Exhibit 10.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of the 19th day of
May, 2003 by and among Onyx Software Corporation, a Washington corporation (the
"Company"), and the Investors identified on the attached Exhibit A (each an
"Investor" and collectively the "Investors").
RECITALS
A. The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 Act").
B. The Investors wish to purchase from the Company, and the Company wishes
to issue and sell to the Investors, upon the terms and conditions stated in this
Agreement, an aggregate of 388,888 shares (before giving effect to the Reverse
Split (as defined below)) of the Company's Common Stock, par value $0.01 per
share (the "Common Stock").
C. The Company is also entering into a Purchase Agreement, of even date
herewith, for the purchase of an aggregate of (1) 4,153,900 shares of the Common
Stock and (2) warrants to purchase an aggregate of 25,000 shares of Common Stock
(in each case, before giving effect to the Reverse Split) to Special Situations
Fund III, L.P. ("SSF") and the other SSF Investors (as defined below)(such
agreement, the "SSF Purchase Agreement"), and the sale of shares to the
Investors under this Agreement is conditioned upon the completion of the
transactions contemplated by the SSF Purchase Agreement.
D. Contemporaneous with the sale of the Common Stock, the parties hereto
and the SSF Investors will execute and deliver a Registration Rights Agreement,
in the form attached hereto as Exhibit B (the "Registration Rights Agreement"),
pursuant to which the Company will agree to provide certain registration rights
under the 1933 Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere in
this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:
"Affiliate" means, with respect to any Person, any other Person
which directly or indirectly Controls, is controlled by, or is under common
control with, such Person.
"Board of Directors" means the board of directors of Onyx Software
Corporation, a Washington corporation.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company, and any securities into which the Common Stock may be reclassified.
"Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of business entity.
"Purchase Price" means the average of the closing bid prices of the
Common Stock on the Nasdaq National Market for each of the two trading days
immediately preceding the Closing Date (as defined below).
"Reverse Split" means an amendment and restatement of the Company's
articles of incorporation for the purpose of effecting a one-for-four reverse
split of the Common Stock and an increase in authorized capital to 100 million
shares (post-Reverse Split), including 80 million shares of Common Stock and 20
million shares of preferred stock.
"Shares" means the shares of Common Stock being purchased by the
Investors hereunder.
"SSF Investor" means any one of the following: Special Situations
Fund III, L.P., Special Situations Cayman Fund, L.P., Special Situations Private
Equity Fund, L.P. or Special Situations Technology Fund, L.P., and any of their
respective transferees.
"Transaction Documents" means this Agreement, the Warrants and the
Registration Rights Agreement.
2. Purchase and Sale of the Shares. Subject to the terms and conditions of
this Agreement, on the Closing Date, each of the Investors shall severally, and
not jointly, purchase, and the Company shall issue and sell to the Investors,
the Shares in the respective amounts set forth opposite the Investors' names on
Exhibit A at the Purchase Price. The total purchase price payable by each
Investor for the Shares that each Investor is hereby agreeing to purchase is set
forth on Exhibit A. The aggregate purchase price payable by the Investors to the
Company for all of the Shares purchased at the Closing shall be approximately
$315,000.
3. Closing. Subject to the satisfaction (or waiver) of the conditions
thereto set forth in this Agreement, the closing of the purchase and sale of the
Shares and the Warrants hereunder (the "Closing") shall take place at the
offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, counsel to the Company, 000
Xxxxxx Xxx., Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, at 10:00 a.m. Pacific time on
the earliest practicable date following the satisfaction of the conditions to
closing set forth in Section 6, or at such other time and place as the Company
and the Investors shall agree. At the Closing, the Company shall deliver to each
Investor a single stock certificate representing the number of Shares purchased
by such Investor, each to be registered in the name of such Investor, against
payment of the applicable purchase price therefor by check or wire transfer of
-2-
immediately available funds to such account or accounts as the Company shall
designate in writing, or by such other method as the Company shall determine in
its sole discretion. The date on which the Closing takes place shall be referred
to herein as the "Closing Date."
4. Representations and Warranties of the Investors. Each of the Investors
hereby severally, and not jointly, represents and warrants to the Company that:
4.1 Purchase for Own Account. The Shares to be purchased by the
Investor hereunder will be acquired for the Investor's own account, not as
nominee or agent, and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the 1933 Act. Such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing its Shares. Such Investor further represents that it does not
presently have any contract, undertaking, agreement or arrangement with any
Person to sell, transfer or grant participation to such Person, with respect to
any of the Shares.
