EXHIBIT P
PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of September 4, 1998 (the
"Agreement"), is entered into by and among (i) First Virtual Holdings
Incorporated, a Delaware corporation (the "Company"), and (ii) SOFTBANK
Technology Ventures IV L.P., a Delaware limited partnership and SOFTBANK
Holdings Inc., a Delaware corporation (each a "Purchaser" and, collectively, the
"Purchasers").
WHEREAS, the Company and the Purchasers desire that the Purchasers
increase their ownership of the Company through the purchase of an aggregate of
$4,000,000 in shares of Common Stock (the "Shares") from the Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale
(a) Upon the terms and subject to the conditions of this Agreement,
each Purchaser, severally and not jointly, will purchase, and the Company will
issue and sell to each Purchaser, the number of Shares equal to the dollar
amount set forth opposite such Purchaser's name on Exhibit A hereto divided by
the closing price of the Company's Common Stock as quoted on the Nasdaq National
Market System on September 4, 1998, rounded to the nearest whole share. The
consummation of such purchase and sale (the "Closing") shall occur following the
satisfaction or waiver of the conditions set forth in Sections 5 and 6 hereto,
at the Company offices at 0000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxx,
XX 00000, or at such time and date as the Purchasers and the Company mutually
agree (the "Closing Date").
(b) At the Closing, the Company shall deliver to its transfer agent,
American Stock Transfer & Trust Company, irrevocable written instructions to
issue to each Purchaser a stock certificate representing the number of Shares to
be purchased by such Purchaser as determined in 1(a) above, against payment by
each Purchaser to the Company by wire transfer of the purchase price therefor in
immediately available funds as set forth on Exhibit A.
2. Representations and Warranties of the Company
The Company represents and warrants to the Purchasers as follows:
(a) Corporate Existence. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all power necessary to carry on its business as now being conducted. The
Company is duly qualified to do business and is in good standing in California
and Texas and there is no other jurisdiction in which the failure to so qualify
would have a material adverse effect on the business, financial condition or
results of operations of the Company (a "Material Adverse Effect").
(b) Execution, Delivery and Performance. The Company has the corporate
power and authority to execute, deliver and perform its obligations under this
Agreement. The Board of Directors of the Company has unanimously approved this
Agreement and the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms.
(c) Capitalization. At the date hereof and as of the Closing, the
authorized capitalization of the Company consists and will consist of 40,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock. As of August 31,
1998, the Company had 31,420,717 shares of Common Stock issued and outstanding
and 5,639,471 shares of Common Stock reserved for issuance upon exercise of
outstanding stock options and warrants, and a sufficient number of shares
reserved for issuance pursuant to the Company's employee stock purchase plans.
At the date hereof (i) the Company does not have outstanding any other capital
stock, or options or warrants for or securities convertible into or exchangeable
for any shares of capital stock, and (ii) no person has any right to subscribe
for or to purchase any stock or options for or securities convertible into or
exchangeable for any shares of capital stock.
(d) Shares. All outstanding shares of the Company's capital stock have
been duly and validly authorized and issued and are fully paid and
non-assessable. The Shares when issued and delivered in accordance with the
terms of this Agreement, will be duly and validly authorized and issued and will
be fully paid and non-assessable.
(e) SEC Documents. (i) The Company has filed all forms, reports and
documents required to be filed by it with the Securities and Exchange Commission
("SEC") since December 31, 1996 (collectively, together with the Company's
Registration Statement on Form S-1 (File No. 333-14573) in the form in which it
became effective, the "'Company Reports"). As of their respective dates, the
Company Reports and any such reports, forms and other documents filed by the
Company with the SEC after the date of this Agreement and before the Closing (i)
complied, or will comply, as to form in all material respects with the
applicable requirements of the Securities Act of 1933, the Securities Exchange
Act of 1934, and the rules and regulations thereunder and (ii) did not, or will
not, contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
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(ii) Each of the balance sheets of the Company included in or
incorporated by reference into the Company Reports (including the related notes
and schedules) fairly presents the financial position of the Company as of its
date, and each of the statements of income, retained earnings and cash flows of
the Company included in or incorporated by reference into the Company Reports
(including any related notes and schedules) fairly presents the results of
operations, retained earnings or cash flows, as the case may be, of the Company
for the periods set forth therein (subject, in the case of unaudited statements,
to normal year-end audit adjustments which would not be material in amount or
effect), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. The Company does not have any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on, or reserved against in, a balance sheet of the
Company or described in the notes thereto, under generally accepted accounting
principles consistently applied, except for (i) liabilities or obligations that
were so reserved on, or reflected in (including the notes to), the balance sheet
of the Company as of December 31, 1997 or June 30, 1998; (ii) liabilities or
obligations arising in the ordinary course of business since December 31, 1997
and (iii) liabilities or obligations which would not, individually or in the
aggregate, have a Material Adverse Effect.
