EXHIBIT 10.19
PERSISTENCE SOFTWARE, INC.
COMMON STOCK PURCHASE AGREEMENT
NOVEMBER 26, 2002
PERSISTENCE SOFTWARE, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "AGREEMENT") is entered into
as of this 26th day of November, 2002 (the "EFFECTIVE DATE") by and between
Persistence Software, Inc., a Delaware corporation (the "COMPANY"), and the
entities listed on SCHEDULE A hereto (each a "PURCHASER" and collectively the
"PURCHASERS").
SECTION 1
SALE OF COMMON STOCK AND WARRANT
--------------------------------
1.1 SALE OF COMMON STOCK. Subject to the terms and conditions hereof,
on the Closing Date (as defined below), the Company will issue and sell to each
Purchaser, and each Purchaser will purchase from the Company, that portion of
the Purchased Shares (as defined below) set forth opposite each such Purchaser's
name on SCHEDULE A attached hereto at the Stock Purchase Price (as defined
below). The term "PURCHASED SHARES" shall mean Three Million Seven Hundred Fifty
Eight Thousand Six Hundred Ninety Two (3,758,692) shares of Common Stock, par
value $0.001 per share, of the Company. The aggregate Stock Purchase Price is
Two Million Dollars ($2,000,000) or $0.5321 per share.
1.2 ISSUANCE OF WARRANT. Subject to the terms and conditions hereof, on
the Closing Date, the Company will issue a warrant to purchase that portion of
the Warrant Shares (as defined below) of the Company (the "WARRANT"), in
substantially the form attached as EXHIBIT A hereto, to each Purchaser as set
forth opposite each such Purchaser's name on SCHEDULE A attached hereto at the
Stock Purchase Price (as defined below). The exercise price per Warrant Share
shall be $0.75 (subject to adjustment for stock splits, stock dividends and the
like and as otherwise provided in the Registration Statement of even date
herewith). The aggregate purchase price of the Warrants shall be $100 (the
"WARRANT PURCHASE PRICE" and together with the Stock Purchase Price, the
"PURCHASE PRICE"). The Purchased Shares and the Warrant Shares are sometimes
referred to herein as the "SECURITIES".
(a) The aggregate number of Warrant Shares is One Million Two Hundred
Five Thousand One Hundred Thirty (1,205,130) shares of Common Stock of the
Company (subject to adjustment for stock splits, stock dividends and the like).
(b) For avoidance of doubt, the formula for calculating the number of
Warrant Shares was intended to ensure that the sum of (1) the total number of
shares of Common Stock to be issued to the Purchasers at the Closing (including
the number of shares of Common Stock issuable upon exercise of the Warrants) and
(2) the aggregate number of shares of Common Stock of the Company which all of
the Purchasers may be deemed to beneficially own (as determined in accordance
with the rules of the Securities and Exchange Commission) immediately prior to
the Closing Date is equal to 19.9% of the sum of (x) the number of shares of
Common Stock of the Company issued and outstanding as of October 31, 2002 and
(y) the total number of shares of Common Stock to be issued to the Purchasers at
the Closing (including the number of shares of Common Stock issuable upon
exercise of the Warrants).
1.3 CLOSING DATE. The closing (the "CLOSING") of the purchase and sale
of the Purchased Shares and the Warrant shall be held at the offices of Venture
Law Group, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx at 1:45 p.m. on November
26, 2002, or at such other time and place upon which the Company and the
Purchasers shall mutually agree (the date of the Closing is hereinafter referred
to as the "CLOSING DATE").
1.4 DELIVERY. At the Closing, the Company will deliver to each
Purchaser (i) a binding and irrevocable instruction letter to the Company's
transfer agent (U.S. Stock Transfer Corporation) instructing the transfer agent
to issue a stock certificate to such Purchaser representing the Purchased Shares
and (ii) the Warrant, against payment of the Purchase Price, by wire transfer of
immediately available funds.
