EXHIBIT B
CONVERSION AGREEMENT
THIS CONVERSION AGREEMENT (this "Agreement") is made as of the 14th day of
June, 2004 by and among VitalStream Holdings, Inc., a Nevada corporation (the
"Company"), Dolphin Communications Parallel Fund II (Netherlands), L.P. and
Dolphin Communications Fund II, L. P. (collectively "Dolphin") and the holders
of Series A Preferred party hereto identified as Series A Holders on the
signature page hereof (each a "Series A Holder"; collectively, the "Series A
Holders"; and collectively with Dolphin, the "Securityholders"). Capitalized
terms not defined when first used in the text hereof have the meaning set forth
in Section 5 of this Agreement.
RECITALS
A. The Company has entered into, or intends to enter into, a Purchase
Agreement (the "Xxxxxx Purchase Agreement") substantially in the form provided
to the Securityholders, pursuant to which the Company agrees to issue Common
Stock and warrants in exchange for up to $11,000,000 in cash and/or cancellation
of debt or payables; and
B. WaldenVC II, L.P. ("Xxxxxx"), which is expected to be the most
significant investor under the Xxxxxx Purchase Agreement, has requested that the
Company, Dolphin and the Series A Holders enter into an agreement pursuant to
which (i) Dolphin agrees to convert and/or accept prepayment of all obligations
under the $1,100,000 in Amended and Restated Convertible Promissory Notes dated
September 30, 2003 issued to Dolphin (the "Notes"), (ii) the Series A Holders
agree to convert and/or accept redemption of all issued and outstanding shares
of Series A Preferred, and (iii) Dolphin and the Series A Holders amend and
cancel certain provisions of certain agreements ancillary to their purchase of
the Notes and the Series A Preferred; and
C. Subject to the terms and conditions of this Agreement, the Company,
Dolphin and the Series A Holders have agreed to convert the Notes, convert the
Series A Preferred and amend and cancel certain provisions of certain ancillary
agreements as provided herein.
AGREEMENT
Now therefore, in consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Agreements to Convert.
(a) Conversion of the Notes. Subject to the terms and
conditions of this Agreement, on the Closing Date (as defined in Section 1(c)),
Dolphin shall surrender the Notes for conversion into shares of Common Stock in
accordance with the terms of Section 5 of the Notes (as supplemented hereby). In
exchange for Dolphin's surrender and conversion of the Notes, the Company shall
(a) within five Business Days of the Closing Date (as defined in Section 1(c)),
deliver to the Person surrendering and converting each Note a certificate
representing the shares of Common Stock into which the outstanding principal
amount under the
B-1
Note is convertible, and (b) within fifteen (15) days of the Closing, cause a
wire transfer in same day funds in the aggregate amount of $267,131 (allocated
pro rata among the holders of the Notes) to be sent to the accounts designated
by the holder surrendering each Note, which $267,131 payment the parties agree
represents the following: (y) $109,249 as accrued but unpaid interest on the
Notes from July 1, 2003 through September 30, 2004, (z) $157,882 as a premium
equal to 14% of the sum of (i) the principal amount of the Notes and (ii) the
accrued and unpaid interest on the Notes from July 1, 2003 through September 30,
2003; provided, however, any Securityholder party to the Xxxxxx Purchase
Agreement may, in its discretion by written notice to the Company prior to the
Xxxxxx Closing, elect to have any funds such Securityholder would otherwise
receive pursuant to subsection 1(a)(b) applied toward the Purchase Price (as
defined in the Xxxxxx Purchase Agreement) of such Securityholder under the
Xxxxxx Purchase Agreement (which notice Dolphin is deemed to have given, and
election Dolphin is deemed to have made, by executing and delivering a
counterpart signature page to this Agreement). Any certificates representing
shares of Common Stock issued upon conversion of the Notes shall have such
legends as are required by the Dolphin Transaction Documents and the Xxxxxx
Transaction Documents to which the respective Securityholder is a party.
(b) Conversion of the Shares of Series A Preferred.
