AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT AND PROMISSORY NOTES
AMENDMENT
TO
AND
PROMISSORY NOTES
AMENDMENT
TO NOTE AND WARRANT PURCHASE AGREEMENT AND PROMISSORY NOTES
(the
“Amendment”),
dated
as of May 2, 2007, by and among EyeTel Imaging, Inc., a Delaware corporation
(the “Company”),
and
the other parties hereto, amending (i) that certain Note and Warrant Purchase
Agreement, dated as of December 28, 2006, by and among the Company and the
persons and entities named on the Schedule of Purchasers attached thereto as
amended from time to time (the “Purchase
Agreement”),
and
(ii) the outstanding Notes thereunder. All capitalized terms used in this
Amendment but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Purchase Agreement.
Whereas,
the
Company and the undersigned, being (i) the Purchasers of at least a majority
of
the Total Loan Amount and (ii) the Majority Holders (as defined in the Notes),
desire to amend the Purchase Agreement and the Notes to allow the Company to
prepay any Notes that are held by a licensed small business investment
company.
NOW,
THEREFORE
in
consideration of the foregoing and the promises and covenants contained herein,
the undersigned hereby agree as follows:
1. Amendment
to Note Purchase Agreement. The
Note
Purchase Agreement is hereby amended by deleting the form of Note attached
as
Exhibit A thereto and substituting therefor the form of Note attached as
Exhibit
A
to this
Amendment. The form of Note attached as Exhibit
A
to this
Amendment shall be the form of Note issued to Purchasers under the Purchase
Agreement on or after the date hereof.
2. Amendment
to Notes.
Section
4 of each of the Notes issued under the Purchase Agreement prior to the date
hereof is hereby deleted and restated in its entirety to read as
follows:
“4. Prepayment.
Except
as otherwise set forth in this Section 4, this Note may not be prepaid, in
whole
or in part, without the prior written consent of the holders of at least a
majority of the outstanding principal amount of the Notes (the “Majority
Holders”);
provided, that the Company may, at any time, prepay all or any part of a Note
(each such Note, an “SBIC
Note”)
that
is then held by a Holder who is a “licensed small business investment company,”
as defined under the Small Business Investment Company Act of 1958, as amended.
Prior to prepaying any SBIC Note, in whole or in part, the Company shall offer
to simultaneously therewith prepay all other Notes outstanding, pro-rata based
on the outstanding principal amount thereof, in which case the Holder of each
such other Note shall have the right, in its sole discretion, to determine
whether to accept or decline such prepayment.”
3. Confirmation.
Each of
the undersigned Purchasers hereby confirms that its representations and
warranties set forth in Section 4 of the Purchase Agreement are true and correct
on the date hereof.
4. Governing
Law.
This
Amendment shall be governed by and construed under the laws of the State of
New
York as such laws are applied to agreements among New York residents entered
into and performed entirely within the State of New York, without reference
to
the conflict of laws provisions thereof.
5. Entire
Agreement.
The
Purchase Agreement and the Notes, as amended hereby, constitute the full and
entire understanding among the parties regarding the subject matter herein
and
therein.
6. Amendment
Limited.
In all
other respects, the Purchase Agreement and the Notes are hereby ratified,
confirmed and approved, and all terms thereof shall remain in full force and
effect.
7. Counterparts.
This
Amendment may be executed in counterparts (including by facsimile or other
electronic transmission), each of which shall constitute an original, but all
of
which, when taken together, shall constitute but one agreement.
