EXHIBIT 10.29
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR
RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY AN AFFILIATE OF THE
COMPANY. NO SALE OR DISPOSITION OF THESE SHARES MAY BE EFFECTED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION RELATED THERETO OR IN COMPLIANCE WITH RULE 144 OR
ITS SUCCESSOR OR PURSUANT TO AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
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Warrant No. W-CS-12 Number of Shares: 30,000
(subject to adjustment)
Date of Issuance: December 1, 2003
PERSISTENCE SOFTWARE, INC.
COMMON STOCK WARRANT
--------------------
Persistence Software, Inc. (the "COMPANY"), for value received equal to $0.001
per Warrant Share, hereby certifies that Brian G. Swift and Suzanne B. Swift,
ttees UTD 3/13/91 FBO Brian and Suzanne Swift 1991 Living Trust or its
registered assigns (the "Registered Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time after the date hereof
and on or before the Expiration Date (as defined in Section 6 below), up to
Thirty Thousand (30,000) shares (as adjusted from time to time pursuant to the
provisions of this Warrant) of Common Stock of the Company, at a per share
Exercise Price equal to $4.48 (subject to adjustment for stock splits, dividends
and the like and otherwise in connection with the Registration Rights
Agreement). The shares purchasable upon exercise of this Warrant and the
exercise price per share, as adjusted from time to time pursuant to the
provisions of this Warrant, are hereinafter referred to as the "WARRANT STOCK"
and the "EXERCISE PRICE," respectively.
This Warrant is issued pursuant to that certain engagement letter dated
November 12, 2003 between Security Research Associates, Inc. ("SRA") and the
Company, pursuant to which SRA acted as placement agent in connection with the
Common Stock Purchase Agreement dated approximately concurrently herewith among
the Company and certain individuals and entities listed on EXHIBIT A thereof
(the "PURCHASE AGREEMENT"). Any capitalized terms used herein, but not defined
herein, shall carry those definitions ascribed to them in the Purchase
Agreement.
1. FULLY VESTED SHARES. The shares of Warrant Stock are fully vested
and exercisable as of the date of this Warrant.
2. EXERCISE.
(a) METHOD OF EXERCISE.
(i) This Warrant may be exercised by the Registered
Holder, in whole or in part, by surrendering this Warrant, with the
purchase/exercise form appended hereto as EXHIBIT A duly executed by such
Registered Holder or by such Registered Holder's duly authorized attorney, at
the principal office of the Company, or at such other office or agency as the
Company may designate in writing prior to the date of such exercise, accompanied
by payment in full of the Exercise Price payable in respect of the number of
shares of Warrant Stock purchased upon such exercise. The Exercise Price may be
paid by cash, check, wire transfer or by the surrender of promissory notes or
other instruments representing indebtedness of the Company to the Registered
Holder.
(ii) In lieu of exercising this Warrant in the manner
provided above in Section 2(a)(i), the Registered Holder may elect to receive
shares equal to the value of this Warrant (or the portion thereof being
exercised) by surrender of this Warrant at the principal office of the Company
together with notice of such election on the purchase/exercise form appended
hereto as EXHIBIT A duly executed by such Registered Holder or such Registered
Holder's duly authorized attorney, in which event the Company shall issue to
holder a number of shares of Common Stock computed using the following formula:
X = Y (A - B)
---------
A
Where X = The number of shares of Common Stock to be issued to the
Registered Holder.
Y = The number of shares of Common Stock being exercised under
this Warrant.
A = The fair market value of one share of Common Stock
(on the exercise date as calculated below)
B = The Exercise Price (as adjusted to the exercise date).
For purposes of this Section 2(a)(ii), the fair market value of one share of
Common Stock on the exercise date shall mean:
(A) if the Company's Common Stock is traded
on a securities exchange or The Nasdaq SmallCap Market, the fair market value
shall be deemed to be the average of the closing sale prices over a five trading
day period ending on the date of calculation; or
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(B) if the Company's Common Stock is
actively traded over-the-counter, the fair market value shall be deemed to be
the average of the closing bid or sales price (whichever is applicable) over the
thirty (30) day period ending three days before the date of calculation; or
(C) if neither (A) nor (B) is applicable,
the fair market value shall be at the highest price per share which the Company
could obtain on the date of calculation from a willing buyer (not a current
employee or director) for shares of Common Stock sold by the Company, from
authorized but unissued shares, as determined in good faith by the Board of
Directors, unless the Company has at such time received a term sheet with regard
to an acquisition as described in Section 5(b) below, in which case the fair
market value per share of Common Stock shall be deemed to be the value of the
consideration per share to be issued to the holders of such stock pursuant to
such acquisition, as calculated pursuant to the definitive agreement relating to
such acquisition.
