EXHIBIT 10.2
REDEMPTION, AMENDMENT AND EXCHANGE AGREEMENT
REDEMPTION, AMENDMENT AND EXCHANGE AGREEMENT (the
"AGREEMENT"), dated as of March 25, 2003, by and between Viewpoint Corporation,
a Delaware corporation, with headquarters located at 000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000 (the "COMPANY"), and Riverview Group, LLC (the
"INVESTOR").
WHEREAS:
A. The Company, the Investor and certain other investors
(the "OTHER INVESTORS"; and collectively with the Investor, the "INVESTORS")
have entered into that certain Securities Purchase Agreement, dated as of
December 31, 2002 (the "SECURITIES PURCHASE AGREEMENT"), pursuant to which,
among other things, the Investors purchased from the Company (i) an aggregate of
$7,000,000 principal amount of convertible notes of the Company (the "INITIAL
NOTES"), convertible into shares of the Company's Common Stock, par value $.001
per share (the "COMMON STOCK") (as converted, the "INITIAL CONVERSION SHARES"),
in accordance with the terms of the Initial Notes, and (ii) warrants (the
"INITIAL WARRANTS") to acquire additional shares of Common Stock;
B. Subject to the terms and conditions set forth in the
Securities Purchase Agreement, the Investors may be required to purchase, and
the Company may have the right to sell (i) up to an aggregate of $7,000,000
principal amount of Subsequent Notes (as defined in the Securities Purchase
Agreement) and (ii) Subsequent Warrants (as defined in the Securities Purchase
Agreement);
C. Subject to the terms and conditions set forth in the
Securities Purchase Agreement, the Investors shall have the right to purchase,
and the Company shall be required to sell, (i) up to an aggregate of $2,800,000
principal amount of Additional Notes (as defined in the Securities Purchase
Agreement) and (ii) Additional Warrants (as defined in the Securities Purchase
Agreement);
D. In connection with the transactions set forth in the
Securities Purchase Agreement, the Company entered into a Pledge Agreement,
dated as of December 31, 2002 (the "PLEDGE AGREEMENT"), pursuant to which the
Company pledged to the Investors certain limited assets to secure during the
Pledge Period (as defined in the Securities Purchase Agreement) its obligations
to pay interest on and principal of the Notes;
E. Contemporaneously with the execution and delivery of
the Securities Purchase Agreement, the Company and the Investors entered into a
Registration Rights Agreement, dated as of December 31, 2002 (the "REGISTRATION
RIGHTS AGREEMENT"), pursuant to which the Company agreed to provide certain
registration rights with respect to the Registrable Securities (as defined in
the Registration Rights Agreement) under the Securities Act of 1933, as amended
(the "1933 ACT"), and the rules and regulations promulgated thereunder, and
applicable state securities laws;
F. On February 28, 2003, the Investor delivered a Notice
of Default and Event of Default Redemption Notice (the "DEFAULT NOTICE");
G. The Company and the Investor desire to enter into
this Agreement, pursuant to which, among other things, (i) the Company will
redeem $1,131,428.57 principal amount of the Investor's Initial Notes ("INVESTOR
REDEMPTION AMOUNT"), (ii) the Investor shall exchange $342,857.14 principal
amount of the Investor's Initial Notes (the "INVESTOR SHARE EXCHANGE AMOUNT")
for 463,320 shares of Common Stock (as adjusted for any stock splits, stock
dividends, stock combinations or other similar transactions) (the "EXCHANGE
SHARES") and (iii) the Investor will exchange the remainder of its Initial Note
(the "INVESTOR NOTE EXCHANGE AMOUNT") for three convertible notes of equal
aggregate principal amount and in the form attached hereto as Exhibit A (each, a
"REPLACEMENT NOTE" and together with any convertible notes issued in replacement
thereof in accordance with the terms thereof and any convertible notes issued to
any Other Investor in exchange for their Initial Notes, the "REPLACEMENT
NOTES"), which Replacement Notes shall be (x) convertible into shares of Common
Stock (as converted, and including any shares paid as a penalty pursuant to the
Replacement Notes, the "REPLACEMENT CONVERSION SHARES"), in accordance with the
terms of the Replacement Notes and (y) redeemable, in certain instances, for
warrants in the form attached hereto as Exhibit B (the "REDEMPTION WARRANTS") to
acquire shares of Common Stock (the "REDEMPTION WARRANT SHARES"), in accordance
with the terms of the Replacement Notes;
H. The parties hereto desire to release (i) to the
Investor, in cash, the portion of the Pledged Financial Assets (as defined in
the Pledge Agreement) equal to the accrued and unpaid interest on the Investor
Redemption Amount (the "REDEMPTION INTEREST RELEASE AMOUNT") and the Investor
Share Exchange Amount (the "SHARE EXCHANGE INTEREST RELEASE AMOUNT"), in each
case to the Closing Date (as defined below), and (ii) to the Company an
aggregate of $376,715.34 of the Pledged Financial Assets (the "COMPANY RELEASE
AMOUNT");
I. The parties hereto desire to amend certain provisions
of the Securities Purchase Agreement, the Registration Rights Agreement and the
Initial Warrants;
J. The exchange of the Initial Notes for the Exchange
Shares and the Replacement Notes is being made in reliance upon the exemption
from registration provided by Section 3(a)(9) of the 1933 Act; and
K. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed to them in the
Securities Purchase Agreement.
