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Exhibit 10.11
FIRST VIRTUAL HOLDINGS INCORPORATED
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Agreement is made as of December 22, 1995, among First Virtual Holdings
Incorporated, a Wyoming corporation (the "Company"), with its principal office
at 00000 Xx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX 00000-0000, and First USA
Merchant Services, Inc., a Nevada corporation (the "Purchaser") with its
principal place of business at 0000 Xxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000.
SECTION 1
Authorization and Sale of Preferred Stock
1.1 Authorization. The Company has authorized or will have
authorized as of the Closing Date (as defined below) the sale and issuance of
up to 1,725,890 shares of its Series B Preferred Stock ("Series B Preferred"),
having the rights, restrictions, privileges and preferences as set forth in the
Company's Amended and Restated Articles of Incorporation in the form attached
to this Agreement as Exhibit A (the "Restated Articles").
1.2 Sale of Series B Preferred. Subject to the terms and
conditions hereof, the Company will issue and sell to the Purchaser, and the
Purchaser will buy from the Company, 783,945 shares (the "Shares") of Series B
Preferred, at a cash purchase price of $3.189 per share.
1.3 Warrants. At the Closing (as hereinafter defined) the Company
shall issue to the Purchaser a warrant to purchase up to 852,272 shares of
Series A Preferred Stock of the Company in substantially the form attached as
Exhibit F hereto (the "Series A Warrant"), a warrant to purchase up to 940,734
shares of Series B Preferred in substantially the form attached as Exhibit G
hereto (the "Series B Warrant") and a warrant to purchase shares of the
Company's Common Stock in substantially the form as attached as Exhibit H
hereto (the "Incentive Warrant" and, together with the Series A Warrant and the
Series B Warrant, the "Warrants"). Any shares sold upon exercise of the
Warrants shall be considered "Shares" for purposes of this Agreement.
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SECTION 2
Closing Date; Delivery
2.1 Closing Date. The closing of the purchase and sale of the
Shares hereunder (the "Closing") shall be held at 3:00 p.m. on December 22,
1995 or on such later date as the Company and the Purchaser may agree to in
writing (the date of such Closing being referred to as the "Closing Date").
The place of the Closing (including the place of delivery to the Purchaser by
the Company of the certificate evidencing the shares of Series B Preferred
being purchased and the place of payment to the Company by the Purchaser of the
purchase price therefor) shall be at the offices of Xxxxxx & Xxxx, L.L.P., 0000
Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, or such other place as the
Purchaser and the Company may mutually agree.
2.2 Delivery. At the Closing, the Company will deliver to the
Purchaser a certificate representing the shares of Series B Preferred being
purchased against payment of the purchase price therefor, by check or wire
transfer payable to the Company, or by a combination thereof. The Company
shall also deliver the Warrants at the Closing against payment of the purchase
price therefor, by company check, in the amount of $100 per Warrant.
SECTION 3
Representations and Warranties of the Company
Except as set forth on Exhibit B attached hereto, the Company hereby
represents and warrants to the Purchaser as follows:
3.1 Organization and Standing. The Company is a corporation duly
organized and existing under, and by virtue of, the laws of the State of
Wyoming and is in good standing under such laws. The Company has requisite
corporate power to own and operate its properties and assets, and to carry on
its business as presently conducted and as proposed to be conducted. The
Company is duly licensed or qualified to do business as a foreign corporation,
and is in good standing, in each state wherein the properties owned or leased
or the business transacted by the Company makes such qualification to do
business as a foreign corporation necessary and where the failure to qualify
would have a material and adverse effect on the condition of the Company,
financial or otherwise, and no other jurisdiction has demanded, requested or
otherwise indicated that (or inquired whether) the Company is required to so
qualify.
