UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(AMENDMENT NO. __)
PERSISTENCE SOFTWARE, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
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(Title of Class of Securities)
715329 10 8
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(CUSIP Number)
NORMAN R. ROBERTSON
SENIOR VICE PRESIDENT, FINANCE AND ADMINISTRATION AND CHIEF FINANCIAL OFFICER
PROGRESS SOFTWARE CORPORATION
14 OAK PARK
BEDFORD, MA 01730
(617) 280-4000
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
SEPTEMBER 26, 2004
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
Note. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 8 Pages)
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CUSIP NO. 715329 10 8 13D PAGE 2 OF 8 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
PROGRESS SOFTWARE CORPORATION
I.R.S. IDENTIFICATION NO.: 04-2746201
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC (SEE ITEM 3 BELOW.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
THE COMMONWEALTH OF MASSACHUSETTS
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NUMBER OF SHARES 7 SOLE VOTING POWER 0
BENEFICIALLY
OWNED BY ---------------------------------------------
REPORTING PERSON 8 SHARED VOTING POWER 996,466(1)
WITH
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9 SOLE DISPOSITIVE POWER 0
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10 SHARED DISPOSITIVE POWER 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 996,466(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.0%(2)
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14 TYPE OF REPORTING PERSON*
CO
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(1) 996,466 shares of Persistence common stock are subject to Voting Agreements
entered into between Progress and certain stockholders of Persistence (discussed
in Items 3 and 4 below), of which 212,544 shares are issuable upon exercise of
outstanding options and warrants which are either vested or will vest within 60
days of September 26, 2004.
(2) Based on the number of shares of Persistence common stock outstanding as of
September 26, 2004 (as represented by Persistence in the Merger Agreement
discussed in Item 4 below), the number of shares of Persistence common stock
indicated, including the shares of Persistence common stock subject to options
and warrants that are exercisable within sixty days of September 26, 2004,
represents approximately 34.0% of the outstanding Persistence common stock.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
Neither the filing of this Schedule 13D nor any of its contents shall be
construed as an admission by Progress that it is the beneficial owner of any of
the common stock of Persistence referred to herein for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended.
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D relates to the common stock, par value
$0.001 per share, of Persistence Software, Inc., a Delaware
corporation (the "Issuer"). The principal executive offices of the
Issuer are located at 1720 South Amphlett Boulevard, Third Floor, San
Mateo, California 94402.
ITEM 2. IDENTITY AND BACKGROUND.
(a) The name of the person filing this statement is Progress Software
Corporation, a Massachusetts corporation ("Progress").
(b) The address of Progress' principal office and principal business
is 14 Oak Park, Bedford, Massachusetts 01730.
(c) Progress develops, markets and distributes software to simplify
and accelerate the development, deployment, integration and management
of business applications.
(d) Neither Progress nor, to Progress' knowledge, any person named in
Schedule A hereto is required to disclose legal proceedings pursuant
to Item 2(d).
(e) Neither Progress nor, to Progress' knowledge, any person named in
Schedule A hereto is required to disclose legal proceedings pursuant
to Item 2(e).
(f) With the exception of Mr. Sanjay Vaswani, who is an Indian
citizen, to Progress' knowledge, each of the individuals identified on
Schedule A attached hereto is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As an inducement for Progress to enter into the Merger Agreement
described in Item 4 and in consideration thereof, the directors,
officers and certain stockholders of the Issuer entered into Voting
Agreements with Progress (discussed in Item 4 below). Progress did not
pay additional consideration to the directors, officers and certain
stockholders of the Issuer in connection with the execution and
delivery of the Voting Agreements. In addition, the directors,
officers and certain stockholders of the Issuer granted Progress an
irrevocable proxy with respect to the Issuer securities covered by the
Voting Agreements.
3
References to, and descriptions of, the Merger (discussed in Item 4
below), the Merger Agreement and the Voting Agreements, as set forth
herein, are qualified in their entirety by reference to the copies of
the Merger Agreement and the form of Voting Agreement, respectively,
included as Exhibits 1 and 2, respectively, to this Schedule 13D, and
are incorporated herein in their entirety where such references and
descriptions appear.
ITEM 4. PURPOSE OF TRANSACTION.
