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EXHIBIT 10.01
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
This PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (this "AGREEMENT")
is made and entered into as of June 28, 1999 (the "Effective Date") by and among
Versant Corporation, a California corporation (the "COMPANY"), and the parties
listed on the Schedule of Investors attached to this Agreement as Exhibit A
(each hereinafter individually referred to as an "INVESTOR" and collectively
referred to as the "INVESTORS").
R E C I T A L S
A. Vertex Technology Fund Ltd. ("Vertex") and the Company are parties to
a Note Purchase Agreement, dated as of October 16, 1998 (the "NPA") pursuant to
which Vertex purchased a note, dated October 16, 1998 (the "Note") with an
aggregate principal amount of $3,619,000 (the "Principal"). The Principal has
accrued interest of $227,550.82 as of the Effective Date. Principal and interest
under the Note is therefore: $3,846,550.82 (the "Debt").
B. The Company is currently in need of funds for working capital
purposes and needs to convert debt into equity in order to facilitate compliance
with Nasdaq's continued listing requirements.
C. Vertex is willing to purchase shares of the Company's Series A
Preferred Stock and warrants to purchase Common Stock, in exchange for the
cancellation of the Debt, as provided in this Agreement. .
D. Other Investors are willing to purchase Preferred Stock and warrants
for cash as provided in this Agreement.
NOW THEREFORE, the parties hereby agree as follows:
1. PURCHASE AND SALE. Each Investor agrees, severally and not jointly,
to purchase from the Company the number of shares of the Company's Series A
Preferred Stock (the "SHARES"), no par value, set forth beside such Investor's
name on Exhibit A at the "Market Price" (as defined below) per share, together
with a warrant to purchase from the Company the number of shares of the
Company's Common Stock set forth beside such Investor's name on Exhibit A (each,
a "WARRANT" and collectively, the "WARRANTS"), at an exercise price equal to the
Market Price, for the warrant purchase price associated with such Warrant, in
substantially the form attached hereto as Exhibit B and the Company agrees to
sell to each Investor the Shares and a Warrant on the terms set forth herein.
The rights and preferences of the Shares, including the terms upon which the
Shares are convertible into Common Stock, are established by the Certificate of
Determination attached as Exhibit C, which will be filed with the California
Secretary of State supplementing the Company's articles of incorporation on or
prior to the
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closing. The Market Price is the average closing price of the Common Stock on
Nasdaq for the five trading days preceding the Effective Date.
2. CLOSING. The purchase and sale of the Shares and Warrants will take
place at the offices of Fenwick & West LLP, Two ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at 11:00 a.m. Pacific Time, on July 12, 1999 or at such
other time and place as the Company and Investors who have agreed to purchase a
majority of the Shares listed on Exhibit A mutually agree upon, either orally or
in writing. Such time and place are referred to in this Agreement as a
"CLOSING". At the Closing, the Company will deliver to each Investor a
certificate for the Shares and a Warrant against delivery to the Company by such
Investor of the full purchase price of such Shares and Warrant, paid by a check
payable to the Company's order or wire transfer of funds to the Company or by
cancellation of indebtedness as set forth on Exhibit A. In the case of payment
by cancellation of indebtedness by Vertex, the Company and Vertex shall execute
the Debt Cancellation Agreement attached as Exhibit E to this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Investor that, except as set forth in the
Schedule of Exceptions (the "SCHEDULE OF EXCEPTIONS") attached to this Agreement
as Exhibit C (which Schedule of Exceptions shall be deemed to be representations
and warranties to the Investors by the Company under this Section 3), the
statements in the following paragraphs of this Section 3 are all true and
complete:
3.1 Organization, Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all requisite corporate power and
authority to own its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted. Each of the Company's
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own its properties and assets and to
carry on its business as now conducted and as presently proposed to be
conducted. Each of the Company and its subsidiaries is qualified to do business
as a foreign corporation in each jurisdiction where failure to be so qualified
would have a material adverse effect on its financial condition, business,
prospects or operations.
