1
EXHIBIT 4.5
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CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
Between
CAYENNE SOFTWARE, INC.
and
SOUTHBROOK INTERNATIONAL INVESTMENTS, LTD.
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Dated as of January 2, 1997
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TABLE OF CONTENTS
PAGE
----
ARTICLE I CERTAIN DEFINITIONS..................................................1
Section 1.1. Certain Definitions.........................................1
ARTICLE II PURCHASE OF SHARES...................................................3
Section 2.1. Purchase of Shares; Closing.................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................4
Section 3.1. Representations and Warranties of the Company...............4
Section 3.2. Representations and Warranties of the
Purchaser...................................................9
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES.................................... 11
Section 4.1. Transfer Restrictions..................................... 11
Section 4.2. Stop Transfer Instruction................................. 12
Section 4.3. Furnishing of Information................................. 12
Section 4.4. Notice of Certain Events.................................. 13
Section 4.5. Copies and Use of Disclosure Materials.................... 13
Section 4.6. Modification to Disclosure Materials...................... 13
Section 4.7. Blue Sky Laws............................................. 14
Section 4.8. Integration............................................... 14
Section 4.9. Furnishing of Rule 144A Materials......................... 14
Section 4.10. Solicitation Materials.................................... 14
Section 4.11. Subsequent Financial Statements........................... 14
Section 4.12. Right of First Refusal; Certain
Corporate Actions......................................... 15
Section 4.13. Purchaser Ownership of Common Stock....................... 16
Section 4.14. Availability of Common Stock.............................. 16
Section 4.15. Listing of Underlying Shares and Warrant
Shares.................................................... 16
Section 4.16. Purchaser's Rights if Trading in Common
Stock is Suspended or Delisted............................ 17
Section 4.17. No Violation of Applicable Law............................ 17
Section 4.18. Redemption Restrictions................................... 17
Section 4.19. Notice of Breaches........................................ 18
Section 4.20. Conversion Procedures..................................... 18
Section 4.21. The Warrants.............................................. 18
ARTICLE V CONDITIONS PRECEDENT TO CLOSING.................................... 19
Section 5.1. Conditions Precedent to Obligations of
the Purchaser............................................. 19
Section 5.2. Conditions Precedent to Obligations of
the Company............................................... 21
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ARTICLE VI TERMINATION........................................................ 22
Section 6.1. Termination by Mutual Consent............................. 22
Section 6.2. Termination by the Company or the
Purchaser................................................. 22
Section 6.3. Termination by the Company................................ 22
Section 6.4. Termination by the Purchaser.............................. 23
ARTICLE VII MISCELLANEOUS...................................................... 23
Section 7.1. Fees and Expenses......................................... 23
Section 7.2. Entire Agreement; Amendments.............................. 24
Section 7.3. Notices................................................... 24
Section 7.4. Amendments; Waivers....................................... 25
Section 7.5. Headings.................................................. 26
Section 7.6. Successors and Assigns.................................... 26
Section 7.7. No Third Party Beneficiaries.............................. 26
Section 7.8. Governing Law; Arbitration................................ 26
Section 7.9. Survival.................................................. 27
Section 7.10. Counterpart Signatures.................................... 27
Section 7.11. Publicity................................................. 27
Section 7.12. Severability.............................................. 27
Section 7.13. Remedies.................................................. 27
Exhibit A Form of Statement of Rights and Preferences
Exhibit B Form of Registration Rights Agreement
Exhibit C Form of Opinion of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, counsel
for the Company
Exhibit D Conversion Procedures
Exhibit E(1) Form of Southbrook Warrants
Exhibit E(2) Form of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants
Schedule 3.1(a) Subsidiaries
Schedule 3.1(c) Capitalization
Schedule 3.1(f) Required Consents and Approvals
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CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT, dated as of
January 2, 1997 (this "AGREEMENT"), by and among Cayenne Software, Inc., a
Massachusetts corporation (the "COMPANY"), and Southbrook International
Investments, Ltd., a corporation organized and existing under the laws of the
British Virgin Islands (the "PURCHASER").
WHEREAS, the Company desires to issue and sell to the
Purchaser and the Purchaser desires to acquire shares of the Company's Series B
Convertible Preferred Stock, par value $1.00 per share (the "PREFERRED STOCK").
IN CONSIDERATION of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
-------------------
Section 1.1. CERTAIN DEFINITIONS. As used in this
Agreement and unless the context requires a different meaning,
the following terms have the meanings indicated:
"AFFILIATE" means, with respect to any Person, any Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person. For the purposes of this definition, "CONTROL"
(including, with correlative meanings, the terms "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH") shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ WARRANTS" shall have the meaning set forth in
Section 4.21.
"BUSINESS DAY" means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
state of New York are authorized or required by law or other government actions
to close.
"CLOSING" shall have the meaning set forth in Section 2.1(b).
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"CLOSING DATE" shall have the meaning set forth in Section
2.1(b).
"CODE" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations thereunder as in effect on the date hereof.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's common stock, par value
$0.01 per share.
"DISCLOSURE MATERIALS" means, collectively, the SEC Documents,
the disclosure package delivered to the Purchaser in connection with the
offering by the Company of the Shares and the Schedules to this Agreement
furnished by or on behalf of the Company pursuant to Section 3.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, encumbrance, right of first refusal, charge or security interest of any
kind in or on such asset or the revenues or income thereon or therefrom.
"MATERIAL ADVERSE EFFECT" shall have the meaning set forth in
Section 3.1(a).
"ORIGINAL ISSUE DATE" shall mean the first issuance of any
Shares, regardless of the number of transfers of any particular Share and
regardless of the number of certificates which may be issued to evidence any
particular Share.
"PERSON" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"PREFERRED STOCK" shall have the meaning set forth in the
recitals hereto.
"PURCHASE PRICE" shall have the meaning set forth in Section
2.1(a).
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"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement, dated as of the date hereof, by and between the Company and the
Purchaser, substantially in the form of EXHIBIT B, as the same may be amended,
supplemented or otherwise modified in accordance with its terms.
"REQUIRED APPROVALS" shall have the meaning set forth in
Section 3.1(f).
"SEC DOCUMENTS" shall have the meaning set forth in Section
3.1(l).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of Preferred Stock purchased by the
Purchaser pursuant to this Agreement.
"SOUTHBROOK WARRANTS" shall have the meaning set forth in
Section 4.21.
"STATED VALUE" shall have the meaning set forth in Section
2.1(a).
"STATEMENT OF RIGHTS AND PREFERENCES" shall have the meaning
set forth in Section 2.1(a).
