Exhibit 10.12
NOTE AND WARRANT PURCHASE AGREEMENT
THIS NOTE AND WARRANT PURCHASE AGREEMENT is made as of the 3lst day of March,
1998 by and among VStream Incorporated, a Delaware corporation (the "Company"),
and the persons and entities named on the Schedule of Purchasers attached hereto
(individually, a "Purchaser" and collectively, the "Purchasers").
The Parties hereby agree as follows:
1. Amount and Terms of the Loan; Purchase and Sale of the Warrants
1.1. The Loan. Subject to the terms of this Agreement, the Company shall
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borrow from each Purchaser and each Purchaser shall lend to the Company the
amount set forth opposite each such Purchaser's name in the first column of the
attached Schedule of Purchasers (the "Loan Amount") pursuant to a convertible
subordinated promissory note in the form attached hereto as Exhibit A (the
"Note" or collectively, the "Notes"). The Loan Amounts are hereinafter referred
to collectively as the "Loan."
1.2. Purchase and Sale of Warrants. The Company will issue and sell to each
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Purchaser and each Purchaser will purchase, severally and not jointly, warrants
in the form attached hereto as Exhibit B (the "Warrants") to purchase that
number of shares of the Company's Series C Preferred Stock as set forth opposite
each Purchaser's name in the second column of the Schedule of Purchasers on the
following terms: (i) the per share exercise price will be One Dollar and Four
Cents ($1.04) per share (subject to adjustment as set forth therein) and (ii)
the purchase price of the Warrants will be One Tenth of One Cent ($.00l) per
warrant share. These warrants shall be issued simultaneously with the closing of
the Loan.
2. The Closing
2.1. Closing Date. The closing shall be held no later than March 31, 1998
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at the offices of Holland & Xxxx LLP, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000, or at such other time as the Company and Purchasers
shall agree (the "Closing Date").
2.2. Delivery. At the Closing (i) each Purchaser will deliver to the
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Company a check or wire transfer of funds in the amount of such (A) Purchaser's
Loan Amount plus (B) the purchase price of the Warrants being issued to such
Purchaser; and (ii) the Company shall deliver to each Purchaser a Note
representing such Purchaser's Loan Amount and an executed Warrant for the shares
indicated opposite such Purchaser's name on the Schedule of Purchasers.
3. Representations and Warranties of the Company.
The Company hereby represents and warrants to each Purchaser as follows:
3.1. Corporate Power. The Company will have at the Closing Date all
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requisite corporate power to execute and deliver this Agreement, the Notes and
the Warrants and to carry out and perform its obligations under the terms of
this Agreement, the Notes and the Warrants.
3.2. Authorization. All corporate action on the part of the Company, its
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directors and its stockholders necessary for the authorization, execution,
delivery and performance of this Agreement by the Company and the performance of
the Company's obligations hereunder, including the issuance and delivery of the
Notes and the Warrants has been taken or will be taken prior to the Closing.
This Agreement, the Notes and the Warrants, when executed and delivered by the
Company, and upon the filing with the Secretary of State of the state of
Delaware of an amendment to the Company's Certificate of Incorporation to
authorize the Series C Preferred Stock into which the Notes are convertible and
for which the Warrants are exercisable shall constitute valid and binding
obligations of the Company enforceable in accordance with their terms, subject
to laws of general application relating to bankruptcy, insolvency, the relief of
debtors and, with respect to rights to indemnity, subject to federal and state
securities laws. The Series C Preferred Stock or other equity securities of the
Company, when issued in compliance with the provisions of this Agreement, the
Notes and the Warrants, and the Company's Certificate of Incorporation will be
validly issued, fully paid and nonassessable and free of any liens or
encumbrances.
3.3. Consents. All consents, approvals, orders or authorizations of, or
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registrations, qualifications, designations, declarations or filings with, any
governmental authority or other third party, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Notes, the Warrants and the equity securities
issuable upon exercise of the Warrants, conversion of the Notes or the
consummation of any other transaction contemplated hereby shall have been
obtained and will be effective at the Closing, except for notices required or
permitted to be filed with certain state and federal securities commissions
following the Closing, which notices will be filed on a timely basis.
3.4. Offering. Assuming the accuracy of the representations and warranties
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of the Purchasers contained in Section 4 hereof, the offer, issue and sale of
the Notes and the Warrants are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and, upon the filing of certain forms which will be completed
promptly following the Closing, are exempt from registration and qualification
under the registration, permit or qualification requirements of all applicable
state securities laws.
4. Representations and Warranties of the Purchasers
4.1. Purchase for Own Account. Each Purchaser represents that it is
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acquiring the Notes, the equity securities issuable upon conversion of the
Notes, the Warrants and the equity securities issuable upon exercise of the
Warrants (collectively, the "Securities") solely for its own account and
beneficial interest and not as nominee for any other party, and for investment
and not for sale or with a view to distribution of the Securities or any part
thereof, and has no present intention of selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the same.
