<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PERITUS SOFTWARE SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of issuer)
COMMON STOCK, par value $.01 per share
- --------------------------------------------------------------------------------
(Title of class of securities)
714006-10-3
--------------------------------------------------------
(CUSIP number)
Eugene DiDonato
Peritus Software Services, Inc.
Suite 111, 112 Turnpike Road,
Westborough, Massachusetts 01581
508 870-0963 x 2104
- --------------------------------------------------------------------------------
(Name, address and telephone number of person authorized to receive notices and
communications)
March 27, 2000
--------------------------------------------------------
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on the following pages)
(Page 1 of 17 Pages)
________________________________
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
- ---------------------- ----------------------
CUSIP NO. 714006-10-3 Page 2 of 16 Pages
- ---------------------- ----------------------
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NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Rocket Software, Inc. (04-3090800); Johan Magnusson, Andrew Youniss,
Matthew Kelley
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
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SOLE VOTING POWER
7
NUMBER OF
None
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 10,000,000 - See Item 5(b)
---
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
None
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
10,000,000 - See Item 5(b)
---
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
10,000,000 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
36.7%
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TYPE OF REPORTING PERSON*
14
CO, IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Item 1. Security and Issuer.
-------------------
The security to which this statement relates is the Common Stock, $.01
par value per share (the "Common Stock"), of Peritus Software Services, Inc., a
Massachusetts corporation (the "Company"). The address of the Company's
principal executive office is Suite 111, 112 Turnpike Road, Westborough,
Massachusetts 01581.
Item 2. Identity and Background.
-----------------------
1. (a) Rocket Software, Inc. ("Rocket").
(b) Two Apple Hill Drive
Natick, MA 01760
(c) Not Applicable.
(d) No.
(e) No.
(f) Not Applicable.
2. (a) Andrew Youniss.
(b) Business Address: Two Apple Hill Drive, Natick, MA 01760.
(c) Director, President, Treasurer and Secretary and 40% stockholder of
Rocket.
(d) No.
(e) No.
(f) United States of America.
3. (a) Johan Magnusson.
(b) Business Address: Two Apple Hill Drive, Natick, MA 01760.
(c) Director of Rocket and 40% stockholder of Rocket.
(d) No.
(e) No.
(f) Sweden
4. (a) Matthew Kelley.
(b) Business Address: Two Apple Hill Drive, Natick, MA 01760.
(c) 20% stockholder of Rocket.
(d) No.
(e) No.
(f) United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
On March 27, 2000, Rocket paid the Company $4,000,000 in cash for
10,000,000 shares of the Common Stock. The funds used by Rocket for purposes of
purchasing the shares were from Rocket's working capital.
Item 4. Purpose of Transaction.
----------------------
The 10,000,000 shares of the Common Stock are being held by Rocket
primarily for investment and strategic business purposes. As a result of the
purchase of the shares by Rocket,
3 of 16 Pages
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Rocket is entitled to nominate up to two (2) members of the Company's Board of
Directors. Except as provided for herein, Rocket does not have any present plan
or proposal to effect any further substantial changes to the business,
organization, form or control of the Company. Rocket reserves the right to
dispose of all or some of the shares of Common Stock or may acquire additional
shares depending upon price and market conditions and the evaluation of
alternative investments.
Item 5. Interest in Securities of Issuer.
--------------------------------
(a) Based upon the 27,276,569 shares of Common Stock outstanding as of
March 28, 2000 as such information was provided by the Company, Rocket is the
record holder of an aggregate of 10,000,000 shares of the Common Stock, which
comprise 36.7% of that class of securities. Andrew Youniss, as a 40%
stockholder of Rocket, is an indirect beneficial owner of 4,000,000 shares of
Common Stock, representing approximately 14.7% of the number of shares of Common
Stock currently outstanding. Johan Magnusson, as a 40% stockholder of Rocket,
is an indirect beneficial owner of 4,000,000 shares of Common Stock,
representing approximately 14.7% of the number of shares of Common Stock
currently outstanding. Matthew Kelley, as a 20% stockholder of Rocket, is an
indirect beneficial owner of 2,000,000 shares of Common Stock, representing
approximately 7.3% of the number of shares of Common Stock currently
outstanding.