"SUBSEQUENT FINANCING NOTICE" shall have the meaning set forth
in Section 4.11(a).
"SUBSEQUENT SALE" shall have the meaning set forth in Section
4.11(a).
"SUBSIDIARIES" shall have the meaning set forth in Section
3.1(a).
"TRADING DAY" shall have the meaning set forth in the
Statement of Rights and Preferences.
"UNDERLYING SHARES" means the shares of Common Stock into
which the Shares are convertible in accordance with the terms hereof and the
Statement of Rights and Preferences.
"UNDERLYING SHARES REGISTRATION STATEMENT" shall have the
meaning set forth in Section 3.1(f).
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"WARRANTS" means, collectively, the Southbrook Warrants and
the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants.
ARTICLE II.
PURCHASE OF SHARES
------------------
Section 2.1. Purchase of Shares; Closing.
---------------------------
(a) Subject to the terms and conditions herein set forth, the
Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
from the Company on the Closing Date 150,000 Shares, which shall have the
respective rights, preferences and privileges set forth in EXHIBIT A (the
"STATEMENT OF RIGHTS AND PREFERENCES"), at a price per Share of $20 (the "STATED
VALUE"). The "PURCHASE PRICE" for the Shares shall equal $3,000,000.
(b) The closing of the purchase and sale of the Shares (the
"CLOSING") shall take place at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP ("RSPAB"), ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, immediately following the execution hereof, or at such other time
and/or place as the Purchaser and the Company may agree, but not until the last
of the conditions listed in ARTICLE V is satisfied or waived by the appropriate
party. The date of the Closing is hereinafter referred to as the "CLOSING
DATE."
(c) At the Closing, (i) the Company shall deliver (1) to the
Purchaser (A) one or more stock certificates representing the Shares purchased
hereunder, registered in the name of the Purchaser (B) the Southbrook Warrants
and (C) all documents, instruments and writings required to have been delivered
at or prior to Closing by the Company pursuant to this Agreement and (2) to
▇▇▇▇▇ ▇▇▇▇▇▇▇, LLC ("▇▇▇▇▇ ▇▇▇▇▇▇▇"), the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants, and (ii) the
Purchaser shall deliver to the Company (A) the Purchase Price, less the fees and
disbursements of the Purchaser's counsel contemplated in Section 7.1, in United
States dollars in immediately available funds by wire transfer to an account
designated in writing by the Company prior to the Closing, and (B) all
documents, instruments and writings required to have been delivered at or prior
to Closing by the Purchaser pursuant to this Agreement.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
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Section 3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Purchaser as follows:
(a) ORGANIZATION AND QUALIFICATION. The Company is a
corporation, duly incorporated, validly existing and in good standing under the
laws of The Commonwealth of Massachusetts, with the requisite corporate power
and authority to own and use its properties and assets and to carry on its
business as currently conducted. The Company has no subsidiaries other than as
set forth in the SEC Documents or in SCHEDULE 3.1(a) (collectively, the
"SUBSIDIARIES"). Each of the Subsidiaries is a corporation, duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with the full corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Company and the Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualifica tion
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have, individually or in the aggregate, have a
material adverse effect on the results of operations, assets, prospects, or
financial condition of the Company and the Subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT").
(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated hereby, by the Warrants (as defined below), by the Statement of
Rights and Preferences and by the Registration Rights Agreement, Statement of
Rights and Preferences and otherwise to carry out its obligations hereunder and
thereunder. This Agreement, the Registration Rights Agreement and the Warrants
are collectively referred to as the "TRANSACTION DOCUMENTS". The execution and
delivery of the Transaction Documents by the Company and the consummation by it
of the transactions contemplated thereby have been duly authorized by all
necessary action on the part of the Company. Each of the Transaction Documents
has been duly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may
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be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application. Neither the Company nor any Subsidiary is in violation of any of
the provisions of its respective articles of organization, bylaws or other
charter documents.
(c) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company and each of the Subsidiaries is set forth in
SCHEDULE 3.1(c). No shares of Common Stock are entitled to preemptive or similar
rights. Except as specifically disclosed in SCHEDULE 3.1(c), there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or, except as a result of
the purchase and sale of the Shares and Warrants hereunder, securities, rights
or obligations convertible into or exchangeable for, or giving any person any
right to subscribe for or acquire any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
(d) ISSUANCE OF SHARES, WARRANTS, WARRANT SHARES AND
UNDERLYING SHARES. The Shares and the Warrants are duly authorized and, when
paid for in accordance with the terms hereof, shall be validly issued, fully
paid and nonassessable, free and clear of any Liens. The Company has and at all
times while the Shares and any Warrants are outstanding will maintain an
adequate reserve of shares of Common Stock to enable it to perform its
conversion and other obligations under this Agreement, the Warrants and the
Statement of Rights and Preferences, which reserve shall be no less than the sum
of (i) twice the number of shares of Common Stock issuable hereunder and
pursuant to the terms of the Statement of Rights and Preferences, assuming a
conversion in full of all of the Shares on the Original Issue Date and (ii) the
number of shares of Common Stock issuable upon the exercise in full of the
Warrants (the "WARRANT SHARES"). When issued in accordance with the terms hereof
and the Statement of Rights and Preferences, the Underlying Shares and the
Warrant Shares will be duly authorized, validly issued, fully paid and
nonassessable, free and clear of all Liens.
(e) NO CONFLICTS. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated
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thereby do not and will not (i) conflict with or violate any provision of its
articles of organization or bylaws (each as amended through the date hereof) or
(ii) subject to obtaining the consents specified in Section 3.1(f), conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, or (iii) to the knowledge of the
Company result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or govern mental authority
to which the Company is subject (including Federal and State securities laws and
regulations), or by which any property or asset of the Company is bound or
affected, except in the case of each of clauses (ii) and (iii), such conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations
as could not, individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of the Transaction Documents, (y) have a
Material Adverse Effect or (z) adversely impair the Company's ability to perform
fully on a timely basis its obligations under the Transaction Documents. The
business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental authority, the violation of which
would have a Material Adverse Effect.
