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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 19, 1999
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Date of Report (Date of earliest event reported)
CyberCash, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-27470 54-725021
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
2100 Reston Parkway, Reston, Virginia 20191
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 620-4200
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Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
The purpose of this Form 8-K is to file a legal opinion and form of
warrant in connection with a public offering under Securities Act Registration
Statement File Number 333-79943. On November 19, 1999, CyberCash, Inc. (the
"Company") issued and sold a warrant to purchase 472,254 shares of common stock.
The exercise price of the warrant is initially equal to $13.345 per share.
The other purpose of this Form 8-K is to report that on November 19,
1999, the Company entered into a subscription agreement with one of its
directors, William N. Melton, pursuant to which Mr. Melton agreed to purchase
1,186,240 shares of the Company's common stock at a price per share of $8.43,
for aggregate proceeds to the Company of $10,000,000. The Company and Mr. Melton
completed this transaction on November 19, 1999.
The form of warrant and the subscription agreement are filed as
exhibits to this Current Report on Form 8-K. This summary description of the
transaction is qualified in its entirety by reference to the documents filed as
exhibits hereto.
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
4.1 Form of Warrant dated as of November 19, 1999.
5.01 Legal Opinion dated of November 19, 1999.
99.1 Subscription Agreement between the Company and William N.
Melton dated November 19, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
CyberCash, Inc.
Date: November 19, 1999 By: /s/ Dennis N. Cavender
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Dennis N. Cavender
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.1 Form of Warrant dated as of November 19, 1999
5.01 Legal Opinion dated as November 19, 1999.
Subscription Agreement between the Company and William N.
99.1 Melton dated November 19, 1999.
</TABLE>
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EXHIBIT 4.1
Right to
Purchase
472,254
Shares of
Common Stock, par
value $.001
per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, RGC INTERNATIONAL INVESTORS, LDC
("RGC") or its registered assigns, is entitled to purchase from CyberCash, Inc.,
a Delaware corporation (the "COMPANY"), at any time or from time to time during
the period specified in Section 2 hereof, Four Hundred Seventy-Two Thousand, Two
Hundred Fifty-Four (472,254) fully paid and nonassessable shares of the
Company's Common Stock, par value $.001 per share (the "COMMON STOCK"), at an
exercise price of $13.345 per share, subject to adjustment as provided herein
(the "EXERCISE PRICE"). The term "WARRANT SHARES," as used herein, refers to the
shares of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Section 4 hereof. The
term "WARRANTS" means this Warrant and the other Warrants, if any, issued
pursuant to that certain letter agreement, dated November 15, 1999, by and
between the Company and RGC (the "LETTER AGREEMENT").
This Warrant is subject to the following terms, provisions, and
conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
(a) Subject to the provisions hereof, this Warrant may be exercised
by the holder hereof, in whole or in part, by the surrender of this Warrant,
together with a completed exercise agreement in the form attached hereto (the
"EXERCISE AGREEMENT"), to the Company during normal business hours on any
business day at the Company's principal executive offices (or such other office
or agency of the Company as it may designate by notice to the holder hereof),
and upon payment to the Company in cash, by certified or official bank check or
by wire transfer for the account of the Company of the Exercise Price for the
Warrant Shares specified in the Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued to the holder hereof or such holder's
designee, as the record owner of such shares, as of the close of business on the
date on which this Warrant shall have been surrendered, the completed Exercise
Agreement shall have been delivered, and payment shall have been made for such
shares as set forth above. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof within a reasonable time, not exceeding
three (3) business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the holder hereof and shall be registered in the name of such holder or such
other name as shall be designated by such holder. If this Warrant shall have
been exercised only in
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part, then, unless this Warrant has expired, the Company shall, at its expense,
at the time of delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised. In lieu of delivering physical certificates
representing the Warrant Shares issuable upon exercise of this Warrant, provided
the Company's transfer agent is participating in the Depository Trust Company
("DTC") Fast Automated Securities Transfer program, upon written request of the
holder, the Company shall cause its transfer agent to electronically transmit
the Warrant Shares issuable upon exercise hereof to the holder by crediting the
account of the holder's Prime Broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system. The time period for delivery of the Warrant
Shares specified above shall also apply to the electronic transmittal of the
Warrant Shares through the DWAC system.