(i) Subject to the terms and conditions of this
Agreement, on the Closing Date, Dolphin and each Series A Holder shall surrender
to the Company certificates representing, and convert into Common Stock in
accordance with Part B.5(a) of the Certificate of Designation (as supplemented
hereby), all outstanding shares of Series A Preferred issued to each of them
under the Dolphin Purchase Agreement. In exchange for such Securityholder's
surrender and conversion of such shares of Series A Preferred, the Company shall
(a) within five Business Days of the Closing, deliver to the Securityholder
surrendering and converting each share of Series A Preferred a certificate
representing the shares of Common Stock into which the Series A Liquidation
Value (as defined in the Certificate of Designation) of such share of Series A
Preferred is convertible and (b) within fifteen (15) days of the Closing, cause
a wire transfer in same day funds in the aggregate amount of $101,061 (allocated
pro rata among the outstanding shares of the Series A Preferred) to be sent to
the accounts designated by the Securityholders converting and surrendering each
shares of Series A Preferred, which $101,061 payment represents the following:
(y) $65,061 as accrued but unpaid dividend on the Series A Preferred from July
1, 2003 through September 30, 2004, and (z) $36,000 as a premium equal to 4% of
the sum of the Series A Liquidation Value (as defined in the Certificate of
Designation); provided, however, any Securityholder party to the Xxxxxx Purchase
Agreement may, in its discretion by written notice to the Company prior to the
Xxxxxx Closing, elect to have any funds such Securityholder would otherwise
received pursuant to subsection 1(b)(i)(b) applied toward the Purchase Price (as
defined in the Xxxxxx Purchase Agreement) of such Securityholder under the
Xxxxxx Purchase Agreement (which notice Dolphin is deemed to have given, and
election Dolphin is deemed to have made, by executing and delivering a
counterpart signature page to this Agreement). Any certificates representing
shares of Common Stock issued upon conversion of the Series a Preferred shall
have such legends as are required by the Dolphin Transaction Documents and the
Xxxxxx Transaction Documents to which the respective Securityholder is a party.
B-2
(ii) Subject to the terms and conditions of this
Agreement, if any holder of Series A Preferred is not party to this Agreement on
the Closing Date, Dolphin and the Series A Holders, which constitute a majority
of the holders of the Series A Preferred, hereby vote as of the moment
immediately prior to the Closing to compel the conversion of all outstanding
shares of Series A Preferred in accordance with Part B.5(b)(ii) of the
Certificate of Designation, in which case the conversion described in Section
1(b)(i) shall be deemed to have been pursuant to Part B.5(b)(ii) of the
Certification of Designation. For purposes of clarification, no holder of Series
A Preferred shall be entitled to such holder's pro rata portion of the premium
described in Section 1(b)(i)(z) hereof unless such holder is a party to this
Agreement and complies with all of such holder's material obligations hereunder.
(c) Closing.
(i) Pre-Closing Deliveries. Within two Business Days
of the execution of this Agreement by the Company and the Required
Securityholders (the "Effective Date"), Dolphin and each Securityholder shall
deliver to Stoel Rives LLP (the "Holding Agent"), in trust, (i) the originals of
all Notes and all certificates representing outstanding shares of Series A
Preferred issued to him or it under the Dolphin Purchase Agreement, (ii) wiring
instructions for all cash payments contemplated by Section 1 hereof and delivery
instructions for delivery of all certificates required to be delivered by the
Company pursuant to Section 1 hereof, and (iii) all closing deliveries required
to be delivered by such Securityholder pursuant to Section 2(a) and 2(b) hereof
((i), (ii) and (iii) collectively, the "Securityholder Deliveries"), and the
Company shall deliver to the Holding Agent all closing delivered required to be
delivered by the Company pursuant to Section 2(c) hereof (the "Company
Deliveries"). The date the Holding Agent has received the Securityholder
Deliveries from Dolphin and the Series A Holders party hereto shall be referred
to as the "Pre-Closing Date."