(f) CONSENTS AND APPROVALS. Except as specifically set forth
in SCHEDULE 3.1(f), neither the Company nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other govern
mental authority or other Person in connection with the execu tion, delivery and
performance by the Company of the Transaction Documents, except for (i) the
filing of the Statement of Rights and Preferences with respect to the Shares
with the Secretary of State of The Commonwealth of Massachusetts, which filing
shall be effected prior to the Closing Date, (ii) the filing of the registration
statement covering the Underlying Shares and the Warrant Shares (the "UNDERLYING
SHARES REGISTRATION STATEMENT") with the Commission and the making of the
applicable blue-sky filings under state securities laws, each as contemplated by
the Registration Rights Agreement and (iii) other than, in all other cases,
where the failure to obtain such consent, waiver, authorization or order, or to
give or make such notice or filing, could not, individually or in the aggregate,
(x) adversely affect the legality, validity or enforceability of the Transaction
Documents, (y) have a Material Adverse Effect or (z) adversely
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impair the Company's ability to perform fully on a timely basis its obligations
under the Transaction Documents (together with the consents, waivers,
authorizations, orders, notices and filings referred to in SCHEDULE 3.1(f), the
"REQUIRED APPROVALS").
(g) LITIGATION; PROCEEDINGS. There is no action, suit, notice
of violation, proceeding or investigation pending or, to the best knowledge of
the Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any court,
governmental or administrative agency or regulatory authority (Federal, state,
county, local or foreign) which (i) relates to or challenges the legality,
validity or enforceability of the Transaction Documents or the Shares (ii)
could, individually or in the aggregate, have a Material Adverse Effect or (iii)
could, individually or in the aggregate, adversely impair the ability of the
Company to perform fully on a timely basis its obligations under the Transaction
Documents.
(h) NO DEFAULT OR VIOLATION. Neither the Company nor any
Subsidiary (i) is in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except such conflicts or defaults
as do not have a Material Adverse Effect, (ii) is in violation of any order of
any court, arbitrator or governmental body, except for such violations as do not
have a Material Adverse Effect, or (iii) is in violation of any statute, rule or
regulation of any ▇▇▇▇▇ nmental authority which could (individually or in the
aggregate) (x) adversely affect the legality, validity or enforceability of the
Transaction Documents, (y) have a Material Adverse Effect or (z) adversely
impair the Company's ability or obligation to perform fully on a timely basis
its obligations under the Transaction Documents.
(i) CERTAIN FEES. No fees or commission will be payable by
the Company to any broker, finder, investment banker or bank with respect to
the consummation of the transactions contemplated hereby.
(j) DISCLOSURE MATERIALS. The Disclosure Materials do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
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(k) PRIVATE OFFERING. Neither the Company nor any Person
acting on its behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
Shares, the Underlying Shares or the Warrant Shares under the Securities Act)
which might subject the offering, issuance or sale of the Shares, the Underlying
Shares or the Warrant Shares to the registration requirements of Section 5 of
the Securities Act.
(l) SEC DOCUMENTS. The Company has filed all reports required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the three years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials being collectively referred to herein as the "SEC DOCUMENTS") on a
timely basis, or has received a valid extension of such time of filing. As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved, except as may be otherwise indicated in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal
year-end audit adjustments. Since the date of the financial statements included
in the Company's last filed Quarterly Report on Form 10-Q, there has been no
event, occurrence or development that has had a Material Adverse Effect which is
not specifically disclosed in any of the Disclosure Materials.
(m) SENIORITY. No class of equity securities of the Company is
senior to the Shares in right of payment, whether upon liquidation, dissolution
or otherwise.
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(n) EXCLUSIVITY. The Company shall not issue and sell the
Preferred Stock to any Person other than the Purchaser.
(o) FORM S-3 ELIGIBILITY. The Company is, and at the Closing
Date will be, eligible to register securities for resale with the Commission
under Form S-3 promulgated under the Securities Act.
(p) INVESTMENT COMPANY. The Company is not and is not an
Affiliate of an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 3.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants to the Company as follows:
(a) ORGANIZATION; AUTHORITY. The Purchaser is a corporation
duly and validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The Purchaser has the requisite power and
authority to enter into and to consummate the transactions contemplated hereby
and by the other Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The purchase of the Shares and the
Warrants by the Purchaser hereunder has been duly authorized by all necessary
action on the part of the Purchaser. Each of the Transaction Documents has been
duly executed and delivered by the Purchaser or on its behalf and constitutes
the valid and legally binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity.
(b) INVESTMENT INTENT. The Purchaser is acquiring the Shares,
the Warrants, the Warrant Shares and the Underlying Shares for its own account
for investment purposes only and not with a view to or for distributing or
reselling such Shares, Warrants, Warrant Shares or Underlying Shares or any part
thereof or interest therein, without prejudice, however, to the Purchaser's
right, subject to the provisions of the Transaction Documents, at all times to
sell or otherwise dispose of all or any part of such Shares, Warrants, Warrant
Shares or Underlying Shares under an effective registration statement under the
Securities Act and in compliance with applicable State securities laws or under
an exemption from such registration.
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(c) PURCHASER STATUS. The Purchaser was not formed for the
purpose of acquiring the Shares and the Warrants. At the time the Purchaser was
offered the Shares and the Warrants, it was, and at the date hereof, it is, and
at the Closing Date, it will be, an "accredited investor" as defined in Rule
501(a) under the Securities Act.
(d) EXPERIENCE OF PURCHASER. The Purchaser has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Shares, the Warrants, the Underlying Shares and the Warrant Shares, and has so
evaluated the merits and risks of such investment.
(e) ABILITY OF PURCHASER TO BEAR RISK OF INVESTMENT. The
Purchaser is able to bear the economic risk of an investment in the Shares, the
Warrants, the Underlying Shares and the Warrant Shares and is able to afford a
complete loss of such investment.
(f) PROHIBITED TRANSACTIONS. The Shares and the Warrants are
not being acquired, directly or indirectly, with the assets of any "employee
benefit plan", within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended.
(g) ACCESS TO INFORMATION. The Purchaser acknowledges receipt
of the Disclosure Materials and further acknowledges that it has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Shares and the Warrants and the merits and
risks of investing in the Shares and the Warrants; (ii) access to information
about the Company and the Company's financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment in the Company; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense and that is necessary to make an informed
investment decision with respect to the Shares and the Warrants and to verify
the accuracy and completeness of the information contained in the Disclosure
Materials.
(h) RELIANCE. The Purchaser understands and acknowledges that
(i) the Shares and the Warrants are being offered and sold, and the Underlying
Shares and the Warrant
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Shares are being offered to it without registration under the Securities Act in
a private placement that is exempt from the registration provisions of the
Securities Act and (ii) the availability of such exemption depends in part on,
and that the Company will rely upon the accuracy and truthfulness of, the
foregoing representations and the Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that the Purchaser makes
no representation or warranty with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
-------------------------------
Section 4.1. TRANSFER RESTRICTIONS. If the Purchaser should
decide to dispose of any of the Shares or any portion of the Warrants to be
purchased by it hereunder (and upon conversion or exercise thereof, any
Underlying Shares or Warrant Shares), the Purchaser understands and agrees that
it may do so only (i) pursuant to an effective the registration statement under
the Securities Act, (ii) pursuant to an available exemption from the
registration requirements of the Securities Act, (iii) to the Company or (iv)
pursuant to an available exemption from registration under the Securities Act.