NOW, THEREFORE, the Company and the Investor hereby
agree as follows:
1. REDEMPTION AND EXCHANGE OF INITIAL NOTES; WITHDRAWAL
OF DEFAULT NOTICE.
(a) Redemption of Initial Notes. Subject to
satisfaction (or waiver) of the conditions set forth in Sections 5 and 6, the
Company shall redeem from the Investor on the Closing Date (as defined below) a
portion of the Investor's Initial Notes equal to the Investor Redemption Amount
(the "CLOSING").
(b) Exchange of Initial Notes. Subject to
satisfaction (or waiver) of the conditions set forth in Sections 5 and 6, at the
Closing the Investor shall surrender to the Company its Initial Notes and the
Company shall (i) in exchange for the Investor Share
2
Exchange Amount, deliver to the Investor 501,931 shares of Common Stock (the
"INVESTOR EXCHANGE SHARES") and (ii) in exchange for the Investor Note Exchange
Amount, issue three Replacement Notes in an aggregate principal amount equal to
the Investor Note Exchange Amount.
(c) Release of Pledged Financial Assets. At the
Closing, the parties hereto will take all actions necessary such that (i) the
Investor shall receive from the Pledged Financial Assets cash in an amount equal
to the aggregate of the Redemption Interest Release Amount and the Share
Exchange Interest Release Amount and (ii) the Company shall receive from the
Pledged Financial Assets cash in an amount equal to the Company Release Amount.
(d) Closing Date. The date and time of the Closing
(the "CLOSING DATE") shall be 10:00 a.m., New York Time, on the date hereof,
subject to notification of satisfaction (or waiver) of the conditions to the
Closing set forth in Sections 5 and 6 below (or such later date as is mutually
agreed to by the Company and the Investor). The Closing shall occur on the
Closing Date at the offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
(e) Form of Payment. On the Closing Date, (i) the
Company (A) shall pay to the Investor the Investor Redemption Amount, by wire
transfer of immediately available funds in accordance with the Investor's
written wire instructions, (B) shall cause to be delivered to the Investor the
aggregate of the Redemption Interest Release Amount and the Share Exchange
Interest Release Amount from the Pledged Financial Assets, by wire transfer of
immediately available funds in accordance with the Investor's written wire
instructions, (C) shall issue and deliver to the Investor certificates
representing the Investor Exchange Shares (in such denominations as the Investor
shall request), and (D) shall issue and deliver to the Investor (in the
principal amounts as the Investor shall request), the Investor's Replacement
Notes, duly executed on behalf of the Company and registered in the name of the
Investor or its designee, and (ii) the Investor (A) shall take such action as is
necessary to cause to be delivered to the Company the Company Release Amount
from the Pledged Financial Assets, by wire transfer of immediately available
funds in accordance with the Company's written wire instructions and (B) shall
deliver to the Company the Investor's Initial Notes for cancellation.
(f) Default Notice. Effective upon the Closing, the
Investor hereby withdraws and cancels the Default Notice.
2. AMENDMENTS TO TRANSACTION DOCUMENTS.
(a) Securities Purchase Agreement. The Securities
Purchase Agreement is hereby amended as follows:
(i) All references to "Initial
Notes" are hereby replaced with "Replacement Notes";
(ii) All references to "Initial
Conversion Shares" are hereby replaced with "Replacement Conversion
Shares";
3
(iii) The defined term "Warrant"
is hereby amended to include the term "Redemption Warrant";
(iv) The defined term "Warrant
Shares" is hereby amended to include the term "Redemption Warrant
Shares";
(v) The defined term
"Transaction Documents" is hereby amended to include this Agreement;
(vi) The defined term "Principal
Market" is hereby amended to mean The NASDAQ National Market or in
the event that the Company is no longer listed with the NASDAQ
National Market, the market or exchange on which the Common Stock is
then listed and traded, which only may be The New York Stock
Exchange, Inc., the American Stock Exchange or The NASDAQ SmallCap
Market; and.
(vii) The fourth sentence in
Section 3(l) is hereby replaced by the following:
"The Company is not as of the date hereof (after giving
effect to the transactions contemplated by the
Securities Purchase Agreement entered into on the date
hereof by and among the Company and the investors listed
on the signature pages thereto (a copy of which has been
provided to the Investors) for the issuance of
$3,500,000 of 4.95% notes due 2006 and 3,614,756 shares
of the Company's common stock), and after giving effect
to the transactions contemplated hereby to occur at each
Closing, will not be Insolvent (as defined below).
