UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13D-1(A) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13D-2(A).
(AMENDMENT NO. 1)*
FIRST VIRTUAL HOLDINGS INCORPORATED
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
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(Title of Class of Securities)
337486 10 4
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(CUSIP Number)
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RONALD FISHER STEPHEN A. GRANT, ESQ.
SOFTBANK HOLDINGS INC. SULLIVAN & CROMWELL
10 LANGLEY ROAD, SUITE 403 125 BROAD STREET
NEWTON CENTER, MA 02159 NEW YORK, NY 10004
(617) 928-9300 (212) 558-4000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JUNE 2, 1998
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(Date of Event which Requires Filing of this Statement)
(Continued on following pages)
(Page 1 of 9 Pages)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|_|.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
<PAGE>
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746(12-91)
<PAGE>
SCHEDULE 13D
CUSIP NO. 337486 10 4 PAGE 2 OF 12 PAGES
- ---------------------- ------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
SOFTBANK HOLDINGS INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES 19,701,213 (1)(2)
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 4,979,611 (2)
REPORTING ------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 19,701,213 (1) (2)
10 SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,680,824 (1) (2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
81.5% (1) (2)
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14 TYPE OF REPORTING PERSON*
CO
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(1) Such number of shares and percentage are estimated and are
subject to increase as described in Item 5.
(2) See Item 5.
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 337486 10 4 PAGE 3 OF 12 PAGES
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
SOFTBANK TECHNOLOGY VENTURES IV L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES 7,974,392 (1)
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 4,979,611 (1)
REPORTING -------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 7,974,392 (1)
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,954,003 (1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.6%
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14 TYPE OF REPORTING PERSON*
PN
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(1) See Item 5.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 337486 10 4 PAGE 4 OF 12 PAGES
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
SOFTBANK CORPORATION
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
JAPAN
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NUMBER OF 7 SOLE VOTING POWER
SHARES 19,701,213 (1) (2)
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 4,979,611 (2)
REPORTING -------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 19,701,213 (1) (2)
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,680,824 (1) (2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
81.5% (1) (2)
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14 TYPE OF REPORTING PERSON*
HC, CO
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(1) Such number of shares and percentage are estimated and are subject
to increase as described in item 5.
(2) See Item 5.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 337486 10 4 PAGE 5 OF 12 PAGES
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MASAYOSHI SON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
JAPAN
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NUMBER OF 7 SOLE VOTING POWER
SHARES 19,701,213(1)(2)
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 4,979,611(2)
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 19,701,213(1)(2)
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,680,824(1)(2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
81.5%(1)(2)
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14 TYPE OF REPORTING PERSON*
IN
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(1) Such number of shares and percentage are estimated and are subject
to increase as described in Item 5.
(2) See Item 5.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 337486 10 4 PAGE 6 OF 12 PAGES
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
STV IV LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES 7,974,392(1)
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 4,979,611(1)
REPORTING -------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 7,974,392(1)
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,954,003(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.6%(1)
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14 TYPE OF REPORTING PERSON*
OO
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(1) See Item 5.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP NO. 337486 10 4 PAGE 7 OF 12 PAGES
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SOFTBANK Holdings Inc. ("SOFTBANK Holdings"), SOFTBANK Technology
Ventures IV L.P. ("SOFTBANK Technology"), SOFTBANK Corporation ("SOFTBANK"),
Masayoshi Son ("Son") and STV IV LLC ("STV" and, together with SOFTBANK
Holdings, SOFTBANK Technology, SOFTBANK and Son, the "Reporting Persons"),
hereby amend and supplement their Statement on Schedule 13D originally filed by
the Reporting Persons on May 11, 1998 (as amended, the "Statement"), with
respect to the Common Stock, par value $0.001 per share (the "Common Stock"), of
First Virtual Holdings Incorporated, a Delaware corporation (the "Company").