3.2 Corporate Power. The Company has all requisite legal and
corporate power to execute and deliver this Agreement, the Warrants, the
Shareholder Rights Agreement attached hereto as Exhibit C (the "SHAREHOLDER
RIGHTS AGREEMENT") and each other agreement to be executed and delivered by the
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Company in connection with this Agreement (the "TRANSACTION DOCUMENTS"), to sell
and issue the Shares hereunder and under the Warrants, to issue the Common
Stock issuable upon conversion of the Shares and to carry out and perform its
obligations under the terms of the Transaction Documents.
3.3 Subsidiaries. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
voting security or other equity interest in any other corporation, association
or business entity.
3.4 Capitalization. The authorized capital stock of the Company
consists solely of an unlimited number of shares of Common Stock, of which
4,273,250 shares are issued and outstanding, 1,545,816 shares of Series A
Preferred Stock, of which 693,544 are issued and outstanding, and 1,725,890
shares of Series B Preferred, none of which has been or will be issued or
outstanding prior to the Closing. All such issued and outstanding shares have
been duly authorized and validly issued, and are fully paid and nonassessable.
All outstanding shares of capital stock of the Company have been issued free of
preemptive or similar rights. The Company has, and will at all relevant times
have, reserved 783,945 shares of Series B Preferred for issuance hereunder,
940,734 share of Series B Preferred for issuance on exercise of the Series B
Warrant; 852,272 shares of Series A Preferred Stock for issuance on exercise of
the Series A Warrant; a sufficient number of shares of Common Stock for
issuance upon conversion of the Shares. The Company has reserved 2,000,000
shares of Common Stock for issuance pursuant to its 1995 Stock Option Plan,
none of which have been issued, and 468,750 shares of Common Stock for issuance
pursuant to its 1994 Stock Option Plan, of which options to purchase 468,750
shares are outstanding. All outstanding Common Stock was issued in compliance
with all federal and state securities laws. Assuming the accuracy of each
Purchaser's representations in Section 4 below, upon issuance the Shares will
have been issued in compliance with all federal and state securities laws.
3.5 Authorization; Conflicts. All corporate action on the part of
the Company, its directors and shareholders necessary for the authorization,
execution, delivery and performance of the Transaction Documents, the
authorization, sale, issuance and delivery of the Shares (and the Common Stock
issuable upon conversion of the Shares) and the performance of the Company's
obligations under each of the Transaction Documents has been taken or will be
taken prior to the Closing. The Agreement and the other Transaction Documents,
when executed and delivered by the Company, shall constitute valid and binding
obligations of the Company enforceable in accordance with their respective
terms. The Shares, when issued in compliance with the provisions of this
Agreement and the other applicable Transaction Documents, will be validly
issued, fully paid and nonassessable. The Shares issuable upon exercise of the
Warrants, and the Common Stock issuable upon conversion of the Shares, have been
duly and validly reserved and, when issued in compliance with the provisions of
this Agreement and the other applicable Transaction Documents, will be validly
issued, fully paid and nonassessable, and free of any preemptive or similar
rights and liens, encumbrances or other adverse claims (other than such
preemptive rights, liens, encumbrances or other rights as shall have been waived
on or prior to the Closing Date). The Series A Preferred Stock and the Series B
Preferred Stock will have the rights, preferences and privileges set forth
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in the Restated Articles. Except as set forth above, there are no outstanding
options, warrants or other rights to purchase or subscribe for any security of
the Company or any subsidiary of the Company. The Company holds no stock in
treasury. The execution, delivery and performance by the Company of the
Transaction Documents and compliance therewith and the issuance and sale of the
Warrants and the Shares pursuant thereto will not result in any violation of and
will not conflict with, or result in a breach of any of the terms of, or
constitute a default under, the Company's Articles of Incorporation or Bylaws or
any mortgage, indenture, agreement, instrument, judgment, decree, order, rule or
regulation or other restriction to which the Company is a party or by which it
is bound or any provision of state or Federal law to which the Company is
subject, or result in the creation of any mortgage, pledge, lien, encumbrance or
charge upon any of the properties or assets of the Company pursuant to any such
term or result in the suspension, revocation, impairment, forfeiture or
non-renewal of any permit, license, authorization or approval applicable to the
Company's operations or any of its assets or properties.