8. Headings.
Headings
in this Amendment are included for reference only and have no effect upon the
construction or interpretation of any part of this Amendment.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
2
IN
WITNESS WHEREOF, the
parties hereto have executed this Amendment as of the day and year first set
forth above.
| COMPANY: | PURCHASERS AND MAJORITY HOLDERS: | |
| Eyetel Imaging, Inc. | XXXX CAPITAL VENTURE FUND 2001, LP | |
| By: Xxxx Capital Venture Partners, LP | ||
|
its
general partner
|
||
| By: /s/ Xxxx Xxxxxxxxx | By: Xxxx Capital Venture Investors, LLC | |
|
Name: Xxxx Xxxxxxxxx |
its
general partner
|
|
|
Title:
Chief Executive Officer
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxx | |
|
Name: Xxxxx X. Xxxxxxx |
||
| Title: Managing Director | ||
| BCIP ASSOCIATES III, LLC | ||
| By: BCIP Associates III, | ||
|
its
sole member and manager
|
||
| BCIP ASSOCIATES III-B, LLC | ||
| By: BCIP Associates III-B, | ||
|
its
sole member and manager
|
||
| |
|
|
| By: | Xxxx Capital Investors, LLC | |
| their Managing Partner | ||
| By: | /s/ Xxxxx X. Xxxxxxx | |
|
Name: Xxxxx X. Xxxxxxx |
||
| Title: Managing Director | ||
| BROOKSIDE CAPITAL PARTNERS FUND, L.P. | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxxxxxxx | |
|
Name: Xxxxxxx Xxxxxxxxxx |
||
| Title: Managing Director | ||
| RGIP, LLC | ||
| |
|
|
| By: | /s/ X. Xxxxxxxx Malt | |
|
Name: X. Xxxxxxxx Malt |
||
| Title: Managing Member | ||
| RADIUS VENTURE PARTNERS II, L.P. | ||
| By: Radius Venture Partners II, LLC | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name: Xxxxxx Xxxxx / Xxxxxx Xxxxx |
||
|
Title:
Managing Partner
|
||
Exhibit
A
Form
of Note
See
attached
THIS
PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE
144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
AN
OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER
FROM
THE SECURITIES AND EXCHANGE COMMISSION.
PROMISSORY
NOTE
|
$[_________]
|
April __
0000
|
|
Xxxxxxxx
Xxxxxxxx
|
For
value
received Eyetel Imaging, Inc.,
a
Delaware corporation (“Payor”
or the “Company”)
promises to pay to [_______________]
or
its
assigns (“Holder”)
the
principal sum of $[_________] with simple interest on the outstanding principal
amount at the rate of 10.0% per annum. Interest shall commence with the date
hereof and shall continue on the outstanding principal until paid in full or
converted. Interest shall be computed on the basis of a year of 365 days for
the
actual number of days elapsed.
1. Series
of Notes.
This
note (the “Note”)
is
issued as part of a series of similar notes (collectively, the “Notes”)
to be
issued pursuant to the terms of that certain Note and Warrant Purchase Agreement
(the “Agreement”)
dated
as of December 28, 2006, as amended from time to time (the “Agreement
Date”)
to the
persons and entities listed on the Schedule of Purchasers thereof (collectively,
the “Holders”).
2. Payment.
All
payments of interest and principal shall be in lawful money of the United States
of America and shall be made pro rata among all Holders. All payments shall
be
applied first to accrued interest, and thereafter to principal.
3. Maturity.
Unless
this Note has been converted in accordance with the terms of Sections 5 or
6
below, the entire outstanding principal balance and all unpaid accrued interest
shall become fully due and payable on December 28, 2007 (the “Maturity
Date”).
4. Prepayment.
Except
as otherwise set forth in this Section 4, this Note may not be prepaid, in
whole
or in part, without the prior written consent of the holders of at least a
majority of the outstanding principal amount of the Notes (the “Majority
Holders”);
provided, that the Company may, at any time, prepay all or any part of a Note
(each such Note, an “SBIC
Note”)
that
is then held by a Holder who is a “licensed small business investment company,”
as defined under the Small Business Investment Company Act of 1958, as amended.
Prior to prepaying any SBIC Note, in whole or in part, the Company shall offer
to simultaneously therewith prepay all other Notes outstanding, pro-rata based
on the outstanding principal amount thereof, in which case the Holder of each
such other Note shall have the right, in its sole discretion, to determine
whether to accept or decline such prepayment.