(b) Registration Rights Agreement. The
Registration Rights Agreement is hereby amended as follows:
(i) The term "Initial
Registrable Securities" is hereby replaced by the following:
(a) "INITIAL
REGISTRABLE SECURITIES" means (i) the Initial Warrant
Shares issued or issuable upon exercise of the Initial
Warrants, (ii) the Replacement Conversion Shares (as
defined in each of the Redemption, Amendment and
Exchange Agreements, dated as of March 25, 2003, between
the Company and each of the Investors (the
"AMENDMENTS")) issued or issuable upon conversion of the
Replacement Notes (as defined in the Amendments), (iii)
the Exchange Shares (as defined in the Amendments), (iv)
the Redemption Warrant Shares (as defined in the
Amendments) issued or issuable upon exercise of the
Redemption Warrants (as defined in the Amendments), (v)
the Interest Shares (as defined in the Notes) issued or
issuable under the Replacement Notes and (vi) any shares
of capital stock issued or issuable with respect to the
Exchange Shares, the Replacement Conversion Shares, the
Replacement Notes, the Interest Shares, the Initial
Warrant Shares, the Initial Warrants, the Redemption
Warrant Shares or the Redemption Warrants as a result of
any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard
to any
4
limitations on conversions of the Replacement Notes or
exercises of the Initial Warrants or Redemption
Warrants.
(ii) The defined term "Notes" is
hereby amended to replace the term "Initial Notes" with the term
"Replacement Notes";
(iii) The defined term
"Conversion Shares" is hereby amended to replace the term "Initial
Conversion Shares" with the term "Replacement Conversion Shares";
(iv) The defined term "Warrants"
is hereby amended to include the term "Redemption Warrants";
(v) The defined term "Warrant
Shares" is hereby amended to include the term "Redemption Warrant
Shares";
(vi) The term "Initial Filing
Deadline" shall be deemed to refer to the "Replacement Filing
Deadline" (as defined below in Section 4(d));
(vii) The Initial Effectiveness
Deadline is extended by sixty-one days to May 31, 2003; provided
that if the Company receives any "going concern" or other
qualification from its independent outside accountants on its
financial statements, then the Initial Effectiveness Deadline shall
remain at March 31, 2003; and
(viii) Section 2(f) is replaced
in its entirety with the following:
f. Effect of Failure to File and Obtain and Maintain
Effectiveness of Registration Statement. If (i) a
Registration Statement covering all the Registrable
Securities required to be covered thereby and required
to be filed by the Company pursuant to this Agreement is
(A) not filed with the SEC on or before the respective
Filing Deadline or (B) not declared effective by the SEC
on or before 30 days after the respective Effectiveness
Deadline or (ii) on any day after such Registration
Statement has been declared effective by the SEC sales
of all the Registrable Securities required to be
included on such Registration Statement cannot be made
(other than during an Allowable Grace Period (as defined
in Section 3(r)) pursuant to such Registration Statement
(including, without limitation, because of a failure to
keep such Registration Statement effective, to disclose
such information as is necessary for sales to be made
pursuant to such Registration Statement or to register
sufficient shares of Common Stock), then, as partial
relief for the damages to any holder by reason of any
such delay in or reduction of its ability to sell the
applicable Registrable Securities (which remedy shall
not be exclusive of any other remedies available at law
or in equity), the Company shall pay to each holder of
Notes relating to such Registration Statement an amount
in cash equal to the product of (i) the sum of (A) the
aggregate Principal (as such term is defined in the
Notes) convertible into Conversion Shares included in
such Registration Statement of such Investor's Notes
plus (B) the product of (x) the number of Exchange
Shares, if any, included in such Registration Statement
multiplied by (y) the Closing Sale Price (as defined in
the Notes) on the applicable date of determination
multiplied by (ii) the sum of (A) 0.015, if such
Registration Statement is not filed by the applicable
Filing Deadline, plus (B) 0.030, if such Registration
Statement is not declared effective by 30 days after the
applicable Effectiveness Deadline, plus (C) the product
of (I) 0.0005 multiplied by (II) the sum of (x) the
number of days after the applicable Filing Deadline that
the Registration Statement is not filed with the SEC,
plus (y) the number of days, in each instance, after the
Registration Statement has been declared effective by
the SEC that such Registration Statement is not
available (other than during an Allowable Grace Period)
for the sale of all the Registrable Securities required
to be included on such Registration Statement; plus (D)
the sum of (x) the product of (I) 0.001 multiplied by
(II) the number of days after the 30th day through the
60th day after the applicable Effectiveness Deadline
that the Registration Statement is not declared
effective by the SEC, plus (y) the product of (I)
5
0.0015 multiplied by (II) the number of days after the
60th day after the applicable Effectiveness Deadline
that the Registration Statement is not declared
effective by the SEC. The payments to which a holder
shall be entitled pursuant to this Section 2(f) are
referred to herein as "REGISTRATION DELAY PAYMENTS."
Registration Delay Payments shall be paid on the earlier
of (I) the last day of the calendar month during which
such Registration Delay Payments are incurred and (II)
the third Business Day after the event or failure giving
rise to the Registration Delay Payments is cured. In the
event the Company fails to make Registration Delay
Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of 1.5% per
month (prorated for partial months) until paid in full.
