Exhibit 10.1
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED UNDER ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING THIS NOTE AND/OR SUCH SECURITIES, OR THE
HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE NOTE AND/OR
SUCH SECURITIES SATISFACTORY TO THE CORPORATION STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND THE QUALIFICATION
REQUIREMENTS UNDER STATE LAW.
CONVERTIBLE PROMISSORY NOTE
$50,000 July 28, 2000
1. OBLIGATION. FOR VALUE RECEIVED, VERTICA SOFTWARE, INC., a Colorado
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corporation (hereinafter called the "Corporation"), hereby promises to pay
Stephen R. Gross (hereinafter called the "Holder"), on January 28, 2001
(the "Maturity Date"), the principal sum of fifty thousand Dollars
($50,000.00), together with accrued interest on such principal sum at the
annual rate of ten percent (10%).
2. MEDIUM OF PAYMENT. The principal and accrued interest on this Note
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are payable in lawful money of the United States of America at the Holder's
address set forth below, or at such other address as the Holder hereof may
from time to time designate to the Corporation in writing.
3. PREPAYMENT. The Corporation may, upon giving the Holder thirty (30)
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days prior written notice, prepay this Note, in whole or in part, at any
time.
4. CONVERSION/PAYMENT. On or December 28, 2000, the Holder shall, by
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giving written notice to the Corporation (the "Election Notice"), elect to
(i) convert the entire principal and accrued interest on this Note into
Common Stock shares of the Corporation at a conversion price equal to 75%
of the closing sale price of the Common Stock as reported on the OTCBB on
the date of the Election Notice, (ii) or have the principal and accrued
interest on this Note paid on the original Maturity Date. If the Holder
elects to convert this Note into shares of Common Stock, no shares of the
Corporation shall be issued to the Holder, and the Holder shall have no
rights to receive such shares, until the Corporation has received this Note
from the Holder for cancellation, and upon such receipt, the Corporation
will promptly issue and deliver to the Holder a certificate of its Common
Stock evidencing the number of shares into which this Note will have been
converted. If the Holder
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fails to give the Election Notice by January 28, 2001, such failure
shall be deemed an election by the Holder to have the principal and accrued
interest on the Note paid on the original Maturity Date.
5. DEFAULT. In the event of default in the payment of principal and
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accrued interest on this Note when due, then the entire outstanding balance
of principal and accrued interest shall become immediately due and payable
at the option of the Holder of this Note.
6. INVESTMENT REPRESENTATION. Neither this Note, the Warrant or the
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Common Stock shares issuable upon the conversion of this Note or issuable
upon the exercise of the Warrant have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or under any applicable
state securities laws. Holder acknowledges by acceptance of the Note that
(a) he has acquired this Note for investment and not with a view toward or
in connection with distribution thereof; (b) he has a pre-existing personal
or business relationship with the Corporation, or its executive officers,
or by reason of his business or financial experience he has the capacity to
protect his own interests in connection with the transaction; and (c) he is
an "Accredited Investor" as such term is defined under Rule 501 promulgated
under the Securities Act. Holder agrees that any shares issuable upon
conversion of this Note or exercise of the Warrant will be acquired for
investment and not with a view toward distribution thereof, and such shares
will not be registered under the Securities Act and applicable state
securities laws, and that such shares may have to be held indefinitely
unless they are subsequently registered or qualified under the Securities
Act and applicable state securities laws or, based on an opinion of counsel
reasonably satisfactory to the Corporation, an exemption from such
registration and qualification is available. Holder, by acceptance hereof,
consents to the placement of the following restrictive legend, or similar
legend, on each certificate to be issued to Holder by the Successor Company
in connection with the issuance of such shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT OR LAWS COVERING SUCH SECURITIES, OR (B) THE HOLDER RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THE SECURITIES SATISFACTORY TO THE
CORPORATION, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SUCH ACT AND ANY FURTHER QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE
LAWS."
7. PUBLIC OFFERING LOCK-UP. In connection with any underwritten
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registration of the Corporation's securities, the Holder agrees, upon the
request of the Corporation and the underwriters managing such underwritten
offering of the Company's securities, not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any
shares of Common Stock issuable upon conversion of this Note or exercise of
the Warrant without the prior written consent of the Corporation and such
underwriters, as the case may be, for such period of time not to exceed
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fourteen (14) days before and one hundred eighty (180) days after the
effective date of such registration as the underwriters may specify. The
Corporation and underwriters may request such additional written agreements
in furtherance of such standoff in the form reasonably satisfactory to the
Corporation and such underwriter. The Corporation may also impose
stop-transfer instructions with respect to the shares and any other
securities subject to the foregoing restrictions until the end of said one
hundred eighty (180) day period.
8. NOTICES. Any communication or notices may be delivered or mailed to
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the offices of the Corporation at its principal place of business and to
the Holder at the Holder's address set forth below, or to such other
addresses as the Corporation, or Holder, may designate in writing from time
to time.
9. APPLICABLE LAW/ATTORNEYS' FEES. This Note shall be governed by and
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construed in accordance with the laws of the State of California applicable
to contracts between California residents entered into and to be performed
entirely within the State of California. If an action is brought to
collect this Note, the Holder hereof shall be entitled to receive all costs
of collection including, without limitation, reasonable attorneys' fees.
10. WAIVER/ASSIGNMENT. The undersigned hereby waives presentment,
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demand, protest, and notice of nonpayment or dishonor of this Note. This
Note may not be assigned by the Holder without the Corporation's prior
written consent.
11. NOTE CONFERS NO RIGHTS OF SHAREHOLDER. The Holder shall not have
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any rights as a shareholder of the Corporation with regard to the shares
issuable hereunder prior to actual conversion hereunder.
Executed on July 28, 2000, at Emeryville, California.
Vertica Software, Inc.
By: /s/ Hans Nehme
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Hans Nehme, President
The name and address of the registered Holder of this Note is:
Stephen R. Gross
2625 Cumberland Parkway
Suite 400
Atlanta, GA 30339
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