3.6 Title to Properties and Assets, Liens, etc. The Company has
good and marketable title to its properties and assets, and has good title to
all its leasehold interests, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) the lien of current taxes not yet
due and payable, and (ii) possible minor liens and encumbrances which do not in
any case materially detract from the value of the property subject thereto or
materially impair the operations of the Company, and which have not arisen
otherwise than in the ordinary course of business.
3.7 Financial Statements; Liabilities. The Company has delivered to
the Purchaser its audited balance sheet and statement of operations as of and
for fiscal year ended December 31, 1994, its reviewed balance sheet and
statement of operations as of and for the six months ended June 30, 1995 and its
internally prepared, unaudited balance sheet and statement of operations for the
eleven months ended November 30, 1995 (the "FINANCIAL STATEMENTS"). The
Financial Statements are complete and correct in all material respects and have
been prepared in accordance with generally accepted accounting principles,
except that the unaudited Financial Statements do not contain footnotes and are
subject to year-end adjustments. The Financial Statements accurately set out
and describe the financial condition and operating results of the Company as of
the dates, and during the periods, indicated therein. Since November 30, 1995,
there has not been any change in the assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements,
except changes in the ordinary course of business which have not been, in the
aggregate, materially adverse. The Company does not have any liabilities of any
sort with a value in excess of $200,000 in the aggregate that are not disclosed
in the Financial Statements.
3.8 Outstanding Debt. Except as set forth in the Financial
Statements the Company has no outstanding indebtedness for borrowed money and is
not a guarantor or otherwise contingently liable for any indebtedness for
borrowed money (including, without limitation, liability by way of agreement,
contingent or otherwise, to purchase, provide funds for payment, supply funds or
otherwise invest in any debtor or otherwise to insure any creditor against
loss). There exists no default under the provisions of any instrument
evidencing any such indebtedness or otherwise or of any agreement relating
thereto.
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3.9 Shareholders, Directors and Officers; Indebtedness. The
Company is not indebted, directly or indirectly, to any of its officers,
directors or shareholders or any of their respective relatives or affiliates.
No officer, director or shareholder of the Company, or any of their relatives
or affiliates is indebted to the Company. To the knowledge of the Company,
none of the officers or directors or significant employees or advisors of the
Company, or their respective spouses, or relatives, owns directly or
indirectly, a material interest in any entity that is a competitor, customer or
supplier of (or has any existing contractual relationship with) the Company.
3.10 Litigation and Bankruptcy Proceedings.
(a) There is neither pending nor, to the knowledge of the Company,
threatened any action, suit, proceeding or claim, whether or not purportedly on
behalf of the Company, to which the Company is or may be named as a party or
its property is or may be subject, or to the knowledge of the Company, to which
any officer, key employee or principal shareholder of the Company is subject
and in which an unfavorable outcome, ruling or finding in any such matter or
for all such matters taken as a whole might have a material adverse effect on
the condition, financial or otherwise, prospects, or operations of the
Company. The Company is not aware of any specific valid basis for any claim of
the type described in the preceding sentence, and the Company has no knowledge
of any unasserted claim, the assertion of which is likely, and which, if
asserted, will seek damages, an injunction or other legal, equitable, monetary
or nonmonetary relief, which claim individually or collectively with other such
unasserted claims if granted would have a material adverse effect on the
condition, financial or otherwise, prospects or operations of the Company.
(b) The Company has not admitted in writing its inability to pay
its debts generally as they become due, filed or consented to the filing against
it of a petition in bankruptcy or a petition to take advantage of any
insolvency act, made an assignment for the benefit of creditors, consented to
the appointment of a receiver for itself of for the whole or any substantial
part of its property, or had a petition in bankruptcy filed against it, been
adjudicated a bankrupt or filed a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other similar law or
statute.
