1
Exhibit 10.1
SYMPOSIUM CORPORATION
000 XXXX XXXXXX
XXXXX 000
XXX XXXX, XXX XXXX 00000
June 16, 2000
To the Holders of Symposium
Corporation Series B
Convertible Preferred Stock
Letter Agreement
Ladies and Gentlemen:
Reference is made to the Certificate of Designation (the
"Certificate") creating the series of preferred stock of Symposium Corporation,
a Delaware corporation (the "Company"), designated as the Series B Convertible
Preferred Stock, par value $.001 per share (the "Series C Shares"), and the Term
Sheet (the "Term Sheet") describing the terms upon which the Series B Shares
were offered and sold to each of you (each, a "Holder" and collectively, the
"Holders"). The Certificate and the Term Sheet are hereinafter collectively
referred to as the "Documents."
Pursuant to the terms and conditions set forth in the Term
Sheet, on January 28, 2000, the Company issued and sold to the Holders, for an
aggregate purchase price of $1,535,000, 15,350 Series B Shares and warrants to
purchase 383,750 shares of Common Stock at an exercise price of $1.50 per share
(the "Original Warrants"). In addition, the Company issued warrants to purchase
58,136 shares of Common Stock at an exercise price of $1.50 per share (the
"Commission Warrants") to D2 Co. LLP, as a fee for arranging the financing.
This letter sets forth our agreement, as follows:
1. Conversion.
On or prior to the Redemption Date (as defined below), each
Holder may, at such Holder's option, convert such Holder's Series B Shares in
accordance with the Documents. Upon such conversion, the Company will issue to
each converting Holder, without additional consideration (and in addition to the
number of shares of Common Stock issuable upon such conversion), the number of
additional shares of Common Stock equal to the excess of: (a) the number of
shares of Common Stock issuable upon such conversion assuming an effective
conversion price of $0.50 per share over (b) the number
2
of shares of Common Stock issuable upon such conversion at the conversion price
then in effect pursuant to the Documents.
2. Redemption.
(a) On June 29, 2000 (the "Redemption Date"), upon surrender
by the Holders of the certificates evidencing the Series B Shares
(except for Series B Shares converted pursuant to Section 1 above), the
Company will redeem all of the outstanding Series B Shares at a
redemption price equal to the Stated Value of such shares as set forth
in the Certificate together with accrued and unpaid dividends thereon
through the Redemption Date. The aggregate redemption price as of the
Redemption Date will be $1,561,436.11 (the "Redemption Price"). The
portion of the Redemption Price payable to each Holder is set forth on
Schedule A hereto. The Company will pay the Redemption Price by check
payable to the order of each Holder or, if such Holder has presented
the Company with written wire instructions prior to the Redemption
Date, by wire transfer of immediately available funds to the account
designated in such instructions.
(b) If any Holder fails to surrender to the Company the
certificates evidencing such Xxxxxx's Series B Shares on the Redemption
Date (or to execute and deliver to the Company a lost certificate
indemnity in form reasonably satisfactory to the Company), the Company
will deposit the full redemption price payable in respect of such
Holder's Series B Shares in escrow with its counsel, Xxxxxx Xxxxx
Xxxxxxxx & Xxxxxxx LLP and from and after the Redemption Date, the
Series B Shares owned by such Holder shall cease to be outstanding and
such Holder shall have no further rights with respect thereto, other
than to be paid such redemption price upon surrender of such
certificates or lost certificate indemnity, as the case may be.
(c) By executing and delivering this Letter Agreement, each
Holder irrevocably waives such Xxxxxx's right to receive notice of
redemption as set forth in the Certificate and agrees that the
redemption of the Series B Shares in accordance with this Letter
Agreement will constitute satisfaction in full by the Company of its
obligation to redeem the Series B Shares pursuant to the Documents.