5. Conversion.
Mandatory
Conversion Upon Qualified Financing.
In the
event that, prior to the Maturity Date, the Company closes a financing that
is
or is deemed a Qualified Financing (as defined in the Agreement), then at the
Closing of the Qualified Financing this Note and all other Notes shall convert
into that number and series of fully paid and non-assessable shares of such
preferred stock issued by the Company (the “Financing
Securities”)
in the
Qualified Financing, determined by dividing the total principal outstanding
under this Note, together with all accrued but unpaid interest thereon, by
the
lowest price paid per share for Financing Securities (subject to adjustment
for
stock dividends, stock splits or other similar recapitalizations of the
Company’s common stock) in such Qualified Financing. The Financing Securities
issued pursuant to this Section
5
shall be
entitled to rights and benefits equivalent to those granted to other purchasers
of the Financing Securities and it shall be a condition to such conversion
that
the holders of the Notes shall be provided with all of the same rights,
privileges, preferences and obligations as provided to investors in such
Qualified Financing.
1.
(b) Mandatory
Conversion Upon Initial Offering.
In the
event an initial public offering of securities of the Company registered under
the Securities Act (an "Initial
Offering")
occurs
prior to the Maturity Date, a Qualified Financing or a Liquidity Event, then
this Note, including any accrued but unpaid interest thereon shall convert
into
that number of fully paid and non-assessable shares of Common Stock of the
Company at a price equal to the lesser of (i) a fraction, the numerator of
which
is $1.394 per share (as adjusted for stock splits, stock dividends,
subdivisions, combinations or consolidations of the shares of Series B Preferred
Stock occurring after June 27, 2005), and the denominator of which is the number
of shares of Common Stock into which each share of Series B Preferred Stock
is
convertible immediately prior to the occurrence of such Initial Offering and
(ii) the price paid by the public in the Initial Offering for the number of
shares of Common Stock into which each share of Series B Preferred Stock is
convertible immediately prior to the occurrence of such Initial
Offering.
(c) Optional
Conversion at Maturity Date.
If the
Company does not complete a Qualified Financing or another equity financing
that
results in the conversion of this Note prior to the Maturity Date, then this
Note, including any accrued but unpaid interest thereon, will be convertible,
at
the option of the Holder, into Series B Preferred Stock of the Company on the
Maturity Date at the price of $1.394 per share (as adjusted for stock splits,
stock dividends, subdivisions, combinations or consolidations of the shares
of
Series B Preferred Stock occurring after June 27, 2005), subject to the same
rights, preferences, privileges and obligations attached to shares of Series
B
Preferred Stock outstanding at the time of such conversion.
(d) Conversion
Procedure.
(i)
Upon
any conversion pursuant to Section
5(a), 5(b) or 5(c),
or upon
any conversion or redemption pursuant to Section
6,
the
Company shall take all measures necessary or appropriate to permit such
conversion or redemption to occur as promptly as practicable and otherwise
comply with all of its obligations hereunder, including, but not limited to,
(A)
calling a special meeting of the Board of Directors and/or stockholders of
the
Company to authorize an amendment to the Company’s Certificate of Incorporation
authorizing the applicable class or series of Company capital stock issuable
upon conversion of the Note and, if necessary, the additional capital stock
issuable upon conversion of the aforementioned capital stock, (B) filing such
amendment with the Secretary of State of the State of Delaware, and
(C) taking any other action necessary or appropriate to consummate the
transactions contemplated hereby and to permit the conversion to occur as
promptly as practicable. If at any time the number of authorized but unissued
shares of Company capital stock are insufficient to permit the conversions
contemplated by this Section
5
or
Section
6,
the
Company shall take such actions as may be necessary to increase the Company’s
authorized, unreserved and unissued shares of the applicable class or series
of
capital stock to such number of shares as shall be sufficient for such
conversion. Upon delivery, all shares issued pursuant to this Section
5
or
Section
6
shall be
duly and validly issued, fully paid and non-assessable.