(a) - (b) Pursuant to the Voting Agreements, dated as of September 26,
2004 (the "Voting Agreements"), among Progress and certain
stockholders of the Issuer listed on Schedule B hereto (collectively,
the "Stockholders"), Progress may be deemed to be the beneficial owner
of 996,466 shares of Issuer common stock (collectively, the "Subject
Shares"). Progress and the Stockholders entered into the Voting
Agreements to induce Progress to enter into the Agreement and Plan of
Merger, dated September 26, 2004 (the "Merger Agreement"), among
Progress, Issuer and PSI Acquisition Sub, Inc., a Delaware corporation
and a wholly owned first-tier subsidiary of Progress ("Merger Sub").
Pursuant to the Merger Agreement, Merger Sub will merge with and into
the Issuer (the "Merger"), with the Issuer continuing as the surviving
corporation in the Merger as a wholly owned subsidiary of Progress
(the "Surviving Corporation"). In the Merger, each share of Issuer
common stock will be converted into the right to receive $5.70 in
cash, without interest. The Merger is subject to customary conditions,
including requisite approval by the stockholders of the Issuer.
The Voting Agreements were entered into as a condition to the
willingness of Progress to enter into the Merger Agreement and to
increase the likelihood that the approval of the Issuer's stockholders
required in connection with the Merger will be obtained. Pursuant to
the terms of the Voting Agreements, any shares of capital stock of the
Issuer acquired by any Stockholder after the date of the Voting
Agreements and during the term of the Voting Agreements (including any
stock options, warrants or similar instruments) will be subject to the
Voting Agreements. Accordingly, any such acquisition of shares of
capital stock of the Issuer by any Stockholder may result in Progress
being deemed to acquire beneficial ownership of additional securities
of the Issuer.
Pursuant to the Voting Agreements, the Stockholders, with respect to
the Subject Shares (and any additional shares of capital stock or
other securities of the Issuer acquired by any Stockholder after the
date of the Voting Agreements and during the term of the Voting
Agreements), have agreed, among other things, (i) not to cause or
permit any Transfer (as defined in Section 1(c) of the Voting
Agreements) of any of the shares to be effected or make any offer
regarding the Transfer of any of the shares; (ii) not to deposit, or
permit the deposit of, any shares in a voting trust, grant any proxy
in respect of the shares, or enter into any voting agreement or
similar arrangement, commitment or understanding; (iii) to vote in
favor of the approval of the Merger and the adoption and approval of
the Merger Agreement, and in favor of each of the other actions
contemplated by the Merger Agreement; (iv) to vote against approval of
any proposal made in opposition to, or in competition with,
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consummation of the Merger, including, without limitation, any
acquisition proposal or superior offer (defined in Sections 5.4(a) and
5.1(c), respectively, of the Merger Agreement) or any action or
agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or
agreement of the Issuer under the Merger Agreement or of any
Stockholder under the Voting Agreement.
Further, as part of the Voting Agreements, each Stockholder has
entered into an Irrevocable Proxy thereby irrevocably appointing
members of the Board of Directors of Progress, and each of them
individually, as the sole and exclusive attorneys and proxies of each
Stockholder (the "Attorneys"), with full power of substitution and
resubstitution, to vote and exercise all voting and related rights (to
the full extent that the Stockholder is entitled to do so) with
respect to all of the shares of capital stock of Issuer that now are
or hereafter may be beneficially owned by the Stockholder, and any and
all other shares or securities of the Issuer issued or issuable in
respect thereof on or after the date of the Voting Agreement in
accordance with the terms of the Irrevocable Proxy, a copy of which is
attached as Exhibit I to the Voting Agreement filed as Exhibit 2 to
this Schedule 13D. The names of each Stockholder and the number of
Subject Shares beneficially owned by each Stockholder, are set forth
on Schedule B hereto.
In exercising the right to vote the Subject Shares as the sole and
exclusive attorneys and proxies of the Stockholders, the Attorneys'
rights are limited to voting the Subject Shares, or granting a consent
or similar approval with respect to the Subject Shares, (i) in favor
of the approval of the Merger and the adoption and approval of the
Merger Agreement, and in favor of each of the other actions
contemplated by the Merger Agreement; (ii) against approval of any
proposal made in opposition to, or in competition with, consummation
of the Merger, including, without limitation, any acquisition proposal
or superior offer (defined in Sections 5.4(a) and 5.1(c),
respectively, of the Merger Agreement) or any action or agreement that
would result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement of the
Issuer under the Merger Agreement or of any Stockholder under the
Voting Agreement.