(c) Warrants. Each of the Initial Warrants,
the Subsequent Warrants, and the Additional Warrants are hereby amended as
follows:
(i) By substituting "3.33%" for
"4.99%" in Section 1(f)(i) thereof;
(ii) By replacing the words "If
and whenever on or after the date of issuance of this Warrant" at
the beginning of Section 2(a) with the words "If and whenever after
December 31, 2003";
(iii) By replacing the words
"For purposes of this Section 2(a)(iii), if the terms of any Option
or Convertible Security that was outstanding as of the date of
issuance of this Warrant are increased or decreased in the manner
described in the immediately preceding sentence," at the beginning
of the second sentence of Section 2(a)(iii) with the words "For
purposes of this Section 2(a)(iii), if the terms of any Option or
Convertible Security that was outstanding as of December 31, 2002
are increased or decreased in the manner described in the
immediately preceding sentence,";
(iv) By replacing the words "If
during the period beginning on and including the Initial Issuance
Date and ending on the date immediately preceding the date of
issuance of this Warrant," at the beginning of Section 2(a)(vi) in
the Subsequent Warrants and the Additional Warrants with the words
"If during the period beginning after December 31, 2003 and ending
on the date immediately preceding the date of issuance of this
Warrant,"; and
(v) By including The NASDAQ
SmallCap Market in the defined term "Principal Market".
6
(d) Pledge Agreement. The Pledge Agreement
is hereby amended such that the removal of the Redemption Interest Release
Amount, the Share Exchange Interest Release Amount and the Company Release
Amount shall not be in breach of its terms.
3. REPRESENTATIONS AND WARRANTIES
(a) Investor Bring Down. The Investor hereby
represents and warrants as to itself only as set forth in Section 2(a)-(g),
Section 2(i) (as to this Agreement) and Section 2(j)-(k) of the Securities
Purchase Agreement as if such representations and warranties were made as of the
date hereof and set forth in their entirety in this Agreement.
(b) Company Bring Down. The Company
represents and warrants to the Investor as set forth in Section 3 of the
Securities Purchase Agreement as if such representations and warranties were
made as of the date hereof and set forth in their entirety in this Agreement;
provided that the Schedules to the Securities Purchase Agreement are replaced in
their entirety by the Schedules attached to this Agreement (the "New Schedules")
and the representations and warranties in the Securities Purchase Agreement are
qualified in their entirety by the New Schedules (regardless of whether such
representations and warranties provide for a Schedule).
4. CERTAIN COVENANTS
(a) Disclosure of Transactions and Other
Material Information. On or before 8:30 a.m., New York Time, on the first
Trading Day following the date hereof, the Company shall file a Current Report
on Form 8-K describing the terms of the transactions contemplated by this
Agreement and by the documents relating to the redemption and exchange of Other
Investor's Initial Notes on the Closing Date (the "OTHER INVESTOR DOCUMENTS") in
the form required by the 1934 Act, and attaching the material transaction
documents (including, without limitation, this Agreement (and all schedules to
this Agreement), the form of the Replacement Notes, the form of the Redemption
Warrants, and the Other Investor Documents) as exhibits to such filing
(including all attachments, the "8-K FILING", and the description and
attachments, the "8-K MATERIALS"). The 8-K Materials shall be subject to the
Investor's prior approval, not to be unreasonably withheld or delayed. From and
after the filing of the 8-K Filing with the SEC, the Investor shall not be in
possession of any material, nonpublic information received from the Company, any
of its Subsidiaries or any of its respective officers, directors, employees or
agents, that is not disclosed in the 8-K Filing. The Company shall not, and
shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees and agents, not to, provide the Investor with any
material nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the 8-K Filing with the SEC without the express
written consent of the Investor. In the event of a breach of the foregoing
covenant by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees and agents, in addition to any other
remedy provided herein or in the Transaction Documents, the Investor shall have
the right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of the 8-K Materials without the prior approval by
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Investor shall not have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, shareholders or agents for any such
7
disclosure. Subject to the foregoing, neither the Company nor the Investor shall
issue any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, with the prior approval of the Investor (not to be unreasonably
withheld or delayed), to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and
regulations, including the applicable rules and regulations of the Principal
Market (provided that in the case of clause (i) the Investor shall be consulted
by the Company (although the consent of the Investor shall not be required) in
connection with any such press release or other public disclosure prior to its
release).
(b) Prohibited Transactions. From the date
hereof through and including April 30, 2003, and during the period beginning
four Trading Days (as defined in the Notes) prior to, and ending ten Trading
Days subsequent to, each of May 16, 2003, August 16, 2003 and November 16, 2003,
the Investor shall not engage in a Prohibited Transaction; provided, however,
that the restrictions on Prohibited Transactions set forth above shall not apply
(i) on or after the first date on which there has been any Change of Control (as
defined in the Notes) or an announcement of any pending, proposed or intended
Change of Control unless such pending, proposed or intended Change of Control
has been terminated, abandoned or consummated and the Company has publicly
announced such termination, abandonment or consummation of such Change of
Control and (ii) on or after the first date on which there has occurred an Event
of Default (as defined in the Notes) or an event that with the passage of time
and without being cured would constitute an Event of Default.
(c) Restricted Purchases of Common Stock by
Investor. At such time as the Investor no longer owns any Securities or has the
right to acquire any Securities, the Investor covenants and agrees to refrain
from buying or selling any shares of Common Stock.