4.2 Economic Risk of Investment. Such Investor has substantial
experience in evaluating private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company. Such Investor must bear the economic
risk of this investment indefinitely unless the Shares are registered pursuant
to the 1933 Act, or an exemption from registration is available. Such Investor
understands that the Company is under no obligation to register the Shares other
than those obligations set forth in the Registration Rights Agreement. Such
Investor also understands that there is no assurance that any exemption from
registration under the 1933 Act will be available and that, even if available,
such exemption may not allow such Investor to transfer all or any portion of the
Shares under the circumstances, in the amounts or at the times such Investor
might propose.
4.3 Access to Information. Such Investor 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
Shares. Such Investor has had an opportunity to discuss the Company's business,
management and financial affairs with its management (or, in the case of an
Investor who is also a member of management of the Company, with other members
of management), and an opportunity to review the Company's facilities and
financial data. Such Investor has also had an opportunity to ask questions of
officers of the Company, which questions were answered to its satisfaction. Such
Investor understands that such discussions, as well as any written information
issued by the Company, were intended to describe certain aspects of the
Company's business and prospects but were not a thorough or exhaustive
description, and that no representation or warranty as to the Company's past,
present or future business or operations was intended thereby.
4.4 Restricted Securities. The Investor understands that the Shares
are characterized as "restricted securities" under applicable U.S. federal and
state securities laws inasmuch that they are being acquired from the Company in
a transaction not involving a public offering and that, pursuant to these laws,
such Investor may not transfer the shares unless such transfer has been
registered with the SEC and qualified by state authorities, or an exemption from
such registration or qualification requirements is available.
-3-
4.5 Legends. It is understood that, except as provided below,
certificates evidencing the Shares may bear the following or any similar legend:
(b) The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
applicable state securities laws, and no interest may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (a) there is an
effective registration statement under the Act and applicable state securities
laws covering any such transaction involving said securities, (b) such
transaction complies with Rule 144, (c) this corporation receives an opinion of
legal counsel for the holder of these securities reasonably satisfactory to this
corporation stating that such transaction is exempt from registration, or (d)
this corporation otherwise satisfies itself that such transaction is exempt from
registration.
(b) If required by the authorities of any state in connection
with the issuance of sale of the Securities, the legend required by such state
authority.
4.6 Accredited Investor. The Investor represents that he or she is
an "accredited investor" as to the Company, as defined in Rule 501(a) of
Regulation D.
4.7 1934 Act Filings. Such Investor agrees and acknowledges that it
shall have sole responsibility for making any filings that may be required with
the SEC pursuant to Sections 13 and 16 of the 1934 Act as a result of its
acquisition of the Shares and any future retention or transfer thereof.
4.8 Rule 144. Such Investor is aware of the provisions of Rule 144
promulgated under the 1933 Act which permit limited resale of shares purchased
in a private placement subject to the satisfaction of certain conditions,
including, among other things, the existence of a public market for the shares,
the availability of certain public information about the Company, the resale
occurring not less than one year after a party has purchased and paid for the
security to be sold, the sale being effected through a "broker's transaction" or
in transactions directly with a "market maker" and the number of shares being
sold during any three-month period not exceeding specified limitations.
4.9 Further Limitations on Distribution. Without in any way limiting
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Shares unless and until:
(a) there is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, such Investor shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the 1933 Act.
-4-
4.10 Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Investors.
4.11 Representation of Counsel. Such Investor has had an opportunity
to review this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby with such Investor's own independent legal
counsel. Such Investor is relying solely on such Investor's legal counsel and
not on the Company or any of the Company's agents, including Xxxxxx, Xxxxxxxxxx
& Xxxxxxxxx LLP, for legal advice with respect to this investment or the
transactions contemplated by this Agreement and the other Transaction Documents.
5. Covenants. Each Investor and the Company hereby covenant as follows:
5.1 Closing Conditions. Each Investor and the Company shall take all
actions necessary and appropriate to cause the conditions set forth in Section 6
hereof to be satisfied prior to the Closing.