In connection with any transfer of any Shares, Warrants, Underlying Shares or
Warrant Shares other than pursuant to an effective registration statement or to
the Company, the Company may require that the transferor provide to the Company
an opinion of counsel experienced in the area of United States securities laws
selected by the transferor, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such Shares, Warrants, Underlying Shares or Warrant
Shares under the Securities Act or any state securities laws.
The Purchaser agrees to the imprinting, so long as is required
by applicable law, of the following legend on certificates representing the
Shares, Warrants, Underlying Shares or Warrant Shares:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION
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OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (B) TO CAYENNE SOFTWARE, INC. OR (C)
PURSUANT TO AN AVAILABLE EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
The legend set forth above shall be removed upon the
conversion of Shares or exercise of Warrants represented by such certificates at
any time after the Underlying Shares Registration Statement has been declared
effective under the Securities Act or upon any resale of Underlying Shares or
Warrant Shares pursuant to an effective registration statement under the
Securities Act or sooner if, in the opinion of counsel to the Company
experienced in the area of United States securities laws such legend is no
longer required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the
Commission). The certificates representing the Shares, Warrants, Underlying
Shares or Warrant Shares shall also bear any other legends required by
applicable Federal or state securities laws, which legends may be removed when,
in the opinion of counsel to the Company experienced in the applicable
securities laws, such legends are no longer required under the applicable
requirements of such securities laws. The Company agrees that it will provide
the Purchaser, upon request, with a substitute stock certificate or certificates
or warrant certificates, free from such legend at such time as such legend is no
longer applicable. The Purchaser agrees that, in connection with any transfer of
Shares, Warrants, Underlying Shares or Warrant Shares by it pursuant to an
effective registration statement under the Securities Act, it will comply with
all prospectus delivery requirements of the Securities Act. The Company makes no
representation, warranty or agreement as to the availability of any exemption
from registration under the Securities Act with respect to any resale of Shares,
Warrants, Underlying Shares or Warrant Shares.
Section 4.2. STOP TRANSFER INSTRUCTION. The Purchaser agrees
that the Company shall be entitled to make a notation on its records and give
instructions to any transfer agent of the Company in order to implement the
restrictions on transfer set forth in Section 4.1 above.
Section 4.3. FURNISHING OF INFORMATION. For so long as the
Purchaser owns Shares, Warrants, Underlying Shares or Warrant Shares, the
Company covenants to timely file (or obtain
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17
valid extensions in respect thereof) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act and to promptly furnish the Purchaser with true and complete copies of all
such filings. If the Company is not at the time required to file reports
pursuant to such sections, it will prepare and furnish to the Purchaser annual
and quarterly financial statements, together with a discussion and analysis of
such financial statements in form and substance substantially similar to those
that would otherwise be required to be included in reports required by Section
13(a) or 15(d) of the Exchange Act in the time period that such filings would
have been required to have been made under the Exchange Act.
Section 4.4. NOTICE OF CERTAIN EVENTS. The Company shall (i)
advise the Purchaser promptly after obtaining knowledge thereof, and, if
requested by the Purchaser, confirm such advice in writing, of (A) the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of the Shares, Warrant Shares or
Underlying Shares or the Common Stock for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purpose by any state securities
commission or other regulatory authority, or (B) any event that makes any
statement of a material fact made in the Disclosure Materials untrue or that
requires the making of any additions to or changes in the Disclosure Materials
in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
from qualification of the Shares, Warrant Shares or Underlying Shares or the
Common Stock under any state securities or Blue Sky laws, and (iii) if at any
time any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of the
Shares, Warrant Shares or Underlying Shares or the Common Stock under any such
laws, use its best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time.
Section 4.5. COPIES AND USE OF DISCLOSURE MATERIALS. The
Company shall furnish the Purchaser, without charge, as many copies of the
Disclosure Materials, and any amendments or supplements thereto, as the
Purchaser may reasonably request. The Company consents to the use of the
Disclosure Materials, and any amendments and supplements thereto, by the
Purchaser in connection with resales of the Shares, the Warrant Shares or the
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Underlying Shares other than pursuant to an effective registration statement.
Section 4.6. MODIFICATION TO DISCLOSURE MATERIALS. If any
event shall occur as a result of which, in the reasonable judgment of the
Company, it becomes necessary or advisable to amend or supplement the Disclosure
Materials in order to make the statements therein, in the light of the
circumstances at the time the Disclosure Materials were delivered to the
Purchaser, not misleading, or if it is necessary to amend or supplement the
Disclosure Materials to comply with applicable law, the Company shall promptly
prepare an appropriate amendment or supplement to the Disclosure Materials so
that (i) as so amended or supplemented the Disclosure Materials will not include
an untrue statement of material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to Purchaser, not misleading and (ii) the
Disclosure Materials will comply in all material respects with applicable law.
Section 4.7. BLUE SKY LAWS. In accordance with the
Registration Rights Agreement, the Company shall qualify the Shares, the
Warrants, the Warrant Shares and the Underlying Shares under the securities or
Blue Sky laws of such jurisdictions as the Purchaser may reasonably request and
to continue such qualification at all times through the third anniversary of the
Closing Date; PROVIDED, HOWEVER, that neither the Company nor its Subsidiaries
shall be required in connection therewith to qualify as a foreign corporation
where they are not now so qualified.
Section 4.8. INTEGRATION. The Company shall not and shall use
its best efforts to ensure that no Affiliate shall sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares, the Warrant Shares or the Underlying Shares in a
manner that would require the registration under the Securities Act of the sale
of the Shares, the Warrant Shares or Underlying Shares to the Purchaser.
Section 4.9. FURNISHING OF RULE 144A MATERIALS. The Company
shall, for so long as any of the Shares, Warrants, Warrant Shares or Underlying
Shares remain outstanding and during any period in which it is not subject to
Section 13 or 15(d) of the Exchange Act, make available to any registered holder
of Shares or Underlying Shares in connection with any sale thereof
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and any prospective purchaser of such Shares, Warrants, Warrant Shares or
Underlying Shares from such Person, the following information in accordance with
Rule 144A(d)(4) under the Securities Act: a brief statement of the nature of the
business of the Company and the products and services it offers and the
Company's most recent audited balance sheet and profit and loss and retained
earnings statements, and similar audited financial statements for such part of
the two preceding fiscal years as the Company has been in operation.