(d) Registration Statement. The Company
shall prepare, and, as soon as practicable but in no event later than twenty
(20) days after the date hereof (the "REPLACEMENT FILING DEADLINE"), file with
the SEC an amendment to the Initial Registration Statement (as defined in the
Registration Rights Agreement) on Form S-3. The amendment to the Initial
Registration Statement prepared pursuant hereto shall register for resale at
least that number of shares of Common Stock equal to the product of (x) 1.3 and
(y) the number of Initial Registrable Securities as of the trading day
immediately preceding the date such amendment to the Initial Registration
Statement is initially filed with the SEC, subject to adjustment as provided in
Section 2(e) of the Registration Rights Agreement. Simultaneously with execution
of this Agreement, the Company shall pay to Xxxxxxx Xxxx & Xxxxx LLP by wire
transfer of immediately available funds in accordance with wire instructions
provided to the Company the amount required by Section 5 of the Registration
Rights Agreement.
5. CONDITIONS TO COMPANY'S OBLIGATIONS HEREUNDER.
The obligations of the Company hereunder are
subject to the satisfaction of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing the Investor with prior
written notice thereof:
8
(a) The Investor shall have executed this
Agreement and delivered the same to the Company
(b) The Investor shall have delivered to the
Company the Investor's Initial Notes.
(c) The representations and warranties of
the Investor shall be true and correct as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and such Investor shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Investor at or prior to the Closing Date.
(d) The Company shall have entered into
separate but substantially identical redemption, amendment and exchange
agreements with each of the Other Investors and all conditions to the closings
contemplated by such agreements shall have been satisfied or waived.
6. CONDITIONS TO INVESTOR'S OBLIGATIONS HEREUNDER.
The obligations of the Investor hereunder
are subject to the satisfaction of each of the following conditions, provided
that these conditions are for the Investor's sole benefit and may be waived by
the Investor at any time in its sole discretion by providing the Company with
prior written notice thereof:
(a) The Company shall have executed and
delivered to such Investor (i) this Agreement and (ii) the Replacement Notes (in
such principal amounts as such Investor shall request).
(b) The Company shall have (i) delivered or
caused to be delivered to the Investor the Investor Redemption Amount, the
Redemption Interest Release Amount and the Share Exchange Interest Release
Amount by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Investor and (ii) executed and delivered the stock
certificates (in such denominations as the Investor shall request) for the
Investor Exchange Shares.
(c) The Investor shall have received the
opinions of Milbank, Tweed, Xxxxxx & XxXxxx LLP, the Company's outside counsel,
and Xxxxx X'Xxxxxxxx, the Company's General Counsel, each dated as of the date
hereof, in substantially the form of Exhibits C-1 and C-2 attached hereto.
(d) The Company shall have delivered to the
Investor a certificate evidencing the incorporation and good standing of the
Company and each Subsidiary in such corporation's state of incorporation issued
by the Secretary of State of such state of incorporation, to the extent set
forth in Section 3(a) of the Securities Purchase Agreement, as of a date within
10 days of the date hereof.
9
(e) The Company shall have delivered to the
Investor a certificate evidencing the Company's qualification as a foreign
corporation and good standing issued by the Secretary of State of the State of
New York as of a date within 10 days of the date hereof.
(f) The Company shall have delivered to the
Investor a certified copy of the Certificate of Incorporation as certified by
the Secretary of State of the State of Delaware within 10 days of the date
hereof.
(g) The Board of Directors of the Company
shall have adopted resolutions consistent with Section 3(b) of the Securities
Purchase Agreement after giving effect to the amendments contemplated by this
Agreement in a form reasonably satisfactory to the Investor.
(h) The Company shall have delivered to the
Investor a certificate, executed by the Secretary of the Company and dated as of
the date hereof, as to (i) the resolutions authorizing the transactions set
froth herein as adopted by the Company's Board of Directors in a form reasonably
acceptable to the Investor (the "RESOLUTIONS"), (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the date hereof, in the
form attached hereto as Exhibit D.
(i) The Company shall have delivered to the
Investor a letter from the Company's transfer agent (x) certifying the number of
shares of Common Stock outstanding as of a date within five days of the date
hereof and (y) acknowledging that the Irrevocable Transfer Agent Instructions
delivered to the Trustee on December 31, 2002 shall also apply to the
Replacement Notes and the Redemption Warrants..
(j) The Common Stock (I) shall be designated
for quotation or listed on the Principal Market and (II) shall not have been
suspended, as of the Initial Closing Date, by the SEC or the Principal Market
from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the date hereof, either in writing
by the SEC or the Principal Market; and the Exchange Shares, the Replacement
Conversion Shares and the Initial Warrant Shares shall be listed upon the
Principal Market .
(k) The representations and warranties of
the Company shall be true and correct as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. The
Investor shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by the Investor in
the form attached hereto as Exhibit E.
(l) The Company shall have obtained all
governmental, regulatory or third party consents and approvals, if any,
necessary for the issuance of the Replacement Notes.
10
(m) The Company shall have delivered to the
Investor such other documents relating to the transactions contemplated by this
Agreement as the Investor or its counsel may reasonably request.
