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EXHIBIT 10.14
WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT ("Agreement") is made as of February
2, 2000, by and between Software Technologies Corporation (the "Company"), and
Electronic Data Systems Corporation ("EDS").
WHEREAS, EDS intends to purchase a warrant from the Company, which
warrant will be exercisable for shares of the Company's common stock; and
WHEREAS, the parties hereto wish to provide for the sale and
issuance of such warrant in consideration for services rendered and to be
rendered to the Company by EDS as contemplated by Section 3 of the Warrant;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Issuance of the Warrant. The Company hereby sells and issues to EDS a warrant
(the "Warrant") to purchase shares of the Company's common stock (collectively,
the "Common Stock") as set forth therein in consideration for services rendered
and to be rendered to the Company by EDS as contemplated by Section 3 of the
Warrant. The Warrant shall be in the form attached hereto as Exhibit A.
2. Representations and Warranties of the Company. In connection with the
transactions provided for herein, the Company hereby represents and warrants to
EDS that:
2.1 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 carry
on its business as now conducted. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure so to
qualify would have a material adverse effect on its business or properties.
2.2 Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all obligations of the
Company hereunder, and the authorization, issuance (or reservation for
issuance), and delivery of the Warrant and the Common Stock issuable upon
exercise of the Warrant has been taken or will be taken prior to the Closing.
2.3 Valid Issuance of Common Stock. The Common Stock, when issued, sold, and
delivered in accordance with the terms of the Warrant for the consideration
expressed therein, will be duly and validly issued, fully paid, and
nonassessable and, based upon the representations of EDS in this Agreement, will
be issued in compliance with all applicable federal and state securities laws.
3. Representations and Warranties of EDS. In connection with the transactions
provided for herein, EDS hereby represents and warrants to the Company that:
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3.1 Authorization. This Agreement constitutes EDS's valid and legally binding
obligation, enforceable in accordance with its terms.
3.2 Purchase Entirely for Own Account. EDS acknowledges that this Agreement is
made with EDS in reliance upon EDS's representation to the Company that the
Warrant and the Common Stock issuable upon exercise of the Warrant
(collectively, the "Securities") will be acquired for investment for EDS's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that EDS has no present intention of
selling, granting any participation in, or otherwise distributing the same. By
executing this Agreement, EDS further represents that EDS does not have any
contract, undertaking, agreement, or arrangement with any person to sell,
transfer, or grant participations to such person or to any third person, with
respect to the Securities. EDS represents that it has full power and authority
to enter into this Agreement.
3.3 Disclosure of Information. EDS acknowledges that it has received all the
information it considers necessary or appropriate for deciding whether to
acquire the Securities. EDS further represents that it has had an opportunity to
ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Securities.
3.4 Investment Experience. EDS is an investor in securities of companies in the
development stage and acknowledges that it can bear the economic risk of its
investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities. EDS also represents it has not been organized solely for the
purpose of acquiring the Securities.
3.5 Accredited Investor. EDS is an "accredited investor" within the meaning of
Rule 501 of Regulation D of the Securities and Exchange Commission (the "SEC"),
as presently in effect.
3.6 Restricted Securities. EDS understands that the Securities are characterized
as "restricted securities" under the federal securities laws inasmuch as they
are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may
be resold without registration under the Securities Act of 1933, as amended (the
"Act"), only in certain limited circumstances. In this connection, EDS
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, EDS further agrees not to make any disposition
of all or any portion of the Securities until either:
(a) There is then in effect a Registration Statement under the Act covering such
proposed disposition and such disposition is made in accordance with such
Registration Statement; or
(b) (i) EDS shall have notified the Company of the proposed disposition and
shall have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and (ii) if reasonably requested by the
Company, EDS shall have furnished the
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Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the Act. It
is agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144(k) or pursuant to Rule 144 if the transfer is to an
affiliate of the transferor.
