EXHIBIT F
PROMISSORY NOTE AND STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 30th day of April, 1998, between SOFTBANK
Holdings Inc., (the "PURCHASER"), and those certain holders of promissory notes
and Common Stock of First Virtual Holdings Incorporated (the "COMPANY") listed
on Exhibit A hereto ( each a "SELLER" and, collectively, the "Sellers").
RECITALS
A. The Sellers hold the promissory notes of the Company (the "NOTES") with
principal amounts as set forth on Exhibit A hereto, shares of Common Stock,
par value $0.001 per share ("Common Stock"), of the Company as set forth on
Exhibit A hereto (the "SHARES" and, together with the Notes, the
"Securities"). In addition to the Shares, the Sellers hold other shares of
Common Stock and options to purchase shares of Common Stock which are not
subject to, or affected by, this Agreement.
B. The Sellers have filed legal complaints naming the Company as a defendant in
the Superior Court of the State of California for the County of San Diego
seeking collection of amounts allegedly due under the Notes.
C. The Sellers desire to sell to the Purchaser the Securities set forth
opposite each respective Seller's name in Exhibit A hereto, which Securities
are held of record and beneficially owned by such Sellers.
D. The Purchaser wishes to purchase such Securities from the Sellers.
E. Each of the Purchaser and the Sellers is familiar with, and has conducted an
independent investigation of, the Company's current business and financial
condition.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree as
follows:
SECTION 1. PURCHASE AND SALE OF SECURITIES
At the Closing (as defined in Section 2.1 hereof), on the terms and subject
to the conditions set forth in this Agreement, each Seller shall sell, convey,
transfer, assign and deliver to the Purchaser, free and clear of all liens,
encumbrances or other defects of title, the Notes and the number of Shares set
forth opposite such Seller's name in Exhibit A hereto for the aggregate purchase
price set forth opposite such Seller's name in Exhibit A hereto, and the
Purchaser shall purchase and acquire such Securities from such Seller. The
purchase price for the Securities shall be equal to the sum of the principal
amount of the Notes plus accrued interest thereon to the Closing Date (as
defined in Section 2.1) plus $0.60 per Share to be purchased hereunder.
SECTION 2. CLOSING
2.1 Closing Date. The closing of the purchase and sale of the Securities
(the "CLOSING") shall be held (i) at the offices of Xxxxxxxx & Xxxxxxxx, 000
Xxxxx Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, at 9:00 A.M., Los Angeles time, on
the first business day on which the last to be fulfilled or waived of the
conditions set forth in Section 5 hereof shall be fulfilled or waived in
accordance with this Agreement or (ii) at such other place and time and/or on
such other date as the parties may mutually agree (the date of the Closing is
hereinafter referred to as the "CLOSING DATE").
2.2 Delivery. At the Closing, (i) each Seller will deliver, or cause to be
delivered, to the Purchaser the original Notes and certificate(s) evidencing the
appropriate number of Shares and shall concurrently deliver to the Company an
executed general release (the "Release") (A) releasing the Company from any
liability or obligation in respect of any purported failure to pay principal or
accrued interest owing on the Notes when due and from all other claims,
obligations and liabilities of whatsoever kind, whether known or unknown,
whether or not concealed or hidden, and whether or not such Seller knows or
suspects such claims exist in his favor, that such Seller then has or previously
had against the Company, its subsidiaries, affiliates, directors, stockholders,
officers, employees and agents, and specifically waiving the provisions of
Section 1542 of the California Civil Code, and (B) agreeing to dismiss with
prejudice the complaints filed in the Superior Court of the State of California,
for the County of San Diego, in the matters of Next
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Century Communications Corp. v. First Virtual Holdings Incorporated, Case no.
717918, and Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, Individually, and as Trustees
for the TNKRGK Family Trust Dated 12/23/76 v. First Virtual Holdings
Incorporated, Case No. 717919 (collectively, the "Litigation") and (ii) the
Purchaser shall pay the purchase price therefor by wire transfer to a bank
account specified by such Seller or by check. In the event payment of the
purchase price is not made as required hereby, the Release shall not be
effective.