7. MUTUAL GENERAL RELEASE.
(a) In consideration of the releases set
forth in Sections 7(b), effective as of the Closing, the Investor, only on
behalf of itself and, to the extent permitted by law, its heirs, executors,
administrators, devisees, trustees, partners, directors, officers, shareholders,
employees, consultants, representatives, predecessors, principals, agents,
parents, associates, affiliates, subsidiaries, attorneys, accountants,
successors, successors-in-interest and assignees (collectively, the "INVESTOR
RELEASING PERSONS"), hereby waives and releases, to the fullest extent permitted
by law, any and all claims, rights and causes of action, whether known or
unknown (collectively, the "INVESTOR CLAIMS"), that any of the Investor
Releasing Persons had or currently has against (i) the Company, (ii) any of the
Company's current or former parents, affiliates, subsidiaries, predecessors or
assigns, or (iii) any of the Company's or such other persons' or entities'
current or former officers, directors, employees, agents, principals, and
signatories (collectively, the "COMPANY RELEASED PERSONS"), including, without
limitations, any Investor Claims arising out of any of the Transaction
Documents. Investor Claims arising after the Closing that relate to events or
circumstances occurring, or actions taken or failed to be taken, after the
Closing are not waived or released hereby.
(b) In further consideration of the Investor
entering into this Agreement, effective as of the date of this Agreement, the
Company on behalf of itself and, to the extent permitted by law, its
administrators, devisees, trustees, partners, directors, officers, shareholders,
employees, consultants, representatives, predecessors, principals, agents,
parents, associates, affiliates, subsidiaries, attorneys, accountants,
successors, successors-in-interest and assignees (collectively, the "COMPANY
RELEASING PERSONS"), hereby waives and releases, to the fullest extent permitted
by law, any and all claims, rights and causes of action, whether known or
unknown (collectively, the "COMPANY CLAIMS"), that any of the Company Releasing
Persons had or currently has against (i) the Investor, (ii) any of the
Investor's current or former parents, members, partners, shareholders,
affiliates, subsidiaries, predecessors or assigns, or (iii) any of the
Investor's or such other persons' or entities' current or former officers,
directors, members, partners, shareholders, employees, agents, principals,
investors, signatories, advisors, consultants, spouses, heirs, estates,
executors, attorneys, auditors and associates and members of their immediate
families (collectively, the "INVESTOR RELEASED PERSONS"), including, without
limitations, any Company Claims arising out of any of the Transaction Documents.
Company Claims arising after the Closing that relate to events or circumstances
occurring, or actions taken or failed to be taken, after the Closing are not
waived or released hereby.
(c) Notwithstanding the foregoing, the
Company and the Investor acknowledge that the releases set forth in Sections
7(a) and (b) above do not affect, waive or release any claim that any Company
Releasing Person or any Investor Releasing Person may have under (i) this
Agreement, (ii) Section 4(g) of the Securities Purchase Agreement, (iii) Section
9(k) of the Securities Purchase Agreement (other than clause (a) thereof with
respect to claims by the Investor relating to a misrepresentation or breach of
any representation or warranty
11
made by the Company in the Securities Purchase Agreement) or (iv) Sections 5, 6
or 7 of the Registration Rights Agreement.
8. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial.
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) Counterparts. This Agreement may be
executed in one or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party; provided that a
facsimile signature shall be considered due execution and shall be binding upon
the signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature.
(c) Headings. The headings of this Agreement
are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement; Effect on Prior
Agreements; Amendments. Except for the Transaction Documents (to the extent any
such Transaction Document is not amended by this Agreement), this Agreement
supersedes all other prior oral or written agreements between the Investor, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
12
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and the Investor and to the extent that Other Investors may be
affected thereby, by holders of Notes representing at least two-thirds of the
aggregate principal amount of the Notes then outstanding. No provision hereof
may be waived other than by an instrument in writing signed by the party against
whom enforcement is sought. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration also is offered to
all of the parties to the Transaction Documents, holders of Notes or holders of
the Warrants, as the case may be. The Company has not, directly or indirectly,
made any agreements with any of the Investors relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.
(f) Notices. Any notices, consents, waivers
or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered: (i)
upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Company:
Viewpoint Corporation
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx,
Executive Vice President,
Business Affairs and
Xxxxx X. X'Xxxxxxxx,
Executive Vice President
and General Counsel
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxx, Esq.
If to the Investor:
Riverview Group, LLC
13
c/o Millennium Partners
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns, including any purchasers of the Notes or the
Warrants. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the holders of Notes
representing at least two-thirds of the aggregate principal amount of the Notes
then outstanding, including by merger or consolidation, except pursuant to a
Change of Control (as defined in Section 5 of the Notes) with respect to which
the Company is in compliance with Section 5 of the Notes and Section 4(b) of the
Warrants. The Investor may assign some or all of its rights hereunder without
the consent of the Company, in which event such assignee shall be deemed to be a
Investor hereunder with respect to such assigned rights.
(h) No Third Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person; provided, however, that
Section 4(b) hereof may be enforced by an Other Investor.
(i) Survival. The representations and
warranties of the Company and the Investor contained herein, and the agreements
and covenants set forth herein, shall survive the Closing.
14
(j) Further Assurances. Each party shall do
and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
(k) No Strict Construction. The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be
applied against any party.
(l) Remedies. The Investor and each holder
of the Securities shall have all rights and remedies set forth in the
Transaction Documents and all rights and remedies which such holders have been
granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. Furthermore, the Company recognizes that in the
event that it fails to perform, observe, or discharge any or all of its
obligations under this Agreement, any remedy at law may prove to be inadequate
relief to the Investor. The Company therefore agrees that the Investor shall be
entitled to seek temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages and without posting a bond or
other security.