1.5 LEGEND. The certificate or certificates for the Securities (and any
securities issued in respect of or exchange for the Securities) shall be subject
to a legend or legends restricting transfer under the Securities Act of 1933, as
amended (the "SECURITIES ACT") and referring to restrictions on transfer herein,
such legends to be substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY AN AFFILIATE
OF THE COMPANY. NO SALE OR DISPOSITION OF THESE SHARES MAY BE EFFECTED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION RELATED THERETO OR IN COMPLIANCE WITH RULE
144 OR ITS SUCCESSOR OR PURSUANT TO AN OPINION OF COUNSEL THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
The legends set forth above shall be removed and the Company shall
issue a certificate without such legends to the holder of any of the Securities
upon which it is stamped, if (a) the sale of such Security is registered under
the Securities Act, or (b) in connection with the resale of such Security, such
holder provides the Company with an opinion of counsel reasonably acceptable to
the Company, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Security may be made without registration under the Securities Act, or (c) the
Security can be sold to the public pursuant to Rule 144 under the Securities Act
("RULE 144") and a registered broker-dealer provides to the Company a customary
broker's Rule 144 letter, or (d) such holder provides the Company with
reasonable assurances that such Security can be sold under Rule 144(k) of. Each
Purchaser agrees to sell all Securities, including those represented by a
certificate(s) from which the legends have been removed, pursuant to an
effective registration statement or under an exemption from the registration
requirements of the Securities Act.
-2-
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to each Purchaser that as of
the Effective Date:
2.1 ORGANIZATION. The Company is a corporation duly organized and
validly existing under the laws of the State of Delaware and is in good standing
under such laws. The Company has the requisite corporate power and authority to
own, lease and operate its properties and assets, and to carry on its business
as presently conducted and as proposed to be conducted. The Company is qualified
to do business as a foreign corporation in each jurisdiction in which the
ownership of its property or the nature of its business requires such
qualification, except where failure to so qualify would not have a materially
adverse effect on the Company. The Company has no subsidiaries or equity
interest in any other entity other than Persistence Software Limited, a United
Kingdom Corporation, Persistence Software GmbH, a German corporation, and
Persistence Software Asia/Pacific Limited, a HongKong corporation, each of which
is duly organized and validly existing under the laws of the jurisdiction of its
incorporation, except where such failure does not have a materially adverse
effect on the Company.
2.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 75,000,000 shares of Common Stock, $0.001 par value, of which at
October 31, 2002, 20,231,266 shares were issued and outstanding, and 5,000,000
shares of Preferred Stock, $0.001 par value, of which no shares of Preferred
Stock were issued and outstanding. All such issued and outstanding shares have
been duly authorized and validly issued and are fully paid and nonassessable. In
addition, as of October 31, 2002, (i) 80,000 shares of Common Stock were
issuable upon exercise of outstanding warrants, (ii) under the Company's 1997
Stock Plan, options to purchase 3,714,323 shares of Common Stock were
outstanding and 2,115,926 shares were available for future issuance (plus up to
an additional 38,645 shares of Common Stock that may be transferred to the 1997
Stock Plan from the Company's 1994 Stock Purchase Plan), and (iii) under the
Company's 1999 Directors' Stock Option Plan, options to purchase 148,000 shares
of Common Stock were outstanding and 352,000 shares were available for future
issuance. Except as set forth in the preceding sentence and for a commitment to
issue a warrant to purchase 50,000 shares of Common Stock of the Company (a copy
of which has been provided to the Purchasers), there are no other options,
warrants, conversion privileges or other contractual rights presently
outstanding to purchase or otherwise acquire any shares of the Company's capital
stock or other securities other than pursuant to the Company's 1994 Stock
Purchase Plan and 1999 Employee Stock Purchase Plan. There are no preemptive
rights or rights of first refusal or similar rights with respect to the issuance
and sale of the Securities.
