EXHIBIT 4.01
EXHIBIT E to
Convertible
Preferred Stock
Purchase Agreement
Strong River Investments, Inc.
c/▇ ▇▇▇▇▇▇▇ Capital Corp.
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Cootes Drive LLC
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Commercial Centre
P.O. Box 31106 SMB
Grand Cayman
Cayman Islands, British West Indies
July 22, 1999
InteliData Technologies Corporation
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Attention: Chief Financial Officer
Re: INTELIDATA TECHNOLOGIES CORPORATION (THE "COMPANY").
Gentlemen:
Reference is made to the Convertible Preferred Stock Purchase
Agreement (the "PURCHASE AGREEMENT"), of even date hereof, among the Company and
the undersigned (collectively, the "PURCHASERS"), pursuant to which the Company
will issue and sell to the Purchasers 600 shares of the Company's 4% Series B
Convertible Preferred Stock, par value $.001 per share, which are convertible
into shares of the Company's common stock, $.001 par value per share, for an
aggregate purchase price of $6,000,000. Capitalized terms used and not otherwise
defined in this letter that are defined in the Purchase Agreement shall have the
meanings set forth in the Purchase Agreement.
Each Purchaser hereby, severally and not jointly, commits,
subject to and upon the terms, conditions and conditions hereof, to purchase
from the Company, and the Company commits, subject to and upon the terms,
conditions and conditions hereof, to sell to the Purchasers, shares of the
Company's to be created Series C Convertible Preferred Stock, par value $.001
per share (the "SERIES C STOCK"), which are convertible into shares of Common
Stock.
The commitments set forth in this letter are subject to the terms,
conditions and qualifications set forth below:
1. TERMS OF SERIES C STOCK. The certificate of designation
governing the rights, preferences and privileges of the Series C Stock (the
"SERIES C CERTIFICATE OF DESIGNATION") shall be identical to the Certificate of
Designation, MUTATIS MUTANDIS and shall rank pari passu with the Preferred Stock
with regard to dividends, liquidation, voting rights and any other preferential
rights designated therein, except that the Initial Conversion Price (as defined
in the Certificate of Designation) shall equal 130% of the average of the Per
Share Market Values (as defined in the Certificate of Designation) for the five
(5) Trading Days immediately preceding the Series C Closing Date (as defined
herein). No later than one (1) Business Day prior to the Series C Closing Date,
the Series C Certificate of Designation shall be filed by the Company with the
Secretary of State of the State of Delaware, in the form and substance mutually
agreed to by the Company and the Purchasers.
2. ADDITIONAL DOCUMENTATION. In order to effectuate the
purchase and sale of the shares of Series C Stock, prior to the Series C Closing
Date, the Company and the Purchasers shall enter into the following agreements:
(a) a convertible preferred stock purchase agreement substantially identical to
the Purchase Agreement, and (b) a registration rights agreement substantially
identical to the Registration Rights Agreement (collectively, the "SERIES C
TRANSACTION DOCUMENTS"). The Purchasers shall prepare the Series C Transaction
Documents.
3. THE SERIES C STOCK CLOSING. (i) Subject to the terms and
conditions set forth in this letter, the Company and the Purchasers shall
each have the right to deliver a written notice to the other (a "SERIES C
FINANCING NOTICE") requiring such other party to either sell or buy
(severally and not jointly), as the case may be, up to 400 shares of the
Series C Stock (the "SERIES C SHARES") for an aggregate purchase price of
$4,000,000. The Series C Financing Notice may be delivered no earlier than 20
Business Days following the date the Underlying Shares Registration Statement
is declared effective by the Commission (such date of effectiveness, the
"TARGET DATE") and no later than 40 Business Days following the Target Date,
PROVIDED, that such 20th Business Day following the Target Date (but not the
40th Business Day following the Target Date) shall be extended for the
number of days during which the prospectus included in the Underlying Shares
Registration Statement may not be used by the Purchasers for the resale of
Registrable Securities (as defined in the Registration Rights Agreement), or
as otherwise agreed to by the parties hereto. The closing of the purchase and
sale of the Series C Shares (the "SERIES C CLOSING") shall take place at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,1290 Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, on the fifth (5th) Business Day after the Series C Financing Notice is
received by the Purchasers or the Company, as the case may be, or on such
other date as otherwise agreed to by the parties hereto; PROVIDED, HOWEVER,
that in no case shall the Series C Closing take place unless and until all of
the conditions listed in Section 4 of this letter shall have been satisfied
by the Company or waived by the Purchasers (it being understood that each
Purchaser may, as to itself, elect to waive or enforce such conditions in its
own discretion). The date of the Series C Closing is hereinafter referred to
as the "SERIES C CLOSING DATE." Notwithstanding anything to the contrary
contained in this letter, each of the Purchasers may designate an Affiliate
thereof to acquire the Series C Shares.