[SIGNATURE PAGE FOLLOWS]
15
IN WITNESS WHEREOF, the Investor and the Company have caused this
Redemption, Amendment and Exchange Agreement to be duly executed as of the date
first written above.
COMPANY: INVESTOR:
VIEWPOINT CORPORATION RIVERVIEW GROUP, LLC
By: /s/ Xxxxx X. X'Xxxxxxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------------- -------------------------
Name: Xxxxx X. X'Xxxxxxxx Name: Xxxxxx Xxxxxxxx
Title: Executive Vice President Title: Portfolio Manager
16
EXHIBITS
Exhibit A Form of Replacement Note
Exhibit B Form of Redemption Warrant
Exhibit C-1 Opinion of Milbank, Tweed, Xxxxxx & XxXxxx LLP
Exhibit C-2 Opinion of Xxxxx X'Xxxxxxxx
Exhibit D Form of Secretary's Certificate
Exhibit E Form of Officer's Certificate
17
SCHEDULES TO
REDEMPTION, AMENDMENT AND EXCHANGE AGREEMENT
DATED AS OF MARCH 25, 2003
BY AND BETWEEN
VIEWPOINT CORPORATION
AND
RIVERVIEW GROUP, LLC
SCHEDULE 3(A)
SUBSIDIARIES
MetaCreations Europe SARL (France)
MetaCreations Holding Corporation (California)
MetaCreations Holding Limited (Ireland)
MetaCreations International Limited (Ireland)
MetaTools Barbados FSC (Barbados)
Viewpoint Digital, Inc. (Delaware)
Viewpoint Digital SARL (France)
Viewpoint Digital Limited (UK)
Thinkfish Acquisition Company (Delaware)
Canoma, Inc. (California)
SCHEDULE 3(E)
CONSENTS
Due to the recent decline in the Company's stock price, the Company does not
currently meet The NASDAQ National Market quantitative maintenance criteria. The
Company received notice from The NASDAQ National Market on March 20, 2003
stating that the Company is not in compliance with Marketplace Rule 4450(e)(2)
and that the Company will be provided 180 days to regain compliance with
National Market standards.
SCHEDULE 3(L)
ABSENCE OF CERTAIN CHANGES
This representation is qualified by the following:
Any facts, events and circumstances relating to or arising out of (i)
the financial results for the quarter and fiscal year ended December
31, 2002 announced by the Company on February 27, 2003, (ii) the Event
of Default Notices delivered to the Company by Smithfield Fiduciary LLC
and Portside Growth & Opportunity Fund on February 28, 2003 and (iii)
and the letter delivered by such investors to the Company on February
28, 2003 regarding the Event of Default Notices and issues relating
thereto.
SCHEDULE 3(M)
NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES
This representation is qualified by the following:
Any facts, events and circumstances relating to or arising out of (i)
the financial results for the quarter and fiscal year ended December
31, 2002 announced by the Company on February 27, 2003, (ii) the Event
of Default Notices delivered to the Company by Smithfield Fiduciary LLC
and Portside Growth & Opportunity Fund on February 28, 2003 and (iii)
and the letter delivered by such investors to the Company on February
28, 2003 regarding the Event of Default Notices and issues relating
thereto.
SCHEDULE 3(N)
CONDUCT OF BUSINESS; REGULATORY PERMITS
Due to the recent decline in the Company's stock price, the Company
does not currently meet The NASDAQ National Market quantitative
maintenance criteria. The Company received notice from the NASDAQ
National Market on March 20, 2003 stating that the Company is not in
compliance with Marketplace Rule 4450(e)(2) and that the Company will
be provided 180 days to regain compliance with National Market
standards.
SCHEDULE 3(P)
TRANSACTIONS WITH AFFILIATES
None
SCHEDULE 3(Q)
EQUITY CAPITALIZATION
1. VIEWPOINT CORPORATION OUTSTANDING OPTIONS AS OF MARCH 20, 2003
PRICE ISSUED VESTED
$/SHARE) (# OF SHARES) (# OF SHARES)
---------------------- ---------------------------- --------------------
0.8700 2,221,866 2,044,707
0.9300 14,000 0
1.7100 15,000 0
1.8700 24,000 0
2.1800 77,000 0
2.6100 802,092 653,512
3.0000 15,000 11,750
3.1000 68,000 0
3.2680 23,000 0
3.4000 16,500 7,459
3.5000 37,000 33,000
3.8130 25,000 11,979
3.8800 1,200,000 62,500
4.0000 4,000 1,333
4.0800 200,000 0
4.1800 44,000 0
4.2500 10,000 3,750
4.3500 1,361,815 1,224,485
4.4000 67,000 0
4.4100 58,000 21,667
4.4690 52,417 35,231
4.6800 5,000 5,000
4.6900 103,602 85,802
4.7660 210,178 140,969
4.8200 24,000 0
5.0300 90,165 90,165
5.0625 5,000 0
5.0900 269,500 266,375
5.0938 258,396 254,588
5.1300 18,417 9,208
5.1500 39,167 19,480
5.3750 152,115 88,615
5.5200 0 0
5.6250 88,825 48,018
5.6500 80,500 80,500
5.7000 18,000 0
5.7300 265,000 56,797
5.7500 78,750 49,218
5.8100 323,750 74,689
5.9900 125,000 27,083
6.0000 46,000 0
6.0400 4,000 0
6.1000 8,000 3,166
6.1300 460,000 239,583
6.2900 20,000 16,668
6.6250 5,000 5,000
6.7000 5,500 1,489