(b) Andrew Youniss, Johan Magnusson and Matthew Kelley, by virtue of their
indirect beneficial ownership in the 10,000,000 shares of the Common Stock
nominally held by Rocket, exercise shared voting and dispositive power with
respect to such shares.
(c) Other than as set forth in Item 3, there have been no transactions in
the Common Stock during the past sixty (60) days by Rocket, Andrew Youniss,
Johan Magnusson or Matthew Kelley.
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
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to Securities of the Issuer.
---------------------------
None.
Item 7. Material to be Filed as Exhibits.
--------------------------------
The following documents are filed as exhibits to this statement:
Exhibit A Common Stock Purchase Agreement, dated as of March 27, 2000, by
---------
and between the Company and Rocket.
[Remainder of Page Intentionally Left Blank]
4 of 16 Pages
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SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
ROCKET SOFTWARE, INC.
April 5, 2000 By: /s/ Andrew Youniss
- --------------------------- ___________________________
(Date) Andrew Youniss, President
April 5, 2000 /s/ Andrew Youniss
- --------------------------- _______________________________
(Date) Andrew Youniss
April 5, 2000 /s/ Johan Magnusson
- --------------------------- _______________________________
(Date) Johan Magnusson
April 5, 2000 /s/ Matthew Kelley
- --------------------------- _______________________________
(Date) Matthew Kelley
5 of 16 Pages
<PAGE>
Common Stock Purchase Agreement
This Common Stock Purchase Agreement (this "Agreement") dated as of March
27, 2000 is entered into by and between Peritus Software Services, Inc., a
Massachusetts corporation (the "Company"), and Rocket Software, Inc. (the
"Purchaser"). The Company and the Purchaser are sometimes referred to herein
each as a "Party" and together as the "Parties".
In consideration of the mutual promises and covenants contained in this
Agreement, the Parties agree as follows:
1. Sale of Shares. Subject to the terms and conditions of this Agreement, at
--------------
the Closing the Company will sell and issue to the Purchaser, and the Purchaser
will purchase, 10,000,000 shares of the Company's common stock, $.01 par value
per share (the "Common Stock"), for an aggregate purchase price of $4,000,000
(the "Purchase Price"), or $.40 per share. The shares of Common Stock sold under
this Agreement are referred to herein as the "Shares".
2. The Closing. The closing (the "Closing") of the sale and purchase of the
-----------
Shares under this Agreement shall take place at the offices of Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts at approximately 12:00 p.m. on March
27, 2000 or at such other time, date and place as are mutually agreeable to the
Company and the Purchaser. At the Closing, the Company shall deliver to the
Purchaser a certificate for the Shares, registered in the name of the Purchaser,
against payment to the Company of the Purchase Price, by wire transfer of
immediately available funds to an account designated by the Company. The date of
the Closing is hereinafter referred to as the "Closing Date".
3. Representations of the Company. Except as disclosed by the Company in the
------------------------------
Disclosure Schedule delivered by the Company to the Purchaser herewith (the
"Disclosure Schedule") or in the Company Reports (as defined in Section 3.6 of
this Agreement), the Company hereby represents and warrants to the Purchaser as
follows:
3.1 Organization and Authority. The Company is a corporation duly organized,
--------------------------
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts, and has requisite power and authority to own its properties and
to carry on its business as now being conducted. The Company has full power to
execute, deliver and perform this Agreement and the Registration Rights
Agreement appended to this Agreement as Annex A (the "Registration Rights
-------
Agreement") and to consummate the transactions contemplated hereby and thereby.
The Company is duly qualified to do business as a foreign corporation and is in
good standing in every jurisdiction in which the failure so to qualify could
reasonably be expected to have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of the Company (a
"Material Adverse Effect").
