EXHIBIT E
OPTION AGREEMENT
THIS OPTION AGREEMENT ("the "Agreement") is made as of April 30, 1998
between SOFTBANK Technology Ventures IV L.P., a Delaware limited partnership
("SOFTBANK Technology"), and SOFTBANK Holdings Inc., a Delaware corporation
("SOFTBANK Holdings" and, together with SOFTBANK Technology, the "Optionees"),
and the persons and entities whose names appear on the signature page hereto
(the "STOCKHOLDERS").
RECITALS
A. The Stockholders own the number of shares of Series A Convertible
Preferred Stock (the "SHARES") of First Virtual Holdings Incorporated (the
"COMPANY") set forth on Schedule A hereto.
B. For good and valuable consideration, the receipt of which is hereby
acknowledged, the Stockholders wish to grant the Optionees options to purchase
the Shares pursuant to the terms of this Agreement.
C. The Optionees wish to purchase such options.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree
as follows:
1. Grant of Option; Term.
1.1 Consideration. Upon execution of this Agreement and in
consideration for the rights granted to the Optionees herein, the Optionees
shall pay to each of the Stockholders, by check or wire transfer in immediately
available funds, the cash amount set forth opposite such Stockholder's name of
Schedule A hereto.
1.2 Grant of Option; Exercise Price. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the Stockholders hereby grants to each Optionee an option (the "OPTION")
to purchase from such Stockholder all or any part of the number of Shares set
forth opposite such Stockholder's name on Schedule A hereto in the column under
such Optionee's name, at an exercise price (the "EXERCISE PRICE") of $5,274.81
per Share.
1.3 Term. The Options shall terminate on the earlier of (a) 5:00 p.m.,
New York City time, on July 31, 1998, or (b) such time and date, if any, as the
Purchase Agreement to be entered into by the Company and the Optionees in
respect of the purchase by the Optionees of 10 million shares of Common Stock,
par value $0.001 per share ("COMMON STOCK"), from the Company shall have been
terminated (such earlier time and date being herein referred to as the
"EXPIRATION DATE")
1.4 Voting Rights and Cash Dividends. The Stockholders shall have the
right to vote and to receive all dividends with respect to the Shares until the
transfer of such Shares to an Optionee pursuant to this Agreement.
1.5 Changes in Capital Structure. In the event of a stock split,
reverse stock split, stock dividend or recapitalization in respect of the
Shares, or if the Shares are converted or exchanged for other securities as a
result of a merger, reorganization or reclassification involving the Company,
the number of Shares, the class of securities and the Exercise Price shall be
equitably adjusted.
2. Exercise of Option.
2.1 Partial Exercise and Time of Exercise. Subject to satisfaction or
waiver by the Stockholder that granted an Option of the conditions set forth in
Section 2.5 hereof, such Option may be exercised in whole or in part, from time
to time, on or prior to the Expiration Date.
2.2 Manner of Exercise. Subject to satisfaction or waiver by the
Stockholder that granted an Option of the conditions set forth in Section 2.5
hereof, an Optionee may exercise such Option, or any part of such Option, by
written notice (the "OPTION EXERCISE NOTICE") to the Stockholder that granted
such Option specifying the number of Shares with respect to which such Option is
exercised and the effective date of the exercise (the "OPTION EXERCISE DATE"),
which shall be ten (10) days after the date on which the Stockholder is deemed
to receive the Option Exercise Notice. Such Option Exercise Notice shall also
specify the date for payment (the "PAYMENT DATE") which shall be no later than
ten (10) days after the Option Exercise Date.
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2.3 Payment of Exercise Price. The purchase price payable upon exercise
of an Option (the "PURCHASE PRICE") shall equal the product obtained by
multiplying (a) the number of Shares as to which the Option is exercised, by (b)
the Exercise Price. The Purchase Price shall be paid by wire transfer on the
Payment Date of immediately available funds to a bank account to be designated
by the Stockholder that granted the Option being exercised no less than five (5)
days prior to the Payment Date.
2.4 Assignment of Option Rights. An Optionee may, in its sole
discretion, assign its rights to purchase the Shares hereunder, provided that
the assignee shall agree in writing to assume such Optionee's obligations
hereunder.
2.5 Conditions to Warrant Exercise. The right of an Optionee to
exercise any Option granted hereunder shall be subject to the following
conditions:
(a) The terms of the warrants granted to the Stockholders by the
Company to purchase an aggregate of 556,750 shares of Common Stock shall have
been amended to reduce the exercise price thereof to $1.00 per share without any
other amendments to the terms thereof (as so amended, the "Warrants").
