1
EXHIBIT 2.3
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION
OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE CORPORATION
THAT SUCH REGISTRATION IS NOT REQUIRED.
FIRST VIRTUAL HOLDINGS INCORPORATED
CONVERTIBLE PROMISSORY NOTE
NOTE NO. 1998A-___
$___________ __________, 1998
San Diego, California
FOR VALUE RECEIVED, First Virtual Holdings Incorporated, a Delaware
corporation (the "COMPANY"), promises to pay to SOFTBANK Holdings, Inc.
("SOFTBANK HOLDINGS" or the "HOLDER"), or its registered assigns, the principal
sum of $__________, or such lesser amount as shall then equal the outstanding
principal amount hereof, together with interest from the date of this Note on
the unpaid principal balance at a rate equal to eight percent (8.0%) per annum,
computed on the basis of the actual number of days elapsed and a year of 360
days consisting of twelve 30-day months. Unless this Note is earlier converted
in accordance with Section 3 hereof, all unpaid principal, together with any
then unpaid and accrued interest and other amounts payable hereunder, shall be
due and payable on the earlier of (i) July 31, 1998 (the "MATURITY DATE"), or
(ii) the acceleration of the maturity thereof in accordance with Section 7 of
the Loan Agreement dated April 30, 1998 (the "LOAN AGREEMENT") between the
Company and SOFTBANK Holdings.
This Note shall be governd by, and be subject to, the terms of the Loan
Agreement, all of which provisions are hereby incorporated herein by reference.
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder hereof, by the
acceptance of this Note, agrees:
1. DEFINITIONS. As used in this Note, the following capitalized terms
have the following meanings:
(a) "HOLDER" shall mean the Person specified in the introductory
paragraph of this Note or any Person who shall at the time be the registered
holder of this Note.
(b) "MAJORITY IN INTEREST" shall, as of any time, mean more than
50% of the aggregate outstanding principal amount of the Notes issued under the
Loan Agreement outstanding at such time.
(c) The "COMPANY" includes the corporation initially executing
this Note and any Person that shall succeed to or assume the obligations of the
Company under this Note.
2
(d) "PERSON" shall mean and include an individual, a partnership,
a corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or any other
entity or a governmental authority.
2. INTEREST. Accrued interest on this Note shall be payable at such time
as the outstanding principal amount hereof shall be paid in full.
3. AUTOMATIC CONVERSION.
(a) Common Stock Financing. Upon the closing (the "CLOSING") of
the sale of Common Stock by the Company to SOFTBANK Holdings, Inc. and SOFTBANK
Technology Partners IV L.P. pursuant to the Purchase Agreement between the
Company and such purchasers of even date herewith (the "COMMON STOCK
FINANCING"), all principal and accrued interest due on this Note shall
automatically convert into a number of shares of Common Stock (the "CONVERSION
NUMBER") determined by dividing all of the unpaid principal and interest due on
this Note as of the Closing by $0.60 (subject to appropriate adjustment in the
event of stock splits, stock dividends, recapitalizations and similar events).
The cancellation of this Note in connection with such conversion shall be deemed
to be payment in full of the purchase price of a number of shares equal to the
Conversion Number purchased by SOFTBANK Holdings pursuant to the Purchase
Agreement.
(b) Issuance of Securities on Conversion. As soon as practicable
after conversion of this Note, the Company will cause to be issued in the name
of and delivered to the Holder, a certificate or certificates representing the
number of shares of the Common Stock to which the Holder shall be entitled on
such conversion. No fractional shares will be issued on conversion of this Note
and in lieu thereof the Holder shall be entitled to payment in cash of the
amount of the Note not converted into shares.
(c) Termination of Rights. All rights with respect to this Note
shall terminate upon the issuance of shares of Common Stock upon conversion of
this Note, whether or not this Note has been surrendered. Notwithstanding the
foregoing, the Holder agrees to surrender this Note to the Company for
cancellation as soon as is possible following conversion of this Note, and no
certificate shall be issued until the Note is surrendered for cancellation.
4. SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer
described in Section 6 below, the rights and obligations of the Company and the
Holder shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
5. WAIVER AND AMENDMENT. Any provision of this Note may be amended,
waived or modified upon the written consent of the Company and holders of a
Majority in Interest.
6. ASSIGNMENT. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company or the Holder without the prior written consent
of the other party except (i) in the case of the Company, in connection with an
assignment in whole to a successor corporation to the Company, provided that
such successor corporation acquires, by purchase of assets, merger or otherwise,
all or substantially all of the Company's property and assets, and (ii) in the
case of Holder, in connection with any transfer to a subsidiary or parent
company of the Holder or partnership of which the Holder is a general partner,
provided in any such case that the transferee
-2-
3
provides such investment representations as the Company may reasonably request
to ensure securities law compliance.
7. 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 Holder, 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
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 00000-1050
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
-3-
4
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.
8. PAYMENT. Payment shall be made in lawful tender of the United States.
This Note may be prepaid at any time without penalty, on 15 days prior written
notice to the Holder.
9. USURY. In the event any interest is paid on this Note which is deemed
to be in excess of the then legal maximum rate, then that portion of the
interest payment representing an amount in excess of the then legal maximum rate
shall be deemed a payment of principal and applied against the principal of this
Note.
10. SEVERABILITY. The holding of any provision of this Note to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provisions and the other provisions of this Note shall remain in full
force and effect.
11. GOVERNING LAW. This Note shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
-4-
5
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of
the date first written above.
FIRST VIRTUAL HOLDINGS INCORPORATED,
a Delaware corporation
By: /s/ Xxx X. Xxxxx
--------------------------------
Title: Chairman and CEO
--------------------------------
Accepted by Xxxxxx:
SOFTBANK HOLDINGS INC.
By: /s/ XXXXXX XXXXXX
--------------------------------
Title: Vice Chairman
------------------------------
-5-