EXHIBIT 10.29
AGREEMENT
---------
This Agreement (this "Agreement") is entered into this 21st day of
October, 1996, by and between Intel Corporation ("Intel") and Virtual Mortgage
Network, Inc. ("VMN").
Recitals
--------
A. Intel and VMN are parties to that certain Rights Agreement, dated May
19, 1995 (the "Rights Agreement").
B. Concurrently with the execution of this Agreement, Intel shall become
a party to the Virtual Mortgage Network, Inc. Master Registration Rights
Agreement (the "Master Agreement").
C. By entering into this Agreement, the parties hereto desire to provide
certain rights to Intel in addition to those rights contained in the Master
Agreement.
Agreement
---------
In consideration of the foregoing and the mutual promises and
covenants contained herein, the parties hereto hereby agree as follows:
1. Termination of Rights Agreement.
-------------------------------
Intel and VMN hereby agree that the Rights Agreement is hereby
terminated in its entirety and that all rights and obligations of the parties
under the Rights Agreement have been waived or satisfied as of the date hereof.
2. Reports.
-------
For fiscal years ending after the date of this Agreement, VMN agrees
to deliver to Intel:
a. as soon as practicable after the end of each fiscal year, and in
any event within ninety (90) days thereafter, a balance sheet of VMN as of
the end of such fiscal year and a statement of operations and a statement
of sources and application of funds of VMN for such year, prepared in
accordance with generally accepted accounting principles consistently
applied and setting forth in each case in comparative form the figures for
the two previous fiscal years, all in reasonable detail and audited by
independent public accountants selected by VMN; and
b. within forty-five (45) days after the end of each of the first
three (3) quarters of each fiscal year, an unaudited consolidated profit or
loss statement for such
fiscal quarter and an unaudited balance sheet as of the end of such fiscal
quarter.
c. After the consummation of the initial underwritten public offering
of VMN's Common Stock, the requirements of this Section 2 shall be
satisfied by VMN sending to Intel copies of all Quarterly Reports on Form
10-Q and Annual Reports on Form 10-K (in each case without exhibits) which
VMN files with the Securities and Exchange Commission at the time that VMN
makes such filings.
3. Annual Plan.
-----------
Within ten (10) days of adoption by the Board of Directors, but not
later than the beginning of each fiscal year of VMN, VMN shall submit to Intel
an annual plan for such year which shall include quarterly capital and operating
expense budgets, cash flow statements, manpower projections, projected balance
sheets, profit and loss projections and sales projections for each month and for
the end of such year itemized in such detail as the Board may reasonably
determine. Approval of such budgets, statements and projections shall be
required by at least a majority of the Board of Directors of VMN. If the annual
plan is modified by the Board of Directors to reflect changes as a result of
operating results and other events that occur during the year covered by the
annual plan, copies of such modification shall be promptly submitted to Intel.
4. Board Visitation Rights.
-----------------------
Intel shall have the right, at Intel's expense, to designate a
representative to attend all meetings of VMN's Board of Directors in a non-
voting observer capacity, and, in this respect, VMN shall give Intel copies of
all notices, minutes, consents and other materials that it provides to its
directors: provided, however, that Intel shall agree to hold in confidence and
-------- -------
trust all information so provided. Meetings to be held by telephone conference
and actions to be taken by consent shall not be prohibited provided notice is
given to Intel.
5. Right of First Offer.
--------------------
Subject to the terms and conditions specified in this Section 5, VMN
hereby grants to Intel, a right of first offer with respect to future sales by
VMN of its New Securities (as defined in subsection 5(d)(i)). For purposes of
this Section 5, the term "Intel" includes any partners, shareholders or
affiliates of Intel. Intel shall be entitled to apportion the right of first
offer hereby granted among itself and its partners, shareholders and affiliates
in such proportions as it deems appropriate.