3.2 Capitalization. The authorized capital stock of the Company consists of (i)
--------------
50,000,000 shares of Common Stock, of which 17,239,971 shares were issued and
outstanding as of March
6 of 16 Pages
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17, 2000, and (ii) 5,000,000 shares of preferred stock, $.01 par value per
share, of which no shares are issued and outstanding. All of the outstanding
shares of capital stock of the Company have been duly and validly issued and are
fully paid and nonassessable. The Disclosure Schedule contains a complete and
correct description of the percentage ownership of each subsidiary of the
Company and, to the extent not wholly owned by the Company, beneficially and of
record, the names (and the percentage ownership) of the other owners thereof.
There are no outstanding preemptive, conversion or other rights, options,
warrants or agreements granted or issued by or binding upon the Company or any
of its subsidiaries for the purchase or acquisition of any shares of its capital
stock.
3.3 Issuance of Shares. The issuance, sale and delivery of the Shares in
------------------
accordance with this Agreement has been, or will be on or prior to the Closing,
duly authorized by all necessary corporate action on the part of the Company.
The Shares when so issued, sold and delivered against payment therefor in
accordance with the provisions of this Agreement will be duly and validly
issued, fully paid and nonassessable.
3.4 Authorization. The execution and delivery of this Agreement and the
-------------
Registration Rights Agreement by the Company and the consummation by the Company
of all transactions contemplated hereby, have been duly authorized by all
requisite corporate action on the part of the Company. This Agreement and the
Registration Rights Agreement, assuming the due execution and delivery by the
parties thereto other than the Company, constitute the valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms subject as to enforcement of remedies to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
generally the enforcement of creditors' rights and subject to a court's
discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies. The execution, delivery and
performance of this Agreement and the Registration Rights Agreement, and the
consummation by the Company of the transactions contemplated hereby and thereby,
will not, with or without the giving of notice or the passage of time or both,
(a) violate the provisions of the charter or bylaws of the Company; (b) violate
any judgment, decree, order or award of any court, governmental body or
arbitrator applicable to the Company; or (c) conflict with or result in the
breach or termination of any term or provision of, or constitute a default
under, or cause any acceleration under, or cause the creation of any lien,
charge or encumbrance upon the properties or assets of the Company pursuant to,
any indenture, mortgage, deed of trust or other agreement or instrument to which
it or its properties is a party or by which the Company is bound, except, with
respect to the immediately preceding clauses (a), (b) and (c), in cases where
such violations, conflicts, breaches or terminations could not reasonably be
expected to result in a Material Adverse Effect. Schedule 3.4 to the Disclosure
------------
Schedule sets forth a true, correct and complete list of all consents and
approvals of third parties that are required in connection with the consummation
by the Company of the transactions contemplated by this Agreement, except for
such consents and approvals the failure of the Company to receive could not
reasonably be expected to result in a Material Adverse Effect.
3.5 Governmental Consents. No consent, approval, order or authorization of, or
---------------------
registration, qualification, designation, declaration or filing with, any
governmental entity is required on the part of the Company in connection with
the execution and delivery of this Agreement or the
7 of 16 Pages
<PAGE>
Registration Rights Agreement, the offer, issuance, sale and delivery of the
Shares or the other transactions to be consummated at the Closing, as
contemplated by this Agreement and the Registration Rights Agreement, except
such filings as shall have been made prior to and shall be effective on and as
of the Closing, such filings required to be made after the Closing under
applicable federal and state securities laws and such filings the failure to be
made could not reasonably be expected to result in a Material Adverse Effect.
Based on the representations made by the Purchaser in Section 4 of this
Agreement, the offer and sale of the Shares to the Purchaser will be in
compliance with applicable federal and state securities laws.