2.3 AUTHORIZATION. The Company has all corporate right, power and
authority to enter into this Agreement, the Warrant, the Voting Agreement
substantially in the form attached hereto as EXHIBIT B (the "VOTING AGREEMENT")
and the Registration Rights Agreement substantially in the form attached hereto
-3-
as EXHIBIT C (the "REGISTRATION RIGHTS AGREEMENT," and collectively with this
Agreement and the Warrant (the "TRANSACTION Documents") and to consummate the
transactions contemplated hereby and thereby. All corporate action on the part
of the Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of the Transaction Documents by the Company,
and the authorization, sale, issuance and delivery of the Purchased Shares and
the Warrant has been taken. The Transaction Documents have been duly executed
and delivered by the Company and constitute legal, valid and binding obligations
of the Company enforceable in accordance with their respective terms, subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies, and to limitations of public policy as they may apply
to the indemnification and contribution obligations pursuant to Section 1.7 of
the Registration Rights Agreement.
2.4 VALID ISSUANCE. The Purchased Shares, Warrant and Warrant Shares
are duly authorized, and when issued, sold and delivered in accordance with the
terms of the Transaction Documents, (i) will be duly and validly issued, fully
paid and nonassessable and free and clear of any taxes, liens, claims,
preemptive or similar rights or encumbrances imposed by or through the Company,
(ii) based in part upon the representations of the Purchasers in this Agreement,
will be issued, sold and delivered in compliance with all applicable federal and
state securities laws, and (iii) the Purchased Shares (and upon payment of the
aggregate Exercise Price (as defined in the Warrants), the Warrant Shares) will
be entitled to all the rights, preferences and privileges of the shares of
Common Stock as set forth in the Company's Certificate of Incorporation. The
Warrant Shares have been duly reserved for issuance.
2.5 NO CONFLICT. The execution and delivery of the Transaction
Documents do not, and the consummation of the transactions contemplated hereby
and thereby will not, conflict with, or result in any violation of, breach 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 of
Incorporation or Bylaws of the Company or any material agreement attached as an
exhibit to the Company's SEC Documents (as defined below), or any judgment,
order, decree, statute, law, ordinance, rule, listing requirement or regulation
applicable to the Company, its properties or assets, which conflict, violation,
default or right would have a material adverse effect on the business,
properties, prospects, financial condition or operations of the Company.
2.6 SEC DOCUMENTS. The Company has filed with the Securities and
Exchange Commission (the "SEC"): (i) the Company's Annual Report on Form 10-K
for the year ended December 31, 2001, (ii) Quarterly Reports on Form 10-Q for
the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, (iii)
the Company's Proxy Statement for the 2002 Annual Meeting of Stockholders, (iv)
all Current Reports on Form 8-K required to be filed by the Company with the
Commission since December 31, 2001, and (v) all other documents, if any, filed
by the Company with the SEC since November 14, 2002 pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") copies of which have been
made available to the Purchasers (the "SEC DOCUMENTS"), have been duly and
timely filed, were in substantial compliance with the requirements of their
respective forms when filed, were complete and correct in all material respects
as of the dates at which the information was furnished, and contained (as of
-4-
such dates) no untrue statement of a material fact nor omitted to state a
material fact necessary in order to make the statements made therein in light of
the circumstances in which made not misleading; provided however that any
information set forth in any SEC Document that is a forward-looking statement as
defined in Rule 175(c) promulgated by the SEC under the Securities Act shall not
be deemed to contain an untrue statement of material fact as long as such
forward-looking statement was made at the time with a reasonable basis and in
good faith. Any statements made in any such SEC Documents that are or were
required to be updated or amended under applicable law have been so updated or
amended. The Company is not aware of any event occurring on or prior to the
Closing (other than the transactions effected hereby) that would require the
filing of, or with respect to which the Company intends to file, a Form 8-K
after the Closing.
2.7 GOVERNMENTAL CONSENTS, ETC. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority or self
regulatory organization on the part of the Company is required in connection
with the valid execution and delivery of the Transaction Documents, or the
consummation of any other transaction contemplated hereby and thereby, except
such filings as may be required to be made with the SEC, Nasdaq, the National
Association of Securities Dealers, Inc. and with governmental authorities for
purposes of effecting compliance with the securities and blue sky laws in the
states in which the Securities are offered and/or sold (which compliance will be
effected in accordance with such laws).
