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EXHIBIT 2.2
EXHIBIT B
FIRST VIRTUAL HOLDINGS INCORPORATED
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("AGREEMENT") is made as of December
15, 1998, between First Virtual Holdings Incorporated ("FIRST VIRTUAL"), and the
former Members of Distributed Bits LLC ("DBITS") listed on EXHIBIT A hereto (the
"STOCKHOLDERS"), pursuant to that certain Agreement and Plan of Reorganization
dated November 18, 1998 by and among First Virtual, DB Acquisition Corp., DBits,
Xxxxx Xxxxxxx, DBI LLC and Chase Manhattan Bank and Trust Company, National
Association (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) "MATERIAL EVENT" means the happening of any event during the
period that the registration statement described in Section 3 hereof is required
to be effective as a result of which, in the judgment of First Virtual, such
registration statement or the related prospectus contains or may contain any
untrue statement of a material fact or omits or may omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(d) "REGISTRABLE SECURITIES" means the Merger Shares and the Warrant
Shares held by the Stockholders and 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 Registrable 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 Stockholder pursuant to Rule 144
under the Securities Act in a single three (3) month period.
(e) "SEC" means the Securities and Exchange Commission.
(f) "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
(g) "SIX MONTH ANNIVERSARY" means the date six months from the
Closing Date of the Reorganization Agreement.
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(h) "WARRANT SHARES" means 500,000 shares of First Virtual Common
Stock issuable upon exercise of the Merger Warrants.
Terms not otherwise defined herein have the meanings given to them in
the Reorganization Agreement.
2. PIGGYBACK REGISTRATIONS. First Virtual shall notify all Stockholders
in writing at least thirty (30) days prior to the filing of any registration
statement under the Securities Act following the Closing Date for purposes of a
public offering of Common Stock 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
Stockholder desiring to include in any such registration statement all or any
part of the Registrable Securities held by such Stockholder shall, within
fifteen (15) days after the receipt of the above-described notice from First
Virtual, so notify First Virtual in writing. Such notice shall state the
intended method of disposition of the Registrable Securities by such
Stockholder. First Virtual agrees to include in any such registration statement
such shares of Registrable Securities for which it has received written requests
to register such shares by the Stockholders thereof within fifteen (15) days
after the receipt of written notice from First Virtual, provided that the
Stockholders in the aggregate may seek registration of a maximum of 200,000 and
100,000 of the Merger Shares, respectively, in the first and second registration
statements filed following the Closing Date and not in any subsequent
registration statement except as provided in Section 3 below. In the event that
the Stockholders request registration of more than the maximum number of Merger
Shares in either of the first two registration statements, First Virtual shall
reduce the number of shares to be registered by each Stockholder on a pro rata
basis, based on the number of shares of Merger Shares held by each Stockholder,
to reduce the aggregate number of Merger Shares registered to 200,000 and
100,000, respectively.
(a) Underwriting. If the registration statements under which First
Virtual gives notice under this Section 2 are for an underwritten offering,
First Virtual shall so advise the Stockholders. In such event, the right of any
such Stockholder to be included in a registration pursuant to this Section 2
shall be conditioned upon such Stockholder's participation in such underwriting
and the inclusion of such Stockholder's Registrable Securities in the
underwriting to the extent provided herein. All 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 2 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 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 other stockholder of record of First Virtual
is also so reduced on a pro rata basis based on the number of shares of First
Virtual Common Stock held at the time notice of the registration is delivered.
(b) Right to Terminate Registration. First Virtual shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2 prior to the effectiveness of such
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registration whether or not any 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.
3. FORM S-3 REGISTRATION. If as of the Six Month Anniversary fewer than
300,000 of the Registrable Securities have been included in Piggyback
Registrations pursuant to Section 2, First Virtual shall prepare and file with
the SEC, and use its reasonable best efforts to have declared effective within
60 days of the Six Month Anniversary, a Registration Statement on Form S-3
providing for the resale by the Stockholders of a number of shares of
Registrable Securities equal to the difference between 300,000 and the number of
shares registered pursuant to Section 2; provided, that First Virtual is
eligible to use Form S-3 at such time pursuant to applicable laws and
regulations and provided further that the Stockholders shall provide all such
information and materials relating to the 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 and shall
remain effective for a period ending on the earlier of six months or the date
when all of the remaining unsold Registrable Securities may be sold in a
three-month period pursuant to Rule 144.
