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EXHIBIT 10.9
MARKETING AGREEMENT
This Marketing Agreement (hereinafter referred to as the "Agreement")
is effective as of the 22nd day of March, 1999, (the "Effective Date") by and
between INTERACTIVE PICTURES CORPORATION, a Tennessee corporation, (hereinafter
referred to as the "Company") and GE CAPITAL EQUITY INVESTMENTS, INC., a
Delaware corporation, (hereinafter referred to as "GE Capital").
RECITALS
WHEREAS, the Company engages in the business of designing, developing
and selling software, hardware systems and related products that create
interactive immersive images that provide users a complete field of view (the
"Products");
WHEREAS, the Company desires wide distribution of its Products;
WHEREAS, GE Capital and the Company desire to enter into this Agreement
in which GE Capital will provide the Company assistance in developing and
implementing a marketing plan (the "Marketing Program");
WHEREAS, GE Capital will pay up to $500,000 pursuant to the terms of
this Agreement; and
WHEREAS, simultaneously herewith, the Company is issuing to GE Capital
warrants to purchase 650,000 shares of the Company's Series D Preferred Stock,
such warrants to be exercisable upon Development Completion and Execution
Completion (as such terms are defined below) of the Marketing Program and
otherwise as more fully described herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. MARKETING PROGRAM.
(a) GE Capital and the Company shall work together in
good faith to develop, within six (6) months from the date hereof, a marketing
program consisting of newspaper, internet and/or magazine advertisements
featuring the Company and/or its Products and co-branded with the name and/or
logo of GE Capital or its ultimate parent company (the "Marketing Program"). The
execution of the Marketing Program shall be as mutually agreed by the parties,
and no materials shall be produced or released pursuant thereto without the
prior approval of both parties. The Company acknowledges that approval by GE
Capital shall include and require approval from the management of both GE
Capital and its ultimate parent company. The Company further acknowledges that,
prior to permitting use of the name or logo of GE Capital or any of its
affiliates in any publicly available
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material, GE Capital may require the Company to prepare and deliver additional
agreements or documents necessary or appropriate to protect GE Capital's rights
with respect thereto.
(b) The Company consents to the publication by GE Capital
of a "tombstone" or similar advertising material relating to the financial
transaction contemplated in that certain Amended and Restated Series D Stock
Purchase Agreement, dated the date hereof, which may include the Company's name
and business description as well as the size of GE Capital's investment. In
addition, the Company agrees that GE Capital may use the Company's name and logo
on GE Capital's intranet and extranet websites among its list of representative
and portfolio investments and may provide the Company's name and appropriate
individual contacts to certain of GE Capital's portfolio companies for the
purpose of securing supplier discounts or other similar benefits for the
Company. For purposes of this paragraph, GE Capital shall include GE Capital's
ultimate parent company and affiliates.
(c) The warrants to be issued in connection with this
Agreement and the Marketing Program shall become exercisable as follows: (i)
one-half upon the parties completing the development of the Marketing Program
whereby the parties will have agreed to the method by which the Marketing
Program will be executed ("Development Completion") and (ii) one-half upon
committing to place or run the last advertisement of the agreed upon Marketing
Program ("Execution Completion").
2. ADVERTISING ALLOWANCE. GE Capital agrees to fund up to
$500,000 in expenses for execution of the Marketing Program. Such amounts shall
be paid directly by GE Capital to vendors, and GE Capital shall have no
obligations to (i) reimburse the Company for any amount attributable to the
Marketing Program or (ii) pay any third-party vendors any amount with respect to
the Marketing Program except to the extent that the terms of such reimbursement
and payment have been approved in advance by GE Capital. To the extent the
parties are unable to reach Development Completion or Execution Completion of
the Marketing Program within the time period provided by this Agreement (or as
extended by mutual agreement of the parties), any and all costs and expenses
attributable to the Marketing Program shall be borne by the Company, and the
Company shall reimburse GE Capital for any such costs and expenses.
3. COMPENSATION. As compensation for its efforts hereunder, the
Company is issuing to GE Capital warrants to purchase shares of Series D
Preferred Stock in the form of EXHIBIT A attached hereto.
4. CONFIDENTIAL INFORMATION. If any confidential information is
to be exchanged in connection with the marketing activities contemplated by this
Agreement, such information will be exchanged pursuant to, and be subject to the
terms and conditions of, that certain Confidentiality Agreement dated February
11, 1999 between GE Capital and the Company (the "Confidentiality Agreement").
