Exhibit 10.1
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 Smithfield Fiduciary 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
$1,225,714.29 principal amount of the Investor's Initial Notes ("INVESTOR
REDEMPTION AMOUNT"), (ii) the Investor shall exchange $371,428.57 principal
amount of the Investor's Initial Notes (the "INVESTOR SHARE EXCHANGE AMOUNT")
for 501,931 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
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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";
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(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
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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)
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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) 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".
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(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
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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:
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(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.
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(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.
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(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:
Smithfield Fiduciary LLC
13
c/o Highbridge Capital Management
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxx
Xxxx X. Chill
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 SMITHFIELD FIDUCIARY LLC
By: /s/ Xxxxx X. X'Xxxxxxxx By: /s/ Xxxx X. Chill
---------------------------- -------------------------
Name: Xxxxx X. X'Xxxxxxxx Name: Xxxx X. Chill
Title: Executive Vice President Title: Authorized Signatory
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
SMITHFIELD FIDUCIARY, 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