2.8 LITIGATION. Other than as set forth in the SEC Documents, there is
no action, suit, proceeding, claim, arbitration or investigation pending or as
to which the Company has received any notice of assertion against the Company,
which could reasonably be expected to result in a material adverse effect on the
business, properties, prospects, financial condition or operations of the
Company.
2.9 NO MATERIAL CHANGE. Subsequent to the date of the Quarterly Report
on Form 10-Q for the quarter ended September 30, 2002, the Company has not
incurred any material liabilities or obligations, direct or contingent, nor has
the Company purchased any of its outstanding capital stock, nor paid or declared
any dividends or entered into any transactions not in the ordinary course of
business; and there has been no change in the capital stock or consolidated long
term debt or short term obligations (other than in the ordinary course) of the
Company or a material adverse change in the business, properties, prospects,
financial condition or operations of the Company; provided, however that changes
in the ordinary course of business consistent with past practices, including but
not limited to the use of cash and increases in liabilities in the ordinary
course of business consistent with past practices, shall not be deemed to be a
material adverse change.
2.10 NO MATERIAL DEFAULT. The Company is not in violation of or default
in any material respect under any provision of (a) its Certificate of
Incorporation or Bylaws, (b) any federal or state judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company, or (c)
any material agreement attached as an exhibit to the SEC Documents, except such
violations or defaults as would not alone or in the aggregate have a material
adverse effect on the business, properties, prospects, financial condition or
operations of the Company.
-5-
2.11 LISTING. The Company's Common Stock is currently traded on Nasdaq;
however, the Company has received a letter dated September 9, 2002 from the
Nasdaq staff regarding the possible delisting of the Company's Common Stock, a
copy of which letter has been provided to the Purchasers. To the Company's
knowledge, upon completion of the transaction contemplated by the Transaction
Documents and the filing of a Current Report on Form 8-K with respect thereto,
the Company will have at least 180 days to comply with the minimum bid
requirements of Nasdaq to maintain its continued listing.
2.12 DISCLOSURE. No representation or warranty of the Company contained
in this Agreement, the exhibits attached hereto or the SEC Documents, as updated
by the disclosure letter dated concurrently herewith (when read together and
taken as a whole), contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein in light of the circumstances under which they were made not
misleading.
2.13 SOLICITATION. Neither the Company nor any of its subsidiaries or
affiliates, nor any person acting on its or their behalf, (i) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Securities or (ii)
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under any circumstances that would
require registration of the Securities under the Securities Act.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
------------------------------------------------
Each Purchaser hereby represents and warrants to the Company as follows
as of the Effective Date:
3.1 INVESTMENT. The Purchaser is acquiring the Securities and the
Warrant for its own account, not as a nominee or agent and with no present
intention of selling or otherwise distributing any of the Securities. Purchaser
understands that, except as provided in the Registration Rights Agreement, the
Securities purchased by the Purchaser from the Company pursuant to this
Agreement have not been, and will not be, registered under the Securities Act by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the Purchaser's investment intent and the accuracy of the Purchaser's
representations as expressed herein.
3.2 ACCREDITED INVESTOR. The Purchaser is an "accredited investor" as
defined by Rule 501(a) of the Securities Act. The SEC Documents have been made
available to the Purchaser. The 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.
3.3 AUTHORITY. The Transaction Documents have been duly executed and
delivered by the Purchaser and constitute legal, valid and binding obligations
of the Purchaser, enforceable in accordance with their respective terms, subject
to laws of general application relating to bankruptcy, insolvency and the relief
-6-
of debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies, and to limitations of public policy. The execution and
delivery of the Transaction Documents do not, and the consummation of the
transactions contemplated hereby and thereby will not, conflict with or result
in any violation of any obligation under any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Purchaser.
3.4 GOVERNMENT CONSENTS, ETC. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the
part of the Purchaser is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Securities, or
the consummation of any other transaction contemplated hereby other than those
filings required the Exchange Act.
3.5 INVESTIGATION. The Purchaser has had a reasonable opportunity to
discuss the Company's business, management and financial affairs with the
Company's management.
