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FORM OF
FIRST VIRTUAL HOLDINGS INCORPORATED
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("AGREEMENT") is made as of ________ __,
1998, between First Virtual Holdings Incorporated, a Delaware corporation
("FIRST VIRTUAL"), and the Stockholders of Email Publishing Inc. (the "COMPANY
STOCKHOLDERS") listed on EXHIBIT A hereto, pursuant to that certain Agreement
and Plan of Reorganization by and among First Virtual, Email Publishing, Inc., a
Delaware corporation (the "COMPANY"), and certain other parties dated August
___, 1998 (the "REORGANIZATION AGREEMENT").
1. DEFINITIONS. As used in this Agreement:
(a) "EFFECTIVE TIME" means the Effective Time of the Merger as
defined in Section 2.1 of the Reorganization Agreement.
(b) "FORM S-3" means such form under the Securities Act as in effect
on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which similarly permits inclusion or
incorporation of substantial information by reference to other documents filed
by First Virtual with the SEC.
(c) "REGISTRABLE SECURITIES" means (i) the shares of First Virtual
Common Stock issued to the Company Stockholders pursuant to the Reorganization
Agreement, (ii) any shares of Common Stock of First Virtual issued to any
Company Stockholder pursuant to that certain letter agreement, dated as of
________, 1998 between First Virtual and the Company Stockholders, and (iii) any
shares of Common Stock of First Virtual issued as a dividend or other
distribution with respect to, or in exchange for or replacement of, such shares;
provided, however, that Registerable Securities shall not include (x) any shares
of Common Stock of First Virtual that have been previously sold to the public or
(y) any shares of Common Stock of First Virtual that may be sold in the public
market by a Company Stockholder pursuant to Rule 144 under the Securities Act in
a single three (3) month period.
(d) "SEC" means the Securities and Exchange Commission.
(e) "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
Terms not otherwise defined herein have the meanings given to them in the
Reorganization Agreement.
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2. FORM S-3 REGISTRATION. First Virtual shall prepare and file with the
SEC, and use its reasonable best efforts to have declared within 60 days of the
Effective Time of the Merger, a Registration Statement on Form S-3 providing for
the resale by the Company Stockholders of all Registerable Securities then owned
(or to be owned upon exercise of warrants) by the Company Stockholders;
provided, however, that the Company Stockholders shall provide all such
information and materials relating to the Company Stockholders, as applicable,
and take all such action as may be required in order to permit First Virtual to
comply with all the applicable requirements of the SEC and to obtain any desired
acceleration of the effective date of such Form S-3, such provision of
information and materials to be a condition precedent to the obligations of
First Virtual pursuant to this Agreement and the Reorganization Agreement. The
offering made pursuant to such registration shall not be underwritten.
3. POSTPONEMENT OF REGISTRATION. If First Virtual shall determine,
pursuant to the good faith judgment of its Board of Directors, that there is a
material development or potential material development with respect to or
involving First Virtual which First Virtual would be obligated to disclosed in
the prospectus included in the registration statement filed pursuant to Section
2 hereof or any document incorporated or deemed to be incorporated therein by
reference, which disclosure would in the good faith judgment of the Board of
Directors of First Virtual be premature or inadvisable at such time, or (ii) the
occurrence of any event that makes any statement made in the registration
statement or prospectus included in the registration statement filed pursuant to
Section 2 hereof or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect, or which requires the
making of any changes in such registration statement or prospectus so that it
will not contain an untrue statement of material fact required to be stated
therein or necessary to make the statements therein not misleading or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, then First Virtual shall notify the Company Stockholders in writing
of the foregoing, and upon receipt of such notice, the use of such registration
statement and prospectus shall be deferred or suspended and will not recommence
until (x) the Company Stockholders receive from First Virtual copies of a
supplemented or amended prospectus, or (y) such Company Stockholders' are
advised in writing by First Virtual that the prospectus may be used. First
Virtual will use reasonable efforts to allow use of the prospectus to resume
expeditiously; provided that First Virtual shall be under no obligation to take
any action or make any disclosure which would be detrimental to First Virtual or
its stockholders in the good faith judgment of the Board, including without
limitation disclosure of any pending business transactions or negotiations.