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5. TERM. This Agreement shall commence on the Effective Date and,
unless modified by mutual agreement of the parties, shall terminate on the date
that is (i) one (1) year from the Effective Date of the Agreement or (ii) the
date on which the Marketing Program has been completed, whichever first shall
occur.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and save harmless GE
Capital and its officers, directors, partners, employees, trustees and agents,
and each person who controls GE Capital within the meaning of the Securities Act
of 1933, as amended or the Securities Exchange Act of 1934, as amended (each, an
"indemnified party"), from and against any and all costs, expenses, damages or
other liabilities resulting from any claim, action, suit or other proceeding
arising out of the transactions contemplated hereby or by the Marketing Program
(other than such costs, expenses, damages or other liabilities resulting,
directly or indirectly, (i) from the breach by GE Capital of any of its
agreements contained herein, (ii) from the gross negligence or willful
misconduct of GE Capital or any of its officers, directors, partners, employees
or agents, or any person who controls GE Capital within the meaning of the
Securities Act or the Exchange Act or (iii) from claims by a third party that
use by the Company of any trademark, logo or trade name of GE Capital or its
ultimate parent company breaches, violates or infringes upon any intellectual
property rights of such third party). So long as the Company has complied with
any instruction, provided by GE Capital regarding the use of such trademark,
logo or trade name; provided, however, that, if and to the extent that such
indemnification is unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of such indemnified
liability which shall be permissible under applicable laws.
(b) In order to assert a claim for indemnification
against the Company, the indemnified party shall promptly notify the Company of
such claim in writing. In the case of any third party claim, the indemnified
party under this Section will, promptly after the receipt of notice of the
assertion of any claim or the commencement of any action, suit or proceeding
against such indemnified party in respect of which indemnity may be sought from
the Company on account of an indemnity agreement contained in this Section,
notify the Company in writing of the commencement thereof. The omission of any
indemnified party to so notify the Company of any such breach or claim, action,
suit or proceeding shall not relieve the Company from any liability which it may
have to such indemnified party except to the extent the Company shall have been
prejudiced by the omission of such indemnified party so to notify the Company,
pursuant to this Section. In case any such action, suit or proceeding shall be
brought against any indemnified party and it shall notify the Company of the
commencement thereof, the Company shall be entitled to participate therein and,
to the extent that they may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
Company to such indemnified party of their election so to assume the defense
thereof, the Company will not be liable to such indemnified party under this
Section for any legal or other expense subsequently incurred by such indemnified
party in connection with the defense thereof nor for any settlement thereof
entered into without the consent of the Company; provided, however, that (i) if
the Company shall
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elect not to assume the defense of such claim or action or (ii) if the
indemnified party reasonably determines (x) that there may be a conflict between
the positions of the Company and of the indemnified party in defending such
claim or action or (y) that there may be legal defenses available to such
indemnified party different from or in addition to those available to the
Company, then separate counsel for the indemnified party shall be entitled to
participate in and conduct the defense, in the case of (i) and (ii)(x), or such
different defenses, in the case of (ii)(y), and the Company shall be liable for
any reasonable legal or other expenses incurred by the indemnified party in
connection with the defense.
7. SCOPE OF RELATIONSHIP. This Agreement is intended solely as a
marketing agreement, and no partnership, joint venture, employment, franchise or
other relationship is created hereby.
8. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors and assigns of the
parties to this Agreement. No party may assign its rights or obligations under
this Agreement without the prior written consent of the other party.
9. GOVERNING LAW; WAIVER OF JURY TRIAL. This Agreement shall be
governed in all respects by the laws of the State of New York in the United
States of America without giving effect to the conflicts of laws principles
thereof. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND OF THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY
OF NEW YORK, FOR ANY ACTION, PROCEEDING OR INVESTIGATION IN ANY COURT OR BEFORE
ANY GOVERNMENTAL AUTHORITY ("LITIGATION") ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE
ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT
SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO
ITS RESPECTIVE ADDRESS SET FORTH IN THIS AGREEMENT SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO
THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, AND
HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OF THE COMPANY AND GE CAPITAL WAIVES,
AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORM IN RESPECT OF ANY ISSUE,
CLAIM OR PROCEEDING ARISING OUT OF THIS
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AGREEMENT OR ANY OTHER AGREEMENT RELATED THERETO OR THE SUBJECT MATTER HEREOF OR
THEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN
CONTRACT, TORT OR OTHERWISE.