(ii) At the Series C Closing, the parties shall deliver or shall
cause to be delivered the following: (a) the Company shall deliver to (x)
each Purchaser or its designated Affiliate, (1)
the stock certificates registered in the name of such Purchaser or its
designated Affiliate, representing a number of Series C Shares equal to the
quotient obtained by dividing the purchase price indicated next to such
Purchaser's name on the signature page of this letter by 10,000; (2) a legal
opinion in form and substance acceptable to such Purchaser, and (3) executed
Series C Transaction Documents and the Transfer Agent Instructions relating to
the Series C Closing, and (y) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, $20,000 as reimbursement of
the legal fees and expenses incurred by the Purchasers to prepare the Series C
Transaction Documents, which amount shall be deducted by the Purchasers (on a
pro-rata basis) from the amount due to the Company for the sale of the Series C
Shares and shall be paid directly to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and (b) each of the
Purchasers shall deliver to the Company (1) the purchase price set forth next to
such Purchaser's name on the signature page of this letter, in United States
dollars in immediately available funds by wire transfer to an account designated
in writing by the Company for such purpose prior to the Series C Closing Date
and (2) the executed Series C Transaction Documents.
4. CONDITIONS PRECEDENT TO THE SERIES C CLOSING.
Notwithstanding anything to the contrary contained in this letter, the
commitment of a Purchaser to acquire the Series C Shares is subject to the
satisfaction by the Company or waiver by the Purchasers of each of the following
conditions:
(a) CLOSING OF PREFERRED STOCK. The Closing shall have
occurred;
(b) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company contained in the Purchase
Agreement shall be true and correct as of the date of the Series C Closing, as
evidenced by an Officer's certificate attesting to such effect to be delivered
by the Company to the Purchasers at the Series C Closing;
(c) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company between the Closing Date and the Series C Closing and no
Event or Triggering Event (each as defined in the Certificate of Designation)
shall have occurred;
(d) UNDERLYING SHARES REGISTRATION STATEMENT. The Underlying
Shares Registration Statement shall have been declared effective under the
Securities Act by the Commission and shall have remained effective at all times,
not subject to any actual or threatened stop order or subject to any actual or
threatened suspension at any time prior to the Series C Closing Date;
(e) NO INJUNCTION. Since the Closing Date, no statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated, amended, modified or endorsed by any court of
governmental authority of competent jurisdiction or governmental authority,
stock market or trading facility which prohibits the consummation of any of the
transactions contemplated by the Series C Transaction Documents or makes
impracticable the transactions contemplated thereby;
(f) ADVERSE CHANGES. Since the Closing Date, no event or series
of events which reasonably would be expected to have or result in a
Material Adverse Effect shall have occurred;
(g) NO SUSPENSIONS OF TRADING IN COMMON STOCK. Trading in the
Common Stock shall not have been suspended by the Commission or the NASDAQ at
any time since the Closing Date;
(h) LISTING OF COMMON STOCK. The Common Stock shall have been
at all times since the Closing Date listed for trading on the NASDAQ;
(i) SHARES OF COMMON STOCK. The Company shall have duly
reserved the number of shares of Common Stock as required by the Series C
Transaction Documents to be reserved for issuance upon conversion of the Series
C Shares;
(j) PERFORMANCE OF CONVERSION OBLIGATIONS. The Company shall
have timely complied with its conversion and delivery requirements under the
Certificate of Designation;
(k) CLOSING THRESHOLD. For the ten (10) Trading Days
immediately preceding the date of the Series C Financing Notice, the average
daily trading volume of the Common Stock on the NASDAQ shall be at least
$150,000 and the average of the Per Share Market Value for such ten (10) Trading
Day period shall be greater than $1.50 (subject to stock splits and similar
adjustments);
(l) SHAREHOLDER APPROVAL. No approval of the shareholders of the
Company shall be required under the rules of the Nasdaq Stock Market or such
other exchange or trading facility or which the Common Stock is then traded or
listed for trading in order to issue a minimum of 200% of the shares of Common
Stock upon conversion of the Series C Shares (assuming such conversion occurred
on the Series C Closing Date); and
(m) DELIVERIES PURSUANT TO SERIES C TRANSACTION DOCUMENTS. At the
Series C Closing, the Company shall deliver the Series C Shares, executed
Series C Transaction Documents and Transfer Agent Instructions relating to the
Series C Shares.
5. INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and neither Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser or Purchasers hereunder. Nothing contained herein or in any other
agreement or document delivered at the Series C Closing, if any, and no action
taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this letter. Each Purchaser shall be entitled to protect and
enforce its rights, including, without limitation, the rights arising out of
this letter or out of the Series C
Transaction Documents, if any, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.
6. GOVERNING LAW. This letter shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof.
7. EXECUTION. This letter may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
Please indicate your agreement with the foregoing by executing a
countersigned copy of this letter and returning the same to our attention,
whereupon effective immediately thereafter this letter shall become a legally
valid and binding agreement between the Purchasers and the Company.
We look forward to our continuing relationship.
Sincerely,
Strong River Investments, Inc. Purchase Price: $1,333,333
By:
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Name:
Title:
Cootes Drive LLC Purchase Price: $2,666,666
By:
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Name:
Title:
Agreed and accepted:
InteliData Technologies Corporation
By:
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Name:
Title: