EXHIBIT 4.14
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
FIRST VIRTUAL COMMUNICATIONS, INC.
WARRANT TO PURCHASE COMMON STOCK
NO. CSW-21 NOVEMBER 12, 2003
VOID AFTER NOVEMBER 11, 2008
THIS CERTIFIES THAT, for value received, Xxxx Capital Partners LLC,
with its principal office at 00 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, or assigns (the "HOLDER"), is entitled to purchase, subject to the
provisions of this Warrant, at the Exercise Price (defined below) from First
Virtual Communications, Inc., a Delaware corporation, with its principal office
at 0000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, XX 00000 (the "COMPANY") up to
458,592 shares of the Common Stock of the Company (the "COMMON STOCK"),
commencing May 12, 2004. This Warrant is being issued pursuant to the terms of
the Letter Agreement dated September 30, 2003 between the Company and the
Holder.
1. DEFINITIONS. As used herein, the following terms shall have
the following respective meanings:
(a) "EXERCISE PERIOD" shall mean the period commencing
May 12, 2004 and ending at 5:00 P.M. PDT on November 11, 2008, unless sooner
terminated as provided below.
(b) "EXERCISE PRICE" shall mean $2.15 per share, subject
to adjustment pursuant to Section 5 below.
(c) "EXERCISE SHARES" shall mean the shares of the
Company's Common Stock issuable upon exercise of this Warrant, subject to
adjustment pursuant to the terms herein, including but not limited to adjustment
pursuant to Section 5 below.
2. EXERCISE OF WARRANT. The rights represented by this Warrant
may be exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Company at its address set forth above (or at
such other address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached
hereto;
(b) Payment of the Exercise Price either (i) in cash or
by check, or (ii) by cancellation of indebtedness; and
(c) This Warrant.
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Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so purchased, registered in
the name of the Holder or persons affiliated with the Holder, if the Holder so
designates, shall be issued and delivered to the Holder within a reasonable time
after the rights represented by this Warrant shall have been so exercised.
The person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
2.1 NET EXERCISE. Notwithstanding any provisions herein
to the contrary, if the fair market value of one share of the Company's Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant by payment of cash, the Holder
may, commencing on May 12, 2004 and thereafter for the full term of this
Warrant, elect to receive shares equal to the value (as determined below) of
this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with the properly
endorsed Notice of Exercise in which event the Company shall issue to the Holder
a number of shares of Common Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to
the Holder
Y = the number of shares of Common Stock purchasable
under this Warrant or, if only a portion of this
Warrant is being exercised, the portion of this
Warrant being canceled (at the date of such
calculation)
A = the fair market value of one share of the Company's
Common Stock (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, the fair market value of one
share of Common Stock shall be on any particular date (a) the last reported
closing bid price per share of Common Stock on such date on the Nasdaq SmallCap
Market (or the Nasdaq National Market, as the case may be), or (b) if there is
no such price on such date, then the closing bid price on the Nasdaq SmallCap
Market (or the Nasdaq National Market, as the case may be) on the date nearest
preceding such date, or (c) if the Common Stock is not then listed or quoted on
the Nasdaq SmallCap Market or the Nasdaq National Market, and if prices for the
Common Stock are then reported in the "pink sheets" published by the National
Quotation Bureau Incorporated (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) if the shares of Common Stock are
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not then publicly traded, the fair market value of a share of Common Stock as
determined in good faith by the Board of Directors of the Company.
3. COVENANTS OF THE COMPANY.
3.1 COVENANTS AS TO EXERCISE SHARES. The Company
covenants and agrees that all Exercise Shares that may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be
validly issued and outstanding, fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issuance thereof. The Company
further covenants and agrees that the Company will at all times during the
Exercise Period, have authorized and reserved, free from preemptive rights, a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights represented by this Warrant. If at any time during the Exercise
Period the number of authorized but unissued shares of Common Stock shall not be
sufficient to permit exercise of this Warrant, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes.
3.2 NO IMPAIRMENT. Except and to the extent as waived or
consented to by the Holder, the Company will not, by amendment of its Amended
and Restated Certificate of Incorporation, as amended, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may be necessary or appropriate in order to protect the exercise
rights of the Holder against impairment.
3.3 NOTICES OF RECORD DATE. In the event of any taking by
the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Company shall mail to the Holder,
at least ten days prior to the date specified herein, a notice specifying the
date on which any such record is to be taken for the purpose of such dividend or
distribution.
4. REPRESENTATIONS OF HOLDER.
4.1 ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The
Holder represents and warrants that it is acquiring this Warrant and the
Exercise Shares solely for its account for investment and not with a view to or
for sale or distribution of said Warrant or Exercise Shares or any part thereof.
The Holder also represents that the entire legal and beneficial interests of
this Warrant and Exercise Shares the Holder is acquiring is being acquired for,
and will be held for, its account only.
4.2 SECURITIES ARE NOT REGISTERED.
(A) The Holder understands that this Warrant and
the Exercise Shares have not been registered under the Securities Act of 1933,
as amended (the "ACT"), on the basis that no distribution or public offering of
the stock of the Company is to be effected. The Holder realizes that the basis
for the exemption may not be present if, notwithstanding its
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representations, the Holder has a present intention of acquiring the securities
for a fixed or determinable period in the future, selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the securities. The Holder has no such present intention.