10. ENTIRE AGREEMENT. This Agreement and the Confidentiality
Agreement sets forth the entire agreement between the Company and GE Capital
concerning the subject matter hereof and supersedes all other agreements,
arrangements and understandings, written or oral, concerning such subject
matter. No amendment or modification of this Agreement or any provision hereof
shall be binding upon any party hereto unless such amendment or modification
shall be in writing and signed by each party to this Agreement.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
12. SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared in a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
13. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
INTERACTIVE PICTURES CORPORATION
By: /s/ John J. Kalec
--------------------------------------
Title: Vice President and Chief Financial
Officer
-----------------------------------
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ James Brown
--------------------------------------
Title: Department Operations Manager
-----------------------------------
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EXHIBIT A TO MARKETING AGREEMENT
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY
TO COUNSEL TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
Date: March 22, 1999
INTERACTIVE PICTURES CORPORATION
a Tennessee corporation
PREFERRED STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, GE CAPITAL EQUITY INVESTMENTS,
INC., a Delaware corporation (hereinafter together with its successors and
assigns, the "Holder"), is entitled, upon the terms and subject to the
conditions hereinafter set forth, to purchase from Interactive Pictures
Corporation, a Tennessee corporation (the "Company"), that number of fully paid
and nonassessable shares of the Company's Series D Preferred Stock at the
purchase price per share as set forth in Section 1 below.
This Warrant is issued in connection with the Marketing Agreement
between the Holder and the Company dated as of the date hereof (the "Marketing
Agreement").
TERMS AND CONDITIONS OF WARRANT
1. Number of Shares; Exercise Price; Term.
(a) The Holder shall be entitled to subscribe for and
purchase 650,000 shares (the "Shares") of the fully paid and nonassessable
Series D Preferred Stock, par value $0.001 per share ("Preferred Stock"), of the
Company at an exercise price of $3.14 per share (the "Exercise Price"). The
number of Shares issuable upon exercise of this Warrant and the Exercise Price
shall be subject to adjustment as hereinafter set forth.
(b) The Holder may exercise one-half of this Warrant
immediately upon Development Completion of the Marketing Program and one-half
immediately upon Execution Completion of the Marketing Program (as each term is
defined in the Marketing Agreement) and at any time thereafter from time to time
prior to the date that is three (3) years after Execution Completion of the
Marketing Program (the "Expiration Date"). GE Capital and the Company shall
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execute and deliver a writing upon Execution Completion of the Marketing Program
setting forth the Expiration Date. This Warrant shall expire and cease to be
exercisable after the Expiration Date. Notwithstanding the foregoing, this
Warrant shall expire upon and cease to be exercisable upon the consummation of
the Company's initial public offering registered on Form S-1 (or substitute or
successor form) at a public offering price (prior to underwriter commissions and
expenses) equal to or exceeding $5.00 per share of Common Stock (as adjusted for
any stock dividends, combinations or splits with respect to such shares
occurring after the date of filing of the Articles of Amendment to the Charter
of the Corporation), and the aggregate proceeds to the Corporation (before
deduction for underwriter commissions and expenses relating to the issuance,
including without limitation fees of the Corporation's counsel) of which equal
or exceed $20,000,000 (a "Qualified Public Offering"), but only if the Company
has provided the Holder with at least thirty (30) days' prior written notice of
the expected expiration hereof. In the event the Company shall consummate a
Qualified Public Offering during the term of the Marketing Program and prior to
its Development Completion or Execution Completion, then this Warrant shall
become exercisable in full on the date immediately prior to consummation of the
Qualified Public Offering.
2. Exercise of Warrant.
(a) This Warrant may be exercised by the Holder upon
surrender of this Warrant to the Company at its principal executive office
together with the Notice of Exercise and Investment Representation Statement
annexed hereto as Exhibit A duly completed and executed by the Holder, and
payment to the Company of the aggregate Exercise Price for the Shares to be
purchased. The Holder shall pay the Exercise Price for the Shares (i) in cash or
(ii) by "cashless exercise", that is, the automatic application of shares of
Preferred Stock received upon exercise of a portion of this Warrant (valued, for
purposes of a cashless exercise, at Fair Market Value (defined in Section 2(d)
below)) to satisfy the Exercise Price for additional portions of this Warrant so
exercised. Certificates for the Shares so purchased shall be delivered to the
Holder promptly after exercise of the stock purchase rights represented by this
Warrant. The exercise of this Warrant shall be deemed to have been effected on
the day on which the Holder surrenders this Warrant to the Company and satisfies
all of the requirements of this Section 2. Upon such exercise, the Holder will
be deemed a shareholder of record of those Shares for which the warrant has been
exercised with all rights of a shareholder (including, without limitation, all
voting rights with respect to such Shares and all rights to receive any
dividends with respect to such Shares). If this Warrant is to be exercised in
respect of less than all of the Shares covered hereby, the Holder shall be
entitled to receive a new warrant covering the number of Shares in respect of
which this Warrant shall not have been exercised and for which it remains
subject to exercise. Such new warrant shall be in all other respects identical
to this Warrant.