(f) Absence of Certain Changes. Except as set forth in Schedule 2(f)
hereto, since June 30, 1998, there has not been (i) any material adverse change
in the Company's business, financial condition or results of operations or (ii)
any material change in the Company's accounting principles, practices or
methods.
(g) Taxes. (i) The Company has filed all material tax returns and
reports required to be filed by it, or requests for extensions to file such
returns or reports have been timely filed and granted and have not expired, and
all tax returns and reports are complete and accurate in all respects, except to
the extent that such failures to file, have extensions granted that remain in
effect or be complete and accurate in all respects, as applicable, individually
or in the aggregate, would not have a Material Adverse Effect. The Company has
paid all taxes shown as due on such tax returns and reports. The most recent
financial statements contained in the Company Reports reflect an adequate
reserve for all taxes payable by the Company for all taxable periods and
portions thereof accrued through the date of such financial statements, and no
deficiencies for any taxes have been proposed, asserted or assessed against the
Company that are not adequately reserved for. No tax audits of the Company by
any federal, state, local or foreign tax authority are currently being conducted
or, to the Company's knowledge, pending. No requests for waivers of the time to
assess any taxes against the Company or any of its subsidiaries have been
granted or are pending.
(ii) As used in this Section 2(g), "taxes" shall include all
Federal, state, local and foreign income, franchise, property, sales, use,
excise and other
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taxes, including obligations for withholding taxes from payments due or made to
any other person and any interest, penalties or additions to tax.
(h) Intellectual Property. The Company owns, licenses or otherwise has
the right to use all patents, trademarks, service marks, trade names and other
intellectual property necessary to enable it to carry on its business as now
conducted without, to the best of its knowledge, any conflict with or
infringement of the rights of others.
(i) No Conflict. The execution and delivery of this Agreement and the
performance of the Company's obligations hereunder will not (a) violate or be in
conflict with (i) any provision of law, (ii) any order, rule or regulation of
any court or other governmental agency or authority binding on the Company or
(iii) any provision of the Certificate of Incorporation or By-Laws of the
Company, (b) violate, be in conflict with, result in a breach of, or constitute
(with or without notice or lapse of time or both) a default under any material
indenture, agreement, lease or other agreement or instrument to which the
Company is a party or by which it or any of its properties is bound, or (c)
result in the creation or imposition of any lien, charge or encumbrance upon any
of its properties or assets.
(j) Litigation. Except as disclosed in the Company Reports or as set
forth in Schedule 2(j), there is no litigation or proceeding pending or, to the
best of the Company's knowledge, threatened against the Company or its
properties or business which is likely to have a Material Adverse Effect or
which seeks to prevent the consummation of the transactions contemplated by this
Agreement.
(k) Employment Agreements. Except as listed in Schedule 2(k) (copies of
which have heretofore been provided to the Purchasers), the Company is not a
party to any employment agreement with any of its employees.
(l) Employee Benefit Plans. Except for plans for which copies have
heretofore been provided to the Purchasers, the Company does not maintain an
employee benefit plan that is subject to Title IV of the Employee Retirement
Income Security Act of 1974, as amended. There is no litigation or proceeding
pending or, to the best of the Company's knowledge, threatened against any such
plan or any administrator or fiduciary thereof.
(m) Consents, etc. No consent, approval or authorization of or
declaration or filing with any governmental authority or other persons or
entities on the part of the Company is required in connection with the execution
or delivery of this Agreement or the consummation of the transactions
contemplated hereby, except as otherwise contemplated by this Agreement.
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(n) Finders. There is no investment banker, broker, finder, consultant
or similar intermediary that has been retained by, or is authorized to act on
behalf of the Company who is entitled to any fee or commission upon consummation
of the transactions contemplated by this Agreement.
3. Representations and Warranties of the Purchasers
Each Purchaser, severally but not jointly, represents and warrants to
the Company as follows:
(a) Investment Representations.
(i) Such Purchaser is acquiring the Shares for its own account
for investment and not with a view to distribution.
