Exhibit 10.9
STREAMLINE, INC.
WAIVER AND MODIFICATION AGREEMENT
This Waiver and Modification Agreement (this "Agreement"), dated as of
September 23, 1997, is by and among Streamline, Inc., a Delaware corporation
(the "Company") and the persons listed on SCHEDULE 1 attached hereto (the
"Investors").
WHEREAS, the Company and certain of the Investors (the "Initial
Investors," and those Investors which are not Initial Investors being referred
to hereinafter as the "New Investors") (i) entered into a certain Stock Purchase
Agreement, dated June 13, 1997 (the "Stock Purchase Agreement"), whereby the
Initial Investors agreed to purchase up to an aggregate of 100,000 shares of the
Company's Preferred Stock, par value $1.00 per share ("Preferred Stock"),
consisting of shares of the Company's Series B Convertible Preferred Stock (the
"Series B Preferred") and shares of the Company's Series C Preferred Stock (the
"Series C Preferred") and (ii) entered into a Registration Rights Agreement,
dated June 13, 1997 (the "Registration Rights Agreement");
WHEREAS, on June 13, 1997 (the "First Closing Date"), the Initial
Investors purchased an aggregate of 20,000 shares of Series B Preferred and
10,000 shares of Series C Preferred at the First Closing contemplated by the
Stock Purchase Agreement;
WHEREAS, the Stock Purchase Agreement contemplates that the Company
shall sell and issue to the Initial Investors and certain other persons, and the
Investors and such other persons shall purchase from the Company, up to an
additional 70,000 shares of Preferred Stock (the "Second Closing Shares") upon
satisfaction of certain conditions, at a second closing to take place no later
than September 5, 1997;
WHEREAS, the Company and the Investors are desirous of providing for
the sale and issuance of the Second Closing Shares to the Initial Investors and
New Investors listed under the caption "Second Closing" on SCHEDULE 1 attached
hereto, at a second closing to take place on the date hereof; and
WHEREAS, to facilitate the sale and issuance by the Company of the
Second Closing Shares, the Company and the Investors wish to modify the Stock
Purchase Agreement and the Registration Rights Agreement as provided herein;
NOW, THEREFORE, the parties hereto, in consideration of the premises
and the mutual covenants and agreements herein contained, and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, hereby agree as follows:
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I. STOCK PURCHASE AGREEMENT
SECTION 1. DEFINITIONS
Capitalized terms not otherwise defined herein shall have the same
meaning given those terms in the Stock Purchase Agreement.
SECTION 2. WAIVER AND CONSENT
(a) The Company and the Initial Investors hereby waive the
requirement in Section 2.2(b) of the Stock Purchase Agreement that the Second
Closing take place no later than September 5, 1997, and the Company and the
Investors hereby consent to effect the Second Closing on the date hereof,
subject to and upon the terms and conditions set forth in the Stock Purchase
Agreement as modified and supplemented by this Agreement.
(b) The Initial Investors hereby waive certain preemptive rights
with respect to issuances of capital stock by the Company (the "Preemptive
Rights"), pursuant to Article Fourth, Section B.8 of the Company's Certificate
of Incorporation, as in effect on the date hereof (the "Charter") with respect
to the issuance to General Electric Capital Corporation, a New York corporation
("GE Capital"), on the date hereof, of a warrant (the "GE Warrant") to purchase
up to 285, 714 shares of Common Stock.
SECTION 3. ADDITIONAL PARTIES
The Stock Purchase Agreement is hereby amended and modified to add the
New Investors as parties thereto for all purposes thereof. From and after the
date hereof, the New Investors shall have all of the rights and obligations
applicable to Investors under the Stock Purchase Agreement as amended hereby. In
the case of GE Capital, the parties acknowledge that the Second Closing Shares
issued to GE Capital at the Second Closing are issued in satisfaction of, and
not in addition to, the Company's obligation to issue up to 20,000 shares of
Series B Preferred upon satisfaction of certain conditions set forth in a
certain letter agreement between the Company and GE Capital, dated as of May 30,
1997.