The Voting Agreements and Irrevocable Proxies expire upon the earlier
of (i) such date and time as the Merger shall become effective in
accordance with the terms and provisions of the Merger Agreement, or
(ii) such date and time as the Merger Agreement shall have been
validly terminated pursuant to Article 7 of the Merger Agreement.
(c) Not applicable.
(d) Upon consummation of the Merger, the directors of the Surviving
Corporation shall be the existing directors of Merger Sub as of
immediately prior to the consummation of the Merger, until their
resignation or removal or until their successors are duly elected and
qualified. The existing director of Merger Sub is Joseph W. Alsop. The
officers of the Surviving Corporation shall be the existing officers
of Merger Sub as of immediately prior to the consummation of the
Merger.
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The existing officers of Merger Sub are Joseph W. Alsop, President,
Norman R. Robertson, Treasurer, and James D. Freedman, Secretary.
(e) Other than as a result of the Merger described in this Item 4, not
applicable.
(f) Not applicable.
(g) Upon consummation of the Merger, the Certificate of Incorporation
of the Issuer shall be amended and restated to be the same in
substance as the Certificate of Incorporation of Merger Sub, as in
effect immediately prior to the Merger, until thereafter amended. The
name of the Surviving Corporation shall be Persistence Software, Inc.
Upon consummation of the Merger, the By-laws of Merger Sub, as in
effect immediately prior to the Merger, shall be the By-laws of the
Surviving Corporation until thereafter changed or amended.
(h) - (i) Upon consummation of the Merger, the Issuer common stock
will be delisted from The Nasdaq SmallCap Market and will become
eligible for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act.
(j) Other than as described above, Progress currently has no plan or
proposals that relate to, or may result in, any of the matters listed
in Items 4(a) - (i) of Schedule 13D (although Progress reserves the
right to develop such plans).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) As a result of the Voting Agreements, Progress may be deemed
to be the beneficial owner of the Subject Shares. The Subject Shares
(which include 212,544 shares of common stock subject to options and
warrants that are exercisable within 60 days of September 26, 2004)
constitute approximately 34.0% of the issued and outstanding shares of
Issuer common stock, based on the Issuer's representation in the
Merger Agreement that there were 2,718,664 shares of Issuer common
stock issued and outstanding at the close of business on September 26,
2004. Progress may be deemed to have the shared power to vote the
Subject Shares with respect to those matters described in Item 4
above. However, Progress is not entitled to any rights as a
stockholder of Issuer as to the Subject Shares and expressly disclaims
any beneficial ownership of the shares covered by the Voting
Agreements. Progress does not have the power to dispose of the Subject
Shares.
(c) Neither Progress nor, to the knowledge of Progress, any person
named in Schedule A has effected any transaction in the Issuer common
stock during the past 60 days.
(d) To the knowledge of Progress, no other person has the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, such securities of Issuer.
(e) Not applicable.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Other than as described in Items 3, 4 and 5 and the agreements
incorporated herein by reference and set forth as exhibits hereto, to
the knowledge of Progress, there are no other contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons
named in Item 2 and between such persons and any person with respect
to any securities of the Issuer, including but not limited to transfer
or voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following documents are filed as exhibits:
99.1 Agreement and Plan of Merger dated as of September 26, 2004, by and
among Progress Software Corporation, a Massachusetts corporation, PSI
Acquisition Sub, Inc., a Delaware corporation and a wholly owned
first-tier subsidiary of Progress and Persistence Software, Inc., a
Delaware corporation (filed as Exhibit 99.1 to the periodic report on
Form 8-K of Progress Software, filed with the SEC on September 27,
2004, and incorporated herein by reference).
99.2 Form of Voting Agreement and Irrevocable Proxy dated September 26,
2004, which has been entered into between Progress Software
Corporation and those stockholders of Persistence Software, Inc.
listed on Schedule B hereto.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Dated: October 6, 2004
Progress Software Corporation
By: /s/ Norman R. Robertson
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Norman R. Robertson
Senior Vice President, Finance and
Administration and Chief Financial Officer
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SCHEDULE A
A. EXECUTIVE OFFICERS AND EMPLOYEE MEMBERS OF THE BOARD OF DIRECTORS OF
PERSISTENCE SOFTWARE, INC.
