EXHIBIT C
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of April 30, 1998 (this "Agreement"),
by the undersigned stockholders (the "Stockholders") of First Virtual Holdings
Incorporated, a Delaware corporation (the "Company"), in favor of SOFTBANK
Technology Ventures IV L.P. and SOFTBANK Holdings Inc., a Delaware corporation
(collectively, the "Purchasers").
RECITALS
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Purchasers and the Company are entering into a Purchase Agreement
(as such agreement may hereafter be amended from time to time, the "Purchase
Agreement"), pursuant to which the Company will issue and sell to the Purchasers
(the "Stock Sale"), and the Purchasers will purchase from the Company, an
aggregate of 10,000,000 shares of Common Stock, par value $0.001 per share
("Common Stock");
WHEREAS, the Purchase Agreement contemplates that (i) upon purchase by
the Purchasers of certain promissory notes of the Company in the aggregate
principal amount of $1,200,000 (the "Notes") from the holders thereof, the
Purchasers shall have the right to convert such principal amount and all accrued
interest thereon into shares of Common Stock at a conversion price of $0.75 per
share and (ii) upon the purchase by the Purchaser of outstanding shares of
Series A Convertible Preferred Stock pursuant to an option or purchase agreement
between the Purchasers and the current holders of such shares, such shares of
Series A Convertible Preferred Stock shall be convertible thereafter, into
shares of Common Stock at a conversion price of $0.75 per share (the Stock Sale
and the issuance of Common Stock upon conversion of the Notes and the Series A
Convertible Preferred Stock being herein collectively referred to as the "Stock
Issuances").
WHEREAS, as an inducement and a condition to entering into the Purchase
Agreement, the Purchasers have required that the Stockholders agree, and each of
the Stockholders has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein the
parties hereto hereby agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act.
(b) "Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
2. Provisions Concerning the Shares. During the period commencing
on the date hereof and continuing until the earliest to occur of (i) consumma-
tion of the Stock Sale, (ii) termination of the Purchase Agreement in
accordance with its terms or (iii) _________, 1998 (such earliest date, the
"Expiration Date"), each Stockholder agrees that it shall, at any meeting of
stockholders of the Company, however called, or in connection with any written
consent of stockholders of the Company, vote (or cause to be voted) the shares
(if any) of Common Stock then held of record or Beneficially Owned by such
Stockholder, (i) in favor of the Stock Issuances, the execution and delivery by
the Company of the Purchase Agreement and the approval of the terms thereof and
each of the other actions contemplated by the Purchase Agreement and this
Agreement, and any actions required in furtherance thereof and hereof; (ii)
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Purchase Agreement; and (iii) except as otherwise agreed
to in writing in advance by the Purchasers, against the following actions (other
than the Stock Issuances and the transactions contemplated by the Purchase
Agreement): (A) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or its
subsidiaries; (B) a
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sale, lease or transfer of all or substantially all of assets of the Company or
its subsidiaries, or a reorganization, recapitalization, dissolution or
liquidation of the Company or its subsidiaries; (C) any material change in the
present capitalization of the Company or any amendment of the Company's
Certificate of Incorporation or By-laws which, in the case of the matters
referred to in this clause (C) of this Section 2, is intended, or could
reasonably be expected, to impede, delay or adversely affect the Stock Issuance
and the transactions contemplated by this Agreement and the Purchase Agreement.
Each Stockholder agrees that it shall not enter into any agreement or
understanding with any person or entity the effect of which would be
inconsistent or violative of the provisions and agreements contained in this
Section 2.
Each Stockholder, in furtherance of the transactions contemplated
hereby and by the Purchase Agreement, and in order to secure the performance by
of its duties under this Agreement, shall promptly execute and deliver to
Purchasers an irrevocable proxy, substantially in the form of Exhibit A hereto,
and irrevocably appoint Purchasers or their designees, with full power of
substitution, its attorney, agent and proxy to vote (or cause to be voted) or,
if applicable, to give consent with respect to, all of the shares of Common
Stock Beneficially Owned by such Stockholder as set forth on Schedule I hereto
(the "Existing Shares"), together with any shares acquired by such Stockholder
in any capacity after the date hereof (together with the Existing Shares, the
"Owned Shares") in the manner, and with respect to the matters, set forth above.
Each Stockholder acknowledges that the proxy executed and delivered by it shall
be coupled with an interest, shall constitute, among other things, an inducement
for Purchasers to enter into the Purchase Agreement, shall be irrevocable and
binding on any successor in interest of such Stockholder and shall not be
terminated by operation of law upon the occurrence of any event, including,
without limitation, the death or incapacity of such Stockholder. Such proxy
shall operation to revoke and render void any prior proxy as to the shares
heretofore granted by such Stockholder. Such proxy shall terminate on the
Expiration Date.
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3. Covenants, Representations and Warranties of each Stockholder.
Each Stockholder hereby represents and warrants to Purchaser as follows:
(a) Ownership of Shares. Such Stockholder is the record and Beneficial
Owner of such Stockholder's Existing Shares. On the date hereof, such
Stockholder's Existing Shares constitute all of the shares of Common Stock owned
of record or Beneficially Owned by such Stockholder. Such Stockholder has sole
voting power and sole power of disposition with respect to all of such
Stockholder's Existing Shares.