5.2 Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each Investor and the Company shall use its respective reasonable
commercial efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement. The
Company and each Investor agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable in order to consummate or implement expeditiously
the transactions contemplated by this Agreement.
5.3 Certain Filings. The Company and each Investor shall cooperate
with one another (a) in determining whether any action by or in respect of, or
filing with, any governmental body, agency, official or authority is required,
or any actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (b) in taking such actions or
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such actions, consents, approvals or waivers.
6. Conditions to Closing.
6.1 Conditions to the Company's and Investors' Obligations. The
obligation of the Company to issue and sell the Shares at Closing and the
obligation of the Investors to purchase the Shares at the Closing is subject to
the fulfillment, on or prior to the Closing Date, of the following conditions,
any of which may be waived in a writing signed by the Company and the Investors
agreeing hereunder to purchase a majority of the Shares (the "Required
Investors"):
-5-
(a) The Company shall have obtained any and all consents,
permits, approvals, registrations and waivers necessary or appropriate for
consummation of the purchase and sale of the Securities, all of which shall be
in full force and effect.
(b) No U.S. federal or state governmental authority or agency
or commission or U.S. federal or state court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree, injunction or other order that is then in
effect and has the effect of making illegal the issuance of the Shares to each
Investor as contemplated hereby.
(c) The Company, and each of the SSF Investors purchasing
shares of Common Stock pursuant to the SSF Purchase Agreement shall have
executed and delivered the Registration Rights Agreement.
(d) The Closing of the sale of Securities to the SSF Investors
under the SSF Purchase Agreement shall have occurred; provided, however, that
this condition shall be deemed to be satisfied if the SSF Purchase Agreement
shall have been executed by the parties thereto and the closing of the
transactions contemplated by the SSF Purchase Agreement shall be scheduled to
occur on the same date as the Closing Date of the transactions hereunder.
(e) No judgment, writ, order, injunction, award or decree of
or by any court, or judge, justice or magistrate, including any bankruptcy court
or judge, or any order of or by any governmental authority, shall have been
issued, and no action or proceeding shall have been instituted by any
governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.
6.2 Additional Conditions to Obligations of the Company. The
Company's obligation to sell and issue the Shares at Closing is subject to the
fulfillment to the satisfaction of the Company on or prior to the Closing Date
of the following additional conditions, any of which may be waived by the
Company:
(a) The representations and warranties made by the Investors
in Section 4 hereof shall be true and correct in all respects when made, and
shall be true and correct in all respects on the Closing Date with the same
force and effect as if they had been made on and as of such date.
(b) Each Investor shall have executed and delivered the
Registration Rights Agreement.
(c) All Investors shall have executed the Lock-Up Agreement in
the form attached hereto as Exhibit C.
6.3 Termination of Obligations to Effect Closing; Effects.
(a) The obligations of the Company, on the one hand, and the
Investors, on the other hand, to effect the Closing shall terminate as follows:
-6-
(i) Upon the mutual written consent of the Company and the
Required Investors;
(ii) By the Company if any of the conditions set forth in
Section 6.2 shall have become incapable of fulfillment, and shall not have been
waived by the Company; or
(iii) By either the Company or the Required Investors if any
of the conditions set forth in Section 6.1 shall have become incapable of
fulfillment, and shall not have been waived by the Required Investors; or
(iv) By either the Company or the Required Investors if the
Closing has not occurred on or prior to August 31, 2003.
provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party's seeking to
terminate its obligation to effect the Closing.
(b) In the event of termination by the Company or the Required
Investors of their obligations to effect the Closing pursuant to this Section
6.3, written notice thereof shall forthwith be given to the other parties hereto
and the obligation of all parties to effect the Closing shall be terminated,
without further action by any party. Nothing in this Section 6.3 shall be deemed
to release any party from any liability for any breach by such party of the
terms and provisions of this Agreement or the other Transaction Documents or to
impair the right of any party to compel specific performance by any other party
of its obligations under this Agreement or the other Transaction Documents.
7. Miscellaneous.
7.1 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.
7.2 Counterparts; Faxes. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.
7.3 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
-7-
7.4 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one day after delivery to
such carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten
days' advance written notice to the other party:
If to the Company:
Onyx Software Corporation
0000 000xx Xxxxxx XX
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Legal Officer
Fax: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Fax: (000) 000-0000
If to any Investor: to the address set forth on the
signature pages hereto.