3.6 Reports and Financial Statements. The Company has made available to the
--------------------------------
Purchaser complete and accurate copies, as amended or supplemented, of its (a)
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999, as filed with the Securities and Exchange
Commission (the "Commission"), (b) Current Reports on Form 8-K dated February 9,
1999, February 18, 1999, March 29, 1999, April 2, 1999, May 10, 1999, June 4,
1999 and July 2, 1999 and (c) Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, as amended, (such reports described in the immediately
preceding clauses (a), (b) and (c) are collectively referred to herein as the
"Company Reports"). The Company Reports constitute all of the documents required
to be filed by the Company under Section 13 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), with the Commission since December 31,
1998. As of their respective dates, the Company Reports did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated herein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since the date of the
latest filed Company Report, the Company has not been required to file a Current
Report on Form 8-K under the Exchange Act. The audited financial statements and
unaudited interim financial statements of the Company included in the Company
Reports (i) comply in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, (ii) have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods covered thereby (except as may be indicated therein or in
the notes thereto, and in the case of quarterly financial statements, as
permitted by Form 10-Q under the Exchange Act), (iii) fairly present the
consolidated financial condition, results of operations and cash flows of the
Company as of the respective dates thereof and for the periods referred to
therein, and (iv) are substantially consistent with the books and records of the
Company.
3.7 No Material Adverse Change. Since September 30, 1999: (i) there has been no
--------------------------
material adverse change to the business, properties, assets or condition
(financial or otherwise) of the Company; (ii) the Company and its subsidiaries,
considered as one entity, have not incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or any of its subsidiaries on any class of capital
stock or repurchase or redemption by the Company or any of its subsidiaries of
any class of capital stock.
8 of 16 Pages
<PAGE>
3.8 Litigation. The Company is not a party to, or to the knowledge of the
----------
Company threatened with, and none of its assets are subject to, any litigation,
suit, action, investigation, proceeding or controversy before any court,
administrative agency or other governmental authority relating to or affecting
its assets or the business or condition (financial or otherwise) of the Company
the outcome of which could reasonably be expected to have a Material Adverse
Effect. The Company is not in violation of or in default with respect to any
judgment, order, writ, injunction, decree or rule of any court, administrative
agency or governmental authority or any regulation of any administrative agency
or governmental authority, which such violation or default could reasonably be
expected to have a Material Adverse Effect.
3.9 Intellectual Property Rights. The Company and its subsidiaries own or
----------------------------
possess sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively, "Intellectual
Property Rights") reasonably necessary to conduct their businesses as now
conducted; and the expected expiration of any of such Intellectual Property
Rights could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any of its subsidiaries has received any notice of
infringement or conflict with asserted intellectual property rights of others,
which infringement or conflict, if the subject of an unfavorable decision, could
reasonably be expected to result in a Material Adverse Effect.
3.10 Employees. To the Company's knowledge, no employee of the Company or any of
---------
its subsidiaries, is in violation of any material term of any employment
contract, patent disclosure agreement or non-competition agreement with the
Company. There is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim, or to its knowledge any basis thereof or threat
thereof, with respect to any contract, agreement, covenant or obligation
referred to in the preceding sentence. The Company does not have any collective
bargaining agreement covering any of its employees.
3.11 All Necessary Permits, etc. The Company and each subsidiary possess such
--------------------------
valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, unless the failure to possess such
certificates, authorizations or permits could not reasonably be expected to have
a Material Adverse Effect. Neither the Company nor any subsidiary has received
any notice of proceedings relating to the revocation or modification of, or
noncompliance with, any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could reasonably be expected to result in a Material Adverse Effect.
3.12 Title to Properties. The Company and each of its subsidiaries has good and
-------------------
valid title to all the properties and assets reflected as owned in the Company
Reports, in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company or such subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or any subsidiary are held
under valid and enforceable leases, with such exceptions as are not material and
do not materially interfere with the use made or proposed
9 of 16 Pages
<PAGE>
to be made of such real property, improvements, equipment or personal property
by the Company, or such subsidiary.
3.13 Tax Law Compliance. The Company and its consolidated subsidiaries have
------------------
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied against any
of them, except for assessments, fines or penalties contested in good faith for
which adequate reserves have been provided to the extent required by GAAP or
which the failure to so pay could not reasonably be expected to result in a
Material Adverse Effect. The Company has made adequate charges, accruals and
reserves reasonably determined by the Company in the applicable financial
statements in the Company Reports in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax liability of the
Company or any of its consolidated subsidiaries has not been finally determined.