(b) Power; No Conflict. Such Stockholder has the legal capacity, power
and authority to enter into and perform all of his obligations under this
Agreement. The execution, delivery and performance of this Agreement by such
Stockholder will not violate any other agreement to which the Stockholder is a
party including, without limitation, any voting agreement, proxy arrangement,
pledge agreement, shareholders' agreement or voting trust.
4. Stop Transfer. Each Stockholder agrees that, prior to the
Expiration Date, it shall not request that the Company or any other person
register the transfer (by book-entry or otherwise) of any certificate
representing any of such Stockholder's Owned Shares, unless such transfer is
made in compliance with this Agreement and unless the transferee agrees in
writing to be bound by the provisions hereof for the benefit of the Purchasers.
In the event of a stock dividend or distribution, or any change in the shares by
reason of any stock dividend, split-up, recapitalization, combination, exchange
of shares or the like, the term "Owned Shares" shall include all such stock
dividends and distributions and any shares of capital stock into which or for
which any or all of such Owned Shares may be changed or exchanged.
5. Confidentiality. Each Stockholder recognizes that successful
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Stockholder agrees that it
shall not disclose or discuss such matters with anyone not a party to this
agreement (other than its counsel and advisors, if any) without the prior
written consent of Purchasers, except for filings required pursuant to the
Exchange Act and the rules and regulations thereunder or disclosures
Stockholder's counsel advises are necessary in
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order to fulfill its obligations imposed by law, in which event such Stockholder
shall give notice of such disclosure to Purchasers as promptly as practicable,
and in any event prior to the time any such filing or disclosure is made.
6. Miscellaneous.
(a) 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.
(b) 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.
(c) Severability. In case any provision in this Agreement (including
the Exhibit 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.
(d) Binding Agreement. This Agreement and the obligations hereunder
shall attach to the Owned Shares and shall be binding upon any person or entity
to which legal or beneficial ownership of such Owned Shares shall pass, whether
by operation of law or otherwise. Notwithstanding any transfer of Owned Shares,
the transferor shall remain liable for the performance of all obligations under
this Agreement of the transferor.
(e) Specific Performance. Each of the Stockholders recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and, therefore, in the
event of any such breach, the Purchasers shall be entitled to the remedy of
specific performance of such covenants and agreements and injunctive and other
equitable
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relief in addition to any other remedy to which they may be entitled, at law or
in equity.
(F) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
(g) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the Stockholders have caused this Agreement to be
duly executed as of the day and year first above written.
STOCKHOLDERS:
Paymentech, Inc. Xxxxxxxx Xxxx
By: /s/ Xxxxxx X. Taken By: /s/ Xxxxxxxx Xxxx
Date: 4/29/98 Date: 98-04-28
First USA Financial Xxxxx Xxxxxxxxx
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx Xxxxxxxxx
Date: 4/29/98 Date: 08 April 1998
G.E. Capital Xxxxx Children's Trust
By: /s/ Xxxxxx Xxxxxxx By: /s/ June X. Xxxxx*
Date: April 29, 1998 Date: 4/29/98
The Xxxxx Company, Ltd. Xxx X. Xxxxx
By: Xxxxx & Xxxxx, Inc. By: /s/ Xxx X. Xxxxx
By: Date: 4/29/98
By: /s/ June X. Xxxxx
June X. Xxxxx
By: /s/ June X. Xxxxx
Date: 4/29/98
Sybase, Inc.
By: /s/ Xxxxxx Xxxxxxx
Date: 4/29/98
*As Trustee of the three education trusts for Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx
and Xxxxxx X. Xxxxx.
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EXHIBIT A
Irrevocable Proxy
In order to secure the performance of the duties of the undersigned
pursuant to the Stockholders' Agreement, dated as of April __, 1998 (the
"Stockholders' Agreement"), by the undersigned, and certain other stockholders
in favor of SOFTBANK Technology Ventures IV L.P. and SOFTBANK Holdings Inc.
(collectively, the "Purchasers"), the undersigned hereby irrevocably appoints
Xxxxxx Xxxxxx and Xxxxxxx Xxxx, and each of them, the attorneys, agents and
proxies, with full power of substitution in each of them, for the undersigned,
and in the name, place and stead of the undersigned, to vote (or cause to be
voted) or, if applicable, to give consent, in such manner as each such attorney,
agent and proxy or his substitute shall in his sole discretion deem proper to
record such vote (or consent) in the manner, and with respect to the matters,
set forth in Section 2 of the Stockholders' Agreement with respect to all shares
of Common Stock, par value $0.001 per share, of First Virtual Holdings
Incorporated, a Delaware corporation (the "Company"), which the undersigned is
or may be entitled to vote at any meeting of the Company held after the date
hereof, whether annual or special and whether or not an adjourned meeting, or,
if applicable, to given written consent with respect thereto. This Proxy is
coupled with an interest, shall be irrevocable and binding on any successor in
interest of the undersigned and shall not be terminated by operation of law upon
the occurrence of any event, including, without limitation, the death or
incapacity of the undersigned. This Proxy shall operate to revoke and render
void any prior proxy as to the shares of Common Stock heretofore granted by the
undersigned. This Proxy shall terminate upon the Expiration Date (as defined in
the Stockholders' Agreement).
Dated: _______________________ _________________________
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