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4.2. Information and Sophistication. Each Purchaser acknowledges that it
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has received all the information it has requested from the Company and considers
necessary or appropriate for deciding whether to acquire the Notes and Warrants.
Each Purchaser represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Notes and the Warrants and to obtain any additional, information
necessary to verify the accuracy of the information given the Purchaser. Each
Purchaser further represents that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risk of this investment.
4.3. Ability to Bear Economic Risk. Each Purchaser acknowledges that
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investment in the Notes and the Warrants involves a high degree of risk, and
represents that it is able, without materially impairing its financial
condition, to hold the Securities for an indefinite period of time and to suffer
a complete loss of its investment.
4.4. Further Limitations on Disposition. Without in any way limiting the
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representations set forth above, each Purchaser further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(a) There is then in effect a registration statement under the 1933
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) The Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Purchaser shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration under the 1933 Act.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above, no
such registration statement or opinion of counsel shall be necessary for a
transfer by such Purchaser to a stockholder or partner (or retired partner) of
such Purchaser, or its affiliates, associates or partners, or transfers by gift,
will or intestate succession to any spouse or lineal descendants or ancestors,
if all transferees agree in writing to be subject to the terms hereof to the
same extent as if they were Purchasers hereunder.
Each Purchaser understands that the Securities are "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances. In this connection, the
Purchaser represents that it is familiar with Rule 144 promulgated under the
1933 Act, as presently in effect, and understands the resale limitations imposed
thereby and by the 1933 Act.
4.5. Accredited Investor. Each Purchaser is an "accredited investor" as
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such term is defined in Rule 501 under the Securities Act.
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5. Conditions to Closing
Each Purchaser's obligation to make its portion of the Loan shall be subject to
satisfaction of the following conditions precedent:
5.1. Opinion. Such Purchaser shall have received the written opinion of
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Xxxxxxx Phleger & Xxxxxxxx LLP, counsel to the Company.
5.2. Certificate. Each other Purchaser shall have concurrently performed
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its obligations hereunder, and Centennial Fund V, L.P.'s obligation is subject
to its receipt of certification from the Company with respect to interests of
certain disqualified persons.
6. Miscellaneous
6.1. Binding Agreement. The terms and conditions of this Agreement shall
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inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any third party any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.2. Governing Law. This Agreement shall be governed by and construed under
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the laws of the State of Colorado as applied to agreements among Colorado
residents, made and to be performed entirely within the State of Colorado.
6.3. Counsel Fees. The Company agrees to reimburse the fees (up to a
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maximum of $5,000) and expenses of Holland & Xxxx LLP, legal counsel to the
Purchasers in connection with the transactions contemplated hereby.
6.4. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5. Titles and Subtitles. The titles and subtitles used in this Agreement
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are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
6.6. Notices. Any notice required or permitted under this Agreement shall
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be given in writing and shall be deemed effectively given upon personal delivery
or upon deposit with the United States Post Office, by registered or certified
mail, postage prepaid, addressed to the Company at 0000 Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, or to a Purchaser at its address shown on the Schedule of
Purchasers, or at such other address as such party may designate by ten (10)
days advance written notice to the other party.
6.7. Modification; Waiver. Any term of this Agreement may be amended and
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the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of Notes representing a majority
of the outstanding aggregate principal amount of the Notes. Any waiver or
amendment effected in accordance with this Section 6.7 shall be binding
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upon each holder of any securities purchased under this Agreement at the time
outstanding (including securities into which such securities have been
converted) and each future holder of all such securities and the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
COMPANY: PURCHASERS:
VSTREAM INCORPORATED CENTENNIAL FUND V, L.P.
By: Centennial Holdings V, L.P.,
By: /s/ Its General Partner
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Title: Chief Financial Officer
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By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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a General Partner
CENTENNIAL ENTREPRENEURS FUND V, L.P.
By: Centennial Holdings V, L.P.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Title: A General Partner
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SOFTBANK TECHNOLOGY VENTURES IV L.P.
By: STV IV LLC
By: /s/ Xxxx Xxxx
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Managing Director
SOFTBANK TECHNOLOGY ADVISORS FUND L.P.
By: STV IV LLC
By: /s/ Xxxx Xxxx
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Managing Director
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SCHEDULE OF PURCHASERS
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CONVERTIBLE SERIES C SERIES C STOCK
SUBORDINATED STOCK WARRANT TOTAL
PURCHASER NOTES WARRANTS PRICE PURCHASE PRICE
Centennial Fund V, L.P $242,500 5829 $ 5.83 $242,505.83
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Centennial Entrepreneurs 7,500 180 .18 7,500.18
Fund V, L.P.
0000 00xx Xxxxxx
Xxxxxx, XX 00000
SOFTBANK Technology 245,000 5889 5.89 245,005.89
Ventures IV L.P.
c/o Xxxxxxx Xxxx
000 X. Xxx Xxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
SOFTBANK Technology Advisors 5,000 120 .12 5,000.12
Fund L.P.
c/o Xxxxxxx Xxxx
000 X. Xxx Xxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
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TOTAL $500,000 12,018 12.02 $500,012.02