7.5 Expenses. Irrespective of whether the Closing is effected, each party
shall bear all costs and expenses that such party incurs in connection with the
transactions contemplated by this Agreement. In the event that legal proceedings
are commenced by any party to this Agreement against another party to this
Agreement in connection with this Agreement or the other Transaction Documents,
the party or parties which do not prevail in such proceedings shall severally,
but not jointly, pay their pro rata share of the reasonable attorneys' fees and
other reasonable out-of-pocket costs and expenses incurred by the prevailing
party in such proceedings.
7.6 Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Required Investors. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of Securities purchased under this Agreement at the time outstanding,
each future holder of all such Securities and the Company.
-8-
7.7 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
7.8 Entire Agreement. This Agreement, including the Exhibits and the
Disclosure Schedules, and the other Transaction Documents constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.
7.9 Governing Law; Venue. This Agreement shall be governed in all
respects by the laws of the state of Washington without reference to its
principles of conflicts of laws. The parties irrevocably consent to the
jurisdiction and venue of the state and federal courts located in King County,
Washington in connection with any action relating to this Agreement or the
transactions contemplated hereby.
[signature page follows]
-9-
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement or caused their duly authorized officers to execute this Agreement as
of the date first above written.
The Company: ONYX SOFTWARE CORPORATION
By: /s/ XXXXX X. XXXXX
_____________________________
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
-10-
Investor:[Signatures of individual investors are included in originally
executed agreement]
------------------------------------
Print Name: ________________________
Social Security Number: ____________
Address: ___________________________
------------------------------------
------------------------------------
Fax: _______________________________
EXHIBIT A
SCHEDULE OF INVESTORS
NUMBER OF SHARES TO BE AGGREGATE
INVESTOR PURCHASED PURCHASE PRICE
-------- --------- --------------
Xxxxxx X. Dial 61,728 $50,000
Xxxxxx Living Trust 92,593 $75,000
Xxxxx X. Xxxx 37,037 $30,000
Xxxxxx X. Xxxx and Xxxxxx X. Xxxx XX TEN 30,864 $25,000
Xxxxx X. Xxxxx 61,728 $50,000
Xxxxxxxx X. Xxxxx, Xx. 30,864 $25,000
Xxxx X. Xxxxx 30,864 $25,000
Xxxx X Xxxxxx 12,346 $10,000
Xxxxxxx Xxxxxx -- Custodian FBO Xxxxxx X. Xxxxxxx XXX 30,864 $25,000
TOTAL 388,888 $315,000
EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
[Filed as Exhibit 10.3 to the registrant's current report on Form 8-K filed on
May 19, 2003]
EXHIBIT C
FORM OF LOCK-UP AGREEMENT
______________, 2003
Onyx Software Corporation
0000-000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
This Lock-Up Agreement (this "Agreement") is being delivered to you in
connection with the Purchase Agreement of even date herewith (the "Purchase
Agreement") by and among Onyx Software Corporation (the "Company") and the
Investors named therein (each an "Investor"), with respect to the purchase of
common stock of the Company ("Common Stock") and warrants to purchase Common
Stock.
In order to induce the Company to enter into the Purchase Agreement, the
undersigned Investor agrees that from the date hereof through and including [the
180th day after the date of this Agreement], the undersigned will not, directly
or indirectly, without the prior written consent of the Company, (i) sell, offer
to sell, contract to sell, hypothecate, pledge, grant any option to purchase or
otherwise dispose of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any Common Stock of the Company or any securities convertible
into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock or any such security, except for the exercise of
any stock option by the undersigned, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock, whether any such transaction is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in clause (i)
or (ii). The foregoing sentence shall not apply to (a) bona fide gifts, provided
the recipient or recipients thereof agree in writing to be bound by the terms of
this Agreement or (b) dispositions to any trust for the direct or indirect
benefit of the undersigned and/or the immediate family of the undersigned,
provided that such trust agrees in writing to be bound by the terms of this
Agreement. For purposes of this Agreement, "immediate family" shall mean the
undersigned and the spouse, any lineal descendant, father, mother, brother or
sister of the undersigned.
Very truly yours,
INVESTOR:
-------------------------------------------
Print Name:
