EXHIBIT 4.10
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR PURSUANT
TO RULE 144 OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.
WARRANT TO PURCHASE STOCK
Company: FIRST VIRTUAL COMMUNICATIONS, INC., a Delaware
corporation
Number of Shares: the Designated Number (as defined below), subject to
adjustment as provided herein
Class of Stock: Common
Warrant Price: the Designated Price (as defined below) per share,
subject to adjustment as provided herein
Issue Date: April 3, 2003
Expiration Date: April 2, 2008
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK ("Holder") is
entitled to purchase the number of fully paid and nonassessable shares of the
class of securities (the "Shares") of the Company at the Warrant Price, all as
set forth above and as adjusted pursuant to Article 2 of this Warrant, subject
to the provisions and upon the terms and conditions set forth in this Warrant.
As used herein, the term "Designated Price" means the average per share closing
price of the Shares reported during the 30-trading-day period immediately before
the Issue Date, which average closing price equals $0.32. As used herein, the
term "Designated Number" means the quotient obtained from dividing (a) $90,000
by (b) the Designated Price.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant
by delivering a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Article 1.2, Holder shall also
deliver to the Company a check, wire transfer (to an account designated by the
Company), or other from of payment acceptable to the Company for the aggregate
Warrant Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant
as specified in Article 1.1, Holder may from time to time convert this Warrant,
in whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the
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aggregate Warrant Price of such Shares by (b) the fair market value of one
Share. The fair market value of the Shares shall be determined pursuant to
Article 1.3.
1.3 Fair Market Value. If the Company's common stock is
traded in a public market and the shares are common stock, the fair market value
of each Share shall be the closing price of a Share reported for the business
day immediately before Holder delivers its Notice of Exercise to the Company. If
the Company's common stock is not traded in a public market, the Board of
Directors of the Company shall determine fair market value in its reasonable
good faith judgment.
1.4 Delivery of Certificate and New Warrant. Promptly
after Holder exercises or converts this Warrant and, if applicable, the Company
receives payment of the aggregate Warrant Price, the Company shall deliver to
Holder certificates for the Shares acquired and, if this Warrant has not been
fully exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.5 Replacement of Warrants. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of mutilation, or surrender and cancellation of this
Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor.
1.6 Treatment of Warrant Upon Acquisition of Company.
1.6.1 "Acquisition". For the purpose of this
Warrant, "Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities immediately before the transaction beneficially own less than 50% of
the outstanding voting securities of the surviving entity immediately after the
transaction.
1.6.2 Treatment of Warrant at Acquisition.
A) Upon the written request of the Company, Holder agrees that, in the
event of an Acquisition in which the sole consideration is cash, either (a)
Holder shall exercise its conversion or purchase right under this Warrant and
such exercise will be deemed effective immediately prior to the consummation of
such Acquisition or (b) if Holder elects not to exercise the Warrant, this
Warrant will expire upon the consummation of such Acquisition. The Company shall
provide Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in
connection with such contemplated Acquisition giving rise to such notice), which
is to be delivered to Holder not less than ten (10) days prior to the closing of
the proposed Acquisition.
B) Upon the written request of the Company, Holder agrees that, in the
event of an Acquisition that is an "arms length" sale of all or substantially
all of the Company's assets (and only its assets) to a third party that is not
an Affiliate (as defined below) of the Company (a "True Asset Sale"), either (a)
Holder shall exercise its conversion or purchase right under this Warrant and
such exercise will be deemed effective immediately prior to the consummation of
such Acquisition or (b) if Holder elects not to
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exercise the Warrant, this Warrant will continue until the Expiration Date if
the Company continues as a going concern following the closing of any such True
Asset Sale. The Company shall provide the Holder with written notice of its
request relating to the foregoing (together with such reasonable information as
the Holder may request in connection with such contemplated Acquisition giving
rise to such notice), which is to be delivered to Holder not less than ten (10)
days prior to the closing of the proposed Acquisition.
C) Upon the closing of any Acquisition other than those particularly
described in subsections (A) and (B) above, the successor entity shall assume
the obligations of this Warrant, and this Warrant shall be exercisable for the
same securities, cash, and property as would be payable for the Shares issuable
upon exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The
Warrant Price and/or number of Shares shall be adjusted accordingly.