(b) EFFECTIVE TIME OF EXERCISE. Each exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the day on which this Warrant shall have been surrendered to the Company as
provided in Section 2(a) above. At such time, the person or persons in whose
name or names any certificates for Warrant Stock shall be issuable upon such
exercise as provided in Section 2(c) below shall be deemed to have become the
holder or holders of record of the Warrant Stock represented by such
certificates.
(c) DELIVERY TO HOLDER. As soon as practicable after the
exercise of this Warrant in whole or in part, and in any event within 10 days
thereafter, the Company at its expense will cause to be issued in the name of,
and delivered to, the Registered Holder, or as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of
shares of Warrant Stock to which such Registered Holder shall be entitled, and
(ii) in case such exercise is in part only, a new
warrant or warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares of Warrant Stock
equal (giving effect to any adjustment therein) to the number of such shares
called for on the face of this Warrant minus the number of such shares purchased
by the Registered Holder upon such exercise as provided in Section 2(a) above.
3. ADJUSTMENTS.
(a) STOCK SPLITS AND DIVIDENDS. If the outstanding shares of
the Company's Common Stock shall be subdivided into a greater number of shares
or a dividend in Common Stock shall be paid in respect of Common Stock, the
Exercise Price in effect immediately prior to such subdivision or at the record
date of such dividend shall simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend be
proportionately reduced. If outstanding shares of Common Stock shall be combined
into a smaller number of shares, the Exercise Price in effect immediately prior
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to such combination shall, simultaneously with the effectiveness of such
combination, be proportionately increased. When any adjustment is required to be
made in the Exercise Price, the number of shares of Warrant Stock purchasable
upon the exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the exercise
of this Warrant immediately prior to such adjustment, multiplied by the Exercise
Price in effect immediately prior to such adjustment, by (ii) the Exercise Price
in effect immediately after such adjustment.
(b) MERGER SALE, RECLASSIFICATION, ETC. In case of any (i)
consolidation or merger (including a merger in which the Company is the
surviving entity), (ii) sale or other disposition of all or substantially all of
the Company's assets or distribution of property to shareholders (other than
distributions payable out of earnings or retained earnings), or
reclassification, change or conversion of the outstanding securities of the
Company or of any reorganization of the Company (or any other corporation the
stock or securities of which are at the time receivable upon the exercise of
this Warrant) or any similar corporate reorganization on or after the date
hereof, then and in each such case the holder of this Warrant, upon the exercise
hereof at any time thereafter shall be entitled to receive, in lieu of the stock
or other securities and property receivable upon the exercise hereof prior to
such consolidation, merger, sale or other disposition, reclassification, change,
conversion or reorganization, the stock or other securities or property to which
such holder would have been entitled upon such consummation if such holder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in Section 3(a) or 3(b); and in each such case, the terms
of this Section 3 shall be applicable to the shares of stock or other securities
properly receivable upon the exercise of this Warrant after such consolidation,
merger, sale or other disposition, reclassification, change, conversion or
reorganization.
(c) ADJUSTMENT CERTIFICATE. When any adjustment is required to
be made in the Warrant Stock or the Exercise Price pursuant to this Section 3,
the Company shall promptly mail to the Registered Holder a certificate setting
forth (i) a brief statement of the facts requiring such adjustment, (ii) the
Exercise Price after such adjustment and (iii) the kind and amount of stock or
other securities or property into which this Warrant shall be exercisable after
such adjustment.
4. TRANSFERS.
(a) UNREGISTERED SECURITY. Each holder of this Warrant
acknowledges that this Warrant and the Warrant Stock have not been registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and agrees
not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose
of this Warrant or any Warrant Stock issued upon its exercise in the absence of
(i) an effective registration statement under the Securities Act as to this
Warrant or such Warrant Stock and registration or qualification of this Warrant
or such Warrant Stock under any applicable U.S. federal or state securities law
then in effect or (ii) an opinion of counsel, reasonably satisfactory to the
Company, that such registration and qualification are not required. Each
certificate or other instrument for Warrant Stock issued upon the exercise of
this Warrant shall bear a legend substantially to the foregoing effect.
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(b) TRANSFERABILITY. Subject to the provisions of Section 4(a)
hereof, this Warrant and all rights hereunder are transferable, in whole or in
part, to (i) any entity controlling, controlled by or under common control of
the Registered Holder, or (ii) to any other proposed transferee of at least
100,000 shares (as adjusted for stock splits, stock dividends, reclassifications
and the like) by surrendering the Warrant with a properly executed assignment
(in the form of EXHIBIT B hereto) at the principal office of the Company.
(c) WARRANT REGISTER. The Company will maintain a register
containing the names and addresses of the Registered Holders of this Warrant.