NAME: PRINCIPAL OCCUPATION OR EMPLOYMENT:
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Christopher Keene Chief Executive Officer, Director
Derek Henninger Vice President of Worldwide Field Operations
Brian Tobin Acting Chief Financial Officer
Vivek Singhal Vice President of Engineering
*All individuals listed in the above table are employed by Persistence Software,
Inc. ("Persistence"). The address of Persistence's principal place of business
is 1720 Amphlett Boulevard, Third Floor, San Mateo, California 94402. With the
exception of Mr. Sanjay Vaswani, who is an Indian citizen, each of these
individuals is a citizen of the United States.
B. NON-EMPLOYEE MEMBERS OF THE BOARD OF DIRECTORS OF PERSISTENCE
SOFTWARE, INC.
PRINCIPAL OCCUPATION OR NAME AND ADDRESS OF PRINCIPAL
NAME: EMPLOYMENT: EMPLOYER:
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Lawrence Owen Brown Management Consultant Owen Brown Enterprises, Ltd.
101 Puesta del Sol
Los Gatos, CA 95032
Thomas P. Shanahan Director Needham Capital Partners
3000 Sand Hill Road
Building 2, Suite 190
Menlo Park, CA 94025
James F. Sutter Management Consultant Peer Consulting Group
21 Curl Drive
Corona del Mar, CA 92625
Sanjay Vaswani Partner Center for Corporate Innovation
873 Santa Cruz Ave., Suite 202
Menlo Park, CA 94025
SCHEDULE B
PERSISTENCE SOFTWARE, INC.
VOTING AGREEMENTS AND IRREVOCABLE PROXIES
THE INFORMATION IN THIS SCHEDULE IS BASED ON INFORMATION
PROVIDED BY PERSISTENCE TO PROGRESS
The following is the list of the holders of common stock of Persistence who
entered into Voting Agreements and Irrevocable Proxies with Progress on
September 26, 2004. The information in this schedule is based upon information
provided by Persistence to Progress.
SHARES OF PERSISTENCE PERCENTAGE OF PERSISTENCE
COMMON STOCK COMMON STOCK
STOCKHOLDER BENEFICIALLY OWNED (1) BENEFICIALLY OWNED
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Needham Capital Partners (2) 501,380 17.7%
Thomas P. Shanahan (3) 496,380 17.5%
Christopher T. Keene (4) 286,906 10.5%
Derek Henninger (5) 130,708 4.8%
Vivek Singhal (6) 37,215 1.4%
Brian Tobin (7) 4,056 *
Sanjay Vaswani (8) 18,966 *
Lawrence Owen Brown (9) 7,958 *
James Sutter (10) 9,277 *
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* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to the securities. All the shares of common
stock shown as beneficially owned by the persons named in the table include
shares of common stock subject to options that may be exercised within 60
days of September 26, 2004. The calculations are based on 2,718,664 shares
outstanding as of September 26, 2004.
(2) Includes 289,176 shares held by Needham Capital Partners III, L.P., 29,694
shares held by Needham Capital Partners IIIA, L.P., immediately exercisable
warrants to purchase 92,717 shares held by Needham Capital Partners III,
L.P. and immediately exercisable warrants to purchase 9,520 shares held by
Needham Capital Partners IIIA, L.P. Needham Capital Management, L.L.C. is
the general partner of each of the above private limited partnerships. Also
includes 56,998 shares held by Needham Capital Partners III (Bermuda), L.P.
and immediately exercisable warrants to purchase 18,275 shares held by
Needham Capital Partners III (Bermuda), L.P. Needham Capital Management
(Bermuda), L.L.C. is the general partner of such entity. Thomas P.
Shanahan, a director of the Company, George A. Needham, John C. Michaelson
and John J. Prior are each managing members of Needham Capital Management,
L.L.C. and Needham Capital Management (Bermuda), L.L.C., and share voting
and dispositive power with respect to the shares held by such entities.
Also includes 5,000 shares held by Needham Contrarian Fund, L.P. Mr. George
A. Needham is the Managing General Partner of Needham Management Partners,
L.P., the general partner of such entity.