(ii) The obligation of the Company and the
Securityholders to close the transactions contemplated by this Agreement (the
"Closing") shall be conditioned upon (a) the receipt by the Holding Agent of the
Securityholder Deliveries from Dolphin and the Series A Holders party hereto,
(b) the receipt by the Holding Agent of the Company Deliveries from the Company,
and (c) all conditions precedent to the Xxxxxx Closing, other than any
conditions precedent requiring that the Closing and the Xxxxxx Closing occur
simultaneously, being satisfied or waived by parties to the Xxxxxx Purchase
Agreement authorized to waive such conditions and the parties to the Xxxxxx
Purchase Agreement being prepare to consummate the Xxxxxx Closing. The Closing
shall occur on the date (the "Closing Date") of, and simultaneously with, the
Xxxxxx Closing. At the Closing, the Holding Agent shall, and is hereby
authorized and directed to, release the Securityholder Deliveries to the Company
(via facsimile followed by next Business Day express courier delivery) and
shall, and is hereby authorized and directed to, release the Company Deliveries
to Dolphin and the Series A Holders (via facsimile follow by next Business Day
express courier delivery). Promptly following the Closing, but in no event later
than the deadline set forth in Section 1(a) or Section 1(b), as applicable, the
Company shall transfer to the Securityholders any funds required to be
transferred pursuant to Section 1(a) or Section 1(b) (net of any such amount
applied to the Purchase Price (as defined in the Xxxxxx Purchase Agreement)
under the Xxxxxx Purchase Agreement) and the certificates representing the
shares of Common Stock issuable upon conversion of the Notes and shares of
Series A Preferred converted by the Securityholders. The Closing shall be deemed
to
B-3
have taken place at the offices of the Company. If additional holders of Series
A Preferred become party to this Agreement as "Series A Holders" after the
Closing Date, the Closing between the Company and such Series A Holder shall
occur at such time, and in such manner, as determined by the Company and such
Series A Holder, in which case the terms "Closing" and "Closing Date" shall, for
each Series A Holder, refer to or be based upon the Closing(s) in which such
Series A Holder participates.
2. Closing Deliveries.
(a) Within two Business Days of the Effective Date, Dolphin
shall deliver to the Holding Agent, for delivery to the Company at Closing, the
following (with the understanding that a document or instrument is duly executed
if signed by an authorized representative of the Affiliate of Dolphin that is
party to such document or instrument and/or which holds the document or
instrument being amended by such document or instrument):
(i) A duly executed counterpart signature page to the
Amendment to Common Stock Purchase Warrant (Amended and Restated) in the form
attached hereto as Exhibit A with respect to each of the Amended and Restated
Warrants issued to Dolphin under the Dolphin Purchase Agreement;
(ii) A duly executed counterpart signature page to the
Amendment to Common Stock Purchase Warrant (Additional Warrants) in the form
attached hereto as Exhibit B with respect to each of the Additional Warrants
issued to Dolphin under the Dolphin Purchase Agreement;
(iii) A duly executed counterpart signature page to the
Amendment to Amended and Restated Investor Rights Agreement in the form attached
hereto as Exhibit C;
(iv) A duly executed counterpart signature page to the
Second Amended and Restated Registration Agreement in the form attached hereto
as Exhibit D;
(v) The original Notes and the certificates
representing all of the shares of Series A Preferred issued to Dolphin pursuant
to the Purchase Agreement, each executed and notated by the holder thereof as
necessary for conversion into Common Stock and cancellation pursuant to the
terms of this Agreement; and
(vi) Such other documents, agreements, assignments,
instruments and certificates as may be required by this Agreement or as may be
reasonably requested by the Company to effect the transactions contemplated by,
and the terms and conditions of, this Agreement.
(b) Within two Business Days of the Effective Date, each
Series A Holder shall deliver to the Holding Agent, for delivery to the Company
at Closing, the following (with the understanding that a document or instrument
is duly executed if signed by an authorized representative of the Series A
Holder party to such document or instrument and/or which holds the document or
instrument being amended by such document or instrument):
B-4
(i) A duly executed counterpart signature page to the
Amendment to Common Stock Purchase Warrant (Additional Warrants) in the form
attached hereto as Exhibit B with respect to each of the Additional Warrants (as
defined in the Dolphin Purchase Agreement) issued to such Series A Holder under
the Dolphin Purchase Agreement;
(ii) A duly executed counterpart signature page to the
Amendment to Amended and Restated Investor Rights Agreement in the form attached
hereto as Exhibit C;
(iii) A duly executed counterpart signature page to the
Second Amended and Restated Registration Agreement in the form attached hereto
as Exhibit D;
(iv) The original certificates representing all of the
shares of Series A Preferred issued to such Series A Holder pursuant to the
Purchase Agreement, each executed and notated by the holder thereof as necessary
for conversion into Common Stock and cancellation pursuant to the terms of this
Agreement; and
(v) Such other documents, agreements, assignments,
instruments and certificates as may be required by this Agreement or as may be
reasonably requested by the Company to effect the transactions contemplated by,
and the terms and conditions of, this Agreement.