3.11 Consents. No consent, approval, qualification, order or
authorization of, or filing with any governmental authority, is required in
connection with the Company's valid execution, delivery or performance of the
Transaction Documents or the offer, sale or issuance of the Shares or the
Warrants or the consummation of any other transaction contemplated on the part
of the Company except for the filing of the Restated Articles with the Wyoming
Secretary of State, which filing will be completed prior to the Closing and
filing of notices required by applicable Federal and state securities laws.
3.12 Permits, Franchises, Licenses, Trademarks, Patents, and Other
Rights. To the knowledge of the Company, the Company has all governmental and
other permits, licenses and other similar authority necessary for the conduct
of its business as now being conducted by it, the lack of which could
materially and adversely affect the operations or condition, financial or
otherwise, or prospects of the Company,
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and it is not in default in any material respect under any of such permits,
licenses or other similar authority.
3.13 Patents, Trademarks, etc. The Company owns or has the right,
or prior to the Closing will own or have the right, to use, free and clear of
all liens, charges, claims and restrictions, all patents, trademarks, service
marks, trade names, copyrights, licenses and rights necessary to its business
as now conducted or proposed to be conducted (the "Intellectual Property"), and
is not infringing upon or otherwise acting adversely to the right or claimed
right of, to the best of its knowledge, any person or entity under or with
respect to any of the Intellectual Property. The execution and delivery by the
Company of the Transaction Documents and its performance of its obligations
under the Transaction Documents will not violate the terms of any of the
Company's rights in the Intellectual Property. There are no outstanding
options, licenses, or agreements of any kind relating to the Intellectual
Property, nor is the Company bound by or a party to any options, licenses or
agreements or any kind with respect to the patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other person or entity. The Company
has not received any communications alleging that the Company has violated or,
by conducting its business as proposed, would violate any patent, trademark,
service xxxx, trade name, copyright or trade secret or other proprietary right
of any other person or entity. The Company is not aware that any of its
employees is obligated under any contract (including licenses, covenants or
commitments or any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere
with the use of such employee's best efforts to promote the interests of the
Company or that would conflict with the Company's business as proposed to be
conducted.
3.14 Material Contracts and Commitments. Neither the company, nor, to
the best knowledge of the Company, any third party is in default under (a) any
material contract, agreement or instrument to which the Company is a party or
by which it is bound or (b) any agreement with respect to indebtedness for
borrowed money.
3.15. Compliance with Other Instruments, None Burdensome, etc. The
Company is not in violation of any term of the Restated Articles or the By-Laws,
or in any material respect of any term or provision of any mortgage, indenture,
contract, agreement, instrument, judgment or decree, and to the best of its
knowledge, is not in violation of any order, statute, rule or regulation
applicable to the Company, which violation reasonably would be expected to have
a material adverse effect on the Company's business, condition (financial or
otherwise), prospects or operations. The execution, delivery and performance of
and compliance with the Transaction Documents and the issuance of the Shares,
the Warrants and the Common Stock issuable upon conversion of the Shares and
the exercise of the Warrants, as the case may be, have not resulted and will not
result in any violation of, or conflict with, or constitute a default under, or
result in the creation of, any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company, and there is no such
violation or default or event that, with the passage of time or giving of notice
or both, would constitute a violation or default which materially and adversely
affects the Company's business, condition (financial or otherwise), prospects or
operations.
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3.16 Employees. To the best of the Company's knowledge, no employee
of the Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with the Company or any other person or entity
because of the nature of the business conducted or to be conducted by the
Company. The Company does not have and has never had any collective bargaining
agreements covering any of its employees.
3.17 Employee Agreements. Each person presently employed by the
Company has executed (or will execute by the Closing Date) a Proprietary
Information Agreement in substantially the form of Exhibit D attached hereto.
3.18 Employee Benefit Plan Obligations. The Company does not
maintain or have any obligations with respect to any employee benefit plan
(within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974 ("ERISA")). The Company is not, nor was it at any time, obligated
to contribute to any employee pension benefit plan which is or was a
multi-employer plan within the meaning of Section 3(37) of ERISA.