2.3 Assignment of Purchase Rights. The Purchaser may, in its sole
discretion, assign its rights to purchase the Securities hereunder, except that
it may not under any circumstances assign the right to any officer or director
of the Company or any person or entity that is the beneficial owner of 5% or
more of the outstanding shares of Common Stock as reported on the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 or, to
the Purchaser's knowledge, an affiliate or, in the case of individuals, relative
thereof, provided that the assignee shall agree in writing to assume all
Purchaser's obligations hereunder.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants as follows:
3.1 Investment Representations.
(a) The Purchaser is acquiring the Securities for its own account for
investment and not with a view to distribution.
(b) The Purchaser is an "accredited investor" as defined in Rule 501(a)
under the Securities Act of 1933 (the "Securities Act").
(c) The Purchaser has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment.
(d) The Purchaser is able to bear the economic risk of an investment in
the Securities and, at the present time, is able to afford a complete loss of
such investment.
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(e) The Purchaser understands and acknowledges that (i) the Securities
are being offered and sold to it without registration under the Securities Act
by reason of reliance upon certain exemptions therefrom and (ii) the
availability of such exemptions, depends in part on, the foregoing
representations set forth in this Section 3.1.
3.2 Due Authorization. All corporate or partnership action, as applicable,
on the part of the Purchaser necessary for the authorization of this Agreement
and the performance of all obligations of the Purchaser hereunder has been
taken.
3.3 Related Agreements. Concurrently with entering into this Agreement, the
Purchaser is entering into a Purchase Agreement providing for the purchase from
the Company of 10,000,000 shares of its Common Stock (the "Purchase Agreement")
by the Purchaser and its affiliates, subject to the terms and conditions set
forth herein, and a Loan Agreement providing, subject to the terms and
conditions set forth therein, for the extension of credit to the Company of up
to $1,500,000 (of which $500,000 is expected to be funded on or about the date
hereof) to fund operating expenditures of the Company (the "Loan Agreement"). It
is understood that nothing in this representation and warranty shall create any
express or implied obligation of the Purchaser to the Sellers with respect to
the Purchaser's performance of its obligations under the Purchase Agreement or
the Loan Agreement or constitute the Sellers third party beneficiaries thereof.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, severally but not jointly, represents and warrants as follows:
4.1 Independent Investigation. Each of the Sellers is aware of, and has
conducted an independent Investigation of, the Company's business affairs,
financial condition and prospects, and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to sell the
Securities. Without limiting the foregoing, the Seller has reviewed and is
familiar with all the Company's filings with the Securities and Exchange
Commission under the Securities Exchange Act of 1934. In entering into this
agreement, the Seller has not relied on any written or oral statement of any
nature with respect to the business, financial condition or prospects of the
Company made by the Purchaser or any other entity, including without limitation
the Company.
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4.2 Further Purchases of Company Stock by Purchaser. The Seller has been
informed by the Purchaser that the Purchaser may determine to purchase
additional outstanding shares of capital stock of the Company from other
stockholders of the Company or from the Company in the future, including through
the Related Transactions (as defined in Section 5.2 hereof). The Seller further
understands that the terms of any such additional purchases by the Purchaser
will be determined by the Purchaser and such stockholders or the Company, at a
purchase price or conversion price of $0.60 per share. The Seller also
understands that Purchaser regards the execution of this agreement as a
condition to proceeding with any additional purchases of capital stock of the
Company.
4.3 Ownership of the Securities. The Seller is the beneficial owner of the
Notes and Shares set forth opposite such Seller's name in Exhibit A hereto, and
such Securities are owned free and clear of all liens, encumbrances, charges,
security interests, claims and assessments, and are subject to no restrictions
with respect to transferability except in compliance with applicable securities
laws as set forth in the legend thereon.
4.4 Offering. So long as this Agreement remains in force, the Seller will
not offer any of the Securities for sale to any person other than the Purchaser
or enter into any discussions or negotiations with any person other than the
Purchaser in respect thereof.
4.5 Sale of Securities. The sale and delivery of the Securities to the
Purchaser pursuant to the terms hereof will vest in the Purchaser legal and
valid title to the Securities free and clear of all liens, encumbrances or other
defects of title other than (i) those created by the Purchaser, and (ii)
restrictions on sales of the Securities under applicable securities laws.