The descriptions contained in the Statement, as amended and
supplemented hereby, of certain agreements and documents are qualified in their
entirety by reference to the complete texts of such agreements and documents,
which have been filed as exhibits to the Schedule 13D, as amended and
supplemented, and incorporated by reference herein. Capitalized terms used, but
not defined, herein shall have the meanings ascribed to them in the Statement.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and restated as follows:
The purpose of the transactions by the Reporting Persons
described in this Statement is the acquisition of a controlling interest in the
Company.
Pursuant to the Purchase Agreement, dated as of April 30, 1998
(the "Purchase Agreement"), by and among the Company, SOFTBANK Holdings and
SOFTBANK Technology, SOFTBANK Holdings and SOFTBANK Technology each severally
agreed to purchase 5,000,000 shares of Common Stock from the Company for a
purchase price of $0.60 per share. The consummation of the transactions
contemplated in the Purchase Agreement is conditioned on the prior or concurrent
consummation of the transactions contemplated in the Option Agreement and the
Promissory Note and Stock Purchase Agreement referred to below.
Pursuant to the Option Agreement, dated as of April 30, 1998 (the
"Option Agreement"), by and among SOFTBANK Technology, SOFTBANK Holdings and the
persons and entities whose names appear on the signature page thereof, SOFTBANK
Technology and SOFTBANK Holdings purchased options (the "Options") on 327 and
328 shares of Series A Convertible Preferred Stock of the Company (the
"Preferred Shares"), respectively. Upon exercise of the Option, each Preferred
Share will be convertible, pursuant to the Conversion Agreement referred to
below, into 9,096 shares of Common Stock. Exercise of the Options is subject to
certain conditions precedent which are expected to be satisfied upon or
following consummation of the transactions contemplated by the Purchase
Agreement and the Promissory Note and Stock Purchase Agreement referred to
below.
Pursuant to the Promissory Note and Stock Purchase Agreement,
dated as of April 30, 1998 (the "Promissory Note and Stock Purchase Agreement"),
by and among SOFTBANK Holdings and holders of Promissory Notes and Common Stock
of the Company listed on Exhibit A thereof, SOFTBANK Holdings has agreed to
purchase and such holders have agreed to sell (1) 1,200,000 shares of Common
Stock and (2) promissory notes (the "Promissory Notes") in a principal amount of
$1,200,000. Pursuant to the Conversion Agreement, upon consummation of such
purchase of the Promissory Notes, the Promissory Notes will be converted into
approximately 2,543,333 shares of Common Stock (subject to increase on account
of accrued interest as described in Item 5 below). The consummation of the
transactions contemplated in the Promissory Note and Stock Purchase Agreement is
conditioned on the prior or concurrent consummation of the transactions
contemplated by the Purchase Agreement. Although at this time SOFTBANK Holdings
has no agreement to do so, SOFTBANK Holdings currently anticipates that 50% of
the shares of Common Stock to be purchased pursuant to the Promissory Note and
Stock Purchase Agreement and 50% of the shares of Common Stock to be issued upon
conversion of the Promissory Notes will be purchased by SOFTBANK Technology.
<PAGE>
CUSIP NO. 337486 10 4 PAGE 8 OF 12 PAGES
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In connection with the execution of the Option Agreement and the
Promissory Note and Stock Purchase Agreement, SOFTBANK Holdings and SOFTBANK
Technology entered into a Conversion Agreement, dated as of April 30, 1998 (the
"Conversion Agreement")(attached hereto as Exhibit G), with the Company
providing for the conversion of the Promissory Notes and the Preferred Shares
into shares of Common Stock. Pursuant to the Conversion Agreement, as soon as
reasonably practicable after acquiring any Promissory Notes or Preferred Shares,
SOFTBANK Holdings and SOFTBANK Technology will tender such Promissory Notes or
Preferred Shares to the Company for conversion into shares of Common Stock. The
Promissory Notes will be converted into a number of shares of Common Stock equal
to the ratio determined by dividing (i) the principal amount of, and accrued but
unpaid interest owing on, the Promissory Notes as of the date of conversion by
(ii) $0.60 (subject to adjustment in certain circumstances). Each Preferred
Share tendered for conversion will be converted into a number of shares of
Common Stock equal to (i) $5,458 divided by (ii) $0.60 (subject to adjustments
in certain circumstances), rounded down to the nearest whole share.