Section 4.10. SOLICITATION MATERIALS. The Company shall not
(i) distribute any offering materials in connection with the offering and sale
of the Shares, Warrants, Warrant Shares or Underlying Shares other than the
Disclosure Materials and any amendments and supplements thereto prepared in
compliance herewith or (ii) solicit any offer to buy or sell the Shares,
Warrants, Warrant Shares or Underlying Shares by means of any form of general
solicitation or advertising.
Section 4.11. SUBSEQUENT FINANCIAL STATEMENTS. The Company
shall furnish to the Purchaser, promptly after they are filed with the
Commission, a copy of all financial statements for any period subsequent to the
period covered by the financial statements included in the Disclosure Materials.
Section 4.12. RIGHT OF FIRST REFUSAL; CERTAIN CORPORATE
ACTIONS. (a) The Company shall not, directly or indirectly, without the prior
written consent of the Purchaser, offer, sell, grant any option to purchase or
otherwise dispose (or announce any offer, sale, grant or any option to purchase
or other disposition) of any of its or its Affiliates equity or equity
equivalent securities (a "SUBSEQUENT SALE") for a period of 180 days after the
Closing Date, except (i) upon conversion of any of the Preferred Stock or
exercise of any of the Warrants, (ii) as a stock dividend or upon any
subdivision of shares of Common Stock, provided that the securities issued
pursuant to such stock dividend or subdivision are limited to additional shares
of Common Stock, (iii) pursuant to subscriptions, warrants, options, convertible
securities or other rights which are outstanding on the Closing Date, (iv)
solely in consideration for the acquisition (whether by merger or otherwise) by
the Company or any of its Subsidiaries of all or substantially all of the stock
or assets of any other entity, (v) pursuant to a primary registered public
offering under the Securities Act, (vi) pursuant to the exercise of options or
purchase rights to purchase Common Stock granted to employees, consultants and
directors of the Company pursuant to any stock purchase, stock
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20
option or employee stock bonus plan approved by the Board of Directors, (vii)
securities issued to equipment lessors or institutional lenders in connection
with lease of corporate equipment or borrowings by the Company as approved by
the Company's Board of Directors, and (viii) upon the exercise of any right
other than a right to purchase securities which was not itself in violation of
the terms of this paragraph, unless (A) the Company delivers to the Purchaser a
written notice (the "SUBSEQUENT FINANCING NOTICE") of its intention to effect
such Subsequent Financing, which Subsequent Financing Notice shall describe in
reasonable detail the proposed terms of such Subsequent Financing, the identity
of the Persons who proposes to provide such Subsequent Financing and the amount
of proceeds intended to be raised thereunder and (B) the Purchaser shall not
have notified the Company by 5:00 p.m. (Eastern Time) on the tenth Business Day
after its receipt of the Subsequent Financing Notice of its willingness to enter
into good faith negotiations to provide (or to cause its sole designee to
provide) financing to the Company on substantially the terms set forth in the
Subsequent Financing Notice. If the Purchaser shall fail to notify the Company
of its intention to enter into such negotiations within such time period, the
Company may effect the Subsequent Financing substantially upon the terms and to
the Persons (or Affiliates of such Persons) set forth in the Subsequent
Financing Notice; provided, that the Company shall provide the Purchaser with a
second Subsequent Financing Notice, and the Purchaser shall again have the right
of first refusal set forth above in this paragraph (a), subject to the
exceptions set forth above in this paragraph (a), if the Subsequent Financing
subject to the initial Subsequent Financing Notice shall not have been
consummated for any reason on the terms set forth in such Subsequent Financing
Notice within 90 days after the date of the initial Subsequent Financing Notice
with the Person (or an Affiliate of such Person) identified in the Subsequent
Financing Notice.
(b) For as long as Preferred Stock or Warrants outstanding,
the Company shall not and shall cause the Subsidiaries not to, without the
consent of the Purchaser, (i) amend its Restated Articles of Organization,
bylaws or other charter documents so as to adversely affect any rights provided
in the Transaction Documents to the Preferred Stock and the Warrants; (ii)
split, combine or reclassify its outstanding capital stock; (iii) redeem,
repurchase or offer to repurchase or otherwise acquire shares of its Junior
Securities (as defined in the Statement of Rights and Preferences); or (iv)
enter into any agreement with respect to any of the foregoing.
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Section 4.13. PURCHASER OWNERSHIP OF COMMON STOCK. The
Purchaser may not use its ability to convert Shares hereunder or under the terms
of the Statement of Rights and Preferences or to use its ability to acquire
Shares of Common Stock upon exercise of the Warrants to the extent that such
conversion or exercise would result in the Purchaser owning more than 4.9% of
the outstanding shares of the Common Stock. The Company shall, promptly upon its
receipt of a Holder Conversion Notice tendered by the Purchaser (or its
designee) under the Statement of Rights and Preferences, and upon its receipt of
a notice of exercise under the terms of the Warrants notify the Purchaser of the
number of shares of Common Stock outstanding on such date and the number of
Underlying Shares and Warrant Shares which would be issuable to the Purchaser
(or its designee, as the case may be) if the conversion requested in such
Conversion Notice and the exercise requested in such notice of exercise were
effected in full, whereupon, notwithstanding anything to the contrary set forth
in the Statement of Rights and Preferences, the Purchaser shall revoke such
conversion or exercise to the extent that it determines that such conversion or
exercise would result in the Purchaser owning in excess of 4.9% of such
outstanding shares of Common Stock.
Section 4.14. AVAILABILITY OF COMMON STOCK. The Company has
reserved 1,820,588 shares of authorized and unissued Common Stock at all times
to provide for converting all of the Shares and exercising all of the Warrants.
If at any time the Company does not have reserved 1,820,588 shares, the Company,
at the option of the holders of Preferred Stock, shall redeem all Shares and
Underlying Shares then held by such holders, pursuant to SECTION 4.16 hereto.
Section 4.15. LISTING OF UNDERLYING SHARES AND WARRANT SHARES.
Prior to the Closing, the Company shall have filed an additional listing
application with the Nasdaq National Market (and each other national securities
exchange on which the Common Stock is then listed) for the listing of the
Underlying Shares and the Warrant Shares. The Company shall, as promptly as
possible, take all steps necessary to cause the Underlying Shares and Warrant
Shares to be approved for listing in the Nasdaq National Market (and each other
national securities exchange or market on which the Common Stock is then
listed), and shall provide to the Purchaser evidence of such listing when
approved and shall maintain the listing of its Common Stock on such exchange.
