Exhibit 4.1
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
COMMON STOCK PURCHASE WARRANT
To Purchase __________ Shares of Common Stock of
FIRST VIRTUAL COMMUNICATIONS, INC.
THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES
that, for value received, _____________ (the "Holder"), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date of issuance of this Warrant (the
"Initial Exercise Date") and on or prior to the fifth anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from First Virtual Communications, Inc., a corporation incorporated in
the State of Delaware (the "Company"), up to ____________ shares (the "Warrant
Shares") of Common Stock, par value $0.001 per share, of the Company (the
"Common Stock"). The purchase price of one share of Common Stock (the "Exercise
Price") under this Warrant shall be $1.77, subject to adjustment hereunder. The
Exercise Price and the number of Warrant Shares for which the Warrant is
exercisable shall be subject to adjustment as provided herein. CAPITALIZED TERMS
USED AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS SET FORTH IN THAT
CERTAIN SECURITIES PURCHASE AGREEMENT (THE "PURCHASE AGREEMENT"), DATED NOVEMBER
6, 2003, AMONG THE COMPANY AND THE PURCHASERS SIGNATORY THERETO.
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1. Title to Warrant. Prior to the Termination Date and
subject to compliance with applicable laws and Section 7 of this Warrant, this
Warrant and all rights hereunder are transferable, in whole or in part, at the
office or agency of the Company by the Holder in person or by duly authorized
attorney, upon surrender of this Warrant together with the Assignment Form
annexed hereto properly endorsed. The transferee shall sign an investment letter
in form and substance reasonably satisfactory to the Company.
2. Authorization of Shares. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).
3. Exercise of Warrant.
(a) Subject to Section 3(c) below, exercise of
the purchase rights represented by this Warrant may be made at any time
or times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto (or such
other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder
appearing on the books of the Company); provided, however, within 5
Trading Days of the date said Notice of Exercise is delivered to the
Company, the Holder shall have surrendered this Warrant to the Company
and the Company shall have received payment of the aggregate Exercise
Price of the shares thereby purchased (and all taxes required to be
paid by the Holder, if any, pursuant to Section 5 prior to the issuance
of such shares) by wire transfer or cashier's check drawn on a United
States bank. Certificates for shares purchased hereunder shall be
delivered to the Holder within 3 Trading Days from the delivery to the
Company of the Notice of Exercise Form by facsimile copy, surrender of
this Warrant and payment of the aggregate Exercise Price as set forth
above ("Warrant Share Delivery Date). This Warrant shall be deemed to
have been exercised on the later of the date the Notice of Exercise is
delivered to the Company by facsimile copy, the date the Exercise Price
(and all taxes required to be paid by the Holder, if any, pursuant to
Section 5 prior to the issuance of such shares) is received by the
Company, and the date the Warrant is surrendered to the Company (or
evidence of loss, theft or destruction thereof and security or
indemnity reasonably satisfactory to the Company) (the later date, the
"Exercise Date"). The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the close of business on the Exercise
Date. If the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to this Section
3(a) by the third Trading Day following the Warrant Share Delivery
Date, then the Holder will have the right to rescind such exercise. In
addition to any other rights available to the Holder, if the Company
fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise by the seventh
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Trading Day after the Warrant Share Delivery Date, and if after such
day the Holder is required by its broker to purchase (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a "Buy-In"), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (y) the amount
obtained by multiplying (A) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the
exercise at issue times (B) the price at which the sell order giving
rise to such purchase obligation was executed, and (2) at the option of
the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In
with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of
$10,000, under clause (1) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable to
the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Company.
Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.
(b) If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
(c) The Company shall not effect any exercise of
this Warrant, and the Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 3(a) or otherwise, to the
extent that after giving effect to such issuance after exercise, the
Holder (together with the Holder's affiliates), as set forth on the
applicable Notice of Exercise, would beneficially own in excess of
4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to such issuance. For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially
owned by the Holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with
respect to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be
issuable upon (A) exercise of the remaining, nonexercised portion of
this Warrant beneficially owned by the Holder or any of its affiliates
and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without
limitation, any other Warrants) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially
owned by
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the Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 3(c), beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act. To the extent that the limitation contained in this
Section 3(c) applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder) and
of which a portion of this Warrant is exercisable shall be in the sole
discretion of such Xxxxxx, and the submission of a Notice of Exercise
shall be deemed to be such Holder's determination of whether this
Warrant is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such
determination. For purposes of this Section 3(c), in determining the
number of outstanding shares of Common Stock, the Holder may rely on
the number of outstanding shares of Common Stock as reflected in (x)
the Company's most recent Form 10-Q or Form 10-K, as the case may be,
(y) a more recent public announcement by the Company or (z) any other
notice by the Company or the Company's transfer agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral
request of the Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Warrant, by the Holder or its affiliates since the date as of which
such number of outstanding shares of Common Stock was reported. The
provisions of this Section 3(c) may be waived by the Holder upon, at
the election of the Holder, not less than 61 days' prior notice to the
Company, and the provisions of this Section 3(c) shall continue to
apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver).