(b) In the event that, at the time of any exercise of this Warrant,
the issuance of the Warrant Shares to the holder is not then registered pursuant
to the Registration Statement (as defined in Section 4(l)(iv) hereof), the
Company will be obligated, in lieu of issuing Warrant Shares to the holder
pursuant to Section 1(a) above, to pay to the holder an amount in cash equal to
the product of (x) the number of Warrant Shares issuable pursuant to the
Exercise Agreement submitted by the holder to the Company, multiplied by (y) the
difference between (i) the Closing Price (as defined below) of the Common Stock
on the date of the Exercise Agreement minus (ii) the Exercise Price then in
effect. Notwithstanding the provisions of Section 1(a) above, in the event of a
payment by the Company hereunder, the holder shall not be obligated to pay the
Exercise Price for the Warrant Shares specified in the Exercise Agreement. For
purposes of this section, "CLOSING PRICE" shall mean (i) the last sale price of
the Common Stock on the Nasdaq National Market ("NASDAQ"), as reported by
Bloomberg, L.P. ("Bloomberg"), on the date that the Exercise Agreement is
delivered, or (ii) if Nasdaq is not the principal trading market for the shares
of Common Stock, the last reported sale price on the principal trading market
for the Common Stock on the date that the Exercise Agreement is delivered, as
reported by Bloomberg, or (iii) if the foregoing do not apply, the last reported
sale price for the Common Stock in the over-the-counter market on the electronic
bulletin board on the date that the Exercise Agreement is delivered, as reported
by Bloomberg, or (iv) if such price cannot be calculated as of such date on any
of the foregoing bases, the Closing Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of the Company
or, at the option of a majority-in-interest of the holders of the outstanding
Warrants, by (b) an independent investment bank of nationally recognized
standing in the valuation of businesses similar to the business of the Company.
(c) Notwithstanding anything in this Warrant to the contrary, in no
event shall the holder of this Warrant be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of Warrants (or portions
thereof) upon exercise of which the sum of (i) the number of shares of Common
Stock beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company subject to a limitation on conversion or exercise
analogous to the limitation contained herein) and (ii) the number of shares of
Common Stock issuable upon exercise of the
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Warrants (or portions thereof) with respect to which the determination described
herein is being made, would result in beneficial ownership by the holder and its
affiliates of more than 9.9% of the outstanding shares of Common Stock. For
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13D-G thereunder, except as otherwise provided
in clause (i) hereof.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or from time to
time on or after the date set forth on the signature page hereof (the "ISSUE
DATE") and before 5:00 p.m., New York City time on the fifth (5th) anniversary
of the Issue Date (the "EXERCISE PERIOD").
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and agrees as
follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon issuance
in accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof.
(b) RESERVATION OF SHARES. During the Exercise Period, the Company
shall at all times have authorized and reserved for the purpose of issuance upon
exercise of this Warrant, free from preemptive rights, a sufficient number of
shares of Common Stock to provide for the exercise in full of this Warrant at
the then current Exercise Price. As of the date of issuance of the Warrants,
566,705 authorized and unissued shares of Common Stock have been duly reserved
for issuance upon exercise of the Warrant (the "RESERVED AMOUNT"). In addition,
if the Company shall issue any securities or make any change in its capital
structure which would change the number of shares of Common Stock into which the
Warrants shall be exercisable at the then current Exercise Price, the Company
shall at the same time also make proper provision so that thereafter there shall
be a sufficient number of shares of Common Stock authorized and reserved, free
from preemptive rights, for exercise of the outstanding Warrants. If at any time
a holder of this Warrant submits an Exercise Agreement, and the Company does not
have sufficient authorized but unissued shares of Common Stock available to
effect such exercise in accordance with the provisions of this Warrant (an
"EXERCISE DEFAULT"), the Company shall issue to the holder all of the shares of
Common Stock which are available to effect such exercise. The portion of this
Warrant included in the Exercise Agreement which exceeds the amount which is
then exercisable into available shares of Common Stock (the "EXCESS AMOUNT")
shall, notwithstanding anything to the contrary contained herein, not be
exercisable into Common Stock in accordance with the terms hereof until (and at
the holder's option at any time after) the date additional shares of Common
Stock are authorized by the Company to permit such exercise, at which time the
Exercise Price in respect thereof shall be the lesser of (i) the Exercise Price
on the Exercise Default Date (as defined below) and (ii) the Exercise Price on
the exercise date elected by the holder in respect thereof. The Company shall
use its best efforts to effect an increase in the authorized number of shares of
Common Stock as soon as possible following the earlier of (i) such time that a
holder of Warrants notifies the Company or that the Company
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otherwise becomes aware that there are or likely will be insufficient authorized
and unissued shares to allow full exercise thereof and (ii) an Exercise Default.