3.14 Insurance. The Company and its subsidiaries are insured by recognized
---------
institutions with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction and acts of vandalism. The Company has no reason to believe
that it or any subsidiary will not be able (i) to renew its existing insurance
coverage as and when such policies expire or (ii) to obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a Material
Adverse Change. Neither the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
3.15 Disclosure. No representation or warranty by the Company in this Agreement
----------
or in any Annex hereto, or in any list, statement, document or information set
-----
forth in or attached to any Schedule delivered or to be delivered pursuant
--------
hereto, contains or will contain any untrue statement of a material fact or
omits or will omit any material fact necessary in order to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading.
4. Representations of the Purchaser. The Purchaser represents and warrants to
--------------------------------
the Company as follows:
4.1 Investment. The Purchaser is acquiring the Shares for its own account for
----------
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and, except as contemplated by this Agreement and the Registration
Rights Agreement hereto, the Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof. The Purchaser is an "accredited investor" as defined in
Rule 501(a) under the Securities Act of 1933, as amended (the "Securities Act").
4.2 Authority. The Purchaser has full power and authority to enter into and to
---------
perform this Agreement in accordance with its terms. The Purchaser has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company.
10 of 16 Pages
<PAGE>
4.3 Experience. The Purchaser has carefully reviewed the representations
----------
concerning the Company contained in this Agreement, has made detailed inquiry
concerning the Company, its business and its personnel and has received and
reviewed the Company Reports; the officers of the Company have made available to
the Purchaser any and all written information which it has requested and have
answered to the Purchaser's satisfaction all inquiries made by the Purchaser;
and the Purchaser has sufficient knowledge and experience in finance and
business that it is capable of evaluating the risks and merits of its investment
in the Company and the Purchaser is able financially to bear the risks thereof.
5. Conditions to the Obligations of the Purchaser. The obligation of the
----------------------------------------------
Purchaser to purchase the Shares at the Closing is subject to the fulfillment,
or the waiver by the Purchaser, of each of the following conditions on or before
the Closing:
5.1 Accuracy of Representations and Warranties. Each representation and
------------------------------------------
warranty contained in Section 3 of this Agreement shall be true on and as of the
Closing Date with the same effect as though such representation and warranty had
been made on and as of that date.
5.2 Performance. The Company shall have performed and complied with all
-----------
agreements and conditions contained in this Agreement required to be performed
or complied with by the Company prior to or at the Closing.
5.3 Opinion of Counsel. The Purchaser shall have received an opinion from Hale
------------------
and Dorr LLP, special counsel for the Company, dated the Closing Date, addressed
to the Purchaser, to the effect set forth on Annex B appended hereto.
-------
5.4 Registration Rights Agreement. The Registration Rights Agreement shall have
-----------------------------
been executed and delivered by the Company.
5.5 Certificates and Documents. The Company shall have delivered to special
--------------------------
counsel to the Purchaser:
(a) The Restated Articles of Organization of the Company, as amended and
in effect as of the Closing Date, certified by the Secretary of the Commonwealth
of the Commonwealth of Massachusetts;
(b) A certificate, as of the most recent practicable date, as to the
corporate good standing of the Company issued by the Secretary of the
Commonwealth of the Commonwealth of Massachusetts;
(c) The Amended and Restated By-laws of the Company, as in effect as of
the Closing Date, certified by the Clerk of the Company as of the Closing Date;
and
(d) Votes of the Board of Directors of the Company, authorizing and
approving all matters in connection with this Agreement and the transactions
contemplated hereby, certified by the Clerk or Assistant Clerk of the Company as
of the Closing Date.
11 of 16 Pages
<PAGE>
(e) Compliance Certificate. The Company shall have delivered to the
----------------------
Purchaser a certificate, executed by the President of the Company, dated the
Closing Date, certifying to the fulfillment of the conditions specified in
Sections 5.1 and 5.2 of this Agreement.
6. Condition to the Obligations of the Company. The obligations of the Company
-------------------------------------------
under this Agreement are subject to fulfillment, or the waiver, of the following
condition on or before the Closing:
6.1 Accuracy of Representations and Warranties. The representations and
------------------------------------------
warranties of the Purchaser contained in Section 4 of this Agreement shall be
true on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of that date.