(b) The issuance of any shares or other securities upon
the exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the
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amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
(c) Notwithstanding, and in addition to, the payment
provisions set forth in Section 2(a) above, the Holder may elect to receive
Shares equal to the value of this Warrant (or of any portion thereof remaining
unexercised) by surrender of this Warrant at the principal office of the Company
together with notice of such election, in which event the Company shall issue to
the Holder that number of Shares computed using the following formula:
X = Y(A-B)
------
A
Where: X = the number of Shares to be issued to the Holder;
Y = the number of Shares purchasable under
this Warrant (at the date of such
calculation);
A = the Fair Market Value of one Share; and
B = the Exercise Price (at the date of such calculation).
(d) For purposes of Section 2(a) and 2(c) above, the Fair
Market Value of one Share shall mean that amount determined by the Board of
Directors of the Company, acting in good faith, taking into consideration all
factors it deems appropriate including, without limitation, recent sale and
offer prices of the Capital Stock of the Company in private transactions
negotiated at arm's length.
3. Covenants of the Company. The Company covenants and agrees
that all equity securities which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and payment therefor in accordance
herewith, will be duly authorized, validly issued, fully paid, and nonassessable
shares of capital stock of the Company. The Company further covenants and agrees
that, during the period within which the stock purchase rights represented by
this Warrant may be exercised, the Company will at all times have duly
authorized and duly reserved for issuance upon the exercise of the purchase
rights evidenced by this Warrant a number of shares of its Capital Stock for
which this Warrant is exercisable sufficient for such issuance.
4. Transfer, Exchange, or Loss of Warrant.
(a) This Warrant may be exchanged, at the option of the
Holder thereof, for another Warrant, or other Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Shares (or portions thereof), upon surrender to the
Company or its duly authorized agent. This Warrant may not be assigned or
transferred except as provided in this Section 4 and in accordance with and
subject to the provisions of the Securities Act of 1933, as amended, and the
Rules and Regulations promulgated thereunder (collectively, the "Securities
Act"). Any purported transfer or assignment made other than in accordance with
this Section 4 shall be null and void and of no force or effect.
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(b) Prior to any transfer of this Warrant, other than in
an offering registered under the Securities Act, the Holder shall notify the
Company of its intention to effect such transfer, indicating the circumstances
of the proposed transfer and, upon request, furnish the Company with either an
opinion of its counsel, in form and substance reasonably satisfactory to counsel
for the Company, to the effect that the proposed transfer may be made without
registration under the Securities Act or qualification under any applicable
state securities laws or a "No Action" Letter from the Securities and Exchange
Commission. The Company will promptly notify the Holder if the opinion of
counsel furnished to the Company is reasonably satisfactory to counsel for the
Company. Unless the Company notifies the Holder within ten (10) days after its
receipt of such opinion that such opinion is not satisfactory to counsel for the
Company, the Holder may proceed to effect the transfer. Notwithstanding the
foregoing, the Holder may transfer this Warrant to any affiliate without being
required to comply with the provisions of this paragraph (b).
(c) Unless a registration statement under the Securities
Act is effective with respect to the Shares or any other security issued upon
exercise of this Warrant, the certificate representing such Shares or other
securities shall bear the following legend, in addition to any legend imposed by
applicable state securities laws:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE BEEN ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT, AND THE SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION, PURSUANT TO RULE 144, IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR ANOTHER AVAILABLE
EXEMPTION UNDER THE SECURITIES ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER AND IS SUBJECT TO THE TERMS OF A VOTING AGREEMENT, COPIES OF WHICH
ARE ON FILE WITH THE SECRETARY OF THE COMPANY."
(d) Upon receipt by the Company of satisfactory evidence
of loss, theft, destruction, or mutilation of this Warrant and of indemnity
satisfactory to the Company, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not the Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
5. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which such holder would otherwise be
entitled, such holder shall be entitled, at its option, to receive either (i) a
cash payment equal to the excess of the Fair Market Value for such fractional
share above the
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Exercise Price for such fractional share (as mutually determined by the Company
and the Holder), or (ii) a whole share if the Holder tenders the Exercise Price
for one whole share.