2
a. In the event VMN proposes to issue New Securities, it shall give
Intel written notice (the "Notice") of its intention stating (i) a
description of the New Securities it proposes to issue, (ii) the number of
shares of New Securities it proposes to offer, (iii) the price per share at
which, and other terms on which, it proposes to offer such New Securities
and (iv) the number of shares that Intel has the right to purchase under
this Section 5, based on Intel's Percentage (as defined in Subsection
5(d)(ii)).
b. Within thirty (30) days after the Notice is given (in accordance
with Section 15), Intel may elect to purchase, at the price specified in
the Notice, up to the number of shares of the New Securities proposed to be
issued equal to Intel's Percentage. An election to purchase shall be made
in writing and must be given to VMN within such thirty (30) day period (in
accordance with Section 15).
c. VMN shall have ninety (90) days after the last date on which
Intel's right of first offer lapsed to enter into an agreement (pursuant to
which the sale of New Securities covered thereby shall be closed, if at
all, within forty-five (45) days from the execution thereof) to sell the
New Securities which Intel did not elect to purchase under this Section 5,
at or above the price and upon terms not materially more favorable to the
purchasers of such securities than the terms specified in the initial
Notice given in connection with such sale. In the event VMN has not
entered into an agreement to sell the New Securities within such ninety
(90) day period (or sold and issued New Securities in accordance with the
foregoing within forty-five (45) days from the date of such agreement), VMN
shall not thereafter issue or sell any New Securities without first
offering such New Securities to Intel in the manner provided in this
Section 5.
d. (i) "New Securities" shall mean any shares of, or securities
convertible into or exercisable for any shares of, any class of VMN's
capital stock; provided that "New Securities" does not include: (A)
the shares of Series A Preferred Stock of the Company or the Common
Stock issuable upon conversion thereof; (B) securities issued pursuant
to the acquisition of another business entity by VMN by merger,
purchase of substantially all of the assets of such entity, or other
reorganization whereby VMN owns not less than a majority of the voting
power of such entity; (C) up to 500,000 shares of VMN Common Stock and
the shares of Common Stock issuable upon exercise of such options,
issued pursuant to any arrangement approved by the Board of Directors
to employees, officers and directors of, or consultants, advisors or
other persons performing services for, VMN; (D) shares of VMN's
3
Common Stock or Preferred Stock of any series issued in connection
with any stock split, stock dividend or recapitalization of VMN; (E)
Common Stock issued upon exercise of warrants, options or convertible
securities if the issuance of such warrants, options or convertible
securities was a result of the exercise of the right of first offer
granted under this Section 5 or was subject to the right of first
offer granted under this Section 5; and (F) securities sold to the
public in an offering pursuant to a registration statement filed with
the Securities and Exchange Commission ("SEC") under the Securities
Act of 1933, as amended (the "Act").
(ii) The applicable "Percentage" for Intel shall be the number of
shares of New Securities calculated by dividing (A) the total number
of shares of Common Stock owned by Intel (assuming conversion of all
outstanding shares of Preferred Stock) by (B) the total number of
shares of Common Stock outstanding at the time the Notice is given
(assuming conversion of all outstanding shares of Preferred Stock).
e. The right of first offer granted under this section may be
assigned by Intel to a transferee or assignee of its shares of VMN's stock.
In the event that VMN shall assign its right of first offer pursuant to
this Section 5 in connection with the transfer of less than all of its
shares of VMN's stock, Intel shall also retain its right of first offer to
the extent then applicable under this Section 5.
6. Put Right Upon Failure to Use ProShare(TM).
--------------------------------------
a. In the event that VMN uses a video conferencing solution other
than Intel's ProShare(TM) with its product, Intel shall have the right, by
delivering written notice (the "Redemption Notice") to VMN to cause VMN to
purchase all shares of VMN stock owned by Intel at such time (the "Intel
Shares"). The per share purchase price for the Intel Shares shall be the
higher of: (i) the price Intel initially paid for the Intel Shares plus the
amount of any declared but unpaid dividends thereon through the date of the
Redemption Notice, plus 10% per annum, compounded annually, of the price
Intel initially paid for the Intel Shares calculated from the date Intel
purchased the Intel Shares through the date of the Redemption Notice; or
(ii) the then current Fair Market Value (as defined in Section 6(b) below)
of the Intel Shares as of the date of the Redemption Notice. The full
purchase price for the Intel Shares shall be paid to Intel in cash by wire
transfer or certified check. The put right granted pursuant to this
Section 6 shall not be assignable to any transferee of the Intel Shares.
