1
EXHIBIT 2.4
CONVERSION AGREEMENT
THIS CONVERSION AGREEMENT (the "Agreement") is made and entered into as
of April 30, 1998, by and between First Virtual Holdings Incorporated, a
Delaware corporation (the "Company"), on the one hand, and SOFTBANK Technology
Ventures IV L.P., a Delaware limited partnership and SOFTBANK Holdings Inc., a
Delaware corporation (the "Purchasers"), on the other hand.
RECITALS
WHEREAS, on the date hereof, the Company and the Purchasers are entering
into a Purchase Agreement (the "Purchase Agreement"), pursuant to which the
Purchasers are acquiring 10 million shares of the Company's Common Stock, $0.001
par value (the "Common Stock").
WHEREAS, the Purchase Agreement contemplates that one or more of the
Purchasers shall enter into an agreement to purchase promissory notes with an
aggregate principal amount of $1.2 million held by persons affiliated with
Xxxxxx X. Xxxxxx and Next Century Communications Corp. (the "Notes") and an
agreement to purchase, or to acquire options to purchase, up to 655 shares of
the Company's Series A Preferred Stock (the "Preferred Shares").
WHEREAS, the Company and the Purchasers wish to provide for conversion
of all Notes and Preferred Shares acquired by the Purchasers into Common Stock
of the Company.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:
ARTICLE I
CONVERSION OF THE SHARES
1.1 CONVERSION OF NOTES. At such time as the Purchasers acquire any of
the Notes and without further action by any of the Purchasers or the Company,
such Notes shall be cancelled and all amounts owing under such Notes shall be
converted into a number of shares of Common Stock of the Company (the
"Conversion Shares") equal to the ratio obtained by dividing (i) the principal
amount of, and accrued but unpaid interest owing on, such Notes as of the date
of conversion, by (ii) $0.60 (subject to adjustment in the event of stock
splits, stock dividends, recapitalizations and similar events). The Purchasers
shall tender such Notes to the Company for cancellation as soon as reasonably
practicable, and the Company shall arrange to have stock certificates
representing the Conversion Shares issued and delivered to the Purchaser as soon
as reasonably practicable thereafter.
1.2 CONVERSION OF PREFERRED SHARES. As soon as reasonably practical
after acquiring any Preferred Shares, the Purchaser acquiring such Preferred
Shares shall tender the stock certificates representing such Preferred Shares to
the Company for conversion. Such Preferred Shares shall be converted into shares
of the Company's Common Stock in accordance with the Company's Certificate
2
of Incorporation and Certificate of Designation of Series A Preferred Stock (the
"Certificate of Designation"); provided however that, notwithstanding anything
to the contrary in the Certificate of Designation, (i) the term "Conversion
Price" as used in the Certificate of Designation shall mean $0.60, subject to
adjustment in the event of stock splits, stock dividends, recapitalizations and
similar events and (ii) the number of shares of Common Stock issuable upon
conversion of each share of Series A Preferred Stock shall be equal to the
quotient obtained by dividing (A) $5,458 by (B) the Conversion Price, rounded
down to the nearest whole share. The Company and the Purchasers hereby waive the
application of any provision of the Certificate of Designation contrary to the
foregoing sentence. The Company shall arrange to have stock certificates
representing the Conversion Shares issued and delivered to the Purchaser as soon
as reasonably practicable after such conversion.
ARTICLE II
MISCELLANEOUS
2.1 AMENDMENTS, WAIVERS AND CONSENTS. Any provision in this Agreement to
the contrary notwithstanding, changes in or additions to this Agreement may be
made, and compliance with any covenant or provision herein or therein set forth
may be omitted or waived, upon the written consent of the Company and the
Purchasers. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
2.2 ADDRESSES FOR NOTICES, ETC. Any notices and other communications
required or permitted under this Agreement shall be effective if in writing and
delivered personally or sent by telecopier, Federal Express or registered or
certified mail, postage prepaid, addressed as follows:
If to the Purchasers, to: SOFTBANK Holdings Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Vice Chairman
with a copy to: Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to the Company, to: First Virtual Holdings Incorporated
00000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
-2-
3
Telecopier: (000) 000-0000
Attention: Xxx X. Xxxxx
Chairman of the Board
and Chief Executive Officer
with a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) two business days after being sent, if sent by Federal Express or other
commercial overnight delivery service, (c) one business day after being sent, if
sent by telecopier with confirmation of good transmission and receipt, and (d)
three business days after being sent, if sent by registered or certified mail.
Each of the parties hereto shall be entitled to specify another address by
giving notice as aforesaid to each of the other parties hereto.
2.3 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Company and the Purchasers and their respective
successors and assigns, except that no party shall have the right to assign its
rights hereunder or any interest herein without the prior written consent of the
other parties.
2.4 PRIOR AGREEMENTS. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the subject matter hereof.
2.5 SEVERABILITY. The invalidity or unenforceability of any provision
herein shall in no way affect the validity or enforceability of any other
provision.
2.6 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without reference to
conflicts of law principles.
2.7 HEADINGS. Article, Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
2.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
2.9 FURTHER ASSURANCES. From and after the date of this Agreement, each
of the parties hereto shall execute and deliver such instruments, documents and
other writings as may be necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.
-3-
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
COMPANY: FIRST VIRTUAL HOLDINGS INCORPORATED
By: /s/ XXX X. XXXXX
-------------------------------------
Name: Xxx X. Xxxxx
Title: Chairman & CEO
PURCHASERS: SOFTBANK TECHNOLOGY VENTURES IV L.P.
By: STV IV LLC, its General Partner
By: /s/ XXXXXXX XXXX
-------------------------------------
Name: Xxxxxxx Xxxx
Title: Managing Director
SOFTBANK HOLDINGS INC.
By: /s/ XXXXXX XXXXXX
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice Chairman
-4-