6. No Rights as Shareholders. This Warrant does not entitle the
holder hereof to any voting rights, dividend rights, or other rights as a
shareholder of the Company prior to the exercise hereof.
7. Saturdays, Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday or a Sunday or a legal holiday.
8. Adjustments. The Exercise Price per Share and the number of
Shares purchasable hereunder shall be subject to adjustment from time to time as
follows:
(a) Merger. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the Company
is not the surviving corporation, then, as a part of such merger or
consolidation, lawful provision shall be made so that the holder of this Warrant
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the aggregate Exercise Price
then in effect, the same number and class of shares of stock or other securities
or property of the successor corporation resulting from such merger or
consolidation, to which a holder of the securities deliverable upon exercise of
this Warrant would have been entitled in such merger or consolidation if this
Warrant had been exercised immediately before such merger or consolidation. In
any such case, appropriate adjustment shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after the merger or consolidation.
(b) Reclassification, etc. If the Company shall, at any
time, by subdivision, combination, or reclassification of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other
class or classes, the Exercise Price shall be appropriately adjusted and this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities which were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change.
(c) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant remains outstanding and unexpired shall
split, subdivide or combine the securities as to which purchase rights under
this Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination, and the number of shares of Preferred Stock or other securities
issuable upon exercise of this Warrant shall also be proportionately adjusted so
that the Holder shall be entitled to receive upon exercise of this Warrant the
aggregate number and kind of shares which, if this Warrant had been exercised
immediately prior to such event, he would have owned upon such exercise and been
entitled to receive by virtue of such event.
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9. Notice of Adjustments; Notices. Whenever the Exercise Price or
number of Shares issuable upon exercise hereof shall be adjusted pursuant to
Section 8 hereof, or whenever the Company shall propose to pay any dividend or
make any distribution on shares of Preferred Stock in shares of Preferred Stock
or make any other distribution to all holders of Preferred Stock, to issue any
rights, warrants, or other securities to all holders of Preferred Stock
entitling them to purchase any additional shares of Preferred Stock or any other
rights, warrants, or other securities, to effect any liquidation, dissolution,
or winding-up of the Company, or to take any other action which would cause an
adjustment to the Exercise Price, the Company shall issue a written notice
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated and
the Exercise Price and number of Shares purchasable hereunder after giving
effect to such adjustment, and shall cause a copy of such notice to be mailed to
the holder of this Warrant.
10. Miscellaneous.
(a) Successors and Assigns. This Warrant shall be binding
upon any successors or assigns of the Company.
(b) Governing Law; Waiver of Jury Trial. This Warrant
shall be governed in all respects by the laws of the State of New York in the
United States of America without giving effect to the conflicts of laws
principles thereof. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA, IN EACH CASE
LOCATED IN THE COUNTY OF NEW YORK, FOR ANY ACTION, PROCEEDING OR INVESTIGATION
IN ANY COURT OR BEFORE ANY GOVERNMENTAL AUTHORITY ("LITIGATION") ARISING OUT OF
OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND
AGREES NOT TO COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS),
AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY
U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN THIS AGREEMENT SHALL
BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY
SUCH COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE
STATE OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE
COUNTY OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OF THE
COMPANY AND THE HOLDER WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORM IN
RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
OTHER AGREEMENT RELATED THERETO OR THE SUBJECT
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MATTER HEREOF OR THEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER IN CONTRACT, TORT OR OTHERWISE.
(c) Attorneys' Fees. In any litigation, arbitration, or
court proceeding between the Company and the holder relating hereto, the
prevailing party shall be entitled to reasonable attorneys' fees and expenses
incurred in enforcing this Warrant.
(d) Amendments. This Warrant may be amended and the
observance of any term of this Warrant may be waived only with the written
consent of the Company and the Holder.
(e) Notice. Any notice, request, or other communication
required or permitted hereunder shall be in writing and shall be given by
personal delivery, sent by facsimile, or mailed by registered or certified mail,
postage prepaid, or by recognized overnight courier addressed (a) if to the
Holder, at such Holder's address set forth in the Schedule of Purchasers to the
Amended and Restated Stock Purchase Agreement, or (b) as to any subsequent
Holder, the address of such Holder contained in the Company's Warrant Register,
or (c) if to the Company, one copy should be sent to its offices and addressed
to the attention of the President, or at such other address as the Company shall
have furnished to the Holder.