4
b. If VMN has Common Stock publicly traded at the time of such
determination, "Fair Market Value" of the Intel Shares (on a fully
converted basis) shall be equal to the average closing price of such Common
Stock on the primary exchange on which such Common Stock is then traded (or
the average of the closing bid and asked prices for such Common Stock, if
then primarily traded on Nasdaq) over the 20 trading days prior to the date
of the Redemption Notice. If there is no active public market, the Fair
Market Value shall be the Fair Market Value thereof, as determined in good
faith by the Board of Directors of VMN.
7. Employee and Other Stock Arrangements.
-------------------------------------
Each acquisition of any shares of capital stock of VMN or any option
or right to acquire any shares of capital stock of VMN by an employee,
consultant, officer or director of VMN will be conditioned upon the execution
and delivery by VMN and such employee, consultant, officer or director of an
agreement substantially in the form approved by the Board of Directors of VMN,
providing, among other things, that such shares, when granted to an employee,
consultant, officer or director, shall be subject to vesting at a rate that is
not more rapid than the following schedule: 1/4th of the shares granted may
vest after one year, and the balance of such shares may vest at a rate of 1/36th
monthly thereafter.
8. Public Announcements.
--------------------
VMN shall not use Intel's name or refer to Intel directly or
indirectly in connection with Intel's relationship with VMN in any
advertisement, news release or professional or trade publication, or in any
other manner, unless otherwise required by law or with Intel's prior written
consent, which consent will generally not be granted. The parties agree that
there will be no press release or other public statement issued by either party
relating to this Agreement or the transactions contemplated hereby unless
required by law. If VMN determines that it is required by law to file this
Agreement with the SEC, it shall at a reasonable time before making any such
filing, consult with Intel regarding such filing and seek confidential treatment
for such portions of the Agreement as may be requested by Intel.
9. Term of the Agreement.
---------------------
a. The rights granted to Intel pursuant to Sections 3, 4, 5, 6 and 7
of this Agreement shall terminate upon the earlier of (a) the date that
Intel ceases to be a stockholder of VMN or (b) the date of the closing of
the first underwritten public offering of VMN's securities to the general
public that is effected with the Securities and
5
Exchange Commission under the Securities Act of 1933, as amended.
b. All other rights granted pursuant to this Agreement shall
terminate on the date that Intel ceases to be a stockholder of VMN.
10. Governing Law.
-------------
This Agreement shall be governed by the laws of the State of Delaware
without regard to provisions regarding choice of laws.
11. Assignment.
----------
Except as otherwise provided herein, no part of this Agreement may be
assigned by either party without the prior written consent of the other party
hereto.
12. Entire Agreement.
----------------
This Agreement constitutes the entire understanding and agreement of
the parties with regard to the subjects hereof; provided, however, that nothing
------------------
in this Agreement shall be deemed to terminate or supersede the provisions of
any confidentiality and nondisclosure agreements executed by the parties hereto
prior to the date hereof, which agreements shall continue in full force and
effect until terminated in accordance with their respective terms.
13. Amendments.
----------
This Agreement may be amended only with the written consent of both
parties hereto.
14. Counterparts.
------------
This Agreement may be executed in counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
15. Notice.
------
All notices and other communications required or permitted hereunder
shall be in writing and shall be hand delivered, sent by facsimile to the number
indicated below, sent by reputable overnight courier or mailed by registered or
certified first class mail, postage prepaid, addressed as follows:
If to Intel: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
6
If to VMN: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other addresses and phone numbers as VMN or Intel shall have
furnished to the other party in writing. Notices hand delivered shall be
effective upon delivery. Notices sent by facsimile shall be effective upon
transmission. Notices sent by overnight courier shall be effective one day
following deposit with such courier, and notices sent by first class mail shall
be effective three days following deposit in the United States mail.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
VIRTUAL MORTGAGE NETWORK, INC,.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
INTEL CORPORATION
By:____________________________
Name:__________________________
Title:_________________________
7