EXHIBIT 10.8
PROMISSORY NOTE
EXECUTED SEPTEMBER 23, 1997
THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND HAVE BEEN TAKEN FOR
INVESTMENT ONLY AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF. IT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION AND QUALIFICATION UNLESS AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION REQUIREMENTS IS AVAILABLE.
THIS INSTRUMENT IS SUBJECT TO A PLEDGE AND SUBORDINATION AGREEMENT DATED AS
OF SEPTEMBER 23, 1997 BETWEEN JUMP! SOFTWARE, INC. AND XXXXXXX XXXXXXXX, OF
WHICH AGREEMENT CERTAIN PERSONS DESCRIBED AS HOLDERS OF "SENIOR INDEBTEDNESS"
ARE THIRD PARTY BENEFICIARIES.
CONVERTIBLE SECURED SUBORDINATED PROMISSORY NOTE
$700,000 Mountain View, California
September 23, 1997
JUMP! SOFTWARE, INC., a California corporation (the "COMPANY"), for
value received, hereby promises to pay to the order of Xxxxxxx Xxxxxxxx or
his assignee (the "HOLDER") the principal amount of Seven Hundred Thousand
Dollars ($700,000) on or before the Maturity Date (as defined below).
1. MATURITY DATE. The "Maturity Date" shall be the earlier of
(a) March 31, 1998 and (b) such date as the Company shall have received at
least $6,000,000 in gross aggregate proceeds from the sale of Series B
Preferred Stock and, if applicable, such other new series of convertible
equity securities as the Company may issue prior to March 31, 1998.
2. INTEREST. As interest on this Note, the Company shall pay
Holder, on or before the Maturity Date, the sum of $6,930 and shall issue
Holder, on the date hereof, a warrant to purchase Common Stock of the Company
at an exercise price of $0.01 per share (the "WARRANT"). Any amounts
outstanding more than 180 days after the Maturity Date shall accrue interest
at the rate of 10% per annum until paid, compounded annually, calculated on
the basis of a 365-day year, beginning on the date which is 181 days after
the Maturity Date.
3. CONVERSION. Holder may elect to convert any or all of the
unpaid principal amount of this Note into shares of the Company's Series B
Preferred Stock or, if the Company has issued a new series of convertible
equity securities on the date of conversion, such other series at a
conversion price equal to the lesser of (a) $2.00 per share and (b) the issue
price of the Series B Preferred Stock or, if applicable, such other series to
the one or more institutional, corporate or venture capital investors that
purchase in the aggregate at least $1.5 million of Series B Preferred Stock
or, if applicable, such other series.
4. SECURITY INTEREST. This Note is secured by certain of the
Company's assets pursuant to a Pledge and Subordination Agreement between the
Company and Holder dated as of even date herewith (the "SECURITY AGREEMENT"),
the terms of which are incorporated herein by reference.
5. SUBORDINATION. This Note and the Collateral are subject to
the subordination provisions of the Security Agreement. No indebtedness which
does not constitute Senior Indebtedness (as defined in the Security
Agreement) shall be senior in any respect to this Note.
6. MISCELLANEOUS.
(a) Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note
or any Note exchanged for it, and indemnity satisfactory to the Company (in
case of loss, theft or destruction) or surrender and cancellation of such
Note (in the case of mutilation), the Company will make and deliver in lieu
of such Note a new Note of like tenor.
(b) The Company hereby waives presentment for payment,
demand, protest and notice of protest for nonpayment of this Note. If the
Holder employs an attorney or take any other steps for collection of any part
hereof after any default, the Company will pay all reasonable legal fees and
expenses incurred in collecting this Note.
(c) If any provision of this Note is held to be
invalid, illegal or unenforceable for any reason, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Note, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
(d) No renewal or extension of this Note, delay in
enforcing any right of Holder under this Note, or assignment by Holder of
this Note shall affect the liability of the Company. All rights of Holder
under this Note are cumulative and may be exercised concurrently or
consecutively at Holder's option.
(e) It is the intent of Borrower and Holder in the
execution of this Note, the Subordination Agreement and the Warrant that the
loan evidenced hereby and thereby be exempt from the restrictions of the
usury laws of the State of California. In the event that, for any reason, it
should be determined that the California usury law is applicable to such
loan, Borrower and Holder stipulate and agree that none of the terms and
provisions contained herein or therein shall be construed to create a
contract for use, forbearance or detention of money requiring payment of
interest at a rate in excess of the maximum interest rate permitted to be
charged by the laws of the State of California. In such event, if any Holder
shall collect monies or other consideration which are deemed to constitute
interest which would otherwise increase the effective interest rate on this
Note to a rate in excess of the maximum rate permitted to be charged under
the laws of the State of California, all such excess consideration shall, at
the option of Holder, be credited to the payment of the sums due hereunder or
returned to Holder.
(f) This Note shall be governed by the laws of the State
of California, without reference to conflicts of laws principles.
IN WITNESS WHEREOF, this Note has been executed and delivered on the
date specified above by the Company.
JUMP! SOFTWARE, INC.
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
President and Chief Executive Officer