3.6 BENEFICIAL OWNERSHIP OF COMMON STOCK. As of the Closing Date, the
Purchasers may be deemed to beneficially own an aggregate of 50,000 shares of
Common Stock of the Company (as determined in accordance with the rules of the
Securities and Exchange Commission).
SECTION 4
CONDITIONS TO OBLIGATIONS OF THE PURCHASERS
-------------------------------------------
The obligations of each Purchaser to the Company under this Agreement
are subject to the fulfillment, on or before the Closing, of each of the
following conditions, unless otherwise waived by such Purchaser:
4.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 2 shall be true and correct in all
material respects when made and on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date.
4.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.
4.3 NO ACTION, ETC. PENDING. There shall not at Closing be in effect
any action, order, or other proceeding, preventing, enjoining or otherwise
restraining the transactions contemplated by this Agreement.
4.4 NO LAW PROHIBITING OR RESTRICTING SALE. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person to issue the Securities which
shall not have been obtained (except as otherwise referenced in this Agreement).
-7-
4.5 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Purchasers a certificate substantially in the form attached hereto as EXHIBIT D
executed by a duly authorized officer, dated the Closing Date, certifying to the
fulfillment of the conditions specified in Sections 4.1 and 4.2 and certifying
that, since the date of the Company's most recent filing with the SEC, there has
not been any material adverse change in the business, properties, prospects,
financial condition or operations of the Company; provided, however that changes
in the ordinary course of business consistent with past practices, including but
not limited to the use of cash and increases in liabilities in the ordinary
course of business consistent with past practices, shall not be deemed to be a
material adverse change.
4.6 RELATED AGREEMENTS. On or before the Closing, the Company, the
Purchasers and Xxxxxxxxxxx Xxxxx, as applicable, shall have executed and
delivered counterparts of (i) the Voting Agreement in the form attached hereto
as EXHIBIT B and (ii) the Registration Rights Agreement in the form attached
hereto as EXHIBIT C.
4.7 DIRECTOR. Xxxxxx Xxxxxxxx shall have been appointed, effective
immediately after the Closing, to serve on the Company's Board of Directors as a
Class III director.
4.8 LEGAL OPINION. The Purchasers shall have received a legal opinion
from the Venture Law Group, counsel to the Company, in a form reasonably
acceptable to the Purchasers.
SECTION 5
CONDITIONS TO OBLIGATIONS OF THE COMPANY
----------------------------------------
The obligations of the Company under this Agreement are subject to the
fulfillment on or prior to the Closing of each of the following conditions,
unless otherwise waived by the Company:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchasers in Section 3 hereof shall be true and correct
in all material respects when made and on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of the Closing Date.
5.2 PERFORMANCE. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchaser on or prior to the Closing Date
shall have been performed or complied with in all material respects.
5.3 NO ACTION, ETC. PENDING. There shall not at Closing be in effect
any action, order or other proceeding, preventing, enjoining or otherwise
restraining the transactions contemplated by this Agreement.
5.4 NO LAW PROHIBITING OR RESTRICTING SUCH SALE. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise provided in this
Agreement).
-8-
SECTION 6
POST-CLOSING COVENANTS OF THE COMPANY
-------------------------------------
6.1 ELECTION OF DIRECTOR. For so long as the Purchasers beneficially
own at least 11% of the issued and outstanding stock of the Company, the
Purchasers shall have right to designate one member of the Board of Directors of
the Company (the "PURCHASER DESIGNEE") (and to fill the vacancy of such member
in the event of the resignation, death or removal of such member). The Purchaser
Designee shall be required to complete a questionnaire in the same form as has
been executed by all other directors for the Company. Subject to the fiduciary
obligations of the Board of Directors to the Company's stockholders based on
advice of legal counsel and the directors' review and approval (not to be
unreasonably withheld) of such questionnaire and any other relevant information,
in each case as applied on a consistent basis to each other director, the
Company shall (i) nominate and recommend in the Company's proxy statement the
Purchaser Designee as a Class III director of the Company's Board of Directors
at each meeting of stockholders of the Company where the class of which the
Purchaser Designee is a member is up for election, and (ii) in the event that
the Purchaser Designee shall resign or be removed as a director for any reason
during the period that this Section 6.1 is in effect, fill the vacancy resulting
thereby with a Purchaser Designee. The Company shall provide all rights and
benefits of indemnity to each Purchaser Designee as are provided to other
outside directors of the Company. In the event of any business conflict of
interest between the Purchaser Designee and another director or proposed
director, the Board shall favor retaining the Purchaser Designee over such other
director, and in any event if the Board of Directors does not approve a
particular individual as the Purchaser Designee for the slate of Class III
directors as a result of the process described in the second sentence of this
paragraph, then the Purchasers shall designate a different Purchaser Designee,
whom shall be subject to the same review and approval process.
