Shares) must be held indefinitely.
Each Investor also understands that the Company is under no obligation to
register any of the securities sold hereunder and that
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no public market now exists for any of the Series E Shares (or the Conversion
Shares) and that is uncertain whether a public market will ever exist for the
Series E Shares (or the Conversion Shares).
3.2. Legends. Each Investor understands that stop
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transfer instructions will be given to the Company's transfer agent with respect
to the certificates representing the Series E Shares and on each certificate
representing the Conversion Shares to assure compliance with the Securities Act
of 1933. Each Investor consents to the placement of the following legends, in
substantially the forms below, on each certificate representing the Series E
Shares and on each certificate representing the Conversion Shares:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR SOLD UNLESS (i) A
REGISTRATION STATEMENT UNDER SUCH ACT IS THEN IN EFFECT WITH RESPECT
THERETO, (ii) A WRITTEN OPINION FROM COUNSEL FOR THE HOLDER REASONABLY
ACCEPTABLE TO THE ISSUER HAS BEEN OBTAINED TO THE EFFECT THAT NO SUCH
REGISTRATION IS REQUIRED OR (iii) A 'NO ACTION' LETTER OR ITS THEN
EQUIVALENT HAS BEEN ISSUED BY THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION WITH RESPECT TO SUCH TRANSFER OR SALE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE ACT WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
AND THE COMPANY DOES NOT INTEND TO REGISTER THEM. PRIOR TO _________,
1998 [END OF 1-YEAR RESTRICTED PERIOD], THE SHARES MAY NOT BE OFFERED OR
SOLD (INCLUDING OPENING A SHORT POSITION IN SUCH SECURITIES) IN THE
UNITED STATES OR TO U.S. PERSONS AS DEFINED BY RULE 902(O) ADOPTED UNDER
THE SECURITIES ACT OF 1933, OTHER THAN TO DISTRIBUTORS, UNLESS THE
SHARES ARE REGISTERED UNDER THE SECURITIES ACT OF 1933, OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 IS
AVAILABLE. PURCHASERS OF SHARES PRIOR TO __________, 1998 [END OF
1-YEAR RESTRICTED PERIOD], MAY RESELL SUCH SECURITIES ONLY PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, OR IN
TRANSACTIONS EFFECTED OUTSIDE OF THE UNITED STATES PROVIDED THEY DO NOT
SOLICIT (AND NO ONE ACTING ON THEIR BEHALF SOLICITS) PURCHASERS IN THE
UNITED STATES OR
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OTHERWISE ENGAGE(S) IN SELLING EFFORTS IN THE UNITED STATES. A HOLDER OF
THE SECURITIES WHO IS A DISTRIBUTOR, DEALER, SUB-UNDERWRITER OR OTHER
SECURITIES PROFESSIONAL, IN ADDITION, CANNOT PRIOR TO __________, 1997
[END OF 1-YEAR RESTRICTED PERIOD] RESELL THE SECURITIES TO A U.S. PERSON
AS DEFINED BY RULE 902(O) OF REGULATION S UNLESS THE SECURITIES ARE
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 IS AVAILABLE."
3.3 Market Standback. Each Investor agrees in
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connection with any registration of the Company's securities that, upon the
request of the Company or the underwriters managing any public offering of the
Company's securities or the Nasdaq Stock Market, Inc. or any other exchange on
which the Company's securities might be registered, such Investor will not sell
or otherwise dispose of any Series E Shares or Conversion Shares without the
prior written consent of the Company or such underwriters or such exchange, as
the case may be, for such period of time (not to exceed 180 days) after the
effective date of such registration requested by such managing underwriters or
such exchange, as the case may be, and subject to all restrictions as the
Company or the underwriters may specify.