3.2 Due Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders, necessary for the
authorization, execution and delivery of, and the performance of all obligations
of the Company under, this Agreement, the Warrants and the Registration Rights
Agreement (as defined in Section 5.7 below) and the authorization, issuance,
reservation for issuance and delivery of all the Shares and the Common Stock
that is issuable under exercise of the Warrants and conversion of the Shares
(the "EXERCISE SHARES") has been taken or will be taken prior to the execution
of this Agreement, and this Agreement, the Warrants and the Registration Rights
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as may be limited
by: (i) applicable bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of creditor's
rights generally; and (ii) the effect of rules of law governing the availability
of equitable remedies.
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3.3 Corporate Power. The Company has all requisite legal and
corporate power to execute and deliver this Agreement, the Warrants and the
Registration Rights Agreement, to issue the Shares and the Exercise Shares, and
to carry out and perform all its obligations under this Agreement, the Warrants
and the Registration Rights Agreement.
3.4 Proceedings. There is no pending action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), prosecution, hearing, or investigation,
commenced, brought, conducted or heard by or before, any governmental body or
any arbitrator or arbitration panel ("PROCEEDING"), and to the Company's
knowledge, no person or entity has threatened to commence any Proceeding, (i)
that challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, the transactions contemplated by this
Agreement, the Warrants or the Registration Rights Agreement or (ii) that might
result, either individually or in the aggregate, in any material adverse change
in the business, assets, financial condition, results of operations or prospects
of the Company. The Company is not party or subject to the provisions of any
order, writ, injunction, judgment, stipulation or decree of any court,
administrative agency, commission, regulatory authority or other governmental
agency or instrumentality that are likely to have a material adverse effect on
the business, assets, financial condition, results of operations or prospects of
the Company.
3.5 Non-Contravention; Consents; No Liens. Neither the execution
and delivery of this Agreement, the Warrants or the Registration Rights
Agreement, nor the consummation or performance of any of the transactions
contemplated by this Agreement, the Warrants or the Registration Rights
Agreement, will directly or indirectly (with or without notice or lapse of
time):
(a) contravene, conflict with or result in a violation of
(i) any of the provisions of the Company's Articles of Incorporation or Bylaws,
or (ii) any resolution adopted by the Company's shareholders, the Company's
Board of Directors or any committee of the Company's Board of Directors;
(b) contravene, conflict with or result in a violation of,
or give any governmental body or other person the right to challenge any of the
transactions contemplated by this Agreement, the Warrants, the Registration
Rights Agreement or any Material Contract (as defined in Section 3.7(d) below)
or to exercise any remedy or obtain any relief under, any federal, state, local,
municipal, foreign or other law, statute, legislation, ordinance, rule,
regulation or ruling that is or has been issued, enacted, adopted, passed,
approved, promulgated, made, implemented or otherwise put into effect by or
under the authority of any governmental body, or any order to which the Company,
or any of the assets owned or used by the Company, is subject;
(c) contravene, conflict with or result in a material
violation or breach of, or result in a material default under, any of the
Company's material agreements; or
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(d) result in the creation of any lien, charge or
encumbrance upon any asset of the Company.
With the exception of any necessary filings pursuant to federal and state
securities laws, and except as disclosed on the Schedule of Exceptions, the
Company will not be required to make any filing with or give any notice to, or
to obtain any consent from, any person in connection with the execution and
delivery of this Agreement, the Warrants and the Registration Rights Agreement
or the consummation or performance of any of the transactions contemplated by
this Agreement, the Warrants and the Registration Rights Agreement.
3.6 Brokers. The Company has not agreed or become obligated to
pay, and has not taken any action that likely would result in any person
claiming to be entitled to receive, any brokerage commission, finder's fee or
similar commission or fee in connection with any of the transactions
contemplated by this Agreement.
3.7 Full Disclosure; SEC Reports; SEC Matters.
(a) This Agreement (including all exhibits and schedules
hereto) does not contain any untrue statement of material fact and does not omit
to state any fact necessary to make any of the representations, warranties or
statements contained herein on behalf of the Company not misleading with respect
to the Company.
(b) As of the date of this Agreement, the Company has
provided the Investors or their counsel with full and complete access to all of
the Company's records and other documents and data requested by them.