7. Transfer of Shares.
------------------
7.1 Restricted Shares. "Restricted Shares" means (i) the Shares and (ii) any
-----------------
other securities of the Company issued in respect of such shares (as a result of
stock splits, stock dividends, reclassifications, recapitalizations, or similar
events); provided, that, shares of Common Stock which are Restricted Shares
-------- ----
shall cease to be Restricted Shares (x) upon any sale pursuant to a registration
statement under the Securities Act or Rule 144 under the Securities Act or (y)
at such time as they become eligible for sale under Rule 144(k) under the
Securities Act.
7.2 Requirements for Transfer.
-------------------------
(a) Restricted Shares shall not be sold or transferred unless either (i) they
first shall have been registered under the Securities Act, or (ii) the Company
first shall have been furnished with an opinion of legal counsel, reasonably
satisfactory to the Company, to the effect that such sale or transfer is exempt
from the registration requirements of the Securities Act.
(b) Notwithstanding the foregoing, no registration or opinion of counsel shall
be required for transfer by the Purchaser to a wholly owned subsidiary of the
Purchaser; provided, that, the transferee in each case agrees in writing to be
-------- ----
subject to the terms of this Section 7 to the same extent as if it were the
Purchaser.
7.3 Legend. Each certificate representing Restricted Shares shall bear a
------
legend substantially in the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be offered,
sold or otherwise transferred, pledged or hypothecated unless and until
such shares are registered under such Act or an opinion of counsel
satisfactory to the Company is obtained to the effect that such
registration is not required."
8. Other Agreements.
----------------
12 of 16 Pages
<PAGE>
8.1 Board of Directors. The Company hereby covenants to the Purchaser that
------------------
until the first to occur of (i) March 31, 2002 and (ii) such time as the
Purchaser no longer owns in excess of 20% of the outstanding shares of Common
Stock, the Company shall, unless it receives the prior written consent of the
Purchaser to act otherwise, use its best efforts to cause (I) two individuals
designated by the Purchaser in writing to the Company to be nominated and
elected as members of the Company's Board of Directors and (II) the number of
members of the Company's Board of Directors to be not in excess of six;
provided, that, if the Purchaser redesignates the individuals to be nominated
- -------- ----
and elected pursuant to this Section 8.1, the Company need not use such best
efforts until such time as the Company has received the effective written
resignations from the Company's Board of Directors of the directors previously
designated by the Purchaser pursuant to this Section 8.1; provided, further,
-------- -------
that the Company hereby covenants to the Purchaser that until the first occur of
(x) March 31, 2002 and (y) such time as the Purchaser no longer owns in excess
of 20% of the outstanding shares of Common Stock, the Company shall use its best
efforts to cause any vacancy on the Company's Board of Directors caused by
death, resignation or removal of a director designated by the Purchaser to be
filled by an individual designated by the Purchaser.
8.2 Confidentiality. The Purchaser agrees that it will keep confidential and
---------------
will not disclose or divulge any confidential proprietary or secret information
which the Purchaser may obtain or have obtained from the Company from materials
submitted by the Company to the Purchaser pursuant to or in connection with this
Agreement, unless such information is known, or until such information becomes
known, to the public (other than as a result of a breach of this Section 8.2 by
the Purchaser); provided, that, the Purchaser may disclose such information to
-------- ----
its attorneys, accountants, consultants and other professionals to the extent
necessary to obtain services in connection with its investment in the Company.
8.3 Expenses. The Purchaser shall pay, at the Closing, the reasonable fees (up
--------
to a maximum of $15,000) and disbursements of Hale and Dorr LLP, counsel to the
Company, in connection with the preparation of this Agreement and the other
agreements contemplated hereby and the closing of the transactions contemplated
hereby.