As used herein "Affiliate" shall mean any person or entity that owns or controls
directly or indirectly twenty (20) percent or more of the stock of Company, any
person or entity that controls or is controlled by or is under common control
with such persons or entities, and each of such person's or entity's officers,
directors, joint venturers or partners, as applicable.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares
or pays a dividend on the Shares payable in common stock, or other securities,
then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend occurred. If the Company subdivides the Shares by
reclassification or otherwise into a greater number of shares or takes any other
action which increase the amount of stock into which the Shares are convertible,
the number of shares purchasable hereunder shall be proportionately increased
and the Warrant Price shall be proportionately decreased. If the outstanding
shares are combined or consolidated, by reclassification or otherwise, into a
lesser number of shares, the Warrant Price shall be proportionately increased
and the number of Shares shall be proportionately decreased.
2.2 Reclassification, Exchange, Combinations or
Substitution. Upon any reclassification, exchange, substitution, or other event
that results in a change of the number and/or class of the securities issuable
upon exercise or conversion of this Warrant (and subject to Section 1.6.2, if
applicable), Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. Such an
event shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company's Certificate of Incorporation upon
the closing of a registered public offering of the Company's common stock. The
Company or its successor shall promptly issue to Holder an amendment to this
Warrant
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setting forth the number and kind of such new securities or other property
issuable upon exercise or conversion of this Warrant as a result of such
reclassification, exchange, substitution or other event that results in a change
of the number and/or class of securities issuable upon exercise or conversion of
this Warrant. The amendment to this Warrant shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 2 including, without limitation, adjustments to the Warrant
Price and to the number of securities or property issuable upon exercise of the
new Warrant. The provisions of this Article 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 [reserved]
2.4 No Impairment. The Company shall not, by amendment of
its Certificate of Incorporation or through a 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 under this Warrant by the Company,
but shall at all times in good faith assist in carrying out of all the
provisions of this Article 2 and in taking all such action as may be necessary
or appropriate to protect Holder's rights under this Article against impairment.
2.5 Fractional Shares. No fractional Shares shall be
issuable upon exercise or conversion of the Warrant and the number of Shares to
be issued shall be rounded down to the nearest whole Share. If a fractional
share interest arises upon any exercise or conversion of the Warrant, the
Company shall eliminate such fractional share interest by paying Holder the
amount computed by multiplying the fractional interest by the fair market value
of a full Share.
2.6 Certificate as to Adjustments. Upon each adjustment
of the Warrant Price, the Company shall promptly notify Holder in writing, and,
at the Company's expense, promptly compute such adjustment, and furnish Holder
with a certificate of its Chief Financial Officer setting forth such adjustment
and the facts upon which such adjustment is based. The Company shall, upon
written request, furnish Holder a certificate setting forth the Warrant Price in
effect upon the date thereof and the series of adjustments leading to such
Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company
represents and warrants to the Holder as follows:
(a) [reserved]
(b) All Shares which may be issued upon the
exercise of the purchase right represented by this Warrant shall, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable, and free of
any liens and encumbrances except for restrictions on transfer provided for
herein or under applicable federal and state securities laws.
(c) [reserved]
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3.2 Notice of Certain Events. If the Company proposes at
any time (a) to declare any dividend or distribution upon any of its stock,
whether in cash, property, stock, or other securities and whether or not a
regular cash dividend; (b) [reserved]; (c) to effect any reclassification or
recapitalization of any of its stock; (d) to merge or consolidate with or into
any other corporation, or sell, lease, license, or convey all or substantially
all of its assets, or to liquidate, dissolve or wind up; or (e) [reserved],
then, in connection with each such event, the Company shall give Holder: (1) at
least 10 days prior written notice of the date on which a record will be taken
for such dividend, distribution, or subscription rights (and specifying the date
on which the holders of common stock will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred to in (c)
and (d) above; (2) in the case of the matters referred to in (c) and (d) above
at least 10 days prior written notice of the date when the same will take place
(and specifying the date on which the holders of common stock will be entitled
to exchange their common stock for securities or other property deliverable upon
the occurrence of such event); and (3) [reserved].
