EXHIBIT 10.12
LOAN AGREEMENT
This Loan Agreement (this "Agreement") is made effective as of the 30th
day of September, 1999 (the "Effective Date"), by and between PeoplePC Inc., a
Delaware corporation (the "Company") , and SOFTBANK Capital Partners LP, a
Delaware limited partnership ("Lender").
RECITALS
Whereas, on the date hereof, the Company and Lender are entering into a
letter of understanding contemplating the preparation and execution of a
mutually acceptable Stock Purchase Agreement (the "Purchase Agreement"),
pursuant to which the Company intends to sell and Lender intends to acquire
shares of the Company's Series B Preferred Stock, par value $.001 per share (the
"Share Acquisition").
Whereas, the Company and Lender wish to enter into this Agreement to fund
the Company's operations until the closing of the Share Acquisition.
In Witness Whereof, the parties agree as follows:
1. The Loan. Subject to the terms and conditions of this Agreement,
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Lender agrees to lend to the Company, and the Company agrees to borrow from
Lender, funds in an aggregate principal amount of ten million dollars
($10,000,000) (the "Loan"), in one installment. The Loan shall be made on the
date hereof. Interest shall accrue on the Loan commencing one month following
the date hereof. Lender will transmit the Loan via wire transfer of immediately
available funds to the following account: Account No.: __________, Bank Name:
________________________; ABA No.: _________; or pursuant to such other
instructions as may have been provided in writing by the Company, and the
Company will accept the Loan pursuant to the terms of this Agreement.
2. The Convertible Note. The Loan will be evidenced by, and repaid with
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interest in accordance with, an interest-bearing promissory note in the form of
Exhibit A (the "Convertible Note"), duly completed and dated as of the date of
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the Loan and delivered to Lender at or prior to the time of the Loan.
3. Interest and Payments. Interest shall accrue and be paid to Lender on
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the outstanding and unpaid principal amount of the Loan at the rate of 7% per
annum, computed on the basis of the actual number of days elapsed and a year of
360 days consisting of twelve 30 day months. Payments of principal and interest
will be made to Lender in the manner specified in the Convertible Note.
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4. Conditions to Funding of Loan. The obligation of the Lender to make
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the Loan is subject to the fulfillment on or prior to the time of funding of the
Loan of the Company's due execution and delivery of the Convertible Note.
5. Events of Default. The occurrence of any of the following events will
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be an "Event of Default" hereunder:
(a) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall
(i) apply for or consent to the appointment of a receiver, trustee, liquidator
or custodian of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of its or any of its creditors, (iii)
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
consent to any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding commenced
against it, or (iv) take any action for the purpose of effecting any of the
foregoing; or
(b) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for
the appointment of a receiver, trustee, liquidator or custodian of the Company
or of all or a substantial part of the property thereof, or an involuntary case
or other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement.
(c) Cross Default. The Company fails to pay or discharge any
obligation in excess of $250,000 when due, whether by scheduled maturity,
required prepayment, acceleration, or otherwise.
(d) Judgment. Rendering of a final judgment or judgments (not subject
to appeal) against the Company or any of its subsidiaries in an aggregate amount
in excess of $500,000 which remains unstayed, in effect and unpaid for a period
of 60 consecutive days thereafter.
(e) Conversion Default. With respect to outstanding obligations under
the Convertible Note, any breach by the Company with respect to its obligations
to issue shares of Common Stock upon conversion of the Convertible Note pursuant
to Section 3 thereof.
(f) Purchase Agreement. Failure by the parties to enter into a
mutually acceptable Purchase Agreement within forty-five (45) days of the date
hereof.
6. Rights of the Lender upon Default. Upon the occurrence or existence of
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an Event of Default specified in Section 5(a) or (b), immediately and without
notice, all outstanding obligations payable by the Company hereunder and under
the Convertible Note shall automatically become immediately due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived. Upon the occurrence or existence of an Event
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of Default as specified in Sections 5(c), (d) or (e), the Lender may declare the
outstanding obligations hereunder and under the Convertible Note immediately
due and payable by written notice to the Company and upon any such declaration
such obligations shall become immediately due and payable.
7. Successors and Assigns. This Agreement and the Convertible Note shall
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be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
8. Waiver and Amendment. Any provision of this Agreement may be amended,
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waived or modified upon the written consent of the Company and the Lender.
9. Assignment. Neither this Agreement nor any of the rights, interests or
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obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company or the Holder without the prior written consent
of the other party except (i) in the case of the Company, in connection with an
assignment in whole to a successor corporation to the Company, provided that
such successor corporation acquires, by purchase of assets, merger or otherwise,
all or substantially all of the Company's property and assets, and (ii) in the
case of Lender to any affiliates of Lender or SOFTBANK Corp., a Japanese
corporation, including, without limitation, any partnership or other entity of
which any direct or indirect subsidiary of SOFTBANK Corp. is a general partner
or has investment discretion, or any employees of any of the foregoing.
10. Addresses for Notices, etc. Any notices and other communications
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required or permitted under this Agreement shall be effective if in writing and
delivered personally or sent by telecopier, Federal Express or registered or
certified mail, postage prepaid, addressed as follows:
If to Lender, to: SOFTBANK Capital Partners LP
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
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If to the Company, to: PeoplePC Inc.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx Xxxxx
with a copy to: Cooley Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) two business days after being sent, if sent by Federal Express or other
commercial overnight delivery service, (c) one business day after being sent, if
sent by telecopier with confirmation of good transmission and receipt, and (d)
three business days after being sent, if sent by registered or certified mail.
Each of the parties hereto shall be entitled to specify another address by
giving notice as aforesaid to each of the other parties hereto.
11. Severability. The holding of any provision of this Agreement to be
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invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provisions and the other provisions of this Convertible Note shall
remain in full force and effect.
12. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Delaware.
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In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first above written.
PeoplePC Inc.,
a Delaware corporation
By:
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Title:
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SOFTBANK Capital Partners LP,
a Delaware limited partnership corporation
By:
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Title:
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