Until any transfer of this Warrant is made in the warrant register, the Company
may treat the Registered Holder of this Warrant as the absolute owner hereof for
all purposes; PROVIDED, HOWEVER, that if this Warrant is properly assigned in
blank, the Company may (but shall not be required to) treat the bearer hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary. Any Registered Holder may change such Registered Holder's address as
shown on the warrant register by written notice to the Company requesting such
change.
5. NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will (subject to Section 14 below) at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment.
6. TERMINATION. This Warrant (and the right to purchase securities upon
exercise hereof) shall terminate on the earlier of: (i) November 25, 2008 or
(ii) the closing of any sale of all or substantially all of the assets of the
Company, or any merger, consolidation or any other transaction or series of
related transactions in which the Company's stockholders immediately prior
thereto own less than a majority of the voting stock of the Company (or its
successor or parent) immediately thereafter (an "ACQUISITION") (the "EXPIRATION
Date").
7. NOTICES OF CERTAIN TRANSACTIONS. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time deliverable upon the
exercise of this Warrant) for the purpose of entitling or enabling them to
receive any dividend or other distribution, or to receive any right to subscribe
for or purchase any shares of stock of any class or any other securities, or to
receive any other right, to subscribe for or purchase any shares of stock of any
class or any other securities, or to receive any other right, or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company, any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity), or any transfer of all or substantially all of the
assets of the Company, or
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(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up) are to be determined.
8. RESERVATION OF STOCK. The Company will at all times have authorized,
reserve and keep available, solely for the issuance and delivery upon the
exercise of this Warrant, such shares of Warrant Stock and other stock,
securities and property, as from time to time shall be issuable upon the
exercise of this Warrant.
9. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder of
any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Holder, at the Company's
expense, a new Warrant or Warrants of like tenor, in the name of such Registered
Holder or as such Registered Holder (upon payment by such Registered Holder of
any applicable transfer taxes) may direct, calling in the aggregate on the face
or faces thereof for the number of shares of Common Stock called for on the face
or faces of the Warrant or Warrants so surrendered.
10. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
11. NOTICES. Any notice required or permitted by this Warrant shall be
in writing and shall be deemed duly given upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
48 hours after being deposited in the regular mail as certified or registered
mail (airmail if sent internationally) with postage prepaid, addressed (a) if to
the Registered Holder, to the address of the Registered Holder most recently
furnished in writing to the Company and (b) if to the Company, to the address
set forth on the signature page of this Warrant or as subsequently modified by
written notice to the Registered Holder.
12. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
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13. NO FRACTIONAL SHARES. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common Stock on the date of exercise, as determined in good faith by the
Company's Board of Directors.
14. AMENDMENT OR WAIVER. Any term of this Warrant may be amended or
waived upon written consent of the Company and the registered holders of at
least 50% of the Common Stock issuable upon exercise of the outstanding warrants
purchased pursuant to the Purchase Agreement. By acceptance hereof, the
Registered Holder acknowledges that in the event the required consent is
obtained, any term of this Warrant may be amended or waived with or without the
consent of the Registered Holder; PROVIDED, HOWEVER, that any amendment hereof
that would materially adversely affect the Registered Holder in a manner
different from the holders of the remaining warrants issued pursuant to the
Purchase Agreement shall also require the consent of Registered Holder.
15. HEADINGS. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
16. GOVERNING LAW. This Warrant and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
17. REGISTRATION RIGHTS. The Warrant Shares are subject to the re-sale
registration rights described in the Registration Rights Agreement by and
between the Company and the Registered Holder and dated concurrently herewith.
18. REPRESENTATIONS AND COVENANTS OF THE HOLDER. This Warrant has been
entered into by the Company in reliance upon the following representations and
covenants of the Registered Holder:
(a) INVESTMENT PURPOSE. The Registered Holder is acquiring
the Warrant and the Common Stock issuable upon exercise of the Warrant for its
own account, not as a nominee or agent and with no present intention of selling
or otherwise distributing any part thereof.
(b) PRIVATE ISSUE. The Registered Holder understands, except
as provided in the Registration Rights Agreement, (i) that neither the Warrant
nor the Common Stock issuable upon exercise of this Warrant is, nor will be,
registered under the Securities Act or qualified under applicable state
securities laws on the ground that the issuance contemplated by this Warrant
will be exempt from the registration and qualifications requirements thereof
pursuant to Section 4(2) of the Securities Act and any applicable state
securities laws, and (ii) that the Company's reliance on such exemption is
predicated on the representations set forth in this Section 18.