6.2 CURRENT REPORT. As soon as reasonably practicable but in no event
later than November 27, 2002, the Company shall file with the SEC on Form 8-K, a
pro forma balance sheet (reflecting the effect of this Agreement and the
transactions contemplated hereby) for the period ended September 30, 2002, that
shows compliance with the Nasdaq stockholders equity listing requirements.
6.3 GOOD STANDING CERTIFICATES. The Company is currently not in good
standing as a foreign corporation in Texas. The Company shall deliver to the
Purchasers within five (5) business days after Closing a good standing
certificate (with regard to both corporate status and franchise taxes) from the
relevant authority in the State of Texas.
SECTION 7
MISCELLANEOUS
-------------
7.1 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
-9-
7.2 FILINGS. The parties shall consult and fully cooperate with and
provide assistance to each other in preparing and filing as soon as practicable
all consents, approvals and authorizations reasonably necessary or advisable to
be made or obtained from any third-party or governmental agency in order to
consummate the transactions contemplated hereby.
7.3 SURVIVAL. The representations and warranties of the Company and the
Purchasers contained in or made pursuant to this Agreement shall terminate six
(6) months following the Closing. The covenants in Section 6 shall survive for
the terms stated therein.
7.4 SUCCESSORS AND ASSIGNS. Neither party may assign its rights or
obligations under this Agreement, except with the prior written consent of the
other party. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their permitted successors and assigns.
7.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Warrant, the
Voting Agreement, the Registration Rights Agreement and the other documents
delivered pursuant hereto or contemplated hereby constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and thereof and supersede all prior agreements and understandings
among the parties relating to the subject matter hereof. Any term of this
Agreement may be amended or waived only with the written consent of the Company
and the Purchasers holding a majority of the Purchased Shares. Any amendment or
waiver effected in accordance with this Section 7.5 shall be binding upon the
Purchasers and each transferee of the Securities, each future holder of all such
Securities, and the Company.
7.6 NOTICES AND DATES. Unless otherwise provided herein, any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier and
addressed to the party to be notified at such party's address as set forth
below, or to the Company at its address specified on its signature page hereto,
or as subsequently modified by written notice. In the event that any date
provided for in this Agreement falls on a Saturday, Sunday or legal holiday,
such date shall be deemed extended to the next business day.
If to the Company: Persistence Software, Inc.
0000 X. Xxxxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxx, Chief Executive Officer
With a copy to: Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
If to Purchasers: c/x Xxxxxxx Capital Partners
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
-10-
With a copy to: Xxxx Xxxxxxx LLP
1995 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
7.7 BROKERS.
(a) The Company has not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. The Company hereby agrees to indemnify and hold
harmless the Purchasers from and against all fees, commissions or other payments
owing to any party acting on behalf of the Company hereunder.
(b) No Purchaser has engaged, consented to or authorized any
broker, finder or intermediary to act on its behalf, directly or indirectly, as
a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. Each Purchaser hereby agrees to indemnify and
hold harmless the Company from and against all fees, commissions or other
payments owing to any party acting on behalf of the Purchaser hereunder.
7.8 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
7.9 COSTS AND EXPENSES. Each party hereto shall pay its own costs and
expenses incurred in connection herewith, including the fees of its counsel,
auditors and other representatives, whether or not the transactions contemplated
herein are consummated.
7.10 NO THIRD PARTY RIGHTS. Nothing in this Agreement shall create or
be deemed to create any rights in any person or entity not a party to this
Agreement.