4.6 No Conflict. The execution, delivery and performance by the Seller of
this Agreement and the consummation by it of the transactions contemplated
hereby will not, with or without the giving of notice of the lapse of time, or
both, (i) violate any provision of law, rule or regulation, foreign or domestic,
(ii) violate any order, judgment or decree applicable to the Seller, (iii) in
the case of any Seller that is a corporation or trust, violate the certificate
of incorporation and by-laws, or declaration or agreement of trust, or
comparable governing document, of such Seller or (iv) violate any contract,
agreement or arrangement to which the Seller is a party or by which the Seller
is bound. No consent, approval or authorization
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of, or exemption by, or filing with, any governmental authority or third party
is required to be obtained by the Seller in connection with the execution,
delivery and performance by it of this Agreement or the taking of any other
action contemplated hereby.
4.7 Due Authorization. In the case of any Seller which is a corporation or
trust, all corporate or trust action on the part of the Seller necessary for the
authorization of this Agreement and the performance of all obligations of such
Seller hereunder has been taken.
SECTION 5. CONDITIONS TO CLOSING
5.1 Representations and Warranties. The Sellers' obligations to consummate
the sale of the Securities under this Agreement are subject to the condition
that the representations and warranties made by the Purchaser in this Agreement
shall be true and correct when made and as of the Closing Date. The Purchaser's
obligation to consummate the purchase of the Securities under this Agreement is
subject to the condition the representations and warranties made by the Sellers
in this Agreement shall be true and correct when made and as of the Closing
Date.
5.2 General Release. The Company shall have executed and delivered to the
Sellers a general release releasing the Sellers from all claims, obligations and
liabilities of whatsoever kind, whether known or unknown, whether or not
concealed or hidden, and whether or not the Company knows or suspects such
claims exist in its favor, that the Company then has or previously had against
any Seller, its subsidiaries, affiliates, directors, stockholders, officers,
employees and agents, and specifically waiving the provisions of Section 1542 of
the California Civil Code.
5.3 Series A Convertible Preferred Stock and Common Stock Transactions.
(a) The Purchaser's obligation to consummate the purchase of the
Securities under this Agreement is subject to the condition that the following
transactions (the "RELATED TRANSACTIONS") shall have been consummated: (i) the
holders of outstanding shares of Series A Convertible Preferred Stock of the
Company (the "SERIES A HOLDERS") shall have entered into a binding agreement to
sell to the Purchasers or its affiliates or designees, or granted to the
Purchaser or its
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affiliates or designees an option to purchase, at least 90% of the outstanding
shares of Series A Convertible Preferred Stock and (ii) and the Company shall
have consummated the sale to the Purchaser and its affiliates of 10,000,000
shares of its Common Stock pursuant to a Purchase Agreement, of even date
herewith (the "Purchase Agreement"), between such parties.
(b) This condition to closing shall not be deemed to create any express
or implied obligation on the part of the Purchaser to enter into any agreement
or transaction with the Series A Holders or the Company to take any action or
make any offer to induce such Series A Holders or the Company to enter into any
agreement or transaction. The Sellers understand and agree that substantial
uncertainty exists as to whether such an agreement or transaction will be
entered into. Each of the Sellers understands and agrees that failure of the
condition to closing to be satisfied will cause a failure of the essential
purpose of this agreement for Purchaser. Each of the Sellers further agrees that
failure of the Purchaser to cause this condition to closing to be satisfied, for
any reason or for no reason, shall not give rise to any claim by any Seller
against the Purchaser or any other entity, including the Company, in equity or
at law.
SECTION 6. MISCELLANEOUS
6.1 Termination. This Agreement shall terminate upon the earlier to occur of
(i) July 31, 1998, if the transactions contemplated hereby are not consummated
on or prior to such date or (ii) the date the Purchase Agreement is terminated
by any of the parties thereto. The Purchaser shall notify the Sellers promptly
following any such termination of the Purchase Agreement. In the event of such
termination, no party hereto shall have any further liability or obligation to
any other party to this Agreement pursuant to this Agreement or as a consequence
thereof, provided that nothing herein shall relieve a party for its willful
breach of this Agreement.
6.2 Modification and Waiver. No amendment or modification of the terms or
provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to or shall constitute a waiver of
any other provisions hereof. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof.
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6.3 Expenses. At the Closing, the Purchaser shall reimburse the Sellers for
the reasonable legal fees and disbursements of outside counsel for the Sellers
upon, delivery of a copy of the xxxx from such counsel, in an amount not to
exceed (a) $60,000 for services rendered in connection with the Litigation and
(b) $10,000 for services rendered in connection with the negotiation of this
Agreement, and any related agreements, instruments or pleadings, and the
consummation of the transactions contemplated hereby. Except as set forth in the
immediately preceding sentence, each of the parties hereto shall bear its or his
own expenses.