(3) See Note 2. Excludes 5,000 shares held by Needham Contrarian Fund, L.P.
(4) Includes 258,215 shares held in the name of "Christopher Keene and Yvonne
Keene Community Property," and shares held by the following trusts: 9,200
shares held by The Alexander Allan Keene Trust and 9,200 shares held by The
Austen Foster Keene Trust. Includes 9,791 shares issuable upon exercise of
options that are exercisable on or before November 25, 2004.
(5) Includes 8,540 shares issuable upon exercise of options that are
exercisable on or before November 25, 2004. Also includes shares held by
the following trusts, of which Mr. Henninger and Elizabeth W. Henninger
share voting and dispositive power as trustees: 105,388 shares held by The
Henninger Family Trust, 8,390 shares held by The Henninger Family
Irrevocable Trust fbo Grant Larson Henninger U/A/D 04/03/2000 and 8,390
shares held by The Henninger Family Irrevocable Trust fbo Webb Ryan
Henninger U/A/D 04/03/2000.
(6) Includes 34,244 shares issuable upon exercise of options that are
exercisable on or before November 25, 2004.
(7) Includes 3,306 shares issuable upon exercise of options that are
exercisable on or before November 25, 2004.
(8) Includes 18,916 shares issuable upon exercise of options that are
exercisable on or before November 25, 2004.
(9) Consists of 7,958 shares issuable upon exercise of options that are
exercisable on or before November 25, 2004.
(10) Consists of 9,277 shares issuable upon exercise of options that are
exercisable on or before November 25, 2004.
EXHIBIT 99.2
VOTING AGREEMENT
This VOTING AGREEMENT (the "AGREEMENT") is made and entered into as of
September 26, 2004, between Progress Software Corporation, a Massachusetts
corporation ("PARENT"), and the undersigned shareholder ("SHAREHOLDER") of
Persistence Software, Inc., a Delaware corporation (the "COMPANY").
RECITALS
A. Concurrently with the execution of this Agreement, Parent, the Company
and PSI Acquisition Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent ("MERGER SUB"), are entering into an Agreement and Plan of
Merger (the "MERGER AGREEMENT") which provides for the merger of Merger Sub with
and into the Company (the "MERGER"). Pursuant to the Merger, shares of common
stock of the Company, par value $0.001 per share ("COMPANY COMMON STOCK") will
be converted into the right to receive cash on the basis described in the Merger
Agreement. Capitalized terms used but not defined herein shall have the meanings
set forth in the Merger Agreement.
B. Shareholder is the record holder of such number of outstanding
shares of Company Common Stock as is indicated on the final page of this
Agreement.
C. As a material inducement to enter into the Merger Agreement, Parent
desires Shareholder to agree, and Shareholder is willing to agree, to vote the
Shares (as defined below), and such other shares of capital stock of the Company
over which Shareholder has voting power, so as to facilitate consummation of the
Merger.
In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as
follows:
1. AGREEMENT TO VOTE SHARES.
1.1 Definitions. For purposes of this Agreement:
(a) Shares. The term "SHARES" shall mean all issued and
outstanding shares of Company Common Stock owned of record or beneficially by
Shareholder or over which Shareholder exercises voting power, in each case, as
of the record date for persons entitled to receive notice of, and to vote at the
meeting of the shareholders of the Company called for the purpose of voting on
the matters referred to in Section 1.2. Shareholder agrees that any shares of
capital stock of the Company that Shareholder purchases or with respect to which
Shareholder otherwise acquires beneficial ownership or over which Shareholder
exercises voting power after the execution of this Agreement and prior to the
termination of this Agreement pursuant to
Section 3 below shall be subject to the terms and conditions of this Agreement
to the same extent as if they constituted Shares on the date hereof.
(b) Subject Securities. The term "SUBJECT SECURITIES" shall
mean: (i) all securities of the Company (including all shares of Company Common
Stock and all options, warrants and other rights to acquire shares of Company
Common Stock) beneficially owned by Shareholder as of the date of this
Agreement; and (ii) all additional securities of the Company (including all
additional shares of Company Common Stock and all additional options, warrants
and other rights to acquire shares of Company Common Stock) of which Shareholder
acquires ownership after the execution of this Agreement and prior to the
termination of this Agreement pursuant to Section 3 below.