2.
(ii)
No
fractional shares or interest of capital stock of the Company, or scrip
representing fractional shares or interests, shall be issued upon conversion
of
the Note pursuant to this Section
5
or
Section
6.
Any
principal amount and accrued but unpaid interest not converted into the capital
stock because of the restrictions of the preceding sentence shall be paid by
the
Company to Holder in immediately available funds on the date of the conversion.
If this Note is converted into capital stock of the Company, this Note shall
be
treated by the Company as surrendered for cancellation and exchanged into such
capital stock and this Note will be deemed, for all purposes, to be canceled
on
the books of the Company and the obligation represented by this Note so
terminated. The Company shall, as soon as practicable after receipt of this
Note
marked cancelled, issue and deliver to the Holder at its designated address
a
certificate or certificates for the number of shares of capital stock to which
Holder shall be entitled upon such conversion (bearing such legends as are
required by applicable state and Federal securities laws in the opinion of
counsel to the Company), together with immediately available funds payable
to
Holder for any cash amounts payable as described in this clause (ii).
6. Liquidity
Event.
If the
Company shall determine to engage in any transaction which would result in
a
Liquidity Event (defined below) at any time while this Note remains outstanding,
the Company shall deliver written notice thereof (the “Company
Liquidity Notice”),
including a summary of the material terms of such Liquidity Event to Holder
not
less than fifteen (15) days prior to the consummation of such Liquidity Event
(or such shorter period as may be approved by the Majority Holders). Immediately
prior to the occurrence of such a Liquidity Event, the then outstanding amount
of this Note and all accrued but unpaid interest thereon shall become
immediately due and payable and the Holder shall have the option to either
(i)
convert the Note into Series B Preferred Stock of the Company immediately prior
to consummation of the Liquidity Event at the price of $1.394 per share (as
adjusted for stock splits, stock dividends, subdivisions, combinations or
consolidations of the shares of Series B Preferred Stock occurring after June
27, 2005), subject to the same rights, preferences, privileges and obligations
attached to shares of Series B Preferred Stock outstanding at the time of such
conversion, and participate in such Liquidity Event on the same basis as other
Series B Preferred Stock holders or (ii) upon the consummation of a Liquidity
Event and delivery by the Holder of this Note, direct the Company to pay the
Holder, in cash, an amount equal to the outstanding principal amount of this
Note, plus accrued but unpaid interest thereon. The term “Liquidity
Event”
means
the consummation of a Sale of the Company (as defined in the Company’s
Certificate of Incorporation); provided,
however,
that a
Qualified Financing shall not, in any event, be deemed to be a Liquidity
Event.
7. Changes
in Securities.
Upon
the
automatic conversion of all outstanding shares of the series of equity
securities comprising the Financing Securities or shares of Series B Preferred
Stock into which this Note is convertible (the “Conversion
Shares”),
this
Note shall become convertible into that number of shares of Common Stock of
the
Company into which the Conversion Shares would then be convertible, so long
as
such shares, if this Note had been converted prior to such offering, would
have
been converted into shares of the Company’s Common Stock pursuant to the
Company’s Certificate of Incorporation. In such case, all references to the
Conversion Shares shall mean shares of the Company’s Common Stock issuable upon
the conversion of this Note, as appropriate.
3.
8. Events
of Default.