(c) Within two Business Days of the Effective Date, the
Company shall deliver to the Holding Agent, for delivery to Dolphin or the
Series A Holder party to the relevant document, the following (with the
understanding that a document or instrument is duly executed if signed by an
authorized representative of the Company):
(i) A duly executed counterpart signature page to the
Amendment to Common Stock Purchase Warrant (Amended and Restated) in the form
attached hereto as Exhibit A with respect to each of the Amended and Restated
Warrants issued to Dolphin under the Dolphin Purchase Agreement;
(ii) A duly executed counterpart signature page to the
Amendment to Common Stock Purchase Warrant (Additional Warrants) in the form
attached hereto as Exhibit B with respect to each of the Additional Warrants
issued to Dolphin or any Series A Holder under the Dolphin Purchase Agreement;
(iii) A duly executed counterpart signature page to the
Amendment to Amended and Restated Investor Rights Agreement in the form attached
hereto as Exhibit C;
(iv) A duly executed counterpart signature page to the
Second Amended and Restated Registration Agreement in the form attached hereto
as Exhibit D: and
(v) Such other documents, agreements, assignments,
instruments and certificates as may be required by this Agreement or as may be
reasonably requested by Dolphin or a Series A Holder effect the transactions
contemplated by, and the terms and conditions of, this Agreement.
3. Certain Representations, Warranties and Covenants.
B-5
(a) Representations and Warranties of the Company. The
Company hereby represents and warrants to the Securityholders as follows:
(i) Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as now conducted and to
own its properties.
(ii) Authorization. The Company has full power and
authority and has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of the Transaction Documents, (ii) the authorization of
the performance of all obligations of the Company hereunder or thereunder, and
(iii) the authorization, issuance and delivery of the shares of Common Stock
issuable hereunder. The Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors' rights generally.
(iii) Authorization of Common Stock. The issuance of the
shares of Common Stock upon conversion of the Notes and the Series A Preferred
has been duly and validly authorized and, when such shares are issued following
conversion and surrender of the Notes and the certificates representing the
shares of Series A Preferred pursuant to this Agreement, such shares will be
validly issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the Securityholders),
except for restrictions on transfer required by the Dolphin Transaction
Documents and the Xxxxxx Transaction Documents to which such Securityholder is a
party or imposed by applicable securities laws.
(iv) No Conflict, Breach, Violation or Default. The
execution, delivery and performance of the Transaction Documents by the Company,
including the issuance of shares of Common Stock upon conversion of the Notes
and shares of Series A Preferred, will not conflict with or result in a breach
or violation of any of the terms and provisions of, or constitute a default
under (i) the Company's Certificate of Incorporation or the Company's Bylaws,
both as in effect on the date hereof (true and complete copies of which have
been made available to the Dolphin through the XXXXX system), or (ii)(a) any
statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company, any subsidiary
of the Company or any of their respective assets or properties, or (b) any
agreement or instrument to which the Company or any subsidiary of the Company is
a party or by which the Company or a subsidiary of the Company is bound or to
which any of their respective assets or properties are subject.
(b) Representations and Warranties of the Securityholders.
Each of the securityholders severally represents and warrants to the Company as
follows:
(i) Ownership of Securities. Such Securityholder holds
all right, title and interest in and to each Note and share of Series A
Preferred issued to such Securityholder pursuant to the Dolphin Purchase
Agreement (and surrendered and converted pursuant to this
B-6
Agreement), free and clear of any liens and encumbrances and, except as set
forth in this Agreement or the Dolphin Transaction Documents, has not granted to
any Person acquisition rights with respect to, or security interest in, such
Notes and shares of Series A Preferred.
(ii) Authorization. Such Securityholder has full power
and authority and has taken all requisite action on the part of such
Securityholder necessary for (i) the authorization, execution and delivery of
the Transaction Documents, and (ii) the authorization of the performance of all
obligations of such Securityholder hereunder or thereunder. The Transaction
Documents to which such Securityholder is a party constitute the legal, valid
and binding obligations of such Securityholder, enforceable against such
Securityholder in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors' rights generally.
(c) Termination of Certain Agreements. At Closing, upon
conversion of the Notes, the Guaranty (as defined in the Dolphin Purchase
Agreement) and the Dolphin Security Agreement (as defined in the Dolphin
Purchase Agreement) shall immediately and automatically terminate.
(d) Consent and Waiver. Dolphin and the Series A Holders
hereby (i) consent to the grant of the demand registration rights pursuant to
the Xxxxxx Registration Rights Agreement, and (ii) consent to the sale of
Securities contemplated by the Xxxxxx Transaction Documents and waive any breach
that may arise under the Dolphin Transaction Documents as a result of the
execution, delivery or consummation of the transactions contemplated by the
Xxxxxx Transaction Documents. In addition, the Securityholders (other than
Dolphin) hereby waive any piggyback or participation rights that would otherwise
arise under Section 3 or any other section of the Dolphin Registration Agreement
as a result of the registration required by the Xxxxxx Registration Rights
Agreement.