In addition, the Company shall pay to the holder payments ("EXERCISE DEFAULT
PAYMENTS") for an Exercise Default in the amount of (a) .24, multiplied by (b)
the Market Price (as defined in Section 4 hereof) on the date of the Exercise
Default of the Warrant Shares which would have been issuable upon exercise of
the Excess Amount, multiplied by (c) (N/365), where N = the number of days from
the day the holder submits an Exercise Agreement giving rise to an Exercise
Default (the "EXERCISE DEFAULT DATE") to the date (the "AUTHORIZATION DATE")
that the Company authorizes a sufficient number of shares of Common Stock to
effect the exercise in full of the Warrants. The Company shall send notice to
the holder of the authorization of additional shares of Common Stock, the
Authorization Date and the amount of the holder's accrued Exercise Default
Payments. The accrued Exercise Default Payment for each calendar month shall be
paid in cash or shall be convertible into Common Stock at the applicable Market
Price, at the holder's option, as follows:
(i) In the event the holder elects to take such payment in
cash, cash payment shall be made to holder by the fifth (5th) day of the month
following the month in which it has accrued; and
(ii) In the event the holder elects to take such payment in
Common Stock, the holder may convert such payment amount into Common Stock at
the Market Price (as in effect at the time of exercise) at any time after the
fifth (5th) day of the month following the month in which it has accrued in
accordance with the terms hereof (so long as there is then a sufficient number
of authorized shares of Common Stock).
The holder's election shall be made in writing to the Company at any
time prior to 9:00 p.m, New York City time, on the third (3rd) day of the month
following the month in which Exercise Default Payments have accrued. If no
election is made, the holder shall be deemed to have elected to receive cash.
Nothing herein shall limit the holder's right to pursue actual damages (to the
extent in excess of the Exercise Default Payments) for the Company's failure to
maintain a sufficient number of authorized shares of Common Stock, and each
holder shall have the right to pursue all remedies available at law or in equity
(including a decree of specific performance and/or injunctive relief).
(c) LISTING. The Company shall, to the extent permitted by Nasdaq,
promptly secure the listing of the shares of Common Stock issuable upon exercise
of the Warrant upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance upon exercise of this Warrant) and shall maintain,
so long as any other shares of Common Stock shall be so listed, such listing of
all shares of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be listed
on such national securities exchange or automated quotation system.
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(d) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment
of its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.
(e) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.
4. ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise Price and
the number of Warrant Shares shall be subject to adjustment from time to time as
provided in this Section 4. In the event that any adjustment of the Exercise
Price as required herein results in a fraction of a cent, such Exercise Price
shall be rounded up to the nearest cent.
(a) ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON ISSUANCE
OF COMMON STOCK. Except as otherwise provided in Sections 4(c) and 4(e) hereof,
if and whenever the Company issues or sells, or in accordance with Section 4(b)
hereof is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share (before deduction of reasonable
expenses or commissions or underwriting discounts or allowances in connection
therewith) less than the Market Price (as hereinafter defined) on the date of
issuance of such Common Stock (a "DILUTIVE ISSUANCE"), then immediately upon the
Dilutive Issuance, the Exercise Price will be reduced to a price determined by
multiplying the Exercise Price in effect immediately prior to the Dilutive
Issuance by a fraction, (i) the numerator of which is an amount equal to the sum
of (x) the number of shares of Common Stock actually outstanding immediately
prior to the Dilutive Issuance, plus (y) the quotient of the aggregate
consideration, calculated as set forth in Section 4(b) hereof, received by the
Company upon such Dilutive Issuance divided by the Market Price in effect
immediately prior to the Dilutive Issuance, and (ii) the denominator of which is
the total number of shares of Common Stock Deemed Outstanding (as defined below)
immediately after the Dilutive Issuance.