(c) The Company has filed all reports required to be filed
with the Securities and Exchange Commission ("SEC") pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") (all such reports and
amendments thereto, collectively, the "COMPANY SEC REPORTS"). None of such
Company SEC Reports, as of their respective dates (as amended through the date
hereof), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) The Company has filed all Material Contracts required
to be filed with the SEC pursuant to the Item 601 of Regulation S-K under the
Securities Act of 1933, as amended (the "1933 ACT") and the Exchange Act.
(e) The Company is eligible to file Form S-3 registration
statements under the 1933 Act with the SEC in connection with offerings of
outstanding Company securities to be offered for the account of any person other
than the Company, so long as such person is not a registered broker-dealer.
3.8 Valid Issuance. The Shares and the Exercise Shares, when
issued in compliance with the terms of this Agreement and the Warrants, will be
validly issued, fully paid and nonassessable and will be free of any liens or
encumbrances.
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3.9 Capitalization. As of the date of this Agreement, the
capitalization of the Company consists of the following:
(a) Preferred Stock. A total of 3,000,000 authorized
shares of preferred stock, no par value per share, none of which is issued and
outstanding.
(b) Common Stock. A total of 30,000,000 authorized shares
of common stock, no par value per share (the "Common Stock"), of which
10,151,227 shares are issued and outstanding as of July 8, 1999.
(c) Options, Warrants, Reserved Shares. Except for: (i)
the 516,862 shares of Common Stock reserved for issuance under the Company's
1989 Stock Option Plan; (ii) the 1,900,000 shares of Common Stock reserved for
issuance under the Company's 1996 Equity Incentive Plan under which options to
purchase 1,756,547 shares are outstanding; (iii) the 325,017 shares of Common
Stock available for issuance under the Company's 1996 Employee Stock Purchase
Plan; (iv) the 125,000 shares of Common Stock reserved for issuance under the
Company's 1996 Directors Stock Option Plan under which options to purchase
70,000 shares are outstanding; (v) the 1,880,000 shares of Common Stock reserved
for issuance upon the conversion of an outstanding Convertible Subordinated
Secured Promissory Note of the Company; and (vi) 350,000 shares of Common Stock
issuable upon the exercise of warrants dated December 28, 1998 by the three
Special Situations Funds (subject to adjustment as provided in such warrants)
there are not outstanding any options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock or any securities convertible into or
ultimately exchangeable or exercisable for any shares of the Company's capital
stock.
3.10 No Material Adverse Change. Since March 31, 1999, the business
of the Company has been operated in the ordinary course and substantially
consistent with past practice, and, except as disclosed in the Company SEC
Reports, there has not been any material adverse change in the business, assets,
financial condition, results of operations or prospects of the Company.
3.11 Title to Properties; Liens and Encumbrances. The Company has
good and marketable title to its properties and assets and, with respect to the
property and assets leased by the Company, holds valid leasehold interests
therein, in each case subject to no mortgage, pledge, lien, security interest,
conditional sale agreement, encumbrance or charge, except (i) tax, materialmen's
or like liens for obligations not yet due or payable or being contested in good
faith by appropriate proceedings, (ii) liens arising from equipment loans
entered into in the ordinary course of business or (iii) except as disclosed on
the Schedule of Exceptions or in the Company's public filings.
3.12 Proprietary Information and Other Rights. The Company has
title and ownership of or license rights to all patents, patent applications,
trademarks, service marks, trade names, copyrights, mask works, trade secrets,
information, proprietary rights and processes
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(collectively, "PROPRIETARY INFORMATION") necessary for its business as now
conducted and as presently proposed to be conducted without, except in the case
of patents and patent applications, any conflict with or infringement of the
rights of others. To the best of the Company's knowledge, it possesses no
patents or patent applications which conflict with or infringe the rights of
others. The Company has not received any communications considered material and
credible alleging that the Company has violated or, by conducting its business
as proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade proprietary rights of any other person or entity. To
the best knowledge of the Company none of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interests of the Company or that would conflict with the
Company's business as proposed to be conducted. Neither the execution nor
delivery of this Agreement and related agreements nor the carrying on of
the?Company's business by the employees of the Company nor the conduct of the
Company's business as proposed, will, to the best of the Company's knowledge,
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any of such employees is now obligated. The Company does not believe nor does it
have any reason to believe it is or will be necessary to utilize any inventions
of any of its employees (or people they currently intend to hire) made prior to
the employment of any such person by the Company.