(c) Transfer. Shareholder shall be deemed to have effected a
"TRANSFER" of a security if Shareholder directly or indirectly: (i) sells,
pledges, encumbers, transfers or disposes of, or grants an option with respect
to, such security or any interest in such security; or (ii) enters into an
agreement or commitment providing for the sale, pledge, encumbrance, transfer or
disposition of, or grant of an option with respect to, such security or any
interest therein.
1.2 Agreement to Vote Shares. Shareholder hereby covenants and
agrees that, during the period commencing on the date hereof and continuing
until the Expiration Date (as defined below), at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of the
shareholders of the Company, however called, Shareholder will appear at the
meeting or otherwise cause the Shares to be counted as present thereat for
purposes of establishing a quorum and vote (or cause to be voted) the Shares:
(1) in favor of the approval and adoption of the Merger
Agreement and the approval of the Merger and the other actions
contemplated by the Merger Agreement and any actions required in
furtherance thereof; and
(2) against approval of any proposal made in opposition to or
in competition with the consummation of the Merger, including, without
limitation, any Acquisition Proposal or Superior Offer (each as defined in
the Merger Agreement) or any action or agreement that would result in a
breach in any respect of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or
of Shareholder under this Agreement.
Shareholder further agrees not to enter into any agreement or
understanding with any person the effect of which would be inconsistent with or
violative of any provision contained in this Section 1.2.
Shareholder may vote on all other matters in a manner
determined in Shareholder's sole discretion. This Agreement is intended to bind
Shareholder only with respect to the voting of Shares as Shareholder herein, and
shall not prohibit Shareholder from acting in accordance with Shareholder's
fiduciary duties as an officer or director of Company.
-2-
1.3 Transfer and Other Restrictions.
(a) Prior to the termination of this Agreement pursuant to
Section 3 below, Shareholder agrees not to, directly or indirectly:
(i) except pursuant to the terms of the Merger Agreement,
offer for sale, Transfer or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to or
consent to the offer for sale, Transfer or other disposition of any or all
of the Subject Securities or any interest therein except as provided in
Section 1.2 hereof;
(ii) grant any proxy, power of attorney, deposit any of the
Subject Securities into a voting trust or enter into a voting agreement or
arrangement with respect to the Subject Securities except as provided in
this Agreement; or
(iii) take any other action that would make any representation
or warranty of Shareholder contained herein untrue or incorrect or have
the effect of preventing or disabling Shareholder from performing its
obligations under this Agreement.
(b) This Section 1.3 shall not prohibit a Transfer of Subject
Securities by Shareholder (A) to any member of Shareholder's immediate family,
or to a trust for the benefit of Shareholder or any member of Shareholder's
immediate family, or (B) upon the death of Shareholder; provided however, that
Shareholder will not effect any such Transfer unless and until the transferee
agrees to be bound by and executes an agreement in the form of this Agreement
with respect to the Shares to be Transferred. To the extent Shareholder is, as
of the date hereof, party to a contract or agreement that requires Shareholder
to Transfer Shares to another person or entity (excluding a contract or
agreement pledging Shares to the Company), Shareholder will not effect any such
Transfer unless and until the transferee agrees to be bound by and executes an
agreement in the form of this Agreement with respect to the Shares to be
Transferred.
1.4 Irrevocable Proxy. Concurrently with the execution of this
Agreement, Shareholder agrees to deliver to Parent a proxy in the form attached
hereto as Exhibit I (the "PROXY"), which shall be irrevocable, with respect to
the Shares, subject to the other terms of this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER.
(a) Shareholder is the record and beneficial owner of, or
Shareholder exercises voting power over, the shares of Company Common Stock
indicated on the final page of this Agreement, which, on and as of the date
hereof, are free and clear of any Encumbrances that would adversely affect the
ability of Shareholder to carry out the terms of this Agreement. The number of
Shares set forth on the signature pages hereto are the only Shares beneficially
owned by such Shareholder and, except as set forth on such signature pages, the
Shareholder holds no options or warrants to purchase or rights to subscribe for
or otherwise acquire any
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securities of the Company and has no other interest in or voting rights with
respect to any securities of the Company.