4. Termination of Obligations to Effect Closing; Effects.
(a) The obligations of the Company, on the one
hand, and the Securityholders, on the other hand, to effect the Closing shall
terminate as follows:
(i) Upon the mutual written consent of the
Company and the Required Securityholders;
(ii) By either the Company or Dolphin if
the Closing shall not have occurred by June 30, 2004.
provided, however, that, except in the case of clause (i) above, the party
or parties seeking to terminate its obligation to effect the Closing shall not
then be in breach of any of its representations, warranties, covenants or
agreements contained in this Agreement if such breach has resulted in the
circumstances giving rise to such party's seeking to terminate its obligation to
effect the Closing.
(b) Nothing in this Section 4 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this
B-7
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents.
5. Definitions. In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the following
terms shall have the meanings set forth below:
"Additional Warrant" has the meaning set forth in the Dolphin Purchase
Agreement.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such Person.
"Amended and Restated Warrants" has the meaning as set forth in the
Dolphin Purchase Agreement.
"Business Day" means a day, other than a Saturday or Sunday, on which
banks in Los Angeles are open for the general transaction of business.
"Certificate of Designation" means the Certificate of Designation Amending
the Articles of Incorporation of VitalStream Holdings, Inc. Establishing the
Series 2003 Series A Preferred Stock and the 2003 Series B Preferred Stock.
"Common Stock" shall mean the Common Stock of the Company, $.001 par
value.
"Dolphin Guaranty" has the same meaning as the term "Guaranty" in the
Dolphin Purchase Agreement.
"Dolphin Purchase Agreement" means the Securities Exchange and Purchase
Agreement dated September 30, 2003 among the Company and the Purchasers referred
to therein.
"Dolphin Registration Agreement" has the same meaning as the term
"Registration Agreement" in the Dolphin Purchase Agreement.
"Dolphin Security Agreement" has meaning set forth in the Dolphin Purchase
Agreement.
"Dolphin Transaction Documents" has the same meaning as the term
"Transaction Agreements" in the Dolphin Purchase Agreement.
"Person" means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.
"Required Securityholders" means Dolphin and the holders of Series A
Preferred holding a majority of the outstanding shares of Series A Preferred not
held by Dolphin.
B-8
"Series A Preferred Stock" means the shares of 2003 Series A Preferred
Stock, $.001 par value, of the Company.
"Transaction Documents" means this Agreement, the Amendment to Common
Stock Purchase Warrant (Amended and Restated) with respect to each of the
Amended and Restated Warrants, the Amendment to Common Stock Purchase Warrant
(Additional Warrant) with respect to each of the Additional Warrants, the
Amendment to Amended and Restated Investor Rights Agreement and the Amendment to
Amended and Restated Registration Agreement.
"Xxxxxx Closing" means the initial Closing (as defined in the Xxxxxx
Purchase Agreement) of the transactions described in the Xxxxxx Purchase
Agreement.
"Xxxxxx Registration Agreement" means that certain Registration Rights
Agreement by and among VitalStream and the other parties thereto, in the form of
Exhibit B attached to the Xxxxxx Purchase Agreement, as executed, amended,
modified, restated, superseded or replaced from time to time.
"Xxxxxx Transaction Documents" has the same meaning as "Transaction
Documents" in the Xxxxxx Purchase Agreement.
6. Miscellaneous.
6.1 Successors and Assigns. This Agreement may not be assigned
by a party hereto without the prior written consent of the Company and the
Required Securityholders. The provisions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
6.2 Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.
6.3 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.4 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in the manner provided for in
Section 8(G) of the Dolphin Purchase Agreement.
6.5 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith, except that the Company shall pay the
reasonable fees and expenses of a single counsel for Dolphin, not to exceed
$5,000 in the aggregate with respect to all Dolphin Transaction Documents and
Xxxxxx Transaction Documents. Such expenses shall be paid not later than the
Closing. In the event that legal proceedings are commenced by any party to this
Agreement against another party to this Agreement in connection with this
Agreement or the
B-9
other Transaction Documents, the party or parties which do not prevail in such
proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys' fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.
6.6 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Securityholders.