(d) If at any time after one year from the date
of issuance of this Warrant there is no effective Registration
Statement registering the resale of the Warrant Shares by the Holder,
this Warrant may also be exercised at such time by means of a "cashless
exercise" in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the Closing Price on the Trading Day immediately
preceding the date of such election;
(B) = the Exercise Price of the Warrants, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise
of the Warrants in accordance with the terms of this
Warrant.
(e) Subject to the provisions of this Section 3,
if after the first anniversary of the Initial Exercise Date each VWAP
(as defined below) for any twenty consecutive Trading Days (the
"Measurement Price") (such period commencing only after such
anniversary date) exceeds the then Exercise Price (as adjusted under
this Warrant) by 200% (the "Threshold Price"), then the Company may,
within three Trading Days of such period, call for cancellation of all
or any portion of this Warrant for which a Notice of Exercise
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has not yet been delivered (such right, a "Call"). To exercise this
right, the Company must deliver to the Holder an irrevocable written
notice (a "Call Notice"), indicating therein the portion of the
unexercised portion of this Warrant to which such notice applies. If
the conditions set forth below for such Call are satisfied from the
period from the date of the Call Notice through and including the Call
Date (as defined below), then any portion of this Warrant subject to
such Call Notice for which a Notice of Exercise shall not have been
received by the Company from and after the date of the Call Notice will
be cancelled at 6:30 p.m. (New York City time) on the 10th Trading Day
after the date of the Call Notice is received by the Holder (such date,
the "Call Date"). Any unexercised portion of this Warrant to which the
Call Notice does not pertain, if any, will be unaffected by such Call
Notice. In furtherance thereof, the Company covenants and agrees that
it will honor all Notices of Exercise with respect to Warrant Shares
subject to a Call Notice that are tendered from the time of delivery of
the Call Notice on the Call Date. The parties agree that any Notice of
Exercise delivered following a Call Notice shall first reduce to zero
the number of Warrant Shares subject to such Call Notice prior to
reducing the remaining Warrant Shares available for purchase under this
Warrant. For example, if (x) this Warrant then permits the Holder to
acquire 100 Warrant Shares, (y) a Call Notice pertains to 75 Warrant
Shares, and (z) prior to the Call Date the Holder tenders a Notice of
Exercise in respect of 50 Warrant Shares, then (1) on the Call Date the
right under this Warrant to acquire 25 Warrant Shares will be
automatically cancelled, (2) the Company, in the time and manner
required under this Warrant, will have issued and delivered (or be
required to issue and deliver) to the Holder 50 Warrant Shares in
respect of the exercises following receipt of the Call Notice, and (3)
the Holder may, until the Termination Date, exercise this Warrant for
cash by payment of the aggregate Exercise Price then in effect for 25
Warrant Shares (subject to adjustment as herein provided and subject to
subsequent Call Notices and the other terms and conditions of this
Warrant). Subject again to the provisions of this Section 3, the
Company may deliver subsequent Call Notices for any portion of this
Warrant for which the Holder shall not have delivered a Notice of
Exercise. Notwithstanding anything to the contrary set forth in this
Warrant, the Company may not require the cancellation of this Warrant
pursuant to this Section 3(d) (and any Call Notice will be void),
unless, from the beginning of the 20 consecutive Trading Days used to
determine whether the Common Stock has achieved the Threshold Price
through the Call Date, (i) the Company shall have honored in accordance
with the terms of this Warrant all Notices of Exercise delivered prior
to the Call Date, (ii) the Registration Statement shall be effective as
to all Warrant Shares and the prospectus thereunder available for use
by the Holder for the resale of all such Warrant Shares (and the
Company is not aware of any event or occurrence that would make it
appropriate for the Company to suspend the effectiveness of the
Registration Statement), (iii) the Warrant Shares shall be listed or
quoted for trading on the Principal Market and trading in the Common
Stock shall not have been suspended (and the Company is not then aware
of any event or occurrence that would required trading to be suspended)
and (iv) such issuance would be permitted in full without violating the
limitations set forth in Section 3(c).