3.12 Employees. To the best of the Company's knowledge, no employee
of the Company is in violation of any term of any employment contract, patent
disclosure agreement, non-competition agreement, or any restrictive covenant to
a former employer relating to the right of any such employee to be employed by
the Company because of the nature of the business conducted or presently
proposed to be conducted by the Company.
3.13 Confidential Information and Invention Assignment Agreements.
Each officer and employee of the Company has executed or will execute before the
first Closing a Confidential Information and Invention Assignment Agreement
conforming in all material respects to the Company's standard form.
3.14 Registration Rights. Except as set forth in the Registration
Rights Agreement or in the Company's public filings, the Company is not under
any obligation to register any of its currently outstanding securities or any of
its securities which may hereafter be issued.
3.15 Agreements; Action.
(a) Except for agreements explicitly contemplated hereby, there
are no material agreements, understandings or proposed transactions between the
Company and any of its officers, directors, affiliates, or any affiliate
thereof, except as disclosed in the Company's public filings.
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(b) Other than as disclosed on the Schedule of Exceptions or its
public filings, the Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or
incurred any liabilities in excess of $25,000 in the aggregate, (iii) made any
loans or advances to any person, other than ordinary advances for travel
expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or
rights other than the sale of their inventory in the ordinary course of
business.
3.16 Litigation. Except as set forth in the Company's public
filings, there are no actions, suits, proceedings or investigations pending or
threatened against the Company or any of its properties before any court or
governmental agency or claims asserted, nor, to the Company's knowledge, is
there any basis therefor. The foregoing includes, without limitation, actions
pending or threatened (or any basis therefor known to the Company) involving
prior employment of any of the Company's employees or former employees or their
obligations under any agreements with prior employers. The Company is not a
party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or governmental agency or instrumentality. There is no
action, suit, proceeding, or investigation by the Company currently pending or
that the Company intends to initiate.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS. Each
Investor hereby represents and warrants to, and agrees with, the Company that:
4.1 Authorization. This Agreement, the Warrant to be purchased by
such Investor and the Registration Rights Agreement constitute such Investor's
valid and legally binding obligation, enforceable in accordance with their
respective terms except as may be limited by: (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights generally, and (ii) the effect of
rules of law governing the availability of equitable remedies. The Investor
represents that such Investor has full power and authority to enter into this
Agreement, the Warrant to be purchased by such Investor and the Registration
Rights Agreement.
4.2 Purchase for Own Account. The Shares and Warrant to be
purchased by such Investor hereunder and the Exercise Shares will be acquired
for investment for such Investor's own account, not as a nominee or agent, and
not with a view to the public resale or distribution thereof within the meaning
of the 1933 Act, and such Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same.
4.3 Disclosure of Information. Such Investor believes it has
received or has had full access to all the information it considers necessary or
appropriate to make an informed investment decision with respect to the Shares
and Warrant to be purchased by such Investor under this Agreement. Such Investor
further has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of the Shares and
Warrant and to obtain additional information (to the extent the Company
possessed such
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information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to such Investor or to which such
Investor had access. The foregoing, however, does not in any way limit or modify
the representations and warranties made by the Company in Section 3.
4.4 Investment Experience. Such Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the ▇▇▇▇ ▇▇▇.
4.5 Restricted Securities. Such Investor understands that the
Shares, Warrants and Exercise Shares are characterized as "restricted
securities" under the 1933 Act and Rule 144 promulgated thereunder inasmuch as
they are being acquired from the Company in a transaction not involving a public
offering and that under the 1933 Act and applicable regulations thereunder such
securities may be resold without registration under the 1933 Act only in certain
limited circumstances.
4.6 No Solicitation. At no time was such Investor presented with
or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares, Warrants or Exercise Shares.