(ii) Such Purchaser is an "accredited investor" as defined in Rule
501(a) under the Securities Act of 1933 (the "Securities Act").
(iii) Such 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 Shares, and has so
evaluated the merits and risks of such investment.
(iv) Such Purchaser is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete
loss of such investment.
(v) Such Purchaser understands and acknowledges that (i) the
Shares 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(a).
(b) Execution, Delivery and Performance. Such Purchaser has the
corporate or partnership, as applicable, power and authority to execute, deliver
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by such Purchaser and constitutes a valid and binding
agreement of such Purchaser enforceable against it in accordance with its terms.
(c) Consents, etc. No consent, approval or authorization of or
declaration or filing with any governmental authority or other persons or
entities on the
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part of such Purchaser is required in connection with the execution or delivery
of this Agreement or the consummation of the transactions contemplated hereby.
(d) Finders. There is no investment banker, broker, finder, consultant
or similar intermediary that has been retained by, or is authorized to act on
behalf of, such Purchaser who is entitled to any fee or commission upon
consummation of the transactions contemplated by this Agreement.
4. Covenants
(a) Access. Upon reasonable notice, the Company shall afford
Purchasers' officers, employees, counsel, accountants and other authorized
representatives access, during normal business hours throughout the period prior
to the Closing Date, to its properties, books, contracts and records and, during
such period, the Company shall (and shall cause each of its subsidiaries to)
furnish promptly to Purchasers all information concerning its business,
properties and personnel as the Purchasers or their representatives may
reasonably request. The Purchasers shall not, and each of them shall cause its
representatives not to, use any information obtained pursuant to this paragraph
for any purpose unrelated to the consummation of the transactions contemplated
by this Agreement.
(b) Publicity. The Company and the Purchasers shall consult with each
other prior to issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and prior to making any
filings with any federal or state governmental or regulatory agency or any
self-regulatory organization with respect thereto.
(c) Fulfillment of Conditions. Each of the Company and each Purchaser
shall use reasonable efforts to perform, comply with and fulfill all
obligations, covenants and conditions required by this Agreement to be
performed, complied with or fulfilled on its part prior to or at the Closing
Date.
(d) Further Assurances. The Company shall use its reasonable efforts at
any time and from time to time prior to, at and after the Closing to execute and
deliver to the Purchasers such further documents and instruments and to take all
such further actions as the Purchasers reasonably may request in order to convey
and transfer the Shares to the Purchasers.
5. Conditions Precedent to Obligations of the Purchasers
The Purchasers' obligations under this Agreement are subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions:
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(a) No preliminary or permanent injunction or other binding order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, shall be in
effect which shall have the effect of preventing the consummation of the
transactions contemplated by this Agreement; provided, however, that the parties
hereto shall use their best efforts to seek to obtain the removal of such
injunction, order, decree or ruling.
(b) All representations and warranties of the Company contained in this
Agreement shall be true in all material respects at and as of the Closing Date
as though made at such time (except where such representations and warranties
speak as of an earlier date), and the Company shall have performed and complied
in all material respects with all covenants, obligations and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date.
(c) All corporate and other proceedings required to carry out the
transactions contemplated by this Agreement and all instruments and other
documents relating to such transactions shall be reasonably satisfactory in form
and substance to Xxxxxxxx & Xxxxxxxx, counsel to the Purchasers, and the
Purchasers shall have been furnished with such instruments, documents and
opinions as such counsel shall have reasonably requested.
6. Conditions Precedent to Obligations of the Company
The obligations of the Company under this Agreement are subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) No preliminary or permanent injunction or other binding order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, shall be in
effect which shall have the effect of preventing the consummation of the
transactions contemplated by this Agreement; provided, however, that the parties
hereto shall use their best efforts to seek to obtain the removal of such
injunction, order, decree or ruling.
(b) All representations and warranties of the Purchasers contained in
this Agreement shall be true in all material respects at and as of the Closing
Date as though made at such time, and the Purchasers shall have performed and
complied in all material respects with all covenants, obligations and conditions
required by this Agreement to be performed or complied with by them prior to or
on the Closing Date.
(c) All corporate and other proceedings required to carry out the
transactions contemplated by this Agreement and all instruments and other
documents relating to such transactions shall be reasonably satisfactory in form
and substance to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel to the Company, and
the Company shall have
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been furnished with such instruments and documents as such counsel shall have
reasonably requested.