(b) The Company shall have filed with respect to all shares of Common
Stock underlying the Warrants (as amended as described in Section 2.4(a)) such
post-effective amendments or supplements to its registration statement on Form
S-3 (File No. 333-42855), or filed a new registration statement with the
Securities and Exchange Commission, in each case as may be necessary to register
all such shares and any such post-effective amendment and/or new registration
statement shall have been declared effective by the Securities and Exchange
Commission, and the Company shall have confirmed to the Stockholders in writing
that, subject to Section 4(h) of the Private Placement Purchase Agreement, dated
October 14, 1997, between the Company, on the one hand, and the Subscribers
party thereto, on the other, the Company shall use its best efforts to maintain
the effectiveness of such registration statement or statements until the
exercisability of the Warrants shall expire in accordance with its terms (or, if
earlier, such date that the shares of Common Stock issuable upon exercise
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of the Warrants shall have been sold pursuant to such registration statement or
statements).
3. Representations, Warranties and Covenants of Stockholders.
Each Stockholder, severally but not jointly, represents, warrants and
covenants as follows:
3.1 Independent Investigation. Such Stockholder is aware of, and has
conducted an independent investigation of, the Company's business affairs,
financial condition and prospects, and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to grant the Options
granted by such Stockholder hereunder. Without limiting the foregoing, such
Stockholder has reviewed and is familiar with all the Company's filings with the
Securities and Exchange Commission under the Securities Exchange Act of 1934. In
entering into this agreement, such Stockholder has not relied on any written or
oral statement of any nature with respect to the business, financial condition
or prospects of the Company made by any Optionee or any other entity, including,
without limitation, the Company.
3.2 Ownership of the Securities. Such Stockholder is the beneficial
owner of the Shares set forth opposite such Stockholder's name in Schedule A
hereto, and such Shares are owned free and clear of all liens, encumbrances,
charges, security interests, claims and assessments, and are subject to no
restrictions with respect to transferability except in compliance with
applicable securities laws.
3.3 Restriction on Sale. For so long as the Options remain in effect,
such Stockholder shall not sell, offer or agree to sell, grant any option for
the sale of, transfer or otherwise dispose of, hypothecate, pledge or otherwise
encumber, directly or indirectly, any of the Shares, or voluntarily initiate or
effect any conversion of the Shares into Common Stock or other securities of the
Company.
3.4 Sale of Stock. The sale and delivery of the Shares to each Optionee
upon exercise of the Options pursuant to the terms hereof will vest in such
Optionee legal and valid title to the Shares free and clear of all
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liens, encumbrances or other defects of title other than (i) those created by
such Optionee, and (ii) restrictions on sales of the Shares under applicable
securities laws.
3.5 No Conflict. The execution, delivery and performance by such
Stockholder of this Agreement and the consummation by it of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time, or both, (i) violate any provision of law, rule or regulation, foreign
or domestic, applicable to such Stockholder, (ii) violate any order, judgment or
decree of any court or governmental agency or authority applicable to such
Stockholder, (iii) in the case of a Stockholder that is a corporation or
partnership, violate the certificate of incorporation and by-laws or partnership
agreement, as applicable, of such Stockholder or (iv) violate any contract,
agreement or arrangement to which the Stockholder is a party or by which such
Stockholder is bound. No consent, approval or authorization of, or exemption by,
or filing with, any governmental authority or third party is required to be
obtained by such Stockholder in connection with the execution, delivery and
performance by it of this Agreement or the taking of any other action
contemplated hereby.
3.6 Due Authorization. In the case of any Stockholder that is a
corporation or partnership, all corporate or partnership action, as applicable,
necessary for the authorization of this Agreement and the performance of all
obligations of such Stockholder hereunder has been taken.
3.7 Further Purchases of Company Stock by Optionee. Such Stockholder
has been informed by the Optionees that the Optionees may determine to purchase
additional outstanding shares of capital stock of the Company from other
stockholders of the Company in the future. Such Stockholder further understands
that the terms of any such additional purchases by the Optionees will be
determined by the Optionees and such stockholders and/or the Company. Such
Stockholder also understands that the Optionees regard the execution of this
agreement as a condition to proceeding with any additional purchases of capital
stock of the Company.
3.8 Finders. There is no investment banker, broker, finder, consultant
or similar intermediary that has
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been retained by, or is authorized to act on behalf of, such Stockholder who is
entitled to any fee or commission upon consummation of the transactions
contemplated by this Agreement.
3.9 Publicity. Such Stockholder shall not issue any press release or
otherwise make any such public statement with respect to the transactions
contemplated hereby without the prior consent of the Optionees, except that no
prior consent shall be required if such disclosure is required by law, in which
case the Stockholder shall provide the Optionees with prior notice of such
public statement.