4.7 Further Limitations on Disposition. 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, Warrants or
Exercise 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 statement
of the circumstances surrounding the proposed disposition, and (ii) such
Investor shall have furnished the Company, at the expense of such Investor or
its transferee, with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such securities
under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required: (i) for any
transfer of any Shares, Warrants or Exercise Shares in compliance with SEC Rule
144; (ii) for any transfer of any Shares, Warrants or Exercise Shares by an
Investor to any affiliate (as that term is defined in Rule 405 promulgated under
the ▇▇▇▇ ▇▇▇) of such Investor; (iii) for any transfer of any Shares, Warrants
or Exercise Shares by an Investor that is a partnership or a corporation to (A)
a partner of such partnership or a shareholder of such corporation or (B) the
estate of any such partner or shareholder; or (iv) for the transfer by gift,
will or intestate succession by any Investor to his or her spouse or lineal
descendants or ancestors or any trust for any of the foregoing; provided that in
each of the
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foregoing cases the transferee agrees in writing to be subject to the terms of
this Section 4 to the same extent as if the transferee were an original Investor
hereunder.
4.8 Legends. It is understood that the certificates evidencing the
Shares, Warrants or Exercise Shares will bear the legend set forth below:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER THE
ACT OR APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS. INVESTORS SHOULD BE AWARE THAT THEY
MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
5. CONDITIONS TO INVESTORS' OBLIGATIONS AT CLOSING. The obligations of
each Investor under Section 2 of this Agreement are subject to the fulfillment
or waiver, on or before the Closing, of each of the following conditions, which
conditions may be waived by written, oral or telephone communication to the
Company, its counsel or to counsel to the Investors:
5.1 Representations and Warranties True. Each of the
representations and warranties of the Company contained in Section 3 shall be
true and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.
5.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
5.3 Compliance Certificate. The Company shall have delivered to
the Investors at the Closing a certificate signed on its behalf by its Chief
Executive Officer or Chief Financial Officer certifying that the conditions
specified in Sections 5.1 and 5.2 have been fulfilled and stating that there
shall have been no material adverse change in the business, affairs, prospects,
operations, properties, assets or condition of the Company not previously
disclosed to the Investors.
5.4 Securities Exemptions. The offer and sale of the Shares,
Warrants and Exercise Shares to the Investors pursuant to this Agreement shall
be exempt from the registration
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requirements of the 1933 Act and the registration and/or qualification
requirements of all applicable state securities laws and shall comply with the
applicable rules of corporate governance of Nasdaq.
5.5 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to each Investor and to the Investors' counsel, and they shall each
have received all such counterpart originals and certified or other copies of
such documents as they may reasonably request.
5.6 No Material Change. There shall have been no material adverse
change in the business, affairs, prospects, operations, properties, assets or
condition of the Company since March 31, 1999.
5.7 Registration Rights Agreement. The Company shall have
executed and delivered the supplement to the Registration Rights Agreement dated
October 16, 1998 substantially in the form attached hereto as Exhibit F (the
"REGISTRATION RIGHTS AGREEMENT").
5.8 Delivery of Shares and Warrants. The Company shall have
delivered to such Investor a certificate for the Shares and the Warrant to be
purchased by such Investor pursuant to this Agreement.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to each Investor under this Agreement are subject to the
fulfillment or waiver on or before the Closing of each of the following
conditions by such Investor:
6.1 Representations and Warranties. The representations and
warranties of such Investor contained in Section 4 shall be true and correct on
the date of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
6.2 Payment of Purchase Price. Such Investor shall have delivered
to the Company the purchase price in accordance with the provisions of Section
2.
6.3 Securities Exemptions. The offer and sale of the Shares,
Warrants and Exercise Shares to the Investors pursuant to this Agreement shall
be exempt from the registration requirements of the 1933 Act and the
registration and/or qualification requirements of all applicable state
securities laws and shall comply with the applicable rules of corporate
governance of Nasdaq.
6.4 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Company and to the Company's
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legal counsel, and the Company shall have received all such counterpart
originals and certified or other copies of such documents as it may reasonably
request.