(c) DISPOSITION OF HOLDER'S RIGHTS. In no event will the
Registered Holder make a disposition of the Warrant or the Common Stock issuable
upon exercise of the Warrant in the absence of (i) an effective registration
statement under the Securities Act as to this Warrant or such Warrant Stock and
registration or qualification of this Warrant or such Warrant Stock under any
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applicable U.S. federal or state securities law then in effect or (ii) an
opinion of counsel, reasonably satisfactory to the Company, that such
registration and qualification are not required. Notwithstanding the foregoing,
the restrictions imposed upon the transferability of any of its rights to
acquire Common Stock or Common Stock issuable on the exercise of such rights do
not apply to transfers from the beneficial owner of any of the aforementioned
securities to its nominee or from such nominee to its beneficial owner, and
shall terminate as to any particular share of Common Stock when (1) such
security shall have been effectively registered under the Securities Act and
sold by the holder thereof in accordance with such registration or (2) such
security shall have been sold without registration in compliance with Rule 144
under the Securities Act, or (3) a letter shall have been issued to the
Registered Holder at its request by the staff of the Securities and Exchange
Commission (the "SEC") or a ruling shall have been issued to the Registered
Holder at its request by the SEC stating that no action shall be recommended by
such staff or taken by SEC, as the case may be, if such security is transferred
without registration under the Securities Act in accordance with the conditions
set forth in such letter or ruling and such letter or ruling specifies that no
subsequent restrictions on transfer are required. Whenever the restrictions
imposed hereunder shall terminate, as hereinabove provided, the Registered
Holder or holder of a share of Common Stock then outstanding as to which such
restrictions have terminated shall be entitled to receive from the Company,
without expense to such holder, one or more new certificates for the Warrant or
for such shares of Common Stock not bearing any restrictive legend.
(d) FINANCIAL RISK. The Registered Holder has such business
and financial experience as is required to give it the capacity to protect its
own interests in connection with its investment.
(e) ACCREDITED INVESTOR. The Registered Holder is an
"accredited investor" as defined by Rule 501 of Regulation D under the
Securities Act, as presently in effect.
19. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. This Warrant has
been entered into by the Registered Holder in reliance upon the following
representations and covenants of the Company:
(a) AUTHORIZATION. The Warrant has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company enforceable in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies.
(b) VALID ISSUANCE. The Warrant Stock is duly authorized and
reserved for issuance, and when issued, sold and delivered in accordance with
the terms of this Warrant will be duly and validly issued, fully paid and
nonassessable.
(c) NO CONFLICT. The execution and delivery of this Warrant do
not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, breach or default (with or without
notice or lapse of time, or both), or give rise to a right of termination,
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cancellation or acceleration of any obligation or to a loss of a material
benefit, under, any provision of the Certificate of Incorporation or Bylaws of
the Company or any material agreement attached as an exhibit to the Company's
SEC Documents (as defined in the Purchase Agreement), or any judgment, order,
decree, statute, law, ordinance, rule, listing requirement or regulation
applicable to the Company, its properties or assets, which conflict, violation,
default or right would have a material adverse effect on the business,
properties, prospects, financial condition or operations of the Company.
20. COUNTERPARTS. This Warrant may be executed in counterparts, and
each such counterpart shall be deemed an original for all purposes.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Common Stock Warrant
as of the date first above written.
PERSISTENCE SOFTWARE, INC.
By /S/ CHRISTOPHER KEENE
----------------------------------------
Title: PRESIDENT
Address: Persistence Software Inc.
1720 S. Amphlett Blvd, 3rd Floor
San Mateo, CA 94402
Attention: Chief Financial Officer
Fax Number: (650) 341-8432
AGREED TO AND ACCEPTED BY:
BRIAN G. SWIFT AND SUZANNE B. SWIFT,
TTEES UTD 3/13/91 FBO
BRIAN AND SUZANNE SWIFT 1991 LIVING TRUST
/S/ BRIAN G. SWIFT
- ------------------------------
Brian G. Swift
/S/ SUZANNE B. SWIFT
- ------------------------------
Suzanne B. Swift
Address:
Fax Number:
SIGNATURE PAGE TO COMMON STOCK WARRANT
insert
EXHIBIT A
PURCHASE/EXERCISE FORM
----------------------
To: Persistence Software, Inc. Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant No. ((Warrant_no)), hereby irrevocably elects to purchase _____ shares
of the Common Stock covered by such Warrant and herewith makes payment of $
_________, representing the full purchase price for such shares at the price per
share provided for in such Warrant.
The undersigned acknowledges that it has reviewed the representations
and warranties contained in Section 18 of the Warrant and by its signature below
hereby makes such representations and warranties to the Company. Defined terms
contained in such representations and warranties shall have the meanings
assigned to them in the Warrant.
Signature: __________________________
Name (print): _______________________
Title (if applic.): _________________
Company (if applic.): _______________
EXHIBIT B
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, _________________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
NAME OF ASSIGNEE ADDRESS/FAX NUMBER NO. OF SHARES
---------------- ------------------ -------------
Dated: _______________________ Signature: ____________________________
____________________________
Witness: ______________________________