3. Warrants.
(a) On the Redemption Date, the exercise price of the
Original Warrants and the Commission Warrants will be reduced from
$1.50 per share to $0.75 per share. In order to effect such reduction,
each Holder will surrender the certificates evidencing such Xxxxxx's
Original Warrants or Commission Warrants, as applicable, to the Company
in exchange for a new certificate reflecting such reduced price. In
addition, on the Redemption Date, (a) the Company will issue to the
Holders of Original Warrants, pro rata in accordance with the
respective
3
numbers of Original Warrants owned by them, additional warrants to
purchase an aggregate of 122,800 shares of Common Stock at an exercise
price of $0.75 per share (the "Additional $0.75 Warrants") and
additional warrants to purchase an aggregate of 200,000 shares of
Common Stock at an exercise price of $1.50 per share (the "Additional
$1.50 Warrants and, together with the Additional $0.75 Warrants, the
"Additional Warrants"); and (b) the Company will issue to D2 Co. LLP
additional warrants to purchase 17,820 shares of Common Stock at an
exercise price of $0.75 per share (the "Additional Commission
Warrants"). The Original Warrants, as amended in accordance with this
paragraph, the Commission Warrants, the Additional Warrants and the
Additional Commission Warrants are hereinafter collectively referred to
as the "Warrants." Other than the exercise prices (which shall be as
described above), the terms and conditions of the Additional Warrants
and the Additional Commission Warrants will be identical to those of
the Original Warrants and the Commission Warrants and the Holders will
be entitled to the same registration rights with respect to the shares
of Common Stock issuable upon exercise of the Additional Warrants and
Additional Commission Warrants as apply to the shares of Common Stock
issuable upon exercise of the Original Warrants and Commission
Warrants. The shares of Common Stock issuable upon exercise of all such
Warrants are hereinafter collectively referred to as the "Warrant
Shares."
(b) The Holders agree that the Company's agreement in
Section 1 hereof to issue additional shares of Common Stock to the
Holders upon conversion of Series B Shares, the reduction of the
exercise price of the Original Warrants and the Commission Warrants and
the issuance to the Holders of the Additional Warrants and Additional
Commission Warrants satisfy in full any claims, whether or not
previously asserted by the Holders, in respect of the amount or terms
of securities to which they were or may have been entitled in
connection with their $1,535,000 investment in the Company in January
2000 or any right to commissions or fees relating to such investment
(the "Claims"). Each such Holder, on its own behalf and on behalf of
its respective officers, directors, partners, managers, equity owners,
agents, affiliates, executors, administrators, successors and assigns,
hereby waives and releases the Company, its officers, directors,
employees, agents, affiliates, successors and assigns from, to the
fullest extent permitted by applicable law, any claims or causes of
action arising out of or relating to the amount or terms of securities
issued to such Holder in connection with such investment or any such
commissions or fees, except for claims arising under this Letter
Agreement.
4. Representations and Warranties of Holders.
Each of the Holders hereby severally represents and
warrants to the Company, on behalf of itself, as follows:
(a) Such Holder is (and on the Redemption Date and
each date on which such Holder purchases Warrant Shares upon exercise of all or
any portion of the
4
Warrants, such Holder will be) an "accredited investor" within the meaning of
Regulation D, as promulgated by the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the "Act");
(b) Such Holder has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
the transactions contemplated hereby and of an investment in the Company's
securities;
(c) Such Holder has been furnished and has reviewed the
Company's Annual Report on Form 10-K for the year ended December 31, 1999,
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 and Current
Report on Form 8-K, as filed with the Commission on June 16, 2000 (which Form
8-K describes the terms and conditions upon which the Company issued shares of
Series A Convertible Preferred Stock, Series C Preferred Stock, and warrants, a
portion of the net proceeds of which will be used to fund the redemption of the
Series B Shares contemplated by this Letter Agreement);
(d) Such Holder has had the opportunity to confer with the
Company's management and has obtained such additional information regarding the
Company, its business and capital structure as such Holder has requested in
connection with the transaction contemplated by this Letter Agreement;
(e) Such Holder acquired the Original Warrants or Commission
Warrants, is acquiring the Additional Warrants or the Additional Commission
Warrants, as applicable, and will acquire Warrant Shares upon exercise of any
such Warrants, for investment and without a view to the sale, assignment,
transfer or other distribution thereof;
(f) Such understands that the Warrants and the Warrant Shares
may not be offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act and in compliance with the
applicable securities laws of any state or other jurisdiction, or pursuant to an
opinion of counsel satisfactory to the company that such registration is not
required and such compliance has been obtained. The Company may affix an
appropriate legend to any certificate(s) evidencing Warrants or Warrant Shares
to reflect the foregoing.