Each New Investor hereby acknowledges that it has received from the
Company a copy of each of the Stock Purchase Agreement (together with all of the
schedules and exhibits thereto) and the Registration Rights Agreement.
SECTION 4. MODIFICATION TO, AND SUPPLEMENTATION OF, THE STOCK PURCHASE
AGREEMENT.
The Stock Purchase Agreement is hereby modified and supplemented as
follows:
(a) SCHEDULES 1, 3.4, 3.13 and 3.15 of the Stock Purchase
Agreement are hereby deleted and replaced in their entirety with SCHEDULES 1,
3.4, 3.13 and 3.15, respectively, attached hereto.
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(b) SCHEDULES 3.7, 3.8 and 3.12 of the Stock Purchase Agreement are
hereby amended and supplemented with the Annexes to such Schedules attached
hereto.
(c) The definition of "Investors" in the Stock Purchase Agreement is
hereby amended to mean those Investors listed on SCHEDULE 1 attached hereto.
(d) The definition of "Financial Statements" in the Stock Purchase
Agreement is hereby amended by inserting after clause (ii) thereof the following
phrase: "and (iii) an unaudited balance sheet and statement of operations and
cash flows of the Company as at and for the seven months ended July 31, 1997."
(e) Subparagraphs (a) and (b) of Section 3.4 of the Stock Purchase
Agreement is hereby deleted and replaced with the following:
SECTION 3.4. CAPITAL STOCK.
(a) As of the date hereof and as of the Closing Date, the
authorized capital stock of the Company shall consist of 25,000,000
shares of Common Stock, of which 6,930,064 shares are issued and
outstanding, and 300,000 shares of Preferred Stock, $1.00 par value per
share, of which (i) 100,000 shares have been designated as Series A
Convertible Preferred Stock ("Series A Preferred"), of which 50,000
shares are issued and outstanding, (ii) 100,000 shares have been
designated as Series B Preferred, of which 20,000 shares are issued and
outstanding, and (iii) 100,000 shares have been designated as Series C
Preferred, of which 10,000 shares are issued and outstanding. At the
Second Closing, if any, up to an additional 70,000 shares of Preferred
Stock, consisting of shares of Series B Preferred and/or Series C
Preferred shall have been, or shall be, issued in accordance with
Section 2.2 hereof.
(b) Except for (i) options to purchase, in the aggregate,
1,307,500 shares of Common Stock, issued or authorized for issuance to
certain employees and directors of and consultants to the Company,
identified on SCHEDULE 3.4 hereto, (ii) warrants to purchase, in the
aggregate, 300,000 shares of Common Stock, at an average weighted
exercise price of $1.002 per share, issued to the parties identified on
SCHEDULE 3.4 hereto, (iii) warrants issued to Intel Corporation
("Intel") to purchase, in the aggregate, 285,714 shares of Common
Stock, at an exercise price of $3.50 per share, (iv) warrants to be
issued to General Electric Capital Corporation ("GE Capital") at the
Second Closing to purchase, in the aggregate, 285,714 shares of Common
Stock at an exercise price of $3.50 per share with respect to
twenty-five percent (25%) of such shares and at an exercise price equal
to or greater than $4.20 with respect to the remaining seventy-five
percent (75%) of such shares (in accordance with the exercise price
adjustments set forth in such warrant) and (v) the issuance of shares
pursuant to the terms hereof, no subscriptions, warrants, options,
convertible debt, or securities, or any commitments, agreements, or
rights of any kind with respect to securities of the
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Company are outstanding as of the date hereof or shall be outstanding
as of the Closing Date.
(f) The date "March 31, 1997" in the first sentence of Section
3.14 of the Stock Purchase Agreement is hereby deleted and replaced with the
date "December 31, 1996."
