AMENDMENT NO. 1
TO
SENIOR SECURED CONVERTIBLE PROMISSORY NOTES
THIS
AMENDMENT NO. 1 TO SENIOR SECURED CONVERTIBLE PROMISSORY NOTES
(this “Amendment”), dated as of September 21,
2007, is made by and among Glowpoint, Inc., a Delaware
corporation (the “Maker”) and ___________________
(the “Holder”).
Preliminary Statement
WHEREAS,
the Maker is the issuer and the Holder is the holder of each
of the senior secured convertible promissory notes set forth
on
Exhibit A hereof
(each, a “Note”, and collectively, the
“Notes”); and
WHEREAS,
in consideration for the issuance of warrants (the
“Amendment Warrants”) to acquire a number of
shares of Common Stock equal to the product of (i) the
Conversion Rate (as defined in the Notes) for the outstanding
principal balance plus any accrued but unpaid interest under
the Notes, times (ii) 0.33, substantially in the form of the
warrants issued in connection with the 2007 Purchase Agreement
(as defined herein), to the Holder, the Maker and the Holder
desire to amend certain provisions of each of the Notes as
described herein.
NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties,
intending to be legally bound, hereby agree as
follows:
1.
Capitalized Terms .
Capitalized terms used, but not defined, herein, shall have the
meanings ascribed to such terms in the Notes.
2.
Amendments to Notes .
(a)
Maturity Date .
The Maturity Date of each of the Notes is hereby extended from
September 30, 2007 to March 31, 2009. All references to
“Maturity Date” in each of the Notes shall be the
Maturity Date as amended by this Amendment.
(b)
Security Agreement .
Section 1.3 of each Note is hereby amended by adding the clause
“, as amended,” immediately after the words
“Security Agreement dated as of March 31,
2006”.
(c)
Remedies Upon an Event of Default .
Subclause (ii) of the proviso contained in Section 2.2 is hereby
deleted and the following new subclause (ii) of such proviso shall
be substituted in lieu thereof:
“(ii)
Sections 2.1(a)-(g) and (j)-(l), the Holder may demand the
prepayment of this Note pursuant to Section 3.7
hereof,”
(d)
Conversion .
(i)
Section
3.1 of each Note is hereby deleted in its entirety and the
following Section 3.1 shall be substituted in lieu
thereof:
“Section
3.1
Conversion .
(a)
Optional Conversion .
At any time on or after the Issuance Date , this Note shall be
convertible (in whole or in part), at the option of the Holder (the
"
Conversion Option "),
into such number of fully paid and non-assessable shares of Common
Stock (the "
Conversion Rate ")
as is determined by dividing (x) that portion of the outstanding
principal balance plus any accrued but unpaid interest under this
Note as of such date that the Holder elects to convert by (y) the
Conversion Price (as defined in Section 3.2(a) hereof) then in
effect on the date on which the Holder faxes a notice of conversion
(the "
Conversion Notice "),
duly executed, to the Maker (facsimile number (973) 860-0754,
Attn.: Chief Executive Officer, with a copy to facsimile number
973-556-1272, Attn.: General Counsel) (the “
Conversion Date ”),
provided, however, that the Conversion Price shall be subject to
adjustment as described in Section 3.6 below. The Holder shall
deliver this Note to the Maker at the address designated in the
Purchase Agreement at such time that this Note is fully converted.
With respect to partial conversions of this Note, the Maker shall
keep written records of the amount of this Note converted as of
each Conversion Date.
(b)
Mandatory Conversion .