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Section 4.16. PURCHASER'S RIGHTS IF TRADING IN COMMON STOCK IS
SUSPENDED OR DELISTED. In the event that at any time within the three-year
period after the Closing Date trading in the shares of the Common Stock is
suspended, or if the Common Stock shall not listed for trading, on the Nasdaq
National Market (other than as a result of the suspension of trading in
securities on such market or exchange generally or temporary suspensions pending
the release of material information and other than a suspension of trading on
the Nasdaq National Market if the Common Stock is listed for trading, and not
suspended, on the Nasdaq SmallCap Market within one Business Day after such
suspension) for more than ten days, at the Purchaser's option exercisable by
written notice to the Company, the Company shall redeem all Shares and all
Underlying Shares then held by such Purchaser, at an aggregate purchase price
equal to (A) the product of the average Per Share Market Value for the five
Trading Days immediately preceding the day of such notice multiplied by the
number of shares of Common Stock into which the Shares to be purchased are then
convertible and exercisable (or in the case of Underlying Shares, the number of
Underlying Shares to be purchased), plus (B) interest on such amount accruing
from the 7th day after such notice at the rate of 15% per annum.
Section 4.17. NO VIOLATION OF APPLICABLE LAW. Notwithstanding
any provision of this Agreement to the contrary, if any redemption of Shares or
Underlying Shares otherwise required under the Transaction Documents or the
Statement of Rights and Preferences would be prohibited by the relevant
provisions of the Massachusetts Business Corporation Law, such redemption shall
be effected as soon as it is permitted under such law; PROVIDED, however, that,
interest payable by the Company with respect to any such redemption shall
continue to accrue in accordance with Section 4.16 during any such period.
Section 4.18. REDEMPTION RESTRICTIONS. Notwith standing any
provision of this Agreement to the contrary, if any redemption of Shares or
Underlying Shares otherwise required under this Agreement would be prohibited in
the absence of consent from any lender of the Company or of any Subsidiary, or
by the holders of any class of securities of the Company, the Company shall use
its best efforts to obtain such consent as promptly as practicable after the
redemption is required. Interest payable by the Company with respect to any such
redemption shall continue to accrue in accordance with Section 4.16 until such
consent is obtained. Nothing contained in this Section shall be construed as a
waiver by the Purchaser of any rights it may have by virtue of any breach of any
representation
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23
or warranty of the Company herein as to the absence of any requirement to obtain
any such consent.
Section 4.19. NOTICE OF BREACHES. Each of the Company and the
Purchaser shall give prompt written notice to the other of any breach of any
representation, warranty or other agreement contained in the Transaction
Documents, as well as any events or occurrences arising after the date hereof
and prior to the Closing Date, which could reasonably be likely to cause any
representation or warranty or other agreement of such party, as the case may be,
contained herein or therein to be incorrect or breached as of such Closing Date.
However, no disclosure by either party pursuant to this Section shall be deemed
to cure any breach of any representation, warranty or other agreement contained
herein or in the other Transaction Documents. Neither the Company, any
Subsidiary nor the Purchaser will take, or agree to commit to take, any action
that is intended to make any representation or warranty of the Company or the
Purchaser, as the case may be, contained herein or in the other Transaction
Documents or in the Statement of Rights and Preferences inaccurate in any
respect at the Closing Date.
Notwithstanding the generality of the foregoing, the Company shall
promptly notify the Purchaser of any notice or claim (written or oral) that it
receives from any lender of the Company to the effect that the consummation of
the transactions contemplated by the Transaction Documents violates or would
violate any written agreement or understanding between such lender and the
Company, and the Company shall promptly furnish by facsimile to the holders of
the Shares and Warrants a copy of any written statement in support of or
relating to such claim or notice.
Section 4.20. CONVERSION PROCEDURES. EXHIBIT D attached hereto
sets forth the procedures with respect to the conversion of the Shares,
including the forms of conversion notice to be provided upon conversion,
instructions as to the procedures for conversion, the form of legal opinion, if
necessary, that shall be rendered to the Company's transfer agent and such other
information and instructions as may be reasonably necessary to enable the
Purchaser to exercise its right of conversion smoothly and expeditiously.
Section 4.21. THE WARRANTS. At the Closing, the Company will
issue warrants to purchase an aggregate of 350,000 shares of Common Stock as
follows: (i) to the Purchaser three Common Stock purchase warrants, each in the
form of EXHIBIT E(1)
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(the "SOUTHBROOK WARRANTS"), pursuant to which Purchaser shall have the right at
any time thereafter through the Expiration Date (as such term is defined in each
of the Southbrook Warrants) thereof, to acquire an aggregate of 262,500 shares
of Common Stock at the Exercise Price (as such term is defined in each of the
Southbrook Warrants) per share, and (ii) to ▇▇▇▇▇ ▇▇▇▇▇▇▇ three Common Stock
purchase warrants, each in the form of EXHIBIT E(2) (the "▇▇▇▇▇ ▇▇▇▇▇▇▇
WARRANTS"), pursuant to which ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have the right at any time
thereafter through the Expiration Date (as such term is defined in each of the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants) thereof, to acquire an aggregate of 87,500 shares of
Common Stock at the Exercise Price (as such term is defined in each of the ▇▇▇▇▇
▇▇▇▇▇▇▇ Warrants) per share. The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants represent a portion of
the aggregate warrants which will be issued to the Purchaser as contemplated
hereby and will be assigned and transferred simultaneously with the Closing by
the Purchaser to ▇▇▇▇▇ ▇▇▇▇▇▇▇. The Southbrook Warrants and the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Warrants are collectively known as the "WARRANTS."
ARTICLE V.