6.4 Entire Agreement. This Agreement sets forth the entire understanding of
the parties with respect to the subject matter hereof. Any previous agreement or
understandings between the parties regarding the subject matter hereof are
merged into and superseded by this Agreement.
6.5 Severability. In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
6.6 No Implied Rights. Nothing herein express or implied is intended to or
shall be construed to confer upon or give to any person, firm, corporation or
legal entity, other than the parties hereto, any interest, rights, remedies or
other benefits with respect to or in connection with any agreement or provision
contained herein or contemplated hereby; provided, however, that the
representations, warranties, covenants and agreements of the Purchaser and the
Sellers set forth in Sections 3.1, 4.1, 4.2 and 5.2(b) shall inure to the
benefit of the Company and the Company shall be entitled to rely on such
representations, warranties and agreements.
6.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
6.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
6.9 Successors and Assigns. The provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
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6.10 Notices. All notices and other communications under this Agreement
shall be in writing, and shall be deemed to have been duly given on the date of
delivery if delivered personally, on the date transmitted by telecopy or on the
second day after mailing if mailed to the party to whom notice is to be given by
first class mail, registered or certified, postage prepaid, and addressed as
follows (until any such address is changed by notice duly given):
(a) if to the Purchaser, to:
SOFTBANK Holdings Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
(b) if to a Seller, at such Seller's address as set forth on the
signature page hereof.
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IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
date first hereinabove set forth.
SELLERS PURCHASER
NEXT CENTURY SOFTBANK HOLDINGS INC.
COMMUNICATIONS CORP.
By: /s/ Xxx Xxxxx By: /s/ Xxxxxx Xxxxxx
--------------------------------------- ------------------------------
Title: Xxx Xxxxx, President Title: Vice Chairman
Address: 0000 Xxx Xxxxxxxxx Address: 00 Xxxxxxx Xxxx,
0xx Xxxxx Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxxx 00000
TNKRGK FAMILY TRUST T/D 12/23/76
By:/s/ Xxxxxx X. Xxxxxx, Attorney-in-Fact
---------------------------------------
Title: Xxxxxx X. Xxxxxx, Trustee
Address: 0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
XXXXX X. XXXXXX T/D 1/27/87
By:/s/ Xxxxxx X. Xxxxxx, Attorney-in-Fact
---------------------------------------
Title: Xxxxx X. Xxxxxx, Trustee
Address: 0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
XXXXX X. XXXXXX T/D 1/27/87
By:/s/ Xxxxxx X. Xxxxxx, Attorney-in-Fact
---------------------------------------
Title: Xxxxx X. Xxxxxx, Trustee
Address: 0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
XXXXXX X. XXXXXX T/D 1/27/87
By:/s/ Xxxxxx X. Xxxxxx, Attorney-in-Fact
---------------------------------------
Title: Xxxxxx X. Xxxxxx, Trustee
Address: 0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
/s/ Xxx X. Xxxxx
------------------------------------------
Xxx X. Xxxxx
Address: 0000 Xxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
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EXHIBIT A
SCHEDULE OF SELLERS
PRINCIPAL ACCRUED AGGREGATE
AMOUNT OF INTEREST ON NO. OF PURCHASE PRICE
NAME NOTES NOTES SHARES OF SECURITIES*
Next Century $800,000 To be 450,000 $1,070,000.00
Communications calculated
Corp. as of the
Closing
TNKRGK FAMILY TRUST T/D $400,000 To be 156,250 $493,750.00
12/23/76 calculated
as of the
Closing
XXXXX X. XXXXXX T/D -- -- 156,250 $93,750.00
1/27/87
XXXXX X. XXXXXX T/D -- -- 156,250 $93,750.00
1/27/87
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* There shall be added to the aggregate purchase price set forth in this
Exhibit A an amount equal to accrued interest on the Notes determined as of
the Closing.
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XXXXXX X. XXXXXX T/D -- -- 156,250 $93,750.00
1/27/87
XXX X. XXXXX -- -- 125,000 $75,000.00
TOTAL $1,200,000 To be 1,200,000 $1,920,000.00
calculated
as of the
Closing
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