3.8 Legend. It is understood that the Securities shall bear the following
legend:
"These securities have not been registered under the Securities
Act of 1933. They may not be sold, offered for sale, pledged, hypothecated, or
otherwise transferred except pursuant to an effective registration statement
under the Securities Act of 1933 or an opinion of counsel satisfactory to the
Company that registration is not required under such Act or unless sold pursuant
to Rule 144 under such Act."
4. California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
5. Right of First Refusal.
5.1 Right of First Refusal. Subject to Section 5.4, in the event that EDS
proposes to sell, pledge or otherwise transfer to a third party (other than an
affiliate of EDS) any shares of Common Stock, or any interest in such Common
Stock, the Company shall have the Right of First Refusal to purchase all (or
less than all) of such shares of Common Stock. If EDS desires to transfer the
Common Stock, EDS shall give a written Transfer Notice to the Company describing
fully the proposed transfer, including the number of shares of Common Stock
proposed to be transferred, the proposed transfer price, the name and address of
the proposed transferee and proof satisfactory to the Company that the proposed
sale or transfer will not violate any applicable federal or state securities
laws. The Transfer Notice shall be signed both by EDS and by the proposed
transferee and must constitute a binding commitment of both parties to the
transfer of the Common Stock. The Company shall have the right to purchase all,
or less than all, of the Common Stock on the terms of the proposal described in
the Transfer Notice (subject, however, to any change in such terms permitted
under Subsection 5.2 below) by delivery to EDS of a notice of exercise of the
Right of First Refusal within 30 days after the date when the Transfer Notice
was received by the Company. The Company's rights under this Subsection 5.1
shall be assignable, in whole or in part.
5.2 Transfer of Shares. If the Company fails to exercise its Right of First
Refusal within 10 days after the date when it received the Transfer Notice, EDS
may, not later than 90 days following receipt of the Transfer Notice by the
Company, conclude a transfer of the Common
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Stock subject to the Transfer Notice on the terms and conditions described in
the Transfer Notice, provided that any such sale is made in compliance with
applicable federal and state securities laws and not in violation of any other
contractual restrictions to which EDS is bound. Any proposed transfer on terms
and conditions different from those described in the Transfer Notice, as well as
any subsequent proposed transfer by EDS, shall again be subject to the Right of
First Refusal and shall require compliance with the procedure described in
Subsection 5.1 above. If the Company exercises its Right of First Refusal, the
parties shall consummate the sale of the Common Stock on the terms set forth in
the Transfer Notice within 60 days after the date when the Company received the
Transfer Notice (or within such longer period as may have been specified in the
Transfer Notice); provided, however, that in the event the Transfer Notice
provided that payment for the Common Stock was to be made in a form other than
cash or cash equivalents paid at the time of transfer, the Company shall have
the option of paying for the Common Stock with cash or cash equivalents equal to
the present value of the consideration described in the Transfer Notice or as
may otherwise be agreed to by EDS and the Company.
5.3 Additional Shares or Substituted Securities. In the event of the declaration
of a stock dividend, the declaration of an extraordinary dividend payable in a
form other than stock, a spin-off, a stock split, a recapitalization or a
similar transaction affecting the Company's outstanding securities without
receipt of consideration, any new, substituted or additional securities or other
property (including money paid other than as an ordinary cash dividend) which
are by reason of such transaction distributed with respect to any Common Stock
subject to this Section 5 or into which such Common Stock thereby become
convertible shall immediately be subject to this Section 5. Appropriate
adjustments to reflect the distribution of such securities or property shall be
made to the number and/or class of Common Stock subject to this Section 5.
5.4 Termination of Right of First Refusal. The Right of First Refusal shall
lapse upon the earliest to occur of (i) one year after the date of this
Agreement, (ii) such time as the Company becomes obligated to file reports
pursuant to the Securities Exchange Act of 1934, as amended, or (iii) the
closing of a firm commitment underwritten public offering, pursuant to an
effective registration statement on Form S-1 or Form SB-2 under the Act,
covering the offer and sale of the Company's common stock. However, the market
stand-off provision contained in the warrant attached hereto as Exhibit A shall
continue to remain in full force and effect following the lapse of the right of
first refusal set forth in this Section 5.