(b) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Exercise Price under Section 4(a) hereof, the following
will be applicable:
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(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("CONVERTIBLE
SECURITIES") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "OPTIONS") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any
manner issues or sells any Convertible Securities, whether or not immediately
convertible (other than where the same are issuable upon the exercise of
Options), and the price per share for which Common Stock is issuable upon such
conversion or exchange is less than the Market Price on the date of issuance of
such Convertible Securities, then the maximum total number of shares of Common
Stock issuable upon the conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such Convertible Securities,
be deemed to be outstanding and to have been issued and sold by the Company for
such price per share. For the purposes of the preceding sentence, the "price per
share for which Common Stock is issuable upon such conversion or exchange" is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exchange thereof at the time
such Convertible Securities first become convertible or exchangeable, by (ii)
the maximum total number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment to the
Exercise Price will be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If there is a
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the
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Company upon the conversion or exchange of any Convertible Securities; or (iii)
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock (other than under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the time
of such change will be readjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed additional consideration or changed
conversion rate, as the case may be, at the time initially granted, issued or
sold.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. If, in any case, the total number of shares of Common Stock issuable
upon exercise of any Option or upon conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option or to
convert or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to the Exercise
Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in respect of
the actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.
(vi) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No adjustment
to the Exercise Price will be made (i) upon the exercise of any warrants,
options or convertible securities granted, issued and outstanding on the date of
issuance of this Warrant; (ii) upon the grant or exercise of any stock or
options which may hereafter be granted or exercised under any employee benefit
plan of the Company now existing or to be implemented in the future, so long as
the issuance of such stock or options is approved by a majority of the
independent members of the Board of Directors of the Company or a majority of
the members of a committee of independent directors established for such
purpose; (iii) upon the exercise of the Warrants or (iv) upon the sale or
issuance of up to $10,000,000 Common Stock under the Registration Statement
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at a price not less than 90 percent of the Market Price on the date of issuance
of such Common Stock.
(c) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at
any time after the Issue Date subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise) the shares of
Common Stock acquirable hereunder into a greater number of shares, then, after
the date of record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced. If the
Company at any time after the Issue Date combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) the shares of
Common Stock acquirable hereunder into a smaller number of shares, then, after
the date of record for effecting such combination, the Exercise Price in effect
immediately prior to such combination will be proportionately increased.
(d) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
(e) CONSOLIDATION, MERGER OR SALE. In case, at any time after the
Issue Date, of any consolidation of the Company with, or merger of the Company
into any other corporation, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection with a
plan of complete liquidation of the Company, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder of this Warrant will have the right to acquire and receive
upon exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for the number of shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of this Warrant had such consolidation, merger or sale
or conveyance not taken place. In any such case, the Company will make
appropriate provision to insure that the provisions of this Section 4 hereof
will thereafter be applicable as nearly as may be in relation to any shares of
stock or securities thereafter deliverable upon the exercise of this Warrant.
The Company will not effect any consolidation, merger or sale or conveyance
unless prior to the consummation thereof, the successor corporation (if other
than the Company) assumes by written instrument the obligations under this
Section 4 and the obligations to deliver to the holder of this Warrant such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to acquire.
(f) DISTRIBUTION OF ASSETS. In case, at any time after the Issue
Date, the Company shall declare or make any distribution of its assets
(including cash) to holders of Common Stock as a partial liquidating dividend,
by way of return of capital or otherwise, then, after the date of record for
determining stockholders entitled to such distribution, but prior to the date of
distribution, the holder of this Warrant shall be entitled upon exercise of this
Warrant for
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the purchase of any or all of the shares of Common Stock subject hereto, to
receive the amount of such assets which would have been payable to the holder
had such holder been the holder of such shares of Common Stock on the record
date for the determination of stockholders entitled to such distribution.
(g) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the chief financial officer of the Company.
(h) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
(i) NO FRACTIONAL SHARES. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.