SOFTBANK Holdings and SOFTBANK Technology may transfer a portion
of the shares of Common Stock to be acquired pursuant to the agreements
described above, or assign their respective rights pursuant to such agreements
to acquire shares of Common Stock, Preferred Shares or Promissory Notes to one
or more of their respective affiliates or entities in which they may or may not
have minority equity investments, although they currently have no specific plans
to do so.
Certain stockholders of the Company holding in the aggregate
approximately 42.3% of the shares of Common Stock outstanding as of April 30,
1998 (the "Stockholders") entered into a Stockholders' Agreement, dated as of
April 30, 1998 (the "Stockholders' Agreement"), in favor of SOFTBANK Technology
and SOFTBANK Holdings. Pursuant to the Stockholders' Agreement, each Stockholder
agreed that it will, at any meeting of stockholders of the Company, or in
connection with any written consent of stockholders of the Company, vote or
cause to be voted all shares of Common Stock then held of record or beneficially
owned by such Stockholder (i) in favor of the Stock Issuances (as defined
therein), the execution and delivery by the Company of the Purchase Agreement
and the approval of the terms thereof and each of the other actions contemplated
by the Purchase Agreement and the Stockholders' Agreement, and any actions
required in furtherance thereof; (ii) against any action or agreement that would
result in a breach in any respect of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Purchase Agreement;
and (iii) except as otherwise agreed to in writing in advance by SOFTBANK
Holdings and SOFTBANK Technology, against the following actions (other than the
Stock Issuances and the transactions contemplated by the Purchase Agreement):
(A) any extraordinary corporate transaction, such as a merger, consolidation or
other business combination involving the Company or its subsidiaries; (B) a
sale, lease or transfer of all or substantially all of assets of the Company or
its subsidiaries, or a reorganization, recapitalization, dissolution or
liquidation of the Company or its subsidiaries; (C) any material change in the
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation or By-laws which, in the case of the matters referred to in this
clause (C), is intended, or could reasonably be expected, to impede, delay or
adversely affect the Stock Issuances and the transactions contemplated by the
Purchase Agreement. Each Stockholder also agreed that it will not enter into any
agreement or understanding with any person or entity the effect of which would
be inconsistent or violative of the provisions and agreements contained in the
Stockholders' Agreement and delivered to SOFTBANK Technology and SOFTBANK
Holdings irrevocable proxies to vote all of the shares of Common Stock
beneficially owned by them, together with any shares acquired by them in any
capacity after the date thereof, in the manner and with respect to the matters
set forth in the Stockholders' Agreement.
<PAGE>
CUSIP NO. 337486 10 4 PAGE 9 OF 12 PAGES
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A condition to the consummation of the transactions contemplated
by the Purchase Agreement is that the stockholders of the Company holding a
majority of the outstanding shares of Common Stock will have elected a Board of
Directors consisting of a total of five members meeting the requirement (the
"Board Composition Requirement") that one of such members will be designated by
Lee H. Stein, one of such members will be designated by Paymentech Merchant
Services, Inc. and the remaining members will be designated by SOFTBANK Holdings
and SOFTBANK Technology, acting jointly. In addition, consummation of the
transactions contemplated by the Purchase Agreement is conditioned on the
execution and delivery by Lee H. Stein, June L. Stein, Paymentech Merchant
Services, Inc. and First USA Financial (the "Principal Stockholders"), SOFTBANK
Holdings and SOFTBANK Technology of a voting agreement providing for maintenance
of the Board Composition Requirement for a period ending on the earlier of (1)
the second anniversary of the consummation of the transaction contemplated by
the Purchase Agreement and (2) such time as the Principal Stockholders
collectively beneficially own less than 75% of the number of shares of Common
Stock beneficially owned by them as of the date of the Purchase Agreement.
The Purchase Agreement contains a covenant by the Company to take
customary actions to seek stockholder approval of an amendment of the Company's
Certificate of Incorporation to eliminate the classification of the Company's
Board of Directors so that, following such amendment, the entire Board of
Directors shall be elected at each annual meeting of stockholders.
The Purchase Agreement also provides for the payment by the
Company to SOFTBANK Holdings and SOFTBANK Technology of a termination fee in
certain circumstances. See Exhibit D hereto.
The Reporting Persons expect to explore from time to time a
variety of plans and proposals with respect to the Company which could relate to
strategic alliances or business combinations with third parties and/or equity
investments in the Company by third parties. There can be no assurance that the
Reporting Persons will develop any plans or proposals with respect to any of the
foregoing transactions or, even if such plans or proposals are developed, that
any such transactions will be consummated.
Other than as described herein, the Reporting Persons have no
present plans or proposals which relate to or would result in: (i) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company; (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (iii) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries; (iv) any change in
the present Board or management of the Company, including any plans or proposals
to change the number or term of directors or to fill any existing vacancies on
the Board; (v) any material change in the present capitalization or dividend
policy of the Company; (vi) any other material change in the Company's business
or corporate structure; (vii) changes in the Company's certificate of
incorporation or by-laws or other actions which may impede the acquisition of
control of the Company by any persons; (viii) causing a class of securities of
the Company to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (ix) a class of equity securities of the
Company becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, as amended; or (x) any action
similar to those enumerated above (collectively, the "Specified Actions").
However, the Reporting Persons intend to evaluate the proposed investment in the
Company on an ongoing basis and, depending on their evaluation of the business
and prospects of the Company and other factors that they may deem relevant, the
Reporting Persons may determine to dispose of such shares or acquire additional
shares or take other actions if market conditions or other business
considerations, in the judgment of the Reporting Persons, warrant. Such
additional acquisitions may be effected through open market purchases, privately
negotiated transactions, tender offers to existing holders or through direct
negotiation with the Company. Such further acquisitions, dispositions or other
actions may or may not result in any of the Specified Actions, and calculated as
provided by Rule 133-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
<PAGE>
CUSIP NO. 337486 10 4 PAGE 10 OF 12 PAGES
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All references to the Purchase Agreement, the Option Agreement,
the Promissory Note and Stock Purchase Agreement, the Conversion Agreement and
the Stockholders' Agreement are qualified in their entirety by the full text of
such agreements, copies of which are attached as Exhibits hereto and are
incorporated by reference herein. See also Item 6.
Item 4 hereby incorporates the information set forth in Item 6
with respect to the Voting Agreement.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Items 5(a) and 5(b) are hereby amended and supplemented by the
addition of the following:
By virtue of the Voting Agreement described in Item 6, pursuant
to which Mr. Stein, Mrs. Stein, Paymentech and First USA have agreed with
SOFTBANK Holdings and SOFTBANK Technology to vote their shares in furtherance of
certain mutual agreements, SOFTBANK Holdings, SOFTBANK Technology, SOFTBANK, Son
and STV may be deemed to have shared power to vote the Capital Stock over which
Mr. Stein, Mrs. Stein, Paymentech and First USA have or share the power to vote.
As of April 30, 1998, the aggregate number of shares beneficially owned by Mr.
Stein, Mrs. Stein, Paymentech and First USA was 3,321,217, representing 28.2% of
the outstanding Capital Stock of the Company.
<PAGE>
CUSIP NO. 337486 10 4 PAGE 11 OF 12 PAGES
- ---------------------- -------------------
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Item 6 is hereby amended and supplemented by the addition of the
following after the first paragraph:
In connection with the execution of the Purchase Agreement,
SOFTBANK Holdings and SOFTBANK Technology entered into a Voting Agreement, dated
as of June 2, 1998 (the "Voting Agreement"), with Lee H. Stein ("Mr. Stein"),
June L. Stein ("Mrs. Stein"), Paymentech Merchant Services, Inc. ("Paymentech")
and First USA Financial, Inc. ("First USA") (collectively, the "Principal
Stockholders"), regarding the composition of the Company's Board of Directors.