3.3 [Reserved]
3.4 No Shareholder Rights. Except as provided in this
Warrant, the Holder will not have any rights as a shareholder of the Company
until the exercise of this Warrant.
ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. This Warrant has been
issued by the Company in reliance upon Holder's representations and warranties
contained in Sections 4.1 through 4.5 below.
4.1 Purchase for Own Account. This Warrant and the
securities to be acquired upon exercise of this Warrant by the Holder will be
acquired for investment for the Holder's account, not as a nominee or agent, and
not with a view to the public resale or distribution within the meaning of the
Act. Holder also represents that the Holder has not been formed for the specific
purpose of acquiring this Warrant or the Shares.
4.2 Disclosure of Information. The Holder has received or
has had full access to all the information it considers necessary or appropriate
to make an informed investment decision with respect to the acquisition of this
Warrant and its underlying securities. The Holder further has had an opportunity
to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the
Holder has access.
4.3 Investment Experience. The Holder understands that
the purchase of this Warrant and its underlying securities involves substantial
risk. The Holder has experience as an investor in securities of companies in the
development stage and acknowledges that the Holder can bear the economic risk of
such Holder's investment in this Warrant and its underlying securities and has
such knowledge and experience in financial or business matters that the Holder
is capable of evaluating the merits and risks of its investment in this Warrant
and its underlying securities and/or has
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a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables the Holder to be aware of the character, business acumen and financial
circumstances of such persons.
4.4 Accredited Investor Status. The Holder is an
"accredited investor" within the meaning of Regulation D promulgated under the
Act.
4.5 The Act. The Holder understands that this Warrant and
the Shares issuable upon exercise or conversion hereof have not been registered
un the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein. The Holder understands that this Warrant
and the Shares issued upon any exercise or conversion hereof must be held
indefinitely unless subsequently registered under the 1933 Act and qualified
under applicable state securities laws, or unless exemption from such
registration and qualification are otherwise available.
ARTICLE 5. MISCELLANEOUS.
5.1 Term: This Warrant is exercisable in whole or in part
at any time and from time to time on or before the Expiration Date.
5.2 Legends. This Warrant and the Shares (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if
any) shall be imprinted with a legend in substantially the following form:
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND
PURSUANT TO THE PROVISIONS OF ARTICLE 5 OF THAT CERTAIN
WARRANT TO PURCHASE STOCK, DATED AS OF APRIL __, 2003, BETWEEN
THE COMPANY AND HOLDER, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW
OR PURSUANT TO RULE 144 OR, IN THE OPINION OF LEGAL COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS EXEMPT FROM REGISTRATION.
5.3 Compliance with Securities Laws on Transfer. This
Warrant and the Shares issuable upon exercise of this Warrant may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as
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reasonably requested by the Company). The Company shall not require Holder to
provide an opinion of counsel if the transfer is to Silicon Valley Bancshares
(Holder's parent company) or any other affiliate of Holder. Additionally, the
Company shall also not require an opinion of counsel if there is no material
question as to the availability of Rule 144 of the Act, including current
information as referenced in Rule 144(c) of the Act, Holder represents that it
has complied with Rule 144(d) and (e) of the Act in reasonable detail, the
selling broker represents that it has complied with Rule 144(f) of the Act, and
the Company is provided with a copy of Holder's notice of proposed sale.
5.4 Transfer Procedure. Upon receipt by Holder of the
executed Warrant, Holder will transfer all of this Warrant to Silicon Valley
Bancshares, Holder's parent company, by execution of an Assignment substantially
in the form of Appendix 2. Subject to the provisions of Article 5.3 and upon
providing Company with written notice, Silicon Valley Bancshares and any
subsequent Holder may transfer all or part of this Warrant or the Shares
issuable upon exercise of this Warrant (or the Shares issuable directly or
indirectly, upon conversion of the Shares, if any) to any transferee, provided,
however, in connection with any such transfer, Silicon Valley Bancshares or any
subsequent Holder will give the Company notice of the portion of the Warrant
being transferred with the name, address and taxpayer identification number of
the transferee and Holder will surrender this Warrant to the Company for
reissuance to the transferee(s) (and Holder if applicable).