If
there shall be any Event of Default hereunder, at the option and upon the
declaration of the Majority Holders and upon written notice to the Payor
(which
election and notice shall not be required in the case of an Event of Default
under Section 8(c) or 8(d)), this Note shall accelerate and all principal and
unpaid accrued interest shall become due and payable. The occurrence of any
one
or more of the following shall constitute an Event of Default:
(a) Payor
fails to pay timely any of the principal amount due under this Note on the
date
the same becomes due and payable or any accrued interest or other amounts due
under this Note on the date the same becomes due and payable;
(b) Payor
shall default in its performance of any covenant under the
Agreement;
(c) Payor
files any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law or any other law for the relief of, or relating
to,
debtors, now or hereafter in effect, or makes any assignment for the benefit
of
creditors or takes any corporate action in furtherance of any of the foregoing;
or
(d) An
involuntary petition is filed against Payor (unless such petition is dismissed
or discharged within sixty (60) days) under any bankruptcy statute now or
hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit
of creditors (or other similar official) is appointed to take possession,
custody or control of any property of Payor.
9. Costs.
In the
event of any default hereunder, Payor shall pay all reasonable attorneys’ fees
and court costs incurred by Holder in enforcing and collecting this
Note.
10. Waiver
of Demand.
Payor
hereby waives demand, notice, presentment, protest and notice of
dishonor.
11. Governing
Law.
This
Note
shall be governed by and construed under the laws of the State of New York
as
such laws are applied to agreements among New York residents entered into and
performed entirely within the State of New York, without reference to the
conflict of laws provisions thereof.
12. Subordination.
The
indebtedness evidenced by this Note is subordinated in right of payment to
the
prior payment in full of any Senior Indebtedness in existence on the date of
this Note. “Senior
Indebtedness”
shall
mean, unless expressly subordinated to or made on a parity with the amounts
due
under this Note, all amounts due in connection with (a) indebtedness of Payor
to
banks or other lending institutions regularly engaged in the business of lending
money (excluding venture capital, investment banking or similar institutions
and
their affiliates, which sometimes engage in lending activities but which are
primarily engaged in investments in equity securities) which shall include
indebtedness to Lighthouse Capital Partners V, L.P., and (b) any such
indebtedness or any debentures, notes or other evidence of indebtedness issued
in exchange for such Senior Indebtedness, or any indebtedness arising from
the
satisfaction of such Senior Indebtedness by a guarantor.
4.
13. Amendment
and Waiver.
Any
term of this Note may be amended or waived with the written consent of Payor
and
the Majority Holders. Upon the effectuation of such waiver or amendment in
conformance with this Section
13,
the
Payor shall promptly give written notice thereof to the record Holders of the
Notes who have not previously consented thereto in writing.
14. Notices.
All
notices and other communications provided for herein shall be in writing and
shall be deemed to have been duly given, delivered and received: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
telex, electronic mail or facsimile if sent during normal business hours of
the
recipient, if not, then on the next business day, (c) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt.
|
(a)
|
If
to Holder:
|
|
|
[______________________
|
||
|
_______________________
|
||
|
_______________________
|
||
|
_______________________]
|
||
|
(b)
|
If
to the Company:
|
|
|
Eyetel
Imaging, Inc.
|
||
|
0000
Xxxxxxxx Xxxx
|
||
|
Xxxxxxxx,
XX 00000
|
||
|
Attention:
Xxxxx X. Xxxx
|
||
|
with
a copy to:
|
||
|
Xxxxxx
Godward, LLP
|
||
|
One
Freedom Square, Reston Town Center
|
||
|
00000
Xxxxxxx Xxxxx
|
||
|
Xxxxxx,
XX 00000-0000
|
||
|
Attn:
Christian Plaza, Esq.
|
||
|
Fax:
(000) 000-0000
|
15. Transfers.
Subject
to the restrictions set forth in Section 5 of the Agreement, this
Note,
and all rights hereunder, are transferable, in whole or in part by the Holder
thereof; provided,
that
the transferee in each case agrees to be subject to the restrictions in Section
5 of the Agreement.
*
* * *
*
5.
IN
WITNESS WHEREOF, the Company has executed this Note as of the date first written
above.
| EYETEL IMAGING, INC. | ||
| |
|
|
| By: | /s/ | |
|
Name:____________________ |
||
| Title: _____________________ | ||
6.