(b) Shareholder has the requisite capacity, power and
authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement by
Shareholder and the consummation by Shareholder of the transactions contemplated
by this Agreement have been duly authorized by all necessary action. This
Agreement has been duly executed and delivered by Shareholder and constitutes a
valid and binding obligation of Shareholder, enforceable against Shareholder in
accordance with its terms, except (i) as the same may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws of general application
relating to or affecting creditors' rights, and (ii) for the limitations imposed
by general principles of equity. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation which would result in the
creation of any Encumbrance (as defined in the Merger Agreement) upon any of the
Shares owned by Shareholder under, any provision of applicable law or regulation
or of any agreement, judgment, injunction, order, decree, or other instrument
binding on Shareholder or any Shares owned by Shareholder. No consent, approval,
order or authorization of any Governmental Entity is required by or with respect
to Shareholder in connection with the execution and delivery of this Agreement
by Shareholder or the consummation by Shareholder of the transactions
contemplated by this Agreement, except (i) for applicable requirements, if any,
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, and (ii) where the failure to obtain such consents,
approvals, orders or authorizations would not prevent or materially delay the
performance by Shareholder of his, her or its obligations under this Agreement.
If this Agreement is being executed in a representative or fiduciary capacity,
the person signing this Agreement has full power and authority to enter into and
perform such Agreement.
3. TERMINATION. This Agreement shall terminate and shall have no further
force or effect as of the first to occur of the following (such date, the
"EXPIRATION DATE"): (i) such date and time as the Merger shall become effective
in accordance with the terms and provisions of the Merger Agreement and (ii)
such date and time as the Merger Agreement shall have been validly terminated
pursuant to Article 7 thereof.
4. MISCELLANEOUS.
4.1 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
4.2 Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither
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this Agreement nor any of the rights, interests or obligations of the parties
hereto may be assigned by either of the parties without the prior written
consent of the other. Any purported assignment in violation of this Section
shall be void.
4.3 Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
4.4 Specific Performance; Injunctive Relief; Attorneys Fees. The
parties hereto acknowledge that Parent will be irreparably harmed and that there
will be no adequate remedy at law for a violation of any of the covenants or
agreements of Shareholder set forth herein. Therefore, it is agreed that, in
addition to any other remedies that may be available to Parent upon any such
violation, Parent shall have the right to enforce such covenants and agreements
by specific performance, injunctive relief or by any other means available to
Parent at law or in equity and Shareholder hereby irrevocably and
unconditionally waives any objection to Parent seeking so to enforce such
covenants and agreements by specific performance, injunctive relief and other
means. If any action, suit or other proceeding (whether at law, in equity or
otherwise) is instituted concerning or arising out of this Agreement or any
transaction contemplated hereunder, the prevailing party shall recover, in
addition to any other remedy granted to such party therein, all such party's
costs and attorneys fees incurred in connection with the prosecution or defense
of such action, suit or other proceeding.
4.5 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given upon delivery either personally or by
commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following address or facsimile numbers (or at such other address
or facsimile numbers for a party as shall be specified by like notice):
If to Parent:
Progress Software Corporation
14 Oak Park
Bedford, MA 01730
Facsimile: (781) 280-4304
Attention: Joseph W. Alsop, Chief Executive
Officer
with copies to:
Progress Software Corporation
14 Oak Park
Bedford, MA 01730
Facsimile: (781) 280-4035
Attention: James D. Freedman, Vice
President and General Counsel
and
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Foley Hoag LLP
Seaport World Trade Center West
155 Seaport Boulevard
Boston, Massachusetts 02210
Facsimile: (617) 832-7000
Attention: Robert L. Birnbaum, Esq. and
William R. Kolb, Esq.
If to Shareholder, to the address for notice set forth on the last
page hereof.
with a copy to:
Heller Ehrman - Venture Law Group
2775 Sand Hill Road
Menlo Park, California 94205
Facsimile: (650) 854-4488
Attention: Laurel H. Finch, Esq.
Any party hereto may by notice so given provide and change its address for
future notices hereunder.