Each party thereto agreed to vote all shares of capital stock of the Company
(the "Capital Stock") over which it has or shares voting power to ensure that
the Company's Certificate of Incorporation and By-laws provide for a Board of
Directors of no less than five and no more than seven directors. In addition,
the parties agreed that, for so long as the Voting Agreement remains in effect,
one member of the Company's Board of Directors will be the designee of (and must
at all times be acceptable to) Mr. Stein, one member of the Company's Board of
Directors will be the designee of (and must at all times be acceptable to)
Paymentech, and the remaining members of the Company's Board of Directors will
be designees of (and must at all times be acceptable to) SOFTBANK Holdings and
SOFTBANK Technology. The Voting Agreement becomes effective immediately upon the
occurrence of the Closing (as defined in the Purchase Agreement). All rights and
duties under the Voting Agreement terminate (1) as to all parties thereto, on
the second anniversary of the Closing Date (as defined in the Purchase
Agreement) and (2) as to any Principal Stockholder, at such time as such
Principal Stockholder beneficially owns less than 75% of the number of shares of
the Company's Common Stock beneficially owned by such Principal Stockholder as
of April 30, 1998.
All references to the Voting Agreement are qualified in their
entirety by the full text of such agreement, a copy of which is attached as
Exhibit I hereto and incorporated by reference herein. See also Item 5.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is hereby amended and supplemented by the addition of the
following:
Exhibit C Stockholders' Agreement, dated as of April 30, 1998,
by the stockholders of the Company whose names appear
on the signature page thereof, in favor of SOFTBANK
Technology and SOFTBANK Holdings.
Exhibit E Option Agreement, dated as of April 30, 1998, by and
among SOFTBANK Technology, SOFTBANK Holdings and the
persons and entities whose names appear on the
signature page thereof.
Exhibit I Voting Agreement, dated as of June 2, 1998, by and
among SOFTBANK Holdings, SOFTBANK Technology, Lee H.
Stein, June L. Stein, Paymentech Merchant Services,
Inc. and First USA Financial, Inc.
<PAGE>
CUSIP NO. 337486 10 4 PAGE 12 OF 12 PAGES
- ---------------------- -------------------
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
June 4, 1998 SOFTBANK HOLDINGS INC.
By: /s/ Ronald D. Fisher
--------------------------------------
Name: Ronald D. Fisher
Title: Vice Chairman
SOFTBANK TECHNOLOGY VENTURES IV L.P.
By: STV IV LLC
Its General Partner
By: /s/ Gary Rieschel
-----------------------------
Name: Gary Rieschel
Title: Executive Managing Director
SOFTBANK CORPORATION
By: /s/ Ronald D. Fisher
--------------------------------------
Name: Ronald D. Fisher
Title: Attorney-in-Fact
MASAYOSHI SON
By: /s/ Ronald D. Fisher
--------------------------------------
Name: Ronald D. Fisher
Title: Attorney-in-Fact
STV IV LLC
By: /s/ Gary Rieschel
---------------------------------------
Name: Gary Rieschel
Title: Executive Managing Director
EXHIBIT C
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of April 30, 1998 (this "Agreement"),
by the undersigned stockholders (the "Stockholders") of First Virtual Holdings
Incorporated, a Delaware corporation (the "Company"), in favor of SOFTBANK
Technology Ventures IV L.P. and SOFTBANK Holdings Inc., a Delaware corporation
(collectively, the "Purchasers").
RECITALS
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Purchasers and the Company are entering into a Purchase Agreement
(as such agreement may hereafter be amended from time to time, the "Purchase
Agreement"), pursuant to which the Company will issue and sell to the Purchasers
(the "Stock Sale"), and the Purchasers will purchase from the Company, an
aggregate of 10,000,000 shares of Common Stock, par value $0.001 per share
("Common Stock");
WHEREAS, the Purchase Agreement contemplates that (i) upon purchase by
the Purchasers of certain promissory notes of the Company in the aggregate
principal amount of $1,200,000 (the "Notes") from the holders thereof, the
Purchasers shall have the right to convert such principal amount and all accrued
interest thereon into shares of Common Stock at a conversion price of $0.60 per
share and (ii) upon the purchase by the Purchaser of outstanding shares of
Series A Convertible Preferred Stock pursuant to an option or purchase agreement
between the Purchasers and the current holders of such shares, such shares of
Series A Convertible Preferred Stock shall be convertible thereafter, into
shares of Common Stock at a conversion price of $0.60 per share (the Stock Sale
and the issuance of Common Stock upon conversion of the Notes and the Series A
Convertible Preferred Stock being herein collectively referred to as the "Stock
Issuances").