7. CERTAIN COVENANTS
7.1 Standstill. Each Investor that owns securities representing
more than five percent of the Company's outstanding Common Stock on an as
converted basis agrees that it will not acquire more than 100,000 shares of the
Company's Common Stock (other than Exercise Shares through conversion of the
Shares or exercise of the Warrants) or securities convertible into Common Stock
without the prior written consent of the Company. The Company will respond to
any Investor request to acquire more than 100,000 shares of such stock within
two business days of the Company's receipt of such request. If the Company does
not respond within such two business day period, the Company shall be deemed to
have denied consent as to the referenced transaction. The Company agrees not to
unreasonably withhold its consent.
7.2 Right of First Offer. Commencing on the Closing, in the event
an Investor and its "affiliates" or "associates" (as those terms are defined in
Rule 405 promulgated under the 1933 Act) (collectively, the "INVESTOR GROUP")
seek to sell, transfer the voting rights in, or otherwise transfer for value
Common Stock (or Shares convertible into Common Stock or Warrants exercisable
for Common Stock) representing 5% or more of the then outstanding shares of the
Company's Common Stock to any person or group of persons in one or more related
transactions (a "SIGNIFICANT TRANSACTION"), the Investor Group will provide the
Company, in writing, with a notice reflecting its desire to enter into such
Significant Transaction and setting forth the terms and conditions of the
proposed Significant Transaction (such notice, a "ROFO NOTICE"). Each ROFO
Notice shall constitute an offer by the Investor Group to sell the securities
covered by such ROFO Notice (the "ROFO SECURITIES") to the Company on the terms
and conditions set forth in the ROFO Notice. If the Company desires to accept
the offer set forth in the ROFO Notice as to any part of the ROFO Securities,
the Company shall, within ten business days of receipt of such ROFO Notice,
notify the Investor Group of its agreement to acquire some or all of the ROFO
Securities (the "ROFO ACCEPTANCE"). The closing of any sale of ROFO Securities
by the Investor Group to the Company shall occur within three business days of
the Investor Group's receipt of the ROFO Acceptance, at which time the Company
will deliver the purchase price for the ROFO Securities it is purchasing in
return for such securities. In the event (i) the Company does not provide the
Investor Group with a ROFO Acceptance within ten business days of receipt of a
ROFO Notice or (ii) the Investor Group receives a ROFO Acceptance with respect
to less than all of the ROFO Securities, then the Investor Group may sell,
transfer the voting rights in, or otherwise transfer for value all or the
remaining ROFO Securities, as the case may be, to any third party or parties on
terms and conditions no less favorable in the aggregate to such third parties
than those set forth in the ROFO Notice; provided, however, that if such sale,
transfer of voting rights, or transfer of value does not occur within 60 days of
the Company's initial receipt of a ROFO Notice, the Investor Group will be
required to resubmit a ROFO Notice to the Company and follow the procedures
outlined in this section before consummating such sale, transfer of voting
rights or transfer for value. This Right of First Offer (i) will not apply to
any transfer in connection with a transaction approved by the
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Company's Board of Directors, (ii) will not continue to apply to any Common
Stock transferred pursuant to this Section, and (iii) will terminate three years
from the Effective Date.
7.4 Change in Control. Neither the Company nor any Investor
intends to effect a "change in control" of the Company, as such term is utilized
in Nasdaq's corporate rules of governance, as a result of this Agreement. In the
event Nasdaq contends that a change in control has, will or may occur, then the
applicable Investor agrees to take such reasonable measures as are requested by
or negotiated with Nasdaq to eliminate Nasdaq's concerns. Such measures may
include giving an irrevocable proxy to vote a portion of such Investor's Shares
to another Investor or shareholder while control issues exist. The Company and
the applicable Investor agree to reasonably cooperate in such efforts. In the
event that such parties are unable to negotiate and timely implement measures
satisfactory to Nasdaq, then the Company can elect to rescind some or all of the
investment transaction or seek shareholder approval of the applicable
transaction.
7.5 Reimbursement. The Company shall pay in connection with the
preparation, execution and delivery of this Agreement, the fees and
out-of-pocket expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel to
the lead Investor, such fees and expenses not to exceed $10,000.
