Exhibit 10.1
DEBT CONVERSION
AGREEMENT
THIS DEBT CONVERSION
AGREEMENT (this
“Agreement”) is entered into as of December 20, 2005,
by and among BROADVISION, INC. , a Delaware corporation (the
“Company”), and HONU HOLDINGS LLC
(“Purchaser”).
RECITALS
WHEREAS, Purchaser holds a Senior Secured Convertible
Promissory Note of the Company in the aggregate principal amount of
$15,359,999.00 and with accrued interest as of the date of this
Agreement of $181,545.19, and additional interest accruing at the
rate of $2,104.11 per day (the “Note”); and
WHEREAS , the Company has authorized the sale and
issuance pursuant to this Agreement of an aggregate of 34,500,000
shares of its Common Stock (the “Shares”) at a purchase
price of $.45 per share; and
WHEREAS , Purchaser desires to purchase the Shares, on
the terms and conditions set forth herein, in exchange for total
consideration of $15,525,000.00, consisting of the cancellation of
all of the unpaid principal under the Note and $165,001.00 of
accrued and unpaid interest under the Note (the “Cancelled
Interest”), with the balance of the accrued and unpaid
interest to be paid in cash; and
WHEREAS , the Company desires to issue and sell the
Shares to Purchaser on the terms and conditions set forth herein;
and
WHEREAS , in connection with such purchase and sale,
Purchaser and the Company desire to enter into an Amended and
Restated Registration Rights Agreement with respect to the Shares,
a mutually satisfactory form of which has been reviewed by the
parties (the “Registration Rights
Agreement”);
NOW, THEREFORE
, the parties agree as
follows:
SECTION 1. AGREEMENT TO
SELL AND PURCHASE
1.1
Authorization of Shares . The Company has authorized the sale and
issuance to Purchaser of the Shares, which have the rights,
preferences, privileges and restrictions set forth in the
Certificate of Incorporation of the Company, as amended as of the
date of this Agreement and in the form as provided to the
Purchaser.
1.2
Sale And Purchase.
Subject to the terms and conditions of this Agreement, at the
Closing the Company hereby agrees to issue and sell the Shares to
Purchaser and Purchaser agrees to purchase the Shares from the
Company in consideration for the cancellation of (a) all of the
unpaid principal under the Note and (b) the Cancelled
Interest.
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SECTION 2. CLOSING,
DELIVERY AND PAYMENT
2.1
Closing . The
closing of the sale and purchase of the Shares under this Agreement
(the “Closing”) shall take place at 10:30 a.m. on
December 30, 2005, at the offices of Cooley Godward LLP, 101
California Street, 5th Floor, San Francisco, California 94111 or at
such other time or place as the Company and Purchaser may mutually
agree (such date is hereinafter referred to as the “Closing
Date”).
2.2
Deliveries. At the
Closing, subject to the terms hereof, Purchaser will deliver to the
Company the original Note marked “Cancelled,” together
with a document in form and substance satisfactory to the Company
evidencing the cancellation of the Cancelled Interest. At or as
soon as practicable following the Closing, subject to the terms and
conditions hereof, the Company will deliver to Purchaser a
certificate representing the Shares and a check in the amount of
all accrued and unpaid interest under the Note other than the
Cancelled Interest.
SECTION 3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The Company hereby represents and
warrants to Purchaser as follows:
3.1
Organization, Good Standing And Corporate Power
. The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company has all requisite
corporate power and authority to execute and deliver this Agreement
and to issue and sell the Shares.
3.2
Capitalization.
The authorized capital stock of the Company, as of the date of this
Agreement, consists of 2,000,000,000 shares of Common Stock,
34,428,665 shares of which are issued and outstanding, and
10,000,000 shares of preferred stock, none of which are issued and
outstanding.
3.3
Authorization; Binding Obligations. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization of this Agreement , the performance of all
obligations of the Company hereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant
hereto has been taken or will be taken prior to the
Closing.
3.4
Offering Valid.
Assuming the accuracy of the representations and warranties of
Purchaser contained in Section 4.2 hereof, the offer, sale and
issuance of the Shares will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the
“Securities Act”), and will have been registered or
qualified (or are exempt from registration and qualification) under
the registration, permit or qualification requirements of all
applicable state securities laws. Neither the Company nor any
agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part
of the Shares to any person or persons so as to bring the sale of
such Shares by the Company within the registration provisions of
the Securities Act or any state securities laws.
3.5
Rights Offering .
The Company has obtained all necessary corporate approvals to
commence and, upon compliance with all applicable legal
requirements, consummate the offering to all stockholders of the
Company on a pro rata basis of rights to acquire
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approximately 202,200,000 shares of
the Company’s Common Stock (including shares attributable to
Purchaser and its affiliates) for cash at the same price per share
at which Purchaser is acquiring the Shares (the “Rights
Offering”).
SECTION 4. REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser hereby represents and
warrants to the Company as follows:
4.1
Requisite Power And Authority. Purchaser has all necessary power and
authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out their provisions. All
action on Purchaser’s part required for the lawful execution
and delivery of this Agreement have been or will be effectively
taken prior to the Closing.
4.2
Investment Representations. Purchaser understands that the Shares
have not been registered under the Securities Act. Purchaser
also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the
Securities Act based in part upon Purchaser’s representations
contained in this Agreement. Purchaser hereby represents and
warrants as follows:
(a)
Purchaser Bears Economic Risk. Purchaser is capable of evaluating the
merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear
the economic risk of this investment indefinitely unless the Shares
are registered pursuant to the Securities Act, or an exemption from
registration is available. Purchaser also understands that
there is no assurance that any exemption from registration under
the Securities Act will be available and that, even if available,
such exemption may not allow Purchaser to transfer all or any
portion of the Shares under the circumstances, in the amounts or at
the times Purchaser might propose.
(b)
Acquisition For Own Account. Purchaser is acquiring the Shares for
Purchaser’s own account for investment only, and not with a
view towards their distribution.
(c)
Purchaser Can Protect Its Interest. Purchaser represents that by reason of
Purchaser’s business or financial experience, Purchaser has
the capacity to protect its own interests in connection with the
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