(f) Investor Rights. All Shares issuable upon exercise of
this Warrant are subject to the registration rights provisions of the Amended
and Restated Rights Agreement dated March 22, 1999 (the "Rights Agreement"), as
such agreement may be amended from time to time.
IN WITNESS WHEREOF, the Company has caused this Preferred Stock
Purchase Warrant to be executed by its officer thereunto duly authorized as of
the date first above written.
INTERACTIVE PICTURES CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
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EXHIBIT A
Notice of Exercise and Investment Representation Statement
NOTICE OF EXERCISE AND
INVESTMENT REPRESENTATION STATEMENT
PREFERRED STOCK PURCHASE WARRANT
To: Interactive Pictures Corporation
1. The undersigned hereby elects to purchase ______________
shares of Series D Preferred Stock ("Stock") of Interactive Pictures Corporation
(the "Company") pursuant to the terms of the attached Warrant, and tenders
herewith payment of the aggregate exercise price therefor and any transfer taxes
payable pursuant to the terms of the Warrant, together with this executed Notice
of Exercise and Investment Representation Statement in form and substance
reasonably satisfactory to legal counsel to the Company.
2. (a) The undersigned is sufficiently aware of the
Company's business affairs and financial condition to reach an informed and
knowledgeable decision to acquire the Stock. The shares of Stock to be received
by the undersigned upon exercise of the Warrant are being acquired for its own
account, not as a nominee or agent, and not with a view to resale or
distribution of any part thereof, and the undersigned has no present intention
of selling, granting any participation in, or otherwise distributing the same.
The undersigned further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to the Stock.
The undersigned believes it has received all the information it considers
necessary or appropriate for deciding whether to purchase the Stock.
(b) The undersigned understands that the Stock has not
been registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of its investment intent as expressed herein. In this connection, the
undersigned understands that, in the view of the Securities and Exchange
Commission (the "SEC"), the statutory basis for such exemption may be
unavailable if its representation was predicated solely upon a present intention
to hold the Stock for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Stock, or for a period of one year or any other fixed period
in the future.
(c) The undersigned further understands that the Stock
must be held indefinitely unless subsequently registered under the Securities
Act or unless an exemption from registration is otherwise available (such as
Rule 144 under the Securities Act). In addition, the undersigned understands
that the certificate evidencing the Stock may be imprinted with a legend which
prohibits
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the transfer of the Stock unless it is registered or such registration is not
required in the opinion of counsel to the undersigned reasonably satisfactory to
counsel for the Company.
(d) The undersigned is familiar with the provisions of
Rule 144, promulgated under the Securities Act, which, in substance, permits
limited public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions,
including, among other things: (1) The availability of certain public
information about the Company; (2) the resale occurring not less than one year
after the party has purchased, and made full payment for, within the meaning of
Rule 144, the securities to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the securities less than two years; (3) the sale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker, as said term is defined under the
Securities Exchange Act of 1934 (the "Exchange Act") and the amount of
securities being sold during any three month period not exceeding the specified
limitations stated therein, if applicable. There can be no assurances that the
requirements of Rule 144 will be met, or that the Stock will ever be saleable.
(e) The undersigned further understands that at the time
the undersigned wishes to sell the Stock there may be no public market upon
which to make such a sale, and that, even if such a public market then exists,
the Company may not be satisfying the current public information requirements of
Rule 144, and that, in such event, the undersigned would be precluded from
selling the Stock under Rule 144 even if the one-year minimum holding period had
been satisfied.
(f) The undersigned further understands that in the event
all of the applicable requirements of Rule 144 are not satisfied registration
under the Securities Act, compliance with Regulation A, compliance with some
other registration exemption or the notification to the Company of the proposed
disposition by it and the furnishing to the Company of (i) detailed information
regarding the disposition, and (ii) and opinion of its counsel to the effect
that such disposition will not require registration (the undersigned understands
such counsel's opinion shall concur with the opinion by counsel for the Company
and the undersigned shall have been informed of such compliance) will be
required and that, notwithstanding the fact that Rule 144 is not exclusive, the
Staff of the SEC has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
3. Please issue a certificate or certificates representing said
shares of Stock in the name of the undersigned:
Name:
--------------------------------------
Address:
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16
IN WITNESS WHEREOF, the Warrant Holder has executed this Notice of
Exercise effective this _______ day of ___________, ____.
WARRANT HOLDER
By:
-------------------------------------
Name:
-----------------------------------
Title:
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