4. Deliveries of the Company and the Investors.
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4.1 Company Deliverables. On the Closing Date, as a
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condition to each Investor's obligation to pay the Purchase Price for the Series
E Shares provided under Section 1.2 hereof, the Company will deliver to each
Investor or the representative of the Investors the following:
(a) an opinion of counsel to the Company,
Fenwick & West LLP, addressed to the Investors, in substantially the form
attached hereto as Exhibit 3;
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(b) copies of the resolutions adopted by the
Company's Board of Directors authorizing the execution, delivery and performance
of this Agreement and the transactions contemplated hereby;
(c) a certificate, dated as of a recent
date, of the Secretary of State of Delaware attesting as to the good standing
of the Company in such state;
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(d) a stock certificate registered in the
name of each Investor representing the Series E Shares purchased by such
Investor in consideration of the Purchase Price therefor;
(e) a certificate signed by the President or
Vice President of the Company that the representations and warranties in Section
2 are true and correct as of the Closing Date; and
(f) a copy of the Restated Certificate;
4.2 Investors' Deliverables. On the Closing Date,
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as a condition to Company's obligations under Section 4.1 hereof, the Investors
will deliver to the Company the Purchase Price for the Series E Shares as
provided under Section 1.2 hereof.
5. Expenses.
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Each party will be responsible for its own costs and
expenses arising in connection with the negotiation, execution and consummation
of this Agreement and the transactions contemplated hereby.
6. No Brokers.
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The Company and each Investor represents and warrants to
the other that there was no broker or finder connected with this Agreement or
the transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his representing or being retained by any Investor, each
Investor agrees to indemnify and save harmless the Company in respect of such
claim. In the event of a claim by any broker or finder based upon his
representing or being retained by the Company, the Company agrees to indemnify
and save harmless each Investor in respect of such claim.
7. Survival of Representations.
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All representations, warranties, covenants and
agreements contained in this Agreement or in any document, exhibit, schedule or
certificate delivered in connection herewith shall survive the execution and
delivery of this Agreement and any investigation at any time made by the
Investor or on its behalf for a period of six months from the date hereof.
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8. Miscellaneous Provisions.
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8.1. Construction and Enforcement. This Agreement
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shall be governed by, and construed and enforced in accordance with, the
internal laws of the State of Delaware without giving any effect to principles
of conflicts of laws.
8.2. Notices. All notices hereunder shall be in
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writing and shall be deemed to have been given at the time when mailed by
certified mail, addressed to the address below stated of the party to which
notice is given, or to such changed address as such party may have fixed by
notice, provided, however, that any notice of change of address shall be
effective only upon receipt:
To the Company:
TSI International Software Ltd.
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxxxx Xxxxxx, President
-with a copy to
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
To the Investors:
At the addresses listed on Exhibit 1 attached hereto
8.3. Assignment. This Agreement shall be binding
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upon and inure to the benefit of the Company, the Investors and the respective
successors and permitted assigns of the Investors. Neither the Company nor any
Investor may assign any of its rights or obligations under this Agreement
without the prior written consent of the other party.
8.4. Amendments and Waivers. This Agreement and all
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exhibits and schedules hereto set forth the entire understanding of the parties
with respect to the transactions
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contemplated hereby. This Agreement may be amended, the Company may take any
action herein prohibited or omit to take action herein required to be performed
by it, and any breach of or compliance with any covenant, agreement, warranty or
representation may be waived, only if the Company has obtained the written
consent or waiver of the holders of not less than 50% of the issued and
outstanding Series E Shares and Conversion Shares.
8.5. Counterparts. This Agreement may be executed in
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one or more counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
8.6. Headings. The headings in this Agreement are
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for reference purposes only and shall not constitute a part hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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TSI International Software Ltd.
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By /s/ Xxxxxxxxx Xxxxxx
Title - President and CEO
Investors:
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Mitsui & Co., Ltd.
By: /s/ Xxxxxxx Xxxxxx
Title: General Manager, Information
Business Development Division
Mitsui Knowledge Industry Co., Ltd.
By: /s/ Hideharu Manuyama
Title: President
NVCC No. 1 Investment Enterprise Partnership
By: Nippon Venture Capital Co., Ltd.
Its: Executive Partner
By: /s/ Kozo Nogom
Title: President