4. POSTPONEMENT OF REGISTRATION.
(a) Registration. Notwithstanding Section 3 above, First Virtual
shall be entitled to postpone the declaration of effectiveness of any Form S-3
prepared and filed pursuant to Section 3 for a reasonable period of time, but
not in excess of 90 calendar days after the applicable deadline, if the Board of
Directors of First Virtual determines in good faith that there exists a Material
Event.
(b) Material Event. The Stockholders agree that, upon receipt of any
notice from First Virtual of the happening of a Material Event, the Stockholders
will forthwith discontinue disposition of the Registrable Securities pursuant to
any Form S-3 described in Section 3 until the Stockholders' receipt of copies of
supplemented or amended prospectuses prepared by First Virtual (which First
Virtual will use its reasonable best efforts to prepare and file promptly), and,
if so directed by First Virtual, the Stockholders will deliver to First Virtual
all copies in their possession, other than permanent file copies then in the
Stockholders' possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In no event shall First Virtual
delay causing to be effective a supplement or post-effective amendment to any
Form S-3 pursuant to Section 3 or the related prospectus, for more than 90
consecutive days or 180 days during any 365 consecutive calendar day period.
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,
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(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 Registrable Securities); (iii) furnish to the
Stockholders such number of copies of any prospectus (including any preliminary
prospectus and any amended or supplemented prospectus) as the 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 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
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
Stockholders a reasonable number of copies of any supplements to or amendments
of such prospectus; (vii) notify the 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 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
Stockholders shall be responsible for all underwriting discounts and commissions
and transfer taxes, as well as any other expenses incurred by the Stockholders.
7. INDEMNIFICATION. In the event of any offering registered pursuant to
this Agreement:
(a) First Virtual will indemnify each 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
misleading, or any violation by First Virtual of the Securities Act, in
connection with any such
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registration, and will reimburse such 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 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 Stockholder to a purchaser of
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 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 Stockholder and
will reimburse First Virtual, the remaining 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 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 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.
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(d) The obligations of First Virtual and the 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 Stockholders only to (i) a subsidiary, parent or affiliate of a Stockholder
which is a corporation, (ii) as a distribution made by a 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 (iii) by a Stockholder which is an individual to a member of
Stockholder's immediate family or a trust established for the benefit of
Stockholder or members of its immediate family; provided, however, that upon the
death of any Stockholder which is an individual, the rights to cause First
Virtual to register Registrable Securities pursuant to this Agreement shall
inure to such Stockholder's devisee, legatee or other designee and provided
further that the rights set forth in Sections 2 and 3 hereof shall be
transferable only to persons acquiring the lesser of all of the Registrable
Securities of any Stockholder or 100,000 shares of Registrable 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 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.
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, at the following addresses: (a) if to the
Stockholders, at the 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, facsimile no. (000) 000-0000.
12. GOVERNING LAW; INTERPRETATION. This Agreement shall be construed in
accordance 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.
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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.
[Signature Pages Follow]
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IN WITNESS WHEREOF, First Virtual and the Stockholders have caused this
Agreement to be executed as of the date first above written.
FIRST VIRTUAL HOLDINGS INCORPORATED
By ____________________________________
Name: Xxxxx X. Xxxxxxxx
Title: President
STOCKHOLDERS
DBI L.L.C.
By ____________________________________
Name:
Title:
_______________________________________
Xxxxx Xxxxxxx
ILLINOIS DEVELOPMENT FINANCE AUTHORITY
By ____________________________________
Name:
Title:
_______________________________________
Xxxx Xxxxxxxx
_______________________________________
Xxxxxxx X. Xxxxx
_______________________________________
Xxxxxxxx Xxxxxxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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_______________________________________
Xxxxx Xxxxxx
_______________________________________
Xxxxxxx Xxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT A
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No. of Registrable
Stockholders No. of Registrable Warrant Shares
Merger Shares ------------------------------------
$6.00 Warrants $8.00 Warrants
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DBI, L.L.C.
c/o Xxxxx Xxxxxxxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx
0000
Xxxxxxx, XX 00000
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Xxxxx Xxxxxxx
0000 X. Xxxxxxx
Xxxxxxx, XX 00000
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Illinois Development Finance
Authority
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
----------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
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Xxxxxxx X. Xxxxx
000 Xxxxxx Xxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxxx
000 Xxxxx Xxx
Xxxxxxx, XX 00000
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Xxxxx Xxxxxx
000 Xxxxxxxxx Xx.
Xxxxxxxxxxxx, XX 00000-0000
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Xxxxxxx Xxxxx
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