7.11 PUBLICITY. The Purchasers and the Company shall not issue any
public statement concerning the transactions contemplated by this Agreement
without the reasonable prior written consent of the parties named in such public
statement; PROVIDED, HOWEVER, that the parties may disclose the transaction or
the terms hereof or thereof from time to time without the approval of the party
whose name is disclosed if (i) such approval has been requested and not received
and such party concludes (after consulting with counsel) that it is required by
law to disclose the transaction or the terms thereof or (ii) to the extent that
similar disclosure has been previously approved pursuant to this Section 7.11.
7.12 CAPTIONS AND HEADINGS. The captions and headings used herein are
for convenience and ease of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
7.13 COUNTERPARTS. This Agreement may be executed in counterparts, and
each such counterpart shall be deemed an original for all purposes.
[SIGNATURE PAGES FOLLOW]
-11-
IN WITNESS WHEREOF, the parties hereto have caused this Common Stock
Purchase Agreement to be executed by their respective authorized officers as of
the date first written above.
PERSISTENCE SOFTWARE, INC.
By: /S/ XXXXXXXXX XXXXXXX
-------------------------
Its: CHIEF FINANCIAL OFFICER
SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Common Stock
Purchase Agreement to be executed by their respective authorized officers as of
the date first written above.
XXXXXXX CAPITAL PARTNERS III, L.P.
By: /S/ XXXXXX X. XXXXXXXX
------------------------
Name: XXXXXX X. XXXXXXXX
Title: GENERAL PARTNER
XXXXXXX CAPITAL PARTNERS IIIA, L.P.
By: /S/ XXXXXX X. XXXXXXXX
------------------------
Name: XXXXXX X. XXXXXXXX
Title: GENERAL PARTNER
XXXXXXX CAPITAL PARTNERS III (BERMUDA), L.P.
By: /S/ XXXXXX X. XXXXXXXX
------------------------
Name: XXXXXX X. XXXXXXXX
Title: GENERAL PARTNER
SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
SCHEDULE A
SCHEDULE OF PURCHASERS
--------------------------------------------- ---------------- ----------------
PORTION OF PORTION OF
NAME OF PURCHASER PURCHASED SHARES WARRANT SHARES
--------------------------------------------- ---------------- ----------------
Xxxxxxx Capital Partners III, L.P. 2,891,761 927,171
--------------------------------------------- ---------------- ----------------
Xxxxxxx Capital Partners IIIA, L.P. 296,949 95,209
--------------------------------------------- ---------------- ----------------
Xxxxxxx Capital Partners III (Bermuda), L.P. 569,982 182,750
--------------------------------------------- ---------------- ----------------
TOTAL 3,758,692 1,205,130
--------------------------------------------- ---------------- ----------------
EXHIBIT A
WARRANT
EXHIBIT B
VOTING AGREEMENT
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
PERSISTENCE SOFTWARE, INC.
COMPLIANCE CERTIFICATE
The undersigned, Xxxxxxxxxxx X. Xxxxx, hereby certifies as follows:
1. The undersigned is the duly elected President and Chief Executive
Officer of Persistence Software, Inc., a Delaware corporation (the "COMPANY").
2. The representations and warranties of the Company set forth in
Section 2 of the Common Stock Purchase Agreement dated November 26, 2002 (the
"AGREEMENT") are true and correct in all material respects as though made on and
as of the date hereof.
3. The Company has performed and complied with all covenants,
agreements, obligations and conditions contained in the Agreement to be
performed by the Company on or prior to the Closing Date.
4. Since the date of the Company's most recent filing with the SEC,
there has not been any material adverse change in the assets, liabilities,
financial condition, or operations of the Company; provided, however that
changes in the ordinary course of business consistent with past practices,
including but not limited to the use of cash and increases in liabilities in the
ordinary course of business consistent with past practices, shall not be deemed
to be a material adverse change.
The undersigned has executed this Certificate this ___ day of November,
2002.
-------------------------------------
Xxxxxxxxxxx X. Xxxxx
President and Chief Executive Officer