7.6 Additional Debt. While Vertex continues to hold more than
half of the Shares it acquires pursuant to this Agreement, the Company shall not
incur any additional indebtedness other than in the ordinary course of business
without the prior written consent of Vertex, which consent shall not be
unreasonably withheld.
7.7 Securities Filings Assistance. The Company shall assist
Vertex in making any required filings under applicable U.S. securities laws in
connection with this Agreement and the transactions contemplated hereby.
8. MISCELLANEOUS.
8.1 Governing Law. This Agreement shall be governed by and
construed under the internal laws of the State of California as applied to
agreements among California residents entered into and to be performed entirely
within California, without reference to principles of conflict of laws or choice
of laws.
8.2 Counterparts. 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.
8.3 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with a recognized international courier service, fees prepaid and
addressed to the party to be notified, in the case of the Company, at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and in the case of an Investor
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at the address indicated for such party on Exhibit A, or at such other address
as such party may designate by ten (10) days advance written notice to all other
parties.
8.4 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 holders of at
least a majority of the aggregate of the Shares (as if converted) and Exercise
Shares then issued or issuable (not including any Shares or Exercise Shares sold
to the public). Any amendment or waiver effected in accordance with this Section
shall be binding upon each holder of any Shares, Warrants or Exercise Shares at
the time outstanding, each future holder of such securities, and the Company.
8.5 Entire Agreement. This Agreement, together with all exhibits
and schedules hereto, constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all prior
understandings and agreements with respect to such matters.
8.6 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
8.7 Headings. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto, all of which exhibits are
incorporated herein by this reference.
8.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
enforced to the maximum extent possible consistent with applicable law and the
balance of the Agreement shall remain in full force and effect.
8.9 Further Assurances. From and after the date of this
Agreement, upon the request of the Investor or the Company, the Company and the
Investor shall execute and deliver such instruments, documents or other writings
as may be reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
VERSANT CORPORATION VERTEX TECHNOLOGY FUND, LTD
By: By:
------------------------------ -----------------------------------
Name: Name:
---------------------------- ---------------------------------
Title: Title:
-------------------------- -------------------------------
ADDITIONAL INVESTOR ADDITIONAL INVESTOR
By: By:
------------------------------ -----------------------------------
Name: Name:
---------------------------- ---------------------------------
Title: Title:
-------------------------- -------------------------------
ADDITIONAL INVESTOR ADDITIONAL INVESTOR
By: By:
------------------------------ -----------------------------------
Name: Name:
---------------------------- ---------------------------------
Title: Title:
-------------------------- -------------------------------
[SIGNATURE PAGE TO PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT.]
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EXHIBIT A
SCHEDULE OF INVESTORS
Shares of Shares of
Shares of Common Stock Common Stock Total
Investor Preferred Stock issuable Subject to Purchase
-------- Stock Purchased Purchase Price upon Warrant @ Price
@ $4.26/Share -------------- conversion* $.125/share* ---------
------------- ----------- ------------
Vertex Technology Fund, Ltd 902,946 $3,846,550.82 1,805,892 902,946** $3,846,550.82
c/o Vertex Management, Inc. by for Shares)
▇ ▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ cancellation plus $0
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ of Debt (for
Warrant)
Vertex Technology Fund (II), 234,741 $999,996.66 469,482 234,741 $999,996.66
Ltd (for
c/o Vertex Management, Inc. Shares)
▇ ▇▇▇▇▇▇ ▇▇▇▇▇, #220 plus
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $29,342.63
(for
Warrant)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 176,056 $749,998.56 352,112 176,056 $749,998.56
Family Limited Partnership (for
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇. Shares)
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ plus
$22,007
(for
Warrant)
Technology Development Fund 176,056 $749,998.56 352,112 176,056 $749,998.56
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (for
#02-01 The Aquarius Shares)
Singapore Science Park II plus
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $22,007
(for
Warrant)
Total 1,489,799 $2,499,993.78 2,979,598 $6,346,544.60
by check and 1,489,799 (for
$3,846,550.82 Shares)
by Debt plus
cancellation $73,356.63
(for
Warrant) or
$6,419,901.23
in total
*subject to adjustment
** Vertex' Warrant
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