(j) OTHER NOTICES. In case at any time after the Issue Date:
(i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger of
the Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription
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rights or for determining the holders of Common Stock entitled to vote in
respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take place.
Such notice shall also specify the date on which the holders of Common Stock
shall be entitled to receive such dividend, distribution, or subscription rights
or to exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least 30 days prior to the record date or the date on which
the Company's books are closed in respect thereto. Failure to give any such
notice or any defect therein shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.
(k) CERTAIN EVENTS. If any event occurs of the type contemplated by
the adjustment provisions of this Section 4 but not expressly provided for by
such provisions, the Company will give notice of such event as provided in
Section 4(g) hereof, and the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of shares of Common
Stock acquirable upon exercise of this Warrant so that the rights of the holder
shall be neither enhanced nor diminished by such event.
(l) CERTAIN DEFINITIONS.
(i) "COMMON STOCK DEEMED OUTSTANDING" shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) pursuant to Section 4(b)(i)
hereof, the maximum total number of shares of Common Stock issuable upon the
exercise of Options, as of the date of such issuance or grant of such Options,
if any, and (y) pursuant to Section 4(b)(ii) hereof, the maximum total number of
shares of Common Stock issuable upon conversion or exchange of Convertible
Securities, as of the date of issuance of such Convertible Securities, if any.
(ii) "MARKET PRICE," as of any date, (i) means the average of
the last reported sale prices for the shares of Common Stock on Nasdaq for the
five (5) trading days immediately preceding such date as reported by Bloomberg,
or (ii) if Nasdaq is not the principal trading market for the shares of Common
Stock, the average of the last reported sale prices on the principal trading
market for the Common Stock during the same period as reported by Bloomberg, or
(iii) if the foregoing do not apply, the average of the last reported sale
prices in the over-the-counter market on the electronic bulletin board for the
Common Stock during the same period, as reported by Bloomberg, or (iv) if market
value cannot be calculated as of such date on any of the foregoing bases, the
Market Price shall be the fair market value as reasonably determined in good
faith by (a) the Board of Directors of the Corporation or, at the option of a
majority-in-interest of the holders of the outstanding Warrants, by (b) an
independent investment bank of nationally recognized standing in the valuation
of businesses similar to the business of the Company. The manner of determining
the Market Price of the Common Stock set forth in
10
<PAGE> 11
the foregoing definition shall apply with respect to any other security in
respect of which a determination as to market value must be made hereunder.
(iii) "COMMON STOCK," for purposes of this Section 4, includes
the Common Stock, par value $.001 per share, and any additional class of stock
of the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only shares of Common Stock, par value $.001 per share, in respect of
which this Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Section 4(e) hereof, the stock or other securities or property provided for in
such Section.
(iv) "REGISTRATION STATEMENT" means the Company's Registration
Statement on Form S-3, Registration No. 333-79943, which was declared effective
by the Securities and Exchange Commission on June 18, 1999 and any successor
registration statement filed pursuant to Rule 429 under the Securities Act of
1933, as amended.
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the exercise
of this Warrant shall be made without charge to the holder of this Warrant or
such shares for any issuance tax or other costs in respect thereof, provided
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than the holder of this Warrant.
6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) TRANSFER. This Warrant and the rights granted to the holder
hereof are transferable, in whole or in part, upon surrender of this Warrant,
together with a properly executed assignment in the form attached hereto, at the
office or agency of the Company referred to in Section 7(e) below. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary.
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant
is exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Section 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased
11
<PAGE> 12
hereunder, each of such new Warrants to represent the right to purchase such
number of shares as shall be designated by the holder hereof at the time of such
surrender.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Section 7.
(e) REGISTER. The Company shall maintain, at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.
8. NOTICES. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 2100 Reston Parkway, 3rd
Floor, Reston, Virginia 20191, Attention: Chief Financial Officer, or at such
other address as shall have been furnished to the holder of this Warrant by
notice from the Company. Any such notice, request, or other communication may be
sent by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Section 8, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.
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<PAGE> 13
9. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
THE BODY OF LAW CONTROLLING CONFLICTS OF LAW.
10. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may only be
amended by an instrument in writing signed by the Company and the holder hereof.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.