3.19 Disclosure. The Agreement and the exhibits hereto as well as
any other document, certificate, schedule, financial, business or other written
statement described in Exhibit B do not contain any untrue statement of a
material fact and do not omit to state a material fact necessary in order to
make the statements contained herein or therein not misleading. To the
knowledge of the Company, there is no fact or circumstance that materially and
adversely affects the condition, financial or otherwise, assets, business,
prospects or operations of the Company that has not been disclosed to the
Purchaser.
3.20 Registration Rights. Except as set forth in the Shareholder
Rights Agreement, the Company is not currently under any obligation to register
under the Securities Act of 1933, as amended (the "Securities Act"), any of its
presently outstanding securities or any of its securities that may hereafter be
issued.
3.20 Governmental Consent, etc. No consent, approval or
authorization of, or designation, declaration or filing with, any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement and the other Transaction Documents, or
the offer, sale or issuance of the Shares or the Warrants (or the Common Stock
issuable upon conversion of the Shares), or the consummation of any other
transaction contemplated thereby, except (a) filing of the Restated Articles in
the office of the Secretary of State of the State of Wyoming, and (b)
qualification (or taking such action as may be necessary to secure an exemption
from qualification, if available) of the offer and sale of the Shares and the
Warrants (and the Common Stock issuable upon conversion of the Shares) under
applicable Blue Sky laws, which filing and qualification, if required, will be
accomplished in a timely manner prior to or promptly upon completion of the
Closing.
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3.21 Brokers or Finders. The Company has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company with
respect to its purchase of the Shares and the Warrants as follows:
4.1 Investment Representations and Covenants of the Purchaser.
(a) This Agreement is made by the Company in reliance upon
the Purchaser's representations and covenants made in this Section 4. The
Purchaser represents that the Shares to be received will be acquired for
investment for its own account, not as a nominee or agent, and not with a view
to the sale or "distribution" of any part thereof within the meaning of the
Securities Act.
(b) The Purchaser understands and acknowledges that the
offering of the Shares and the Warrants pursuant to this Agreement will not,
and any issuance of Common Stock on conversion or exercise thereof may not, be
registered under the Securities Act on the ground that the sale provided for in
this Agreement and the issuance of securities hereunder is exempt pursuant to
section 4(2) of the Securities Act, and that the Company's reliance on such
exemption is predicated on the Purchaser's representations set forth herein.
(c) The Purchaser is an "accredited investor" within the
meaning of Regulation D under the Securities Act.
(d) Without limiting the effect of any representation or
warranty made by the Company, the Purchaser represents that it is able to fend
for itself in transactions such as the one contemplated by this Agreement, has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its prospective investment in the
Company, and has the ability to bear the economic risks of the investment.
(e) Without limiting the effect of any representation or
warranty made by the Company, the Purchaser acknowledges that it has been
informed of, and has considered in evaluating its investment in the Shares, the
following factors (without limitation): (i) The Company's business and
prospects are highly dependent on the acceptance of the Company's Internet
Payment System and other Internet-related products and services, and on
widespread adoption of the Internet as a medium for commercial transactions;
(ii) The market for Internet-based transaction payment systems has only
recently begun to
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develop, is rapidly evolving and is characterized by an increasing number of
entrants and rapid technological change; (iii) The future viability of the
Internet as a medium for commercial transactions is highly speculative; the
Internet may not prove to be a viable commercial marketplace because of
inadequate development of the necessary infrastructure, such as a reliable
network backbone or timely development of complimentary products, such as high
speed modems; (iv) If the necessary infrastructure or complementary products are
not developed, if the Internet does not become a viable commercial marketplace,
or if the Company's internet payment system is not widely adopted by merchants
and consumers, the Company's business, operating results and financial
conditions will be materially adversely affected;
(f) The Purchaser acknowledges and understands that the
Shares, and any Common Stock acquired upon the conversion thereof, must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available, and that, except as
otherwise provided in the Shareholder Rights Agreement, the Company is under no
obligation to register either the Shares or such Common Stock.