5.5 Termination of Rights as Stockholder. If the Company makes available, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Common Stock to be purchased in accordance with this
Section 5, then after such time the person from whom such Common Stock is to be
purchased shall no longer have any rights as a holder of such Common Stock
(other than the right to receive payment of such consideration in accordance
with this Agreement). Such Common Stock shall be deemed to have been purchased
in accordance with the applicable provisions hereof, whether or not the
certificate(s) therefor have been delivered as required by this Agreement.
6. Miscellaneous.
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6.1 Successors and Assigns. Except as otherwise provided herein, 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. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. Except in accordance with the Warrant, the
Warrant cannot be assigned by EDS without the express written consent of the
Company, except when such assignment is to an affiliate of EDS.
6.2 Arbitration.
(a) In the event of any dispute arising hereunder or with respect to
the transactions contemplated hereby, the Company and EDS shall attempt in good
faith for thirty (30) days to agree upon the rights of the respective parties
with respect to such dispute. If the Company and EDS should so agree, a
memorandum setting forth such agreement shall be prepared and signed by such
parties and shall be binding upon such parties and each other or transferee of
any of the Securities.
(b) If no such agreement can be reached after good faith
negotiation, either the Company or EDS may, by written notice to the other,
demand arbitration of the matter unless the amount of the damage or loss is at
issue in pending litigation with a third party, in which event arbitration shall
not be commenced until such amount is ascertained or such parties agree to
arbitration, and in either such event the matter shall be settled by arbitration
conducted by three (3) arbitrators. Within fifteen (15) days after such written
notice is sent, the Company and EDS shall each select one (1) arbitrator, and
the two (2) arbitrators so selected shall select a third arbitrator. The
decision of the arbitrators as to the validity and amount of any claim shall be
binding and conclusive upon the Company and EDS or transferee of any of the
Securities.
(c) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction; however, the parties hereto agree to
submit to the jurisdiction of the federal and state courts of the State of
California with respect to the rendering of any such judgment. Any such
arbitration shall be held in Los Angeles County, California under the commercial
rules then in effect of the American Arbitration Association.
6.3 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of California as applied to agreements among California
residents, made and to be performed entirely within the State of California.
6.4 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
6.6 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
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delivery to the party to be notified, by delivery by confirmed facsimile or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to such party at the address set forth below, or
at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
If to the Company:
Software Technologies Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attn.: Chief Executive Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to EDS:
Electronic Data Systems Corporation
MS H3-3D-05
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
6.7 Finder's Fee. Each party represents that it neither is or will be obligated
for any finder's fee or commission in connection with this transaction. EDS
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
EDS or any of its officers, partners, employees, or representatives is
responsible.
The Company agrees to indemnify and hold harmless EDS from any
liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees, or
representatives is responsible.
6.8 Expenses. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
6.9 Reservation of Shares. The Company shall reserve and keep available at all
times, free of preemptive rights, the full number of shares of Common Stock
issuable upon exercise of the Warrant.
6.10 Entire Agreement; Amendments and Waivers. This Agreement and the Warrant
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. 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
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retroactively or prospectively), with the written consent of the Company and
EDS. Any waiver or amendment effected in accordance with this Section shall be
binding upon EDS, each holder of any securities purchased under this Agreement
at the time outstanding (including securities into which such securities have
been converted), each future holder of all such securities, and the Company.
6.11 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SOFTWARE TECHNOLOGIES CORPORATION
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chief Executive Officer
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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SIGNATURE PAGE TO SOFTWARE TECHNOLOGIES CORPORATION
WARRANT PURCHASE AGREEMENT
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ELECTRONIC DATA SYSTEMS CORPORATION
By:
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Name:
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Title:
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Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Attn: General Counsel
SIGNATURE PAGE TO SOFTWARE TECHNOLOGIES CORPORATION
WARRANT PURCHASE AGREEMENT