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
Section 5.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
PURCHASER. The obligation of the Purchaser to purchase the Shares is subject to
the satisfaction or waiver by the Purchaser, at or prior to the Closing, of each
of the following conditions:
(a) LEGAL OPINION. The Purchaser shall have received the legal
opinion, addressed to it and dated the Closing Date, of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇,
counsel for the Company, substantially in the form of EXHIBIT C;
(b) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company contained herein and in the
Registration Rights Agreement (except as such representations and warranties
relate to the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants) shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made at
that time;
(c) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents and the
Statement of Rights and Preferences
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to be performed, satisfied or complied with by the Company at or
prior to the Closing;
(d) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court of governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by the Transaction Documents;
(e) NO MATERIAL ADVERSE EFFECT. Since the date of the
financial statements included in the Company's last filed Quarterly Report on
Form 10-Q, no event which in the judgment of the Purchaser has or could have a
Material Adverse Effect and no material adverse change in the financial
condition or business of the Company shall have occurred which is not disclosed
in the Disclosure Materials (the Purchaser may consider changes in stock price
in determining whether any such event or change has occurred);
(f) NO PROHIBITIONS. The purchase of and payment for the
Shares (and upon conversion thereof, the Underlying Shares) hereunder (i) shall
not be prohibited or enjoined (temporarily or permanently) by any applicable law
or governmental regulation and (ii) shall not subject the Purchaser to any
penalty, or in its judgment, other onerous condition under or pursuant to any
applicable law or governmental regulation that would materially reduce the
benefits to the Purchaser of the purchase of the Shares or the Underlying Shares
(PROVIDED, HOWEVER, that such regulation, law or onerous condition was not in
effect in such form at the date of this Agreement);
(g) COMPANY CERTIFICATES. The Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or an Assistant
Secretary of the Company and certifying (i) that attached thereto is a true,
correct and complete copy of (A) the Company's Restated Articles of
Organization, as amended to the date thereof, (B) the Company's By-Laws, as
amended to the date thereof, and (C) resolutions duly adopted by the Board of
Directors of the Company authorizing the execution and delivery of the
Transaction Documents, the Statement of Rights and Preferences and the issuance
and sale of the Shares, Warrants, Warrant Shares and the Underlying Shares and
(ii) the incumbency of officers executing the Transaction Documents;
(h) REGISTRATION RIGHTS AGREEMENT. The Company shall have
executed the Registration Rights Agreement;
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(i) NO SUSPENSIONS OF TRADING IN COMMON STOCK. Trading in the
Common Stock shall not have been suspended by the Commission or the Nasdaq
National Market or any other national securities exchange or market on which the
Common Stock is listed or quoted (except for any suspension of trading of
limited duration at the direction of the Company solely to permit dissemination
of material information regarding the Company);
(j) LISTING OF COMMON STOCK. The Common Stock shall have at
all times between the date hereof and the Closing Date been, and on the Closing
Date be, listed for trading on the Nasdaq National Market;
(k) LISTING OF UNDERLYING SHARES AND WARRANT SHARES. An
additional listing application for the listing of 1,470,588 Underlying Shares
and 350,000 Warrant Shares for trading on the Nasdaq National Market shall have
been filed by the Company with the National Association of Securities Dealers;
(l) REQUIRED APPROVALS. All Required Approvals shall have been
obtained;
(m) DELIVERY OF STOCK CERTIFICATES AND WARRANTS. The Company
shall have (i) delivered to or at direction of the Purchaser the stock
certificate(s) representing the Shares and the Southbrook Warrants, registered
in the name of the Purchaser, each in form satisfactory to the Purchaser and
(ii) delivered to or at direction of ▇▇▇▇▇ ▇▇▇▇▇▇▇ the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants;
(n) SHARES OF COMMON STOCK. On the Closing Date, the Company
shall have duly reserved for issuance to the Purchaser 1,470,588 Underlying
Shares and 350,000 Warrant Shares;
(o) STATEMENT OF RIGHTS AND PREFERENCES. The Statement of
Rights and Preferences shall have been duly filed with the Secretary of State of
The Commonwealth of Massachusetts, and the Company shall have delivered proof of
such filing to the Purchaser, reasonably satisfactory to it; and
(p) FORM S-3 ELIGIBILITY. The Company shall be eligible to
register securities for resale under Form S-3 promulgated under the Securities
Act.
Section 5.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
COMPANY. The obligation of the Company to issue and sell the Shares hereunder is
subject to the satisfaction or waiver by the
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Company, at or prior to the Closing, of each of the following conditions:
(a) ACCURACY OF THE PURCHASER'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of the Purchaser shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except that representations and
warranties that are made as of a specific date need be true in all material
respects only as of such date);
(b) PERFORMANCE BY THE PURCHASER. The Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by it at or prior to the Closing;
(c) NO PROHIBITIONS. The sale of the Shares (and upon
conversion thereof, the Underlying Shares) hereunder (i) shall not be prohibited
or enjoined (temporarily or permanently) by any applicable law or governmental
regulation and (ii) shall not subject the Company to any penalty, or in its
reasonable judgment, any other onerous condition under or pursuant to any
applicable law or governmental regulation that would materially reduce the
benefits to the Company of the sale of Shares or the Underlying Shares to the
Purchaser (PROVIDED, HOWEVER, that such regulation, law or onerous condition was
not in effect in such form at the date of this Agreement); and
(d) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court of governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.
ARTICLE VI.
TERMINATION
-----------
Section 6.1. TERMINATION BY MUTUAL CONSENT. This Agreement may
be terminated at any time prior to Closing by the mutual consent of the Company
and the Purchaser.
Section 6.2. TERMINATION BY THE COMPANY OR THE PURCHASER. This
Agreement may be terminated prior to Closing by
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either the Company or the Purchaser, by giving written notice of such
termination to the other party, if:
(a) there shall be in effect any statute, rule, law or
regulation that prohibits the consummation of the Closing or if the
consummation of the Closing would violate any non-appealable final judgment,
order, decree, ruling or injunction of any court of or governmental authority
having competent jurisdiction; or
(b) there shall have been an amendment to Regulation D or an
interpretive release promulgated or issued thereunder, which, in the judgment
of the terminating party, would materially adversely affect the transactions
contemplated hereby and by the other Transaction Documents.
Section 6.3. TERMINATION BY THE COMPANY. This Agreement may be
terminated prior to Closing by the Company, by giving written notice of such
termination to the Purchaser, if the Purchaser has materially breached any
representation, warranty, covenant or agreement contained in the Transaction
Documents and such breach is not cured within five Business Days following
receipt by the Purchaser of notice of such breach.
Section 6.4. TERMINATION BY THE PURCHASER. This Agreement may
be terminated prior to Closing by the Purchaser, by giving written notice of
such termination to the Company, if:
(a) the Company has breached any representation, warranty,
covenant or agreement contained in the Transaction Documents or the Statement
of Rights and Preferences and such breach is not cured within five Business
Days following receipt by the Company of notice of such breach;
(b) there has occurred an event since the date of the
financial statements included in the Company's last filed Quarterly Report on
Form 10-Q which in the Purchaser's judgment has or could have a Material
Adverse Effect and which is not disclosed in the Disclosure Materials;
(c) trading in the Common Stock has been suspended by the
Commission or the Nasdaq National Market or other national securities exchange
or market on which the Common Stock is listed or quoted (except for any
suspension of trading of limited duration solely to permit dissemination of
material information regarding the Company); or
▇-▇▇
▇▇
(▇) the Common Stock shall have failed to be
listed for trading on the Nasdaq National Market and the Purchaser shall have
exercised its termination right herein provided within 10 Business Days of
obtaining knowledge of such delisting.