6.7 Publicity. No public release or announcement concerning
the transactions contemplated hereby shall be issued by the Company or the
Securityholders without the prior consent of the Company (in the case of a
release or announcement by the Securityholders) or Dolphin (in the case of a
release or announcement by the Company) (which consents shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the applicable rules or regulations of any securities exchange or
securities market, in which case the Company or the Securityholders, as the case
may be, shall allow the Dolphin and the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance.
6.8 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
6.9 Entire Agreement. This Agreement and the other Transaction
Documents constitute the entire agreement among the parties hereof with respect
to the subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.
6.10 Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
6.11 Governing Law. TO THE EXTENT APPLICABLE, THE CORPORATE
LAW OF THE STATE OF NEVADA SHALL GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE
RELATIVE RIGHTS AND OBLIGATIONS OF THE COMPANY AND THEIR SECURITYHOLDERS. ALL
OTHER ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT
AND INTERPRETATION OF THIS AGREEMENT AND ANY OF THE OTHER TRANSACTION DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO
B-10
ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. IN FURTHERANCE OF THE
FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL CONTROL THE
INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT AND EACH OF THE OTHER
TRANSACTION DOCUMENTS, EVEN THOUGH UNDER THAT JURISDICTION'S CHOICE OF LAW OR
CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD
ORDINARILY APPLY.
6.12 Jurisdiction and Venue. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST THE COMPANY WITH RESPECT TO THIS AGREEMENT OR ANY OTHER TRANSACTION
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN NEW YORK CITY, NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS TO WHICH THEY ARE A PARTY, THE COMPANY AND EACH
SECURITYHOLDER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION AGREEMENTS. THE COMPANY AND
EACH SECURITYHOLDER HEREBY WAIVE ANY CLAIM THAT NEW YORK CITY, NEW YORK IS AN
INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.
6.13 Waiver of Right To Jury Trial. THE COMPANY AND EACH
SECURITYHOLDER HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE
VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR
THEREOF; AND THE COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE RIGHT TO INTERPOSE ANY SETOFF IN CONNECTION WITH ANY SUCH LITIGATION,
IRRESPECTIVE OF THE NATURE OF SUCH SETOFF EXCEPT TO THE EXTENT THAT THE FAILURE
SO TO ASSERT ANY SUCH SETOFF WOULD PERMANENTLY PRECLUDE THE PROSECUTION OF OR
RECOVERY UPON SAME. THE COMPANY AGREES THAT THIS SECTION 6.13 IS A SPECIFIC AND
MATERIAL ASPECT OF THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS
AND ACKNOWLEDGES THAT EACH SECURITYHOLDER WOULD NOT HAVE ENTERED INTO THIS
AGREEMENT OR MADE AN INVESTMENT HEREUNDER IF THIS SECTION 6.13 WERE NOT PART OF
THIS AGREEMENT.
[signature page follows]
B-11
IN WITNESS WHEREOF, the parties have executed this Conversion Agreement or
caused their duly authorized officers to execute this Agreement as of the date
first above written.
COMPANY:
VITALSTREAM HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
DOLPHIN:
DOLPHIN COMMUNICATIONS FUND II, L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: /s/ Xxxxxx X'Xxxxxxx
---------------------------------
Name: Xxxxxx X'Xxxxxxx
Title:
DOLPHIN COMMUNICATIONS PARALLEL FUND II
(NETHERLANDS), L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: /s/ Xxxxxx X'Xxxxxxx
---------------------------------
Name: Xxxxxx X'Xxxxxxx
Title:
[SIGNATURE PAGE FOR CONVERSION AGREEMENT]
SERIES A HOLDERS
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx, an individual
/s/ Xxxxx Xxxxx
-----------------------------------------
Xxxxx Xxxxx, an individual
-----------------------------------------
Xxxxx X. Xxxxxx, an individual
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, an individual
/s/ Xxxxxx Xxxx
-----------------------------------------
Xxxxxx Xxxx, an individual
[SIGNATURE PAGE FOR CONVERSION AGREEMENT]
EXHIBIT A
TO
CONVERSION AGREEMENT
Form of Amendment to Common Stock Purchase Warrant (Amended and Restated)
[see attached]
EXHIBIT B
TO
CONVERSION AGREEMENT
Form of Amendment to Common Stock Purchase Warrant (Additional Warrant)
[see attached]
EXHIBIT C
TO
CONVERSION AGREEMENT
Form of Amendment to Amended and Restated Investor Rights Agreement
[see attached]
EXHIBIT D
TO
CONVERSION AGREEMENT
Form of Second Amended and Restated Registration Agreement
[see attached]