5.5 Notices. All notices and other communications from
the Company to the Holder, or vice versa, shall be deemed delivered and
effective when given personally or mailed by first-class registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
or the Holder, as the case may (or on the first business day after confirmed
transmission by facsimile) be, in writing by the Company or such holder from
time to time. Effective upon receipt of the fully executed Warrant and the
initial transfer described in Article 5.4 above, all notices to the Holder shall
be addressed as follows until the Company receives notice of a change of address
in connection with a transfer or otherwise:
Silicon Valley Bancshares
Attn: Treasury Department
0000 Xxxxxx Xxxxx, XX 000
Xxxxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice to the Company shall be addressed as follows until the Holder
receives notice of a change in address:
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First Virtual Communications, Inc.
Attn: Chief Financial Officer
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Telephone: 000.000.0000
Facsimile: 408.748.2241
5.6 Waiver. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.
5.7 Attorney's Fees. In the event of any dispute between
the parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party all
costs incurred in such dispute, including reasonable attorney's fees.
5.8 Automatic Conversion upon Expiration. In the event
that, upon the Expiration Date, the fair market value of one Share (or other
security issuable upon the exercise hereof) as determined in accordance with
Section 1.3 above is greater than the Exercise Price in effect on such date,
then this Warrant shall automatically be deemed on and as of such date to be
converted pursuant to Section 1.2 above as to all Shares (or such other
securities) for which it shall not previously have been exercised or converted,
and the Company shall promptly deliver a certificate representing the Shares (or
such other securities) issued upon such conversion to the Holder.
5.9 Counterparts. This Warrant may be executed in
counterparts, all of which together shall constitute one and the same agreement.
5.10 Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of California, without giving
effect to its principles regarding conflicts of law.
[remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
executed and delivered as of the date first above written.
"COMPANY"
FIRST VIRTUAL COMMUNICATIONS, INC.
By: /s/ Xxxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxx
------------------------------
(Print)
Title: Chairman of the Board, President or
Vice President
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
------------------------------
(Print)
Title: Chief Financial Officer, Secretary,
Assistant Treasurer or Assistant
Secretary
"HOLDER"
SILICON VALLEY BANK
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
------------------------------
(Print)
Title:
------------------------------
Signature Page
APPENDIX 1
NOTICE OF EXERCISE
1. Holder elects to purchase ___________ shares of the Common
Stock of __________________ pursuant to the terms of the attached Warrant, and
tenders payment of the purchase price of the shares in full.
[or]
1. Holder elects to convert the attached Warrant into Shares/cash
[strike one] in the manner specified in the Warrant. This conversion is
exercised for _____________________ of the Shares covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing the
shares in the name specified below:
___________________________________________
Holders Name
___________________________________________
___________________________________________
(Address)
3. By its execution below and for the benefit of the Company,
Holder hereby restates each of the representations and warranties in Article 4
of the Warrant as the date hereof.
HOLDER:
______________________________
By:___________________________
Name:_________________________
Title:________________________
(Date):_______________________
Appendix 1
APPENDIX 2
ASSIGNMENT
FOR VALUE RECEIVED, SILICON VALLEY BANK HEREBY SELLS, ASSIGNS AND
TRANSFERS UNTO
NAME: SILICON VALLEY BANCSHARES
ADDRESS: 0000 XXXXXX XXXXX (XX-000)
XXXXX XXXXX, XX 00000
TAX ID: 00-0000000
THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY FIRST VIRTUAL
COMMUNICATIONS, INC. (THE "COMPANY"), ON APRIL __, 2003 (THE "WARRANT")
TOGETHER WITH ALL RIGHTS, TITLE AND INTEREST THEREIN.
SILICON VALLEY BANK
By:__________________________________
Name:________________________________
Title:_______________________________
Date: April __, 2003
By its execution below, and for the benefit of the Company, Silicon Valley
Bancshares makes each of the representations and warranties set forth in Article
4 of the Warrant as of the date hereof.
SILICON VALLEY BANCSHARES
By:__________________________________
Name:________________________________
Title: ______________________________
Appendix 2