4.6 Governing Law; Submission to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts of
the United States of America located in Boston, Massachusetts for any actions,
suits or proceedings arising out of or relating to this Agreement (and the
parties agree not to commence any action, suit or proceeding relating thereto
except in such courts), and further agree that service of any process, summons,
notice or document by U.S. certified mail shall be effective service of process
for any action, suit or proceeding brought against the parties in any such
court. The parties hereby irrevocably and unconditionally waive any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement, in the courts of the United States of America located in Boston,
Massachusetts, and hereby further irrevocably and unconditionally waive and
agree not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
4.7 Entire Agreement. The Merger Agreement, this Agreement and the
Proxy granted hereunder constitute and contain the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersede any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the subject
matter hereof.
4.8 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.
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4.9 Captions. The captions to sections of this Agreement have been
inserted only for identification and reference purposes and shall not be used to
construe or interpret this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Voting Agreement
to be executed as of the date first above written.
PROGRESS SOFTWARE CORPORATION
By: ___________________________________
Name:
Title:
SHAREHOLDER:
(Shareholder Name)
Shareholder's Address for Notice:
_______________________________________
_______________________________________
Attention:
Outstanding Shares of Company Common
Stock Beneficially Owned by
Shareholder:
____________________________________
Options, Warrants or Rights to
purchase Company Common Stock
Beneficially Owned by Shareholder:
____________________________________
EXHIBIT I
IRREVOCABLE PROXY
The undersigned stockholder (the "SHAREHOLDER") of Persistence Software,
Inc., a Delaware corporation (the "COMPANY"), hereby irrevocably appoints and
constitutes the members of the Board of Directors of Progress Software
Corporation ("PARENT") and each such Board member (collectively, the
"PROXYHOLDERS"), the agents, attorneys-in-fact and proxies of the undersigned,
with full power of substitution and resubstitution, to the full extent of the
undersigned's rights with respect to the shares of capital stock of the Company
which are listed below (the "SHARES"), and any and all other shares or
securities issued or issuable in respect thereof on or after the date hereof and
prior to the date this proxy terminates, to vote the Shares as follows: the
Proxyholders named above are empowered at any time prior to termination of this
proxy to exercise all voting and other rights (including, without limitation,
the power to execute and deliver written consents with respect to the Shares) of
the undersigned at every annual, special or adjourned meeting of the Company
stockholders, and in every written consent in lieu of such a meeting, or
otherwise, (i) in favor of adoption and approval of the Agreement and Plan of
Merger (the "MERGER AGREEMENT") among Parent, PSI Acquisition Sub, Inc., a
Delaware corporation and wholly-owned subsidiary of Parent ("MERGER SUB") and
the Company, and the approval of the merger of Merger Sub with and into the
Company (the "MERGER") and the other actions contemplated by the Merger
Agreement and any actions required in furtherance thereof, and (ii) against
approval of any proposal made in opposition to or in competition with
consummation of the Merger, including, without limitation, any Acquisition
Proposal or Superior Offer (each as defined in the Merger Agreement) or any
action or agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or of the Shareholder under that certain
Voting Agreement, dated as of September 26, 2004, by and between Parent and the
Shareholder (the "VOTING AGREEMENT").
The Proxyholders may not exercise this proxy on any other matter. The
Shareholder may vote the Shares on all matters other than those set forth in the
immediately preceding paragraph. The proxy granted by the Shareholder to the
Proxyholders hereby is granted as of the date of this Irrevocable Proxy in order
to secure the obligations of the Shareholder set forth in Section 1 of the
Voting Agreement, and is irrevocable and coupled with an interest in such
obligations and in the interests in the Company to be purchased and sold
pursuant to the Merger Agreement.
This proxy will terminate upon the termination of the Voting Agreement in
accordance with its terms. Upon the execution hereof, all prior proxies given by
the undersigned with respect to the Shares and any and all other shares or
securities issued or issuable in respect thereof on or after the date hereof are
hereby revoked and no subsequent proxies will be given until such time as this
proxy shall be terminated in accordance with its terms. Any obligation of the
undersigned hereunder shall be binding upon the successors and assigns of the
undersigned. The undersigned Shareholder authorizes the Proxyholders to file
this proxy and any substitution or revocation of substitution with the Secretary
of the Company and with any Inspector of Elections at any meeting of the
shareholders of the Company.
This proxy is irrevocable and shall survive the insolvency,
incapacity, death or liquidation of the undersigned. Dated: September
26, 2004.
______________________________________
Signature
Name (and Title)
Shares of Company Common Stock beneficially owned:
___________
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