8.4 Brokers. Each of the Company and the Purchaser (i) represents and warrants
-------
to the other Party that it has not retained a finder or broker in connection
with the transactions contemplated by this Agreement, and (ii) will indemnify
and save the other Party harmless from and against any and all claims,
liabilities or obligations with respect to brokerage or finders' fees or
commissions, or consulting fees in connection with the transactions contemplated
by this Agreement asserted by any person on the basis of any statement or
representation alleged to have been made by such indemnifying Party.
9. Miscellaneous.
-------------
9.1 Successors and Assigns. This Agreement shall be binding upon and inure to
----------------------
the benefit of the Parties and their respective successors and permitted
assigns; provided, that, neither Party may assign their respective rights and
-------- ----
obligations without the prior written consent of the other
13 of 16 Pages
<PAGE>
Party and; provided, further, that with respect to the Purchaser's rights under
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Section 8.1 of this Agreement, (i) a merger or consolidation in which the
Purchaser is a constituent corporation and the stockholders of the Purchaser
prior to such transaction do not represent a majority voting interest in the
surviving entity and (ii) a sale of all or substantially all of the assets of
the Purchaser, shall both be deemed an assignment by the Purchaser requiring the
prior written consent of the Company under this Section 9.1. Any assignment in
contravention of this Section 9.1 shall be void.
9.2 Survival. All representations and warranties made by the Parties in this
--------
Agreement shall speak as of the Closing Date and shall survive the Closing. The
representations and warranties set forth in Section 3 of this Agreement shall
expire on the first anniversary of the Closing Date, except for claims, if any,
asserted in writing prior to such first anniversary, which shall survive until
finally resolved and satisfied in full.
9.3 Severability. The invalidity or unenforceability of any provision of this
------------
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
9.4 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the internal laws of the Commonwealth of Massachusetts (without
reference to the conflicts of law provisions thereof).
9.5 Notices. All notices, requests, consents, and other communications under
-------
this Agreement shall be in writing and shall be deemed delivered (i) two
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery (unless the courier's receipt evidences a later date), in each case to
the intended recipient as set forth below:
To the Company: Copy to:
- -------------- -------
Peritus Software Services, Inc. Hale and Dorr LLP
Suite 111 60 State Street
112 Turnpike Road Boston, Massachusetts 02109
Westborough, Massachusetts 01581 Attention: Peter B. Tarr, Esq.
Attention: President
To the Purchaser: Copy to:
- ---------------- -------
Rocket Software, Inc. Lucash, Gesmer & Updegrove, LLP
Two Apple Hill Drive 40 Broad Street
Natick, Massachusetts 01760 Boston, Massachusetts 02109
Attention: Johan Magnusson Attention: Jill Swaim, Esq.
Any Party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger
14 of 16 Pages
<PAGE>
service, telecopy, first class mail or electronic mail), but no such notice,
request, consent or other communication shall be deemed to have been duly given
unless and until it is actually received by the party for whom it is intended.
Any Party may change the address to which notices, requests, consents or other
communications hereunder are to be delivered by giving the other Party notice in
the manner set forth in this Section 9.5.
9.6 Complete Agreement. This Agreement, the Disclosure Schedule and the
------------------
Registration Rights Agreement constitute the entire agreement and understanding
of the Parties with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter.
9.7 Amendments and Waivers. Except as otherwise expressly set forth in this
----------------------
Agreement, any term of this Agreement may be amended or terminated and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the Purchaser. No waivers of or exceptions to any
term, condition or provision of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
9.8 Counterparts; Facsimile Signatures. This Agreement may be executed in any
----------------------------------
number of counterparts, each of which shall be deemed to be an original, and all
of which shall constitute one and the same document. This Agreement may be
executed by facsimile signatures.
9.9 Section Headings. The section headings are for the convenience of the
----------------
Parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the Parties.
* * * * *
15 of 16 Pages
<PAGE>
Executed as of the date first written above.
COMPANY:
PERITUS SOFTWARE SERVICES, INC.
By: /s/
-----------------------------------
Name: John Giordano
Title: President and
Chief Executive Officer
PURCHASER:
ROCKET SOFTWARE, INC.
By: /s/
-----------------------------------
Name: Andrew Youniss
Title: President
16 of 16 Pages