(g) The phrase "without the prior written consent of a
majority in interest of the holders of then outstanding shares of Series A
Preferred, Series B Preferred and Series C Preferred (voting together as a
class, with each such holder being entitled to the number of votes to which such
holder would be entitled upon conversion of each share of Series A Preferred,
Series B Preferred and Series C Preferred held of record by such holder)" in the
first sentence of Section 6.7 of the Stock Purchase Agreement is hereby deleted
and replaced with the following phrase:
without the prior written consent of at least 66-2/3% in interest of
the holders of then outstanding shares of Series A Preferred, Series B
Preferred and Series C Preferred (voting together as a class, with each
such holder being entitled to one vote for each share of Series A
Preferred, Series B Preferred and Series C Preferred held of record by
such holder)
(h) Section 6.13 of the Stock Purchase Agreement is hereby
deleted and replaced with the following:
SECTION 6.13. TERMINATION OF COVENANTS. The covenants of the
Company contained in Sections 6.1, 6.3, 6.6, 6.7, 6.10, 6.14 and 6.16
shall terminate, and be of no further force or effect, upon the
Company's first public offering of Common Stock, resulting in gross
proceeds to the Company of at least $15,000,000 (and net proceeds of at
least $14,000,000), at a price per share of at least $7.50.
(i) The Stock Purchase Agreement is hereby amended by
inserting the following as Section 6.14 thereto:
SECTION 6.14. ANCILLARY FINANCING. In the event the Company
proposes to enter into any arrangement for the provision of debt
financing with respect to assets of the Company, including but not
limited to leasing or secured or unsecured lending (a "Debt
Financing"), or receives an offer for the provision of Debt Financing
from any person (a "Prospective Financier"), then prior to negotiating
any such arrangement, the Company shall give GE Capital the right to
provide such Debt Financing on the following basis:
(i) The Company shall deliver a written request to GE
Capital to provide a proposal for Debt Financing (a "Financing
Notice"). Within fifteen (15) business days after receipt of
the Financing Notice, GE Capital shall deliver to the Company
a proposal containing the material terms of
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such financing or shall notify the Company that it does not
wish to provide such financing.
(ii) In the event that GE Capital notifies the
Company that it declines to deliver a proposal, then the
Company shall be free to pursue negotiations with a
Prospective Financier.
(iii) If GE Capital delivers a proposal to the
Company, then following delivery of such proposal, the Company
shall not enter into any other arrangements for the provision
of Debt Financing with any Prospective Financier on terms
equal to or less favorable to the Company (taken as a whole)
than those proposed by GE Capital in its proposal to the
Company.
(iv) If sixty (60) days after delivery of such
proposal, the Company has failed to enter into definitive
arrangements for the provision of Debt Financing that was the
subject of the Financing Notice, then the Company's
obligations under this Section 6.14 with respect to the
provision of Debt Financing shall thereafter be subject to all
of the restrictions and provisions of this Section 6.14.
(j) The Stock Purchase Agreement is hereby amended by
inserting the following as Section 6.15 thereto:
SECTION 6.15. CO-DEVELOPMENT. The Company shall permit GE
Capital or one of its Affiliates to participate, at no additional cost
to GE Capital or such Affiliate, in any activities conducted by the
next Streamline Consumer Learning Center organized by the Company prior
to the year 2000 (which Streamline Consumer Learning Center is expected
to be organized by the Company in 1998). Additionally, the Company
agrees that, during 1998, it shall use commercially reasonable efforts
to enter into arrangements with GE Capital or one of its Affiliates, on
terms mutually agreeable to such parties, for the co-development of
financial products or services to be offered to customers of the
Company.