4. PIGGYBACK REGISTRATIONS. First Virtual shall notify all Company
Stockholders in writing at least thirty (30) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of First Virtual (other than relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 (or any successor Rule) of the Securities Act) in connection with the
proposed offer and sale for money of any of its securities either for its own
account or on behalf of any other security holder. Each Company Stockholder
desiring to include in any such registration statement all or any part of the
Registrable Securities held by it shall, within fifteen (15) days after the
above-described notice from
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First Virtual, so notify First Virtual in writing. Such notice shall state the
intended method of disposition of the Registrable Securities by such Company
Stockholder. First Virtual agrees to include in such registration statement such
shares of Registrable Securities for which it has received written requests to
register such shares by the Company Stockholders thereof within fifteen (15)
days after the receipt of written notice from First Virtual. If a Company
Stockholder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by First Virtual, such Company
Stockholder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or registration
statements as may be filed by First Virtual with respect to offerings of its
securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If the registration statement under which First
Virtual gives notice under this Section 4 is for an underwritten offering, First
Virtual shall so advise the Company Stockholders. In such event, the right of
any such Company Stockholder to be included in a registration pursuant to this
Section 4 shall be conditioned such Company Stockholder's participation in such
underwriting and the inclusion of such Company Stockholder's Registrable
Securities in the underwriting to the extent provided herein. All Company
Stockholders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by First Virtual.
Notwithstanding any other provision of the Agreement, if the underwriter with
respect to a registration pursuant to this Section 4 determines in good faith
that marketing factors require a limitation of the number of shares to be
underwritten, then First Virtual shall so advise all Company Stockholders
participating in such registration and the number of shares that may be included
in the underwriting shall be accordingly reduced, provided that any shares
included in such underwriting for the account of any stockholder of record of
First Virtual as of the date of this Agreement is also so reduced on a pro rata
basis.
(b) Right to Terminate Registration. First Virtual shall have the
right to terminate or withdraw any registration initiated by it under this
Section 4 prior to the effectiveness of such registration whether or not any
Company Stockholder has elected to include securities in such registration. The
registration expenses of such withdrawn registration shall be borne by First
Virtual in accordance with Section 6 hereof.
5. OBLIGATIONS OF FIRST VIRTUAL. Except as set forth in Sections 2, 3 and
4, whenever required to effect the registration of any Registrable Securities,
First Virtual shall (i) prepare and file with the SEC a registration statement,
which registration statement (including any amendments or supplements thereto
and prospectuses contained therein) shall not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, (ii) prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act (including any amendments or
supplements which may be necessary as a result of transfers of Registerable
Securities); (iii) furnish to the Company Stockholders such number of copies of
any prospectus (including any preliminary prospectus and any
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amended or supplemented prospectus) as the Company Stockholders may reasonably
request in order to effect the offering and sale of the shares of the
Registrable Securities to be offered and sold, but only while First Virtual
shall be required under the provisions hereof to cause such registration
statement to remain current; (iv) use its commercially reasonable efforts to
register or qualify the shares of the Registrable Securities covered by such
registration statement under the securities or blue sky laws of such
jurisdictions as the Company Stockholders shall reasonably request (provided
that First Virtual shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such jurisdiction where it has not been qualified),
and do any and all other acts or things which may be reasonably necessary or
advisable to enable the Company Stockholders to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; (v) cause
all such Registrable Securities to be listed on each securities exchange or
National Association of Securities Dealers, Inc. Automated Quotation System on
which similar securities issued by First Virtual are then listed; (vi) so long
as the registration statement remains effective, promptly prepare, file and
furnish to the Company Stockholders a reasonable number of copies of any
supplements to or amendments of such prospectus; (vii) notify the Company
Stockholders promptly of any request by the SEC for the amending or
supplementing of such registration statement or prospectus or for additional
information; and (viii) advise the Company Stockholders promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC suspending the effectiveness of any registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.
6. EXPENSES. First Virtual shall pay the expenses incurred by First
Virtual in connection with any registration of Registrable Securities pursuant
to this Agreement including all SEC, NASD and blue sky registration and filing
fees, printing expenses, transfer agents' and registrars' fees, and the fees and
disbursements of First Virtual's outside counsel and independent auditors. The
Company Stockholders shall be responsible for all underwriting discounts and
commissions and transfer taxes, as well as any other expenses incurred by the
Company Stockholders; provided however that in the event that the Company or its
underwriters require an opinion of counsel for the Company Stockholders in
connection with an underwritten public stock offering, the Company shall pay the
reasonable fees and expenses of such counsel in connection with rendering such
opinion, up to a maximum of $5,000.
7. INDEMNIFICATION. In the event of any offering registered pursuant to
this Agreement:
(a) First Virtual will indemnify each Company Stockholder with
respect to any registration effected pursuant to this Agreement, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, or any amendment or supplement thereto, or prospectus
related thereto, incident to any such registration, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they are made, not
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misleading, or any violation by First Virtual of the Securities Act, in
connection with any such registration, and will reimburse such Company
Stockholder, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that First Virtual will not be liable in
any such case (i) to the extent that any such claim, loss, damage, liability or
expense arises out of or is based in any untrue statement or omission or alleged
untrue statement or omission, made in reliance upon and in conformity with
information furnished to First Virtual by such Company Stockholder or (ii) if a
copy of the final prospectus relating to any registration statement (as then
amended or supplemented if First Virtual shall have furnished any amendments or
supplements thereto) (the "FINAL PROSPECTUS") was not sent or given by or on
behalf of such Company Stockholder to a purchaser of the Company Stockholder's
Registrable Securities, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Registrable Securities to
such purchaser, and if the final prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or
liability.