(g) The Purchaser acknowledges that it is familiar with
Rule 144 promulgated under the Securities Act.
(h) The Purchaser acknowledges that in the event the
applicable requirements of Rule 144 are not met, registration under the
Securities Act or compliance with another exemption from registration will be
required for any disposition of its stock.
(i) The Purchaser covenants that, in the absence of an
effective registration statement covering the stock in question, it will not
sell, transfer or otherwise dispose of the Shares, the Warrants or any Preferred
Stock or Common Stock issued on conversion or exercise thereof other than in a
transaction registered under the Securities Act or exempt from the registration
provisions thereof. In connection therewith the Purchaser acknowledges that the
Company shall make a notation on its stock books regarding the restrictions on
transfer set forth in this Section 4 and shall transfer shares and warrants on
the books of the company only to the extent not inconsistent therewith.
4.2 Receipt of Information. Without limiting the effect of any
representation or warranty made by the Company, the Purchaser represents that it
has received and reviewed this Agreement and all Exhibits hereto, and the draft
of Company's Business Plan and all Exhibits thereto; that, to its knowledge
without special inquiry of any sort, it, its attorneys and its accountants have
had access to, and an opportunity to review all documents and other materials
requested of the Company; it and they have been given an opportunity to ask
any and all questions of; and receive answers from, the Company concerning the
terms and conditions of the offering and to obtain all information it or they
believe necessary or appropriate to verify the accuracy of the Business Plan
and to evaluate the suitability of an investment in the Series B Preferred.
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4.3 Authorization. This Agreement when executed and delivered by
the Purchaser will constitute a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies.
4.4 Brokers or Finders. The Company has not, and will not, incur,
directly or indirectly, as a result of any action taken by the Purchaser, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement.
SECTION 5
Conditions to Closing of Purchaser
The Purchaser's obligation to purchase the Shares and the Warrants at
the Closing is, at the option of the Purchaser, subject to the fulfillment on
or prior to the Closing Date of the following conditions:
5.1 Representations and Warranties Correct. The representations
and warranties made by the Company in Section 3 hereof shall be true and
correct in all material respects when made, and shall be true and correct in
all material respects on the Closing Date with the same force and effect as if
they had been made on and as of the Closing Date.
5.2 Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed by the Company on or prior to the Closing
Date shall have been performed or complied with in all material respects.
5.3 Opinion of Company's Counsel. The Purchaser shall have
received from Wilson, Sonsini, Xxxxxxxx & Xxxxxx, counsel to the Company, an
opinion addressed to it, dated the Closing Date, in substantially the form of
Exhibit E.
5.4 Compliance Certificate. The Company shall have delivered to the
Purchaser a certificate executed by the President of the Company, dated the
Closing Date, and certifying to the fulfillment of the conditions specified in
Sections 5.1 and 5.2 of this Agreement, and that he has made, or caused to be
made, such investigations as he deemed necessary in order to permit him to
verify the accuracy of the information set forth in such certificate.
5.5 Blue Sky. The Company shall have obtained all necessary Blue
Sky law permits and qualifications, or secured an exemption therefrom, required
by any state for the offer and sale of the Shares and the Warrants, the
issuance of additional Shares upon exercise of the Warrants, and the issuance
of Common Stock upon conversion of the Shares.
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5.6 Restated Articles. The Restated Articles shall have been filed
with the Secretary of State of the State of Wyoming.
5.7 Shareholder Rights Agreement. The Shareholder Rights Agreement
shall have been executed as set forth in Exhibit C hereto and shall be in full
force and effect as of the Closing Date.
5.8 Control Option Agreement. A Control Option Agreement in
substantially the form attached hereto as Exhibit I shall have been executed
and delivered by the Company and each shareholder of the Company and shall be
in full fierce and effect as of the Closing Date.