(c) REMEDIES. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holder hereof, by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Warrant will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions hereunder, that the
holder shall be entitled, in addition to all other available remedies at law or
in equity, to an injunction or injunctions restraining, preventing or curing any
breach of this Warrant and to enforce specifically the terms and provisions
hereof, without the necessity of showing economic loss and without any bond or
other security being required.
[Signature Page Follows]
13
<PAGE> 14
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
CYBERCASH, INC.
By: /s/ Dennis N. Cavender
------------------------------
Dennis N. Cavender
Chief Financial Officer
Dated as of November 19, 1999
14
<PAGE> 15
FORM OF EXERCISE AGREEMENT
Dated: ________ __, 199_
To: CyberCash, Inc. (the "COMPANY")
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant and, subject to Section 1(b) of the Warrant, makes payment herewith
in full therefor at the price per share provided by such Warrant in cash or by
certified or official bank check in the amount of $_________.
The Company shall electronically transmit the Common Stock issuable
pursuant to this Exercise Agreement to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC
TRANSFER").
Name of DTC Prime Broker:___________________________________________
Account Number:_____________________________________________________
In lieu of receiving shares of Common Stock issuable pursuant to this
Exercise Agreement by way of a DWAC Transfer, the undersigned hereby requests
that the Company issue a certificate or certificates for the number of shares of
Common Stock set forth below in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:
Name:_______________________________________________________________
Address:____________________________________________________________
If said number of shares of Common Stock shall not be all the shares purchasable
under the within Warrant, a new Warrant is to be issued in the name of said
undersigned covering the balance of the shares purchasable thereunder less any
fraction of a share paid in cash.
By:__________________________________
15
<PAGE> 16
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the attached Warrant, with respect to
the number of shares of CyberCash, Inc. covered thereby set forth hereinbelow,
to:
Name of Assignee Address No. of Shares
- ---------------- ------- -------------
, and hereby irrevocably constitutes and appoints ______________
________________________ as agent and attorney-in-fact to transfer said Warrant
on the books of the above-named corporation, with full power of substitution in
the premises.
Dated: ________ __, 199_
In the presence of:
- -------------------------
Name:
------------------------------------
Signature:
-------------------------------
Title of Signing Officer or Agent (if any):
----------------------------------
Address:
---------------------------------
----------------------------------
Note: The above signature should
correspond exactly with the name on
the face of the within Investment
Option.
<PAGE> 1
Exhibit 5.01
November 19, 1999
Board of Directors
CyberCash, Inc.
2100 Reston Parkway, 3rd Floor
Reston, Virginia 20191
Ladies and Gentlemen:
We are acting as special counsel to CyberCash, Inc., a Delaware
corporation (the "COMPANY"), in connection with its registration statement on
Form S-3, as amended (the "REGISTRATION STATEMENT") filed with the Securities
and Exchange Commission relating to the proposed public offering of a Warrant to
purchase Common Stock (the "WARRANT"), and 472,254 shares of Common Stock which
will be issued upon exercise of the Warrant (the "WARRANT SHARES"), all of which
are to be sold by the Company. This opinion letter is furnished to you at your
request to enable you to fulfill the requirements of Item 601(b)(5) of
Regulation S-K, 17 C.F.R. Section 229.601(b)(5), in connection with the
Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Certificate of Incorporation of the Company, as certified
by the Secretary of the State of the State of Delaware on
August 16, 1999 and by the Chief Financial Officer of the
Company on the date hereof as being complete, accurate, and in
effect.
3. The Bylaws of the Company, as certified by the Chief Financial
Officer of the Company on the date hereof as being complete,
accurate, and in effect.
4. Resolutions of the Board of Directors of the Company adopted
at a meeting held on November 15, 1999, as certified by the
Chief Financial Officer of the Company on the date hereof as
being complete, accurate, and in effect, relating to the
issuance and sale of the Warrant and the Warrant Shares and
arrangements in connection therewith.
<PAGE> 2
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents, and the conformity to authentic original documents of
all documents submitted to us as copies (including telecopies). This opinion
letter is given, and all statements herein are made, in the context of the
foregoing.