ARTICLE VII.
MISCELLANEOUS
-------------
Section 7.1. FEES AND EXPENSES. Each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, except as
provided in the Registration Rights Agreement and except that the Company shall
reimburse the Purchaser $10,000 for its legal fees and disbursements. The
Company shall pay all stamp and other taxes and duties levied in connection with
the issuance of the Shares (and upon conversion thereof, the Underlying Shares)
and the Warrants (and upon exercise thereof, the Warrant Shares) pursuant
hereto. The Purchaser shall be responsible for its own tax liability that may
arise as a result of the investment hereunder or the transactions contemplated
by this Agreement. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company shall pay
(i) all costs, expenses, fees and all taxes incident to and in connection with:
(A) the preparation, printing and distribution of the Disclosure Materials and
all amendments and supplements thereto (including, without limitation, financial
statements and exhibits), and all preliminary and final Blue Sky memoranda and
all other agreements, memoranda, correspondence and other documents prepared and
delivered in connection herewith (B) the issuance and delivery of the Shares and
the Warrants and, upon conversion of the Shares, the Underlying Shares and upon
exercise of the Warrants, the Warrant Shares, (C) the qualification of the
Shares and the Warrants and, upon conversion of the Shares, the Underlying
Shares and upon exercise of the Warrants, the Warrant Shares for offer and sale
under the securities or Blue Sky laws of the several states (including, without
limitation, the fees and disbursements of the Purchasers' counsel relating to
such registration or qualification), (D) furnishing such copies of the
Disclosure Materials and all amendments and supplements thereto, as may
reasonably be requested for use in connection with resales of the Shares and the
Warrants and, upon conversion of the Shares, the Underlying
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Shares and upon exercise of the Warrants, the Warrant Shares, and (E) the
preparation of certificates for the Shares and the Warrants and, upon conversion
of the Shares, the Underlying Shares and upon exercise of the Warrants, the
Warrant Shares (including, without limitation, printing and engraving thereof),
(ii) all fees and expenses of the counsel and accountants of the Company and
(iii) all expenses and listing fees in connection with the application for
quotation of the Underlying Shares and the Warrant Shares in the Nasdaq National
Market.
Section 7.2. ENTIRE AGREEMENT; AMENDMENTS. This Agreement,
together with the Exhibits, and Schedules hereto, and the Registration Rights
Agreement, the Statement of Rights and Preferences and the Warrants contain the
entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with
respect to such matters.
Section 7.3. NOTICES. Any notice or other communication
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been received (a) upon hand delivery (receipt acknowledged) or
delivery by telex (with correct answer back received), telecopy or facsimile
(with transmission confirmation report) at the address or number designated
below (if delivered on a Business Day during normal business hours where such
notice is to be received), or the first Business Day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second Business Day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
If to the Company: Cayenne Software, Inc.
▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.:
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With copies to: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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31
If to the Purchaser: Southbrook International
Investments, Ltd.
c/o Trippoak Advisors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
-and-
▇▇▇▇▇ ▇▇▇▇▇▇▇, LLC
Carnegie Hall Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
Section 7.4. AMENDMENTS; WAIVERS. No provision of this
Agreement may be waived or amended except in a written instrument signed, in the
case of an amendment, by both the Company and the Purchaser, or, in the case of
a waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.
Section 7.5. HEADINGS. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
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32
Section 7.6. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. Neither the Company nor the Purchaser may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other, except that the Purchaser may assign its rights hereunder
and under the Registration Rights Agreement to an Affiliate thereof, provided,
that such assignee demonstrates to the reasonable satisfaction of the Company
its satisfaction of the representations and warranties set forth in Section 3.2
herein. The assignment by a party of this Agreement or any rights hereunder
shall not affect the obligations of such party under this Agreement.
Section 7.7. NO THIRD PARTY BENEFICIARIES. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person, except that the representations,
warranties and other agreements contained herein of the Company are intended for
the benefit of and may be relied upon and enforced by ▇▇▇▇▇ ▇▇▇▇▇▇▇ to the
extent such representations, warranties and agreements relate to the Warrants.
Section 7.8. GOVERNING LAW; ARBITRATION. (a) This Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York without regard to the principles of conflicts of
law thereof.
(b) All disputes between the parties hereto arising under
the terms of this Agreement and the other Transaction Documents shall be
arbitrated in New York City under the rules of the American Arbitration
Association then in effect in the City of New York. Judgment on any award made
by the arbitrators hereunder may be rendered in any court having jurisdiction.
The parties consent to the nonexclusive jurisdiction of the State and Federal
Courts sitting in New York County, New York, in connection with the enforcement
of such award. The parties agree to keep confidential any materials, documents
and other information that is disclosed in connection with any arbitration
proceeding.
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33
Section 7.9. SURVIVAL. The representations and warranties of
the Company and the Purchaser contained in ARTICLE III and the agreements and
covenants of the parties contained in ARTICLE IV and this ARTICLE VII shall
survive the Closing (or any earlier termination of this Agreement) and any
conversion of Shares and exercise of Warrants hereunder.
Section 7.10. COUNTERPART SIGNATURES. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if
such facsimile signature page were an original thereof.
Section 7.11. PUBLICITY. The Company and the Purchaser shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and neither
party shall issue any such press release or otherwise make any such public
statement without the prior written consent of the other, which consent shall
not be unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, in which such case the
disclosing party shall provide the other party with prior notice of such public
statement.
Section 7.12. SEVERABILITY. In case any one or more of the
provisions of this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
Section 7.13. REMEDIES. In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, the Purchaser will be entitled to specific performance of the
obligations of the Company under this Agreement and the Company will be entitled
to specific performance of the obligations of the Purchaser hereunder with
respect to the subsequent transfer of Shares, Warrants, Warrant
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Shares and Underlying Shares. Each of the Company and the Purchaser agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of any breach of its obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first indicated above.
Company:
CAYENNE SOFTWARE, INC.
By:
-----------------------------------
Name:
Title:
SOUTHBROOK INTERNATIONAL
INVESTMENTS, LTD.
By:
-----------------------------------
Name:
Title:
36
Exhibit D
---------
[To be provided by Company prior to the Closing]
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