7. Indemnification
Each of the Company and each Purchaser (severally but not jointly)(an
"Indemnifying Party") covenants and agrees to indemnify and hold the other (the
"Indemnified Party") harmless from and against, and to reimburse each
Indemnified Party for, any claim for any losses, damages, liabilities or
expenses, including reasonable counsel fees (collectively "Damages") incurred by
such Indemnified Party by reason of or arising from (i) any misrepresentation or
breach of any representation or warranty of such Indemnifying Party contained in
this Agreement or in any instrument delivered hereunder or (ii) any failure by
such Indemnifying Party to perform any obligation or covenant required to be
performed by it under any provision of this Agreement.
The indemnification obligation hereunder shall not apply to any claim
until the aggregate of all such claims against an Indemnifying Party under this
Agreement reaches $200,000, in which event such Indemnifying Party's indemnity
obligation shall apply to the total amount. The aggregate liability of the
Company, on the one hand, and the aggregate liability of the Purchasers, on the
other hand, for indemnity hereunder shall not exceed $4,000,000.
8. Termination
(a) This Agreement may be terminated by action of the Purchasers,
acting jointly, or the Company if a United States federal or state court of
competent jurisdiction or United States federal or state governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable; provided that the party seeking to terminate this Agreement
shall have used all reasonable efforts to remove such injunction, order or
decree.
(b) This Agreement may be terminated at any time prior to the Closing
by action of the Board of Directors of the Company, if there has been a material
breach by any Purchaser of any representation, warranty, covenant or agreement
made by it in this Agreement.
(c) This Agreement may be terminated at any time prior to the Closing
by the Purchasers, acting jointly, if there has been a material breach by the
Company of any representation, warranty, covenant or agreement made by it in
this Agreement which
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breach has not been cured within 15 days of delivery of notice thereof to the
Company.
(d) In the event of termination of this Agreement pursuant to this
Section 8, all obligations of the parties hereto shall terminate; provided that
in the event of termination of this Agreement pursuant to Sections 8(b) or 8(c),
nothing herein shall relieve a party from liability for any willful breach of
this Agreement.
9. Miscellaneous
(a) Survival. All representations, warranties, covenants and agreements
made herein shall survive for two years after the Closing Date and shall
continue in full force and effect after delivery of and payment for the Shares.
No claim on account of any breach of any representation, warranty, covenant or
agreement made herein, or for indemnification in respect thereof, may be
asserted unless written notice of such breach has been given to the party
against whom such claim is asserted prior to such second anniversary.
(b) 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.
(c) 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.
(d) Severability. In case any provision in this Agreement (including
the Exhibits and Schedules hereto) 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.
(e) Notices. All notices, consents or other communications shall be in
writing, and shall be deemed to have been duly given and delivered when
delivered by hand, or when mailed by registered or certified mail, return
receipt requested, postage prepaid, or when received via telecopy, telex or
other electronic transmission, in all cases addressed to the party for whom
intended at its address set forth below:
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If to the Purchasers:
At the address set forth on Exhibit A hereto.
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:
First Virtual Holdings Incorporated
0000 Xxxxxxxx Xxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone : (000) 000-0000
Telecopier: (000) 000-0000
Attention : Xxxxx X. Xxxxxxxx
President
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone : (000) 000-0000
Telecopier: (000) 000-0000
Attention : Xxxx X. Xxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
or such other address as a party shall have designated by notice in writing to
the other party given in the manner provided by this Section.
(f) 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 and their affiliates, any
interest, rights, remedies or other benefits with respect to or in connection
with any agreement or provision contained herein or contemplated hereby.
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(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
(h) 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.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
FIRST VIRTUAL HOLDINGS INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
SOFTBANK TECHNOLOGY VENTURES IV L.P.
By: Its General Partner
STV IV LLC
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
SOFTBANK TECHNOLOGY ADVISORS FUND, L.P.
By: Its General Partner
STV IV LLC
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: Executive Managing Director
SOFTBANK HOLDINGS INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice Chairman
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EXHIBIT A
SCHEDULE OF PURCHASERS
DOLLAR AMOUNT OF SHARES OF
NAME COMMON STOCK PURCHASED
SOFTBANK Holdings Inc. $2,000,000
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Vice Chairman
SOFTBANK Technology Ventures IV L.P. $1,962,399.56
000 Xxxx Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000)000-0000
Attention: Xxxx Xxxxxxxx,
Executive Managing Director
SOFTBANK Technology Advisors Fund, L.P. $37,600.44
000 Xxxx Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
TOTAL $4,000,000
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