5.9 Proprietary Information Agreements. Each person presently
employed by the Company shall have executed a Proprietary Information Agreement
in substantially the form of Exhibit D hereto.
5.10 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be satisfactory in substance
and form to the Purchaser and its counsel.
5.11 No Material Adverse Change. There shall have been no material
adverse change in the Company's business or financial condition or prospects,
except for continuing losses from operations consistent with past losses.
SECTION 6
Conditions to Closing of Company
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The Company's obligation to sell and issue the Shares and the Warrants
at the Closing is, at the option of the Company, subject to the fulfillment of
the following conditions:
6.1 Representations. The representations made by the Purchaser in
Section 4 hereof shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date.
6.2 Blue Sky. the Company shall have obtained all necessary Blue
Sky Law permits and qualifications, or secured an exemption therefrom, required
by any state for the offer and sale of the Series B Preferred and the Common
Stock issuable upon conversion of the Series B Preferred.
6.3 Restated Articles. The Restated Articles shall have been filed
with the Secretary of State of the State of Wyoming.
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6.4 Payment of Purchase Price. The Purchaser shall have delivered
to the Company the purchase price for the Shares and the Warrants.
SECTION 7
Miscellaneous
7.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Delaware, without giving effect to the
conflicts of laws principals thereof.
7.2 Survival. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by the Purchaser
and the closing of the transactions contemplated hereby.
7.3 Successors and Assigns. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties
hereto, provided, however, that the rights of the Purchaser to purchase Shares
and Warrants at the Closing shall not be assignable to a person or entity that
is not an affiliate of the Purchaser without the written consent of the Company.
7.4 Entire Agreement; Amendment. This Agreement and the other
documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof and supersede all prior written and all prior or
contemporaneous oral negotiations, agreements, arrangements and
understandings. Neither this Agreement nor any term hereof may be amended,
waived, discharged, or terminated other than by a written instrument signed by
the party against whom enforcement of any such amendment, waiver, discharge, or
termination is sought.
7.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person or by courier service or
five days after deposit with the United States mail, by registered or certified
mail, postage prepaid, addressed (a) if to the Purchaser, at such Purchaser's
address set forth on the first page of this Agreement, or at such other address
as the Purchaser shall have furnished to the Company in writing, with a copy to
Xxxxxx and Xxxx, L.L.P., 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, Attn.: Xxxx
Xxxxxxxxx, Esq., or (b) if to any other holder of any Shares or Warrants, at
such address as such holder shall have furnished the Company in writing, or,
until any such holder so furnishes an address to the Company, then to and at
the address of the last holder of such Shares or warrants who has so furnished
an address to the Company, or (c) if to the Company, one copy should be sent
to its address set forth on the first page of this Agreement and addressed to
the attention of the President, or at such other address as the Company shall
have furnished to the Purchaser, with a copy to Wilson, Sonsini, Xxxxxxxx &
Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000,
Attn.: Xxxxxxx X. XxXxxxx, Esq.
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7.6 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any holder of any Shares, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
7.7 Expenses. The Company and the Purchaser shall each bear their
own expenses and legal fees with respect to this Agreement and the transactions
contemplated hereby; except that, the Company will pay the reasonable legal
fees and reasonable expenses (up to a maximum of $30,000) upon receipt of a
xxxx therefor, incurred by counsel to the Purchaser.
7.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
7.9 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in fill force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to
any party.
7.10 Gender. The use of the neuter gender herein shall be deemed to
include the masculine and the feminine gender, if the context so requires.
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The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY" FIRST VIRTUAL HOLDINGS INCORPORATED
a Wyoming corporation
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx, President
"PURCHASER" FIRST USA MERCHANT SERVICES, INC.
a Nevada corporation
By: /s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx, President
EXHIBITS:
A Restated Articles
B Schedule of Exceptions
C Shareholder Rights Agreement
D Proprietary Information Agreement
E Opinion of Company Counsel
F Series A Warrant
G Series B Warrant
H Incentive Warrant
I Acquisition Option Agreement
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