6.8750 10,000 5,417
7.3100 40,825 27,602
7.9375 25,000 23,438
8.5000 6,500 4,167
8.5630 84,375 84,375
8.7000 15,333 15,333
8.7300 16,100 9,727
9.0000 5,000 5,000
10.7500 5,000 5,000
11.0000 20,000 20,000
11.0900 9,200 5,750
12.8750 5,000 5,000
25.1250 5,000 5,000
---------------------------- -----------------
TOTALS: 9,286,887.99 5,889,594.66
============================ =================
AVERAGE ISSUED PRICE 3.8081
AVERAGE VESTED PRICE 3.3622
2. VIEWPOINT CORPORATION OUTSTANDING WARRANTS AS OF DECEMBER 31, 2002
PRICE ISSUED
($/SHARE) (# OF SHARES)
---------------------------- ----------------------------
2.2600 269,780
2.2600 249,027
2.2600 207,523
15.6500 57,500
----------------------------
TOTALS: 783,830
============================
AVERAGE ISSUED PRICE 3.2423
3. VIEWPOINT CORPORATION PRE-EMPTIVE RIGHTS
a. Pursuant to Section 7.4 of the Amended and Restated Series A
Preferred Stock Purchase Agreement, dated as of June 12, 2000
among Metastream Corporation, a Delaware corporation and
predecessor in interest to Viewpoint Corporation, MetaCreations
Corporation, a Delaware corporation (now known as Viewpoint
Corporation) and America Online, Inc., a Delaware corporation
("AOL"), AOL has a right, upon the issuance of Viewpoint common
stock to a third party under certain circumstances, to acquire
an amount of shares of Viewpoint common stock as will permit AOL
to maintain its percentage equity interest in Viewpoint
immediately prior to the proposed issuance at the same price and
on the same terms and conditions as such proposed issuance to a
third party. AOL currently owns 1,725,000 shares of Viewpoint
common stock (approximately 4.2%) and has orally stated that it
will waive the above-described rights.
b. Pursuant to Section 7.4 of the Series B Preferred Stock Purchase
Agreement, dated as of July 18, 2000 among Metastream
Corporation, a Delaware corporation and predecessor in interest
to Viewpoint Corporation, MetaCreations Corporation, a Delaware
corporation now known as Viewpoint Corporation, and Adobe
Systems Incorporated, a Delaware corporation ("Adobe"), Adobe
has a right, upon the issuance of Viewpoint common stock to a
third party under certain circumstances, to acquire an amount of
shares of Viewpoint common stock as will permit Adobe to
maintain its percentage equity interest in Viewpoint immediately
prior to the proposed issuance at the same price and on the same
terms and conditions as such proposed issuance to a third party.
Adobe currently owns 1,499,000 shares of Viewpoint common stock
(approximately 3.7%) and has orally stated that it will waive
the above-described rights.
c. Pursuant to Section 8.1 of the Exchange Agreement, dated as of
August 10, 2000 (this "Agreement"), by and between MetaCreations
Corporation,
a Delaware corporation now known as Viewpoint Corporation, and
Computer Associates International, Inc., a Delaware corporation
("Computer Associates"), Computer Associates has a right, upon
the issuance of Viewpoint common stock to a third party under
certain circumstances, to acquire an amount of shares as will
permit Computer Associates to maintain its percentage equity
interest in Viewpoint immediately prior to the proposed issuance
at the same price and on the same terms and conditions as such
proposed issuance to a third party. Computer Associates
currently owns 3,744,093 shares of Viewpoint common stock
(approximately 9.1%) and has orally stated that it will waive
the above-described rights.
SCHEDULE 3(R)
INDEBTEDNESS AND OTHER CONTRACTS
Irrevocable Clean Transferable Standby Letter of Credit No. S303505
Date: October 1, 2001
Bank: KeyBank National Association
Benefeciary: 498 Seventh, LLC; c/o Xxxxxx Comfort & Sons, Inc.
Issued Amount: $289, 328.00; Current Amount: $252,581.00
Expiry, original: October 1, 2002; current expiry: October 1, 2003
Automatic One-Year Extensions
[Backed by KeyBank restricted cash bank account]
SCHEDULE 3(S)
LITIGATION
Viewpoint x. Xxxxx: Litigation commenced by the Company against Xxxxx X. Xxxxx
to recover $1.5 million. Bench trial ended November 21, 2002. Awaiting judge's
decision.
Viewpoint v. de Espona: Litigation commenced in Spain by Viewpoint against an
individual (Xxxx Xxxxx de Espona) to recover damages for intellectual property
infringement. Viewpoint alleges that de Espona is marketing and selling a
collection of three-dimensional models to which Viewpoint has exclusive rights.
A decision by the court in Spain is expected in the first half of 2003 and the
amount in dispute is less than $750,000.
SCHEDULE 3(V)
TITLE
None
SCHEDULE 3(W)
INTELLECTUAL PROPERTY RIGHTS
None