(b) Each Company Stockholder will severally indemnify First Virtual,
each of its directors and officers, and each person who controls First Virtual
within the meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) or a material
fact contained in any registration statement, or any amendment or supplement
thereto, or prospectus related thereto, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement or prospectus in reliance upon and in
conformity with information furnished to First Virtual by such Company
Stockholder and will reimburse First Virtual, the remaining Company
Stockholders, such directors, officers, or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, provided, however, that in no
event shall the indemnity provided under this Section 7(b) exceed the net
proceeds from the offering received by the Company Stockholder.
(c) Each party entitled to indemnification under this Section 7 (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has notice of any claim as to which indemnity may be sought, and shall permit
the Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, and the Indemnified Party may participate in such defense
at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, except to the
extent, but only to the extent, that the Indemnifying Party's ability to defend
against such claim or litigation is impaired as a result of such failure to give
notice. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter any settlement which does not include as an
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unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Whether or not the defense of any claim or action is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability
for any settlement without its consent.
(d) The obligations of First Virtual and the Company Stockholders
under this Section 7 shall survive the completion of any offering of stock in a
registration statement under this Agreement.
8. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause First Virtual
to register Registrable Securities pursuant to this Agreement may be assigned by
the Company Stockholders to only to (i) a subsidiary, parent or affiliate of a
Company Stockholder which is a corporation, (ii) as a distribution made by a
Company Stockholder which is a partnership, limited liability company or
corporation to its partners, members and stockholders, as the case may be, in
accordance with their interest in such entity, or (ii) by a Company Stockholder
which is an individual to a member of the Company Stockholder's immediate family
or a trust established for the benefit of the Company Stockholder or members of
its immediate family; provided, however, that upon the death of any Company
Stockholder which is an individual, the rights to cause First Virtual to
register Registrable Securities pursuant to this Agreement shall inure to such
Company Stockholder's devisee, legatee or other designee; and provided further
that the rights set forth in Section 4 hereof shall be transferable only to
persons acquiring at least 100,000 shares of Registerable Securities (as
adjusted for stock splits, stock dividends and similar events).
9. AMENDMENT OF REGISTRATION RIGHTS. This Agreement may be amended by the
holders of a majority of the Registrable Securities and First Virtual at any
time by execution of an instrument in writing signed on behalf of each of the
parties.
10. GRANT OF ADDITIONAL REGISTRATION RIGHTS. The Company Stockholders
acknowledge that First Virtual may acquire other companies, businesses or assets
and in the course of such acquisitions may grant the equity owners thereof
registration rights with respect to their shares of First Virtual on terms which
would be negotiated at such time and may be materially different than the terms
of this Agreement. The proviso contained in last sentence of Section 4(a) of
this Agreement shall not be affected by any such future grant.
11. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
messenger or courier service, or mailed by registered or certified mail (return
receipt requested) or sent via facsimile (with acknowledgment of complete
transmission) to the parties, addressed (a) if to the Company Stockholders, at
the Company Stockholders' addresses as set forth in the securities register of
First Virtual or (b) if to First Virtual at 0000 Xxxxxxxx Xxxxxx Xxxx., Xxxxx
000, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxx, President.
12. GOVERNING LAW; INTERPRETATION. This Agreement shall be construed in
accordance
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and governed for all purposes by the laws of the State of California regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
13. SEVERABILITY; SURVIVAL. If any portion of this Agreement is held by a
court of competent jurisdiction to conflict with any federal, state or local
law, or to be otherwise invalid or unenforceable, such portion of this Agreement
shall be of no force or effect, and this Agreement shall otherwise remain in
full force and effect and be construed as if such portion had not been included
in this Agreement.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding of the parties and supersedes all prior discussions, agreement and
understandings relating to the subject matter hereof.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
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IN WITNESS WHEREOF, First Virtual and the Company Stockholders have caused
this Agreement to be executed as of the date first above written.
FIRST VIRTUAL HOLDINGS
INCORPORATED
---------------------------------
Signature of Authorized Signatory
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Print Name and Title
COMPANY STOCKHOLDERS
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Signature of Authorized Signatory
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Print Name of Stockholder
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT A
COMPANY STOCKHOLDERS
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