WHEREAS, as an inducement and a condition to entering into the Purchase
Agreement, the Purchasers have required that the Stockholders agree, and each of
the Stockholders has agreed, to enter into this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein the
parties hereto hereby agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act.
(b) "Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
2. Provisions Concerning the Shares. During the period commencing on
the date hereof and continuing until the earliest to occur of (i) consummation
of the Stock Sale, (ii) termination of the Purchase Agreement in accordance with
its terms or (iii) _________, 1998 (such earliest date, the "Expiration Date"),
each Stockholder agrees that it shall, at any meeting of stockholders of the
Company, however called, or in connection with any written consent of
stockholders of the Company, vote (or cause to be voted) the shares (if any) of
Common Stock then held of record or Beneficially Owned by such Stockholder, (i)
in favor of the Stock Issuances, the execution and delivery by the Company of
the Purchase Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Purchase Agreement and this Agreement, and any
actions required in furtherance thereof and hereof; (ii) against any action or
agreement that would result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Purchase Agreement; and (iii) except as otherwise agreed to in writing
in advance by the Purchasers, against the following actions (other than the
Stock Issuances and the transactions contemplated by the Purchase Agreement):
(A) any extraordinary corporate transaction, such as a merger, consolidation or
other business combination involving the Company or its subsidiaries; (B) a
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<PAGE>
sale, lease or transfer of all or substantially all of assets of the Company or
its subsidiaries, or a reorganization, recapitalization, dissolution or
liquidation of the Company or its subsidiaries; (C) any material change in the
present capitalization of the Company or any amendment of the Company's
Certificate of Incorporation or By-laws which, in the case of the matters
referred to in this clause (C) of this Section 2, is intended, or could
reasonably be expected, to impede, delay or adversely affect the Stock Issuance
and the transactions contemplated by this Agreement and the Purchase Agreement.
Each Stockholder agrees that it shall not enter into any agreement or
understanding with any person or entity the effect of which would be
inconsistent or violative of the provisions and agreements contained in this
Section 2.
Each Stockholder, in furtherance of the transactions contemplated
hereby and by the Purchase Agreement, and in order to secure the performance
of its duties under this Agreement, shall promptly execute and deliver to
Purchasers an irrevocable proxy, substantially in the form of Exhibit A hereto,
and irrevocably appoint Purchasers or their designees, with full power of
substitution, its attorney, agent and proxy to vote (or cause to be voted) or,
if applicable, to give consent with respect to, all of the shares of Common
Stock Beneficially Owned by such Stockholder as set forth on Schedule I hereto
(the "Existing Shares"), together with any shares acquired by such Stockholder
in any capacity after the date hereof (together with the Existing Shares, the
"Owned Shares") in the manner, and with respect to the matters, set forth above.
Each Stockholder acknowledges that the proxy executed and delivered by it shall
be coupled with an interest, shall constitute, among other things, an inducement
for Purchasers to enter into the Purchase Agreement, shall be irrevocable and
binding on any successor in interest of such Stockholder and shall not be
terminated by operation of law upon the occurrence of any event, including,
without limitation, the death or incapacity of such Stockholder. Such proxy
shall operate to revoke and render void any prior proxy as to the shares
heretofore granted by such Stockholder. Such proxy shall terminate on the
Expiration Date.
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<PAGE>
3. Covenants, Representations and Warranties of each Stockholder. Each
Stockholder hereby represents and warrants to Purchaser as follows:
(a) Ownership of Shares. Such Stockholder is the record and Beneficial
Owner of such Stockholder's Existing Shares. On the date hereof, such
Stockholder's Existing Shares constitute all of the shares of Common Stock owned
of record or Beneficially Owned by such Stockholder. Such Stockholder has sole
voting power and sole power of disposition