(b) The Holder recognizes that this Warrant and
the Exercise Shares must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The Holder recognizes that the Company has no obligation to register this
Warrant or the Exercise Shares of the Company, or to comply with any exemption
from such registration.
(c) The Holder is aware that neither this
Warrant nor the Exercise Shares may be sold pursuant to Rule 144 adopted under
the Act unless certain conditions are met, including, among other things, the
existence of a public market for the shares, the availability of certain current
public information about the Company, the resale following the required holding
period under Rule 144 and the number of shares being sold during any three month
period not exceeding specified limitations.
4.3 DISPOSITION OF WARRANT AND EXERCISE SHARES.
(a) The Holder further agrees not to make any
disposition of all or any part of this Warrant or Exercise Shares in any event
unless and until:
(i) The Company shall have received a
letter secured by the Holder from the Securities and Exchange Commission stating
that no action will be recommended to the Commission with respect to the
proposed disposition;
(ii) There is then in effect a
registration statement under the Act covering such proposed disposition and such
disposition is made in accordance with said registration statement; or
(iii) The Holder shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
and if reasonably requested by the Company, the Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, for
the Holder to the effect that such disposition will not require registration of
this Warrant or Exercise Shares, as applicable, under the Act or any applicable
state securities laws.
(b) The Holder understands and agrees that all
certificates evidencing the Exercise Shares to be issued to the Holder may bear
the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
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SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
5. ADJUSTMENT OF EXERCISE PRICE. In the event of changes in the
outstanding Common Stock of the Company by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like, the number and class of
shares available under this Warrant in the aggregate and the Exercise Price
shall be correspondingly adjusted to give the Holder of this Warrant, on
exercise for the same aggregate Exercise Price, the total number, class, and
kind of shares as the Holder would have owned had this Warrant been exercised
prior to the event and had the Holder continued to hold such shares until after
the event requiring adjustment. The form of this Warrant need not be changed
because of any adjustment in the number of Exercise Shares subject to this
Warrant.
6. FRACTIONAL SHARES. No fractional shares shall be issued upon
the exercise of this Warrant as a consequence of any adjustment pursuant hereto.
All Exercise Shares (including fractions) issuable upon exercise of this Warrant
may be aggregated for purposes of determining whether the exercise would result
in the issuance of any fractional share. If, after aggregation, the exercise
would result in the issuance of a fractional share, the Company shall, in lieu
of issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the then
current fair market value of an Exercise Share by such fraction.
7. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company.
8. TRANSFER OF WARRANT. Subject to applicable laws and the
restriction on transfer set forth on the first page of this Warrant, this
Warrant and all rights hereunder are transferable, by the Holder in person or by
duly authorized attorney, upon delivery of this Warrant and the form of
assignment attached hereto to any transferee designated by Holder. The
transferee shall sign an investment letter in form and substance satisfactory to
the Company.
9. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of
a mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
10. NOTICES, ETC. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
to the Company at the address listed on the signature
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page and to the Holder at the address on the Company records, or at such other
address as the Company or Holder may designate by ten days advance written
notice to the other party hereto.
11. ACCEPTANCE. Receipt of this Warrant by the Holder shall
constitute acceptance of and agreement to all of the terms and conditions
contained herein.
12. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer as of November 12, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: Chief Financial Officer
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NOTICE OF EXERCISE
TO: FIRST VIRTUAL COMMUNICATIONS, INC.
(1) [ ] The undersigned hereby elects to purchase ________
shares of the Common Stock of First Virtual Communications, Inc. (the "COMPANY")
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
[ ] The undersigned hereby elects to purchase ________
shares of the Common Stock of the Company pursuant to the terms of the net
exercise provisions set forth in Section 2.1 of the attached Warrant, and shall
tender payment of all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
____________________________
(Name)
____________________________
____________________________
(Address)
(3) The undersigned represents that (i) the aforesaid shares of
Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares; (ii) the undersigned is aware of the
Company's business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
regarding its investment in the Company; (iii) the undersigned is experienced in
making investments of this type and has such knowledge and background in
financial and business matters that the undersigned is capable of evaluating the
merits and risks of this investment and protecting the undersigned's own
interests; (iv) the undersigned understands that the shares of Common Stock
issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), by reason of a
specific exemption from the registration provisions of the Securities Act, which
exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Securities Act, they must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available; (v) the undersigned is aware that the aforesaid
shares of Common Stock may not be sold pursuant to Rule 144 adopted under the
Securities Act unless certain conditions are met and until the undersigned has
held the shares for the number of years prescribed by Rule 144; and (vi) the
undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Common Stock unless and until there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided the Company with an opinion of
counsel satisfactory to the Company, stating that such registration is not
required.
__________________ _________________________________________
(Date) (Signature)
_________________________________________
(Print name)
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form
and supply required information. Do not use this form
to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
Name:___________________________________________________________________________
(Please Print)
Address:________________________________________________________________________
(Please Print)
Dated: __________, 20____
Holder's
Signature:____________________________________
Holder's
Address:______________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of this Warrant, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