On the Mandatory Conversion Date (as defined below), this Note
shall automatically and without any action on the part of the
Holder, convert into such number of fully paid and non-assessable
shares of Common Stock as is determined by dividing (x) that
portion of the outstanding principal balance plus any accrued but
unpaid interest under this Note as of the Mandatory Conversion Date
by (y) the Conversion Price then in effect on the Mandatory
Conversion Date, provided, however, that the Conversion Price shall
be subject to adjustment as described in Section 3.6 below. As used
herein, "Mandatory Conversion Date" shall be the first date that
the Closing Bid Price (as defined below) of the Common Stock
exceeds $1.25 (as adjusted for stock splits, stock dividends,
combinations and similar transactions) for twenty (20) consecutive
trading days. The Mandatory Conversion Date and the Voluntary
Conversion Date collectively are referred to in this Note as the
"Conversion Date". Notwithstanding the foregoing to the contrary,
the Note shall automatically convert pursuant to this Section
3.1(b) only if (1) the Registration Statement is effective and has
been effective, without lapse or suspension of any kind, for such
twenty (20) consecutive trading day period, (2) trading in the
Common Stock shall not have been suspended by the Securities and
Exchange Commission or the OTC Bulletin Board (or other exchange or
market on which the Common Stock is trading), and (3) the Maker is
in material compliance with the terms and conditions of this Note
and the other Transaction Documents. The term "Closing Bid Price"
shall mean, on any particular date (i) the last closing bid price
per share of the Common Stock on such date on the OTC Bulletin
Board or another registered national stock exchange on which the
Common Stock is then listed, or if there is no such price on such
date, then the last closing bid price on such exchange or quotation
system on the date nearest preceding such date.”
(ii)
Section
3.4(a) of each Note is hereby amended by adding the following
after the last sentence thereof:
“In
the event the Holder is unable to fully convert this Note in
connection with either a mandatory conversion pursuant to
Section 3.1(b) hereof, or a conversion election following the
delivery of a Maker's Prepayment Notice pursuant to Section
3.7(k) hereof due to the restrictions set forth in this
Section 3.4(a), such holder may elect to receive Series D
Convertible Preferred Stock of the Company in lieu of shares
of Common Stock convertible into the number of shares of
Common Stock that would have been delivered to such holder but
for the limitations set forth in this Section 3.4(a). The
foregoing sentence shall not preclude the Holder from waiving
at any time its rights to limit its ownership to (i) 4.9% of
all of the Common Stock issued and outstanding at such time in
accordance with this Section 3.4(a) or (ii) 9.9% of all of the
Common Stock issued and outstanding at such time in accordance
with Section 3.4(b) hereof.”
(e)
Anti-Dilution Exemptions .
Section 3.6(c) of each Note is hereby deleted in its entirety and
the following new Section 3.6(c) shall be substituted in lieu
thereof:
“(c)
Certain Issues Excepted .
Anything herein to the contrary notwithstanding, the Maker shall
not be required to make any adjustment to the Conversion Price in
connection with (i) securities issued (other than for cash) in
connection with a merger, acquisition, or consolidation, (ii)
securities issued pursuant to the conversion or exercise of
convertible or exercisable securities issued or outstanding on or
prior to the date hereof (so long as the conversion or exercise
price in such securities are not amended to lower such price and/or
adversely affect the Holders)
or
issued pursuant to the Purchase Agreement, (iii) securities issued
pursuant to the terms of that certain Exchange Agreement, dated as
of September 21, 2007, by and among the Maker and the holders
signatory thereto, (iv) the issuance of the Promissory Notes and
the Warrants (each as defined below), (v) the shares of Common
Stock issuable upon the conversion of the Promissory Notes or the
exercise of the Warrants, (vi) securities issued in connection with
bona fide strategic license agreements or other partnering
arrangements so long as such issuances are not for the purpose of
raising capital, (vii) Common Stock issued or the issuance or
grants of options to purchase Common Stock pursuant to the
Maker’s stock option plans and employee stock purchase plans
approved by the Makers board of directors, so long as such
issuances in the aggregate do not exceed the number of shares of
Common Stock (or options to purchase such number of shares of
Common Stock) issuable pursuant to such plans as they exist as of
September 21, 2007, (viii) any warrants issued to the placement
agent and its designees for the transactions contemplated by the
Purchase Agreement, (ix) the payment of any dividends on the
Maker’s Series B convertible preferred stock, (x) securities
issued pursuant
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