This opinion letter is based as to matters of law solely on (i) the
Delaware General Corporation Law, as amended and (ii) Delaware contract law (but
not including any statutes, ordinances, administrative decisions, rules or
regulations of any political subdivision of the State of Delaware). We express
no opinion herein as to any other laws, statutes, ordinances, rules, or
regulations.
Based upon, subject to and limited by the foregoing, we are of the
opinion that following (i) action of the Board of Directors of the Company
approving the price of the Warrant, and (ii) receipt by the Company of the
consideration for the Warrant specified in the resolutions of the Board of
Directors, the Warrant will constitute a binding obligation of the Company,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights (including, without limitation, the
effect of statutory and other law regarding fraudulent conveyances, fraudulent
transfers and preferential transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of equity including,
without limitation, requirements of good faith, fair dealing, conscionability
and materiality (regardless of whether such agreement is considered in a
proceeding in equity or at law). Following issuance of the Warrant Shares
pursuant to the terms of the Warrant and receipt by the Company of the
consideration for the Warrant Shares specified in the Warrant, the Warrant
Shares will be validly issued, fully paid and nonassessable.
The opinion expressed in the paragraph above relating to the Warrant
shall be understood to mean only that if there is a default in performance of an
obligation, (i) if a failure to pay or other damage can be shown and (ii) if the
defaulting party can be brought into a court which will hear the case and apply
the governing law, then, subject to the availability of defenses, and to the
exceptions set forth in the paragraph above, the court will provide a money
damage (or perhaps injunctive or specific performance) remedy.
This opinion letter has been prepared for your use in connection
with the Registration Statement and speaks as of the date hereof. We assume no
obligation to advise you of any changes in the foregoing subsequent to the
delivery of this opinion letter.
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<PAGE> 3
We hereby consent to the filing of this opinion letter as Exhibit
5.01 to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus supplement constituting a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
HOGAN & HARTSON L.L.P.
3
<PAGE> 1
EXHIBIT 99.1
SUBSCRIPTION AGREEMENT
This Subscription Agreement is entered into as of November 19, 1999 by and
between CyberCash, Inc., a Delaware corporation (the "COMPANY"), and William N.
Melton ("BUYER").
1. SALE OF STOCK. Subject to the terms and conditions herein, the Company
agrees to issue to Buyer, and Buyer agrees to purchase from the Company,
1,186,240 shares of the Company's common stock (the "SHARES") at a per share
purchase price of $8.43.
2. PAYMENT. Buyer shall deliver to the Company on the date hereof by check
or wire transfer the aggregate purchase price of the Shares as determined in
accordance with Section 1. Upon receipt of the purchase price, the Company shall
issue the Shares to Buyer.
3. NO RESALE. Buyer understands that the Shares have not been registered
under the Securities Act of 1933, as amended (the "ACT"), in reliance upon
exemptions contained in the Act or interpretations thereof, and cannot be
offered for sale, sold or otherwise transferred unless the Shares subsequently
are so registered or qualify for exemption from registration under the Act.
4. LEGENDS. The certificates evidencing the Shares shall bear a
restrictive legend until such time as the Shares have been registered under the
Act or qualify for exemption from registration under the Act, and a "stock
transfer" order shall be entered in the stock transfer records of the Company
with respect to the Shares.
5. CHOICE OF LAW. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia (excluding
the choice of law rules thereof).
6. ENTIRE AGREEMENT; AMENDMENT. This Subscription Agreement constitutes
the entire Agreement among the parties hereto with respect to the transaction
contemplated herein, and it supersedes all prior oral or written agreements,
commitments or understandings with respect to the matters provided for herein.
No amendment, modification or discharge of this Subscription Agreement shall be
valid or binding unless set forth in writing and duly executed and delivered by
the party against whom enforcement of the amendment, modification or discharge
is sought.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have duly executed this
Subscription Agreement, or have caused this Subscription Agreement to be duly
executed on their behalf, as of the day and year first above written.
CYBERCASH, INC.
By: /s/ DENNIS N. CAVENDER
-----------------------------
Name: Dennis N. Cavender
Title: Chief Financial Officer
WILLIAM N. MELTON
("BUYER")
/s/ WILLIAM N. MELTON
---------------------------------
2