3.10 Restriction on Resale. Each Stockholder hereby agrees that, during
the period indicated, such Stockholder shall not exercise Warrants owned by such
Stockholder for a number of shares of Common Stock that exceeds the percentage
of the shares of Common Stock underlying such Warrants set forth in the table
below (or sell through a short sale or derivatives transaction more than such
percentage of such shares):
Period Percentage
------ ----------
Closing of transactions
contemplated by Purchase
Agreement ("Closing")
until the date
6 months thereafter.................................0%
6 months after the Closing
until the date
12 months after the Closing........................50%
After the date 12 months
after Closing.....................................100%
Notwithstanding the foregoing, the restrictions in this Section 3.10 shall not
apply if (i) following the end of any twenty consecutive trading day period in
which the closing bid price of the Common Stock on the Nasdaq National Market
(or, if the Common Stock is not quoted thereon, the closing bid price on the
other principal over-the-counter market or the closing sale price on any
national securities exchange on which the Common Stock is admitted for quotation
or listed) exceeds $5.00 per share (appropriately adjusted for
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any stock split or stock dividend after the date hereof) for any ten trading
days during such twenty trading day period or (ii) an Optionee shall register
any of the shares of Common Stock beneficially owned by such Optionee for sale
pursuant to a registration statement filed with the Securities and Exchange
Commission.
3.11 Further Assurances. Upon the reasonable request of the Optionees,
each Stockholder agrees to prepare, execute and deliver any further instruments
and do any further acts that may be necessary to carry out more effectively the
purposes of this Agreement.
4. Representations, Warranties and Covenants of Optionees.
Each Optionee, severally but not jointly, represents, warrants and
agrees as follows:
4.1 Investment Representations.
(a) Investment Intent. Such Optionee is acquiring the Options and, upon
exercise thereof, the Shares for its own account for investment and not with a
view to distribution.
(b) Qualifications. Such Optionee is an "accredited investor" as
defined in Rule 501(a) under the Securities Act of 1933 (the "Securities Act").
(c) Experience. Such Optionee 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 Options and the
Shares, and has so evaluated the merits and risks of such investment.
(d) Ability to Bear Risk. Such Optionee is able to bear the economic
risk of an investment in the Options and the Shares and, at the present time, is
able to afford a complete loss of such investment.
(e) Reliance. Such Optionee understands and acknowledges that (i) the
Options and 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,
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depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing representations set forth in this Section 4.1.
4.2 Due Authorization. All corporate or partnership action, as
applicable, on the part of such Optionee necessary for the authorization of this
Agreement and the performance of all obligations of such Optionee hereunder has
been taken.
5. Miscellaneous.
5.1 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.
5.2 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.
5.3 Severability. In case any provision in this Agreement 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.
5.4 No Implied Rights. Except as otherwise provided in Section 3.1(e),
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, any interest, rights, remedies or other benefits with
respect to or in connection with any agreement or provision contained herein or
contemplated hereby.
5.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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5.6 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.
5.7 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
5.8 Notices. All notices and other communications under this Agreement
shall be in writing, and shall be deemed to have been duly given on the date of
delivery if delivered personally, on the date transmitted by telecopy or on the
second day after mailing if mailed to the party to whom notice is to be given by
first class mail, registered or certified, postage prepaid, and addressed as
follows (until any such address is changed by notice duly given):
(a) if to the Optionees, to:
SOFTBANK Holdings Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention:
(b) if to a Stockholder, at such Stockholder's address as set forth on
Exhibit A hereto.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
STOCKHOLDERS OPTIONEES
Huberfeld Xxxxxx Family SOFTBANK Technology
Foundation Ventures IV L.P.
By:/s/ Xxxxxx Xxxxxxxxx By: STV IV LLC
------------------------- Its General Partner
Title: President By: /s/Xxxxxxx X. Xxxx
--------------------- ----------------------------
Millenco LP Title: Managing Director
By:/s/ Xxxxxx Xxxxxxxxx
-------------------------
Title: CEO SOFTBANK Holdings Inc.
----------------------
By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxxx/Xxxxx --------------------------------
Xxxxxx Partnership
Title: Vice Chairman
By:/s/ Xxxxxx Xxxxxxxxx
-------------------------
Title: Partner
----------------------
/s/ Xxxx X. Xxxxxx
----------------------------
Xxxx X. Xxxxxx
/s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxx
----------------------------
Xxxxx Xxxxx
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EXHIBIT A
OPTIONS TO OPTIONS TO
BE PURCHASED BE PURCHASED AGGREGATE
NO. OF BY SOFTBANK BY SOFTBANK PURCHASE
NAME SHARES TECHNOLOGY HOLDINGS PRICE
Huberfeld Xxxxxx Family
Foundation
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000 400 200 200 $73,282.45
Millenco LP
000 Xxxxxxxx
Xxx Xxxx, XX 00000 130 65 65 23,816.79
Xxxxxx Xxxxxxxxx/
Xxxxx Xxxxxx Partnership
000 Xxxx 00xx Xx.,
00xx Xxxxx
Xxx Xxxx, XX 00000 35 17 18 6,412.21
Xxxx X. Xxxxxx
0000 Xxx Xxx.
Xxxxxxxx, XX 00000 60 30 30 10,992.37
Xxxx Xxxxxx
000 Xxxxx Xxx.
Xxx Xxxx, XX 00000 20 10 10 3,664.12
Xxxxx Xxxxx
0000 Xxxxxxx Xxx.
Xxxxxxxx, XX 00000 10 5 5 1,832.06
Total 655 327 328 $120,000.00