(k) The Stock Purchase Agreement is hereby amended by
inserting the following as Section 6.16 thereto:
SECTION 6.16. PROHIBITION AGAINST CERTAIN REDEMPTIONS. So long
as any shares of Series A Preferred, Series B Preferred or Series C
Preferred are outstanding, the Company shall not, without the prior
written consent of at least a majority in interest of the holders of
then outstanding shares of Series A Preferred, Series B Preferred and
Series C Preferred (voting together as a class, with each such holder
being entitled to one vote for each share of Series A Preferred, Series
B Preferred and Series C Preferred held of record by such holder), (i)
repurchase, redeem or otherwise acquire for consideration from any
director, officer or holder of greater than 10% of Common Stock any
shares of Common Stock then held of
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record by such person or (ii) furnish information regarding the Company
or its operations in order to facilitate the sale of any shares of
Common Stock by any such person.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Investors purchasing
Second Closing Shares that the representations and warranties set forth in
Article 3 of the Stock Purchase Agreement, as supplemented and modified by this
Agreement, are true and correct in all material respects at and as of the date
hereof with the same effect as though made at and as of the date hereof, except
to the extent that any of such representations and warranties were made as of a
specified date, in which case such representations and warranties are true and
correct as of such date. Each Investor purchasing Second Closing Shares hereby
severally represents and warrants to the Company, with respect to itself only,
that the representations and warranties set forth in Article 4 of the Stock
Purchase Agreement are true and correct in all material respects at and as of
the date hereof.
II. REGISTRATION RIGHTS AGREEMENT
SECTION 1. MODIFICATION TO THE REGISTRATION RIGHTS AGREEMENT
The definition of "Registrable Shares" is hereby deleted and replaced
in its entirely with the following:
"REGISTRABLE SHARES" shall mean, (i) with respect to each
Investor (or its Permitted Transferee), any or all of the shares of
Common Stock issued upon conversion of any or all of such Investor's
(or Permitted Transferee's) shares of Preferred Stock, (ii) in the case
of Intel, shall also include any shares of Common Stock issuable upon
exercise of that certain warrant issued by the Company to Intel on June
13, 1997 and (iii) in the case of General Electric Capital Corporation
("GE"), shall also include any shares of Common Stock issuable upon
exercise of that certain warrant issued by the Company to GE on
September 23, 1997; PROVIDED, HOWEVER, that such securities shall cease
to be Registrable Shares when the holder of such Registrable shares
would be entitled to sell all of such securities within a three-month
period pursuant to the provisions of Rule 144.
III. GENERAL PROVISIONS
SECTION 1. RATIFICATION.
Except to the extent modified and/or supplemented by this Agreement,
all of the terms, conditions and covenants of the Stock Purchase Agreement and
the Registration
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Rights Agreement are hereby ratified and confirmed and shall remain in full
force and effect.
SECTION 2. ENTIRE AGREEMENT.
The Stock Purchase Agreement, the Registration Rights Agreement and
this Agreement, together with the other writings referred to therein and herein
and/or delivered pursuant thereto and/or hereto, contain the entire agreement
among the parties with respect to the subject matter thereof and hereof and
shall be read and construed together as a single agreement.
SECTION 3. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
SECTION 4. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed entirely within the state without regard to principles of conflicts of
law.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the day and year first above written.
STREAMLINE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. XxXxxxx
Chairman and Chief Executive Officer
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INVESTORS:
RELIANCE INSURANCE COMPANY
on behalf of itself and its nominee, HARE & Co.
By: /s/ Xxxx X. Xxxxxxxxxxx
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Xxxx X. Xxxxxxxxxxx
Vice President
PAINEWEBBER CAPITAL INC.
By: /s/ Xxxxxxxxx Xxx
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Xxxxxxxxx Xxx
President
INTEL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Vice President and Treasurer
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Managing Director-Technology Ventures
(As Attorney in Fact)
SAP AMERICA, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. XxXxx
Chief Operations Officer and Chief Financial Officer
SCHEDULES
Schedule 1 Name of Investor, Number of Shares and Subscription Price
Schedule 3.4 Capitalization
Annex to Schedule 3.7 Consents
Annex to Schedule 3.8 Material Contracts
Annex to Schedule 3.12 Financial Statements
Schedule 3.13 Absence of Certain Undisclosed Liabilities
Schedule 3.15 Litigation