"VWAP" means, for any date, the price determined by the first
of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average
price of the Common Stock for such date (or
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the nearest preceding date) on the Trading Market on which the Common
Stock is then listed or quoted as reported by Bloomberg Financial L.P.
(based on a trading day from 9:30 a.m. Eastern Time to 4:02 p.m.
Eastern Time); (b) if the Common Stock is not then listed or quoted on
a Trading Market and if prices for the Common Stock are then quoted on
the OTC Bulletin Board, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board; (c) if the Common Stock is not then listed or quoted on the OTC
Bulletin Board and if prices for the Common Stock are then reported in
the "Pink Sheets" published by the National Quotation Bureau
Incorporated (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of
the Common Stock so reported; or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Purchasers and reasonably
acceptable to the Company.
4. No Fractional Shares or Scrip. No fractional shares
or scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates
for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.
7. Transfer, Division and Combination.
(a) Subject to compliance with any applicable
securities laws and the conditions set forth in Sections 1 and 7(e)
hereof and to the provisions of Section 4.1 of the Purchase Agreement,
this Warrant and all rights hereunder are transferable, in whole or in
part (provided that if the Warrant is being transferred in part, the
portion of this Warrant being transferred shall represents the right to
purchase at least 100,000 Warrant Shares (or such lesser amount
comprising the entire number of Warrant Shares then underlying this
Warrant and subject to adjustment as provided herein), upon surrender
of this Warrant at the principal office of the Company, together with a
written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and compliance with the conditions
referenced in
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the preceding sentence, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
(b) Subject to compliance with Section 7(a), as
to any transfer which may be involved in such division or combination,
(i) this Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or
attorney, and (ii) the Company shall execute and deliver a new Warrant
or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver
at its own expense (other than transfer taxes) the new Warrant or
Warrants under this Section 7.
(d) The Company agrees to maintain, at its
aforesaid office or at the offices of a designated agent, books for the
registration and the registration of transfer of the Warrants.
(e) At the time of the surrender of this Warrant
in connection with any transfer of this Warrant, the Company will
require, as a condition of allowing such transfer (i) that the Holder
or transferee of this Warrant, as the case may be, furnish to the
Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions and reasonably acceptable to the Company) to the effect
that such transfer may be made without registration under the
Securities Act and under applicable state securities or blue sky laws,
(ii) that the holder or transferee execute and deliver to the Company
an investment letter in form and substance acceptable to the Company,
(iii) that the transferee be an "accredited investor" as defined in
Rule 501(a) promulgated under the Securities Act and (iv) such other
documents as may be reasonably requested by the Company to give effect
to the transfer and comply with applicable laws.
8. No Rights as Shareholder until Exercise. This Warrant
does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the delivery of
the Exercise Notice, the surrender of this Warrant, the payment of the aggregate
Exercise Price to the Company, the Warrant Shares so purchased shall be and be
deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the Exercise Date as determined in accordance with Section
3(a).
9. Loss, Theft, Destruction or Mutilation of Warrant.
The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
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(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or cause to be
delivered a stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant
Shares; Stock Splits, etc. The number and kind of securities purchasable upon
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the events described
in the next sentence. In the event the Company shall (i) pay a dividend in
shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in prior to the date upon which such event described in
clauses (i) through (iv) of this Section 3(a) shall become effective. Upon each
such adjustment of the kind and number of Warrant Shares or other securities of
the Company which are purchasable hereunder, the Holder shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
equal to (x) the result obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment divided by (y) the number
of Warrant Shares or other securities of the Company resulting from such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
12. Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all of its
property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
("Other Property"), to be received by or distributed to the holders of Common
Stock of the Company, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger,
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consolidation or disposition of assets by a Holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation
(if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of Warrant Shares for which
this Warrant is exercisable which shall be as nearly equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
13. Voluntary Adjustment by the Company. The Company may
at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company.
14. Notice of Adjustment. Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable upon the
exercise of this Warrant or the Exercise Price is adjusted, as herein provided,
the Company shall give notice thereof to the Holder, which notice shall state
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.
15. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution, or any right to subscribe for
or purchase any evidences of its indebtedness, any shares of stock of
any class or any other securities or property, or to receive any other
right, or
(b) there shall be any capital reorganization of
the Company, any reclassification or recapitalization of the capital
stock of the Company or any consolidation or merger of the Company
with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to,
another corporation or,
(c) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
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then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify, to the extent
known by the Company, (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, the date on which the
holders of Common Stock shall be entitled to any such dividend, distribution or
right, and the amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Xxxxxx appearing on the books of the Company and
delivered in accordance with Section 17(d).
16. Authorized Shares. The Company covenants
that during the period the Warrant is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed.
17. Miscellaneous.
(a) Jurisdiction. All questions concerning the
construction, validity, enforcement and interpretation of this Warrant
shall be determined in accordance with the provisions of the Purchase
Agreement.
(b) Restrictions. The Holder acknowledges that
the Warrant Shares acquired upon the exercise of this Warrant, if not
registered, will have restrictions upon resale imposed by state and
federal securities laws.
(c) Nonwaiver and Expenses. No course of dealing
or any delay or failure to exercise any right hereunder on the part of
Holder shall operate as a waiver of such right or otherwise prejudice
Xxxxxx's rights, powers or remedies, notwithstanding all rights
hereunder terminate on the Termination Date. If the Company willfully
and knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Holder as determined by a court
of law, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including,
10
but not limited to, reasonable attorneys' fees, including those of
appellate proceedings, incurred by Xxxxxx in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.
(d) Notices. Any notice, request or other
document required or permitted to be given or delivered to the Holder
by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
(e) Limitation of Liability. Subject to Section
3(d), no provision hereof, in the absence of any affirmative action by
Holder to exercise this Warrant or purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give
rise to any liability of Holder for the purchase price of any Common
Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being
entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under
this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law
would be adequate.
(g) Successors and Assigns. Subject to
applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(h) Amendment. This Warrant may be modified or
amended or the provisions hereof waived with the written consent of the
Company and the Holder.
(i) Severability. Wherever possible, each
provision of this Warrant shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or
the remaining provisions of this Warrant.
(j) Headings. The headings used in this Warrant
are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Warrant.
********************
11
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.
Dated: November 12, 2003
FIRST VIRTUAL COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxx
_______________________________
Name:
Title:
12
NOTICE OF EXERCISE
To: First Virtual Communications, Inc.
(1) The undersigned hereby elects to purchase ________ Warrant
Shares of First Virtual Communications, Inc. pursuant to the terms of the
attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] the cancellation of such number of Warrant Shares
as is necessary, in accordance with the formula set
forth in subsection 3(d), to exercise this Warrant
with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise
procedure set forth in subsection 3(d).
(3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is
specified below:
________________________________________
The Warrant Shares shall be delivered to the following:
________________________________________
________________________________________
________________________________________
(4) Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.
[PURCHASER]
By: ______________________________
Name:
Title:
Dated: ________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
Holder's Signature: ___________________________
Holder's Address: _____________________________
_____________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
EXHIBIT A
PURCHASERS
NAME OF PURCHASER NUMBER OF SHARES NUMBER OF WARRANTS
----------------- ---------------- ------------------
LAGUNITAS PARTNERS LP 837,989 418,994
X. Xxxxxxxxx XxXxxxx 111,732 55,866
Xxx X. Xxxxxx & Xxxxx X. Xxxxxx 111,732 55,866
Xxxxxx & McBaine International 279,330 139,665
Special Situations Fund III, L.P. 553,771 276,885
Special Situations Cayman Fund L.P. 178,911 89,455
Special Situations Technology Fund L.P. 17,039 8,519
Special Situations Technology Fund II L.P. 102,235 51,117
MicroCapital Fund L.P. 391,061 195,530
MicroCapital Fund Ltd. 167,598 83,799
Bonanza Fund 139,665 69,832
Firelake Strategic Technology Fund, L.P. 837,989 418,994
Agile Partners, LP 279,330 139,665
Behavioral Financial Fund Ltd. 782,123 391,061
Jurika Family Trust 167,598 83,799
JMK Investment Partners, L.P. 167,598 83,799
Encinal Crossover Fund 83,799 41,899
Xxxx X. Xxxxxxx XXX Rollover 200,000 100,000
Palisades Master Fund L.P. 279,330 139,665
Xxxxxx X. Xxxx 11,174 5,587
Xxxxxx Xxxx Xxxxxxxxxxxxxxx 11,174 5,587
Xxxx X. Xxxxx 11,174 5,587
Xxxxxxx X. Xx 8,380 4,190
Xxxxx X. Xxxxx 1,676 838