6. Miscellaneous.
This Letter Agreement will be governed by the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State. Any claims or disputes relating in any way to this Letter
Agreement shall be submitted to the New York State courts or the United States
District Court for the Southern District of New York and such courts shall have
exclusive jurisdiction over such claims or disputes. The parties hereby consent
to such venue and the personal jurisdiction of such courts and agree not to
contest such venue or assert any claims to move the claim or dispute to another
venue or forum. This Letter Agreement may be executed in counterparts and by
the parties hereto in separate counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same agreement.
This Letter Agreement supersedes any prior understanding or agreement, written
or oral, among the parties hereto relating to the subject matter hereof.
5
If the foregoing correctly sets forth our understanding, please so
indicate by signing an enclosed counterpart of this Letter Agreement and
returning it to the undersigned. Upon execution and delivery to the undersigned
of a counterpart of this Letter Agreement by each of the Holders, this Letter
Agreement will constitute a binding agreement among us.
Very truly yours,
SYMPOSIUM CORPORATION
By:________________________
Xxxxxx Xxxxxxx
Chairman and Chief Executive Officer
6
Signature Page of Letter Agreement, dated June 16, 2000, among Symposium
Corporation and the Holders of its Series B Convertible Preferred Shares
Accepted and agreed to as of the
date first above written:
___________________________ Redeem / / Convert / /
Xxxxxxx Xxxxx
___________________________ Redeem / / Convert / /
Xxxxxxxx Xxxxxx
___________________________ Redeem / / Convert / /
Dublin Holdings LLC
By:
Title:
___________________________ Redeem / / Convert / /
JR Squared LLC
By:
Title:
___________________________ Redeem / / Convert / /
Xxxxx Xxxxxxx
___________________________ Redeem / / Convert / /
Xxxxxxx Xxxxxxx
___________________________ Redeem / / Convert / /
Xxxxx Xxx Xxxxxxxx
___________________________ Redeem / / Convert / /
TCMP3 Capital LLC
By:
Title:
___________________________ Redeem / / Convert / /
Xxxx Xxxxxx
7
Signature Page of Letter Agreement, dated June 16, 2000, among Symposium
Corporation and the Holders of its Series B Convertible Preferred Shares
___________________________ Redeem / / Convert / /
Xxxxxxx X. Xxxxxx
___________________________ Redeem / / Convert / /
Xxxx Xxxxx
8
------------------------------------------------------------------------------------------
SCHEDULE A
------------------------------------------------------------------------------------------
CURRENT
------------------------------------------------------------------------------------------
NAME OUTSTANDING DIVIDEND TOTAL
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
B-1 Xxxxxxx Xxxxx $ 150,000.00 $ 2,583.33 $ 152,583.33
------------------------------------------------------------------------------------------
B-2 Xxxxxxxx Xxxxxx 50,000.00 861.11 50,861.11
------------------------------------------------------------------------------------------
B-3 Dublin Holdings, Ltd 100,000.00 1,722.22 101,722.22
------------------------------------------------------------------------------------------
B-4 JR Squared LLC 150,000.00 2,583.33 152,583.33
------------------------------------------------------------------------------------------
B-5 Xxxxx Xxxxxxx 450,000.00 7,750.00 457,750.00
------------------------------------------------------------------------------------------
B-6 Xxxxxxx Xxxxxxx 150,000.00 2,583.33 152,583.33
------------------------------------------------------------------------------------------
B-7 Xxxxx Xxx Xxxxxxxx 150,000.00 2,583.33 152,583.33
------------------------------------------------------------------------------------------
B-8 TCMP3 Capital LLC 60,000.00 1,033.33 61,033.33
------------------------------------------------------------------------------------------
B-9 Xxxx Xxxxxx 200,000.00 3,444.44 203,444.44
------------------------------------------------------------------------------------------
B-10 Xxxxxxx Xxxxxx 25,000.00 430.56 25,430.56
------------------------------------------------------------------------------------------
B-11 Xxxx Xxxxx 50,000.00 861.11 50,861.11
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
$ 1,535,000 $26,436.11 $ 1,561,436.11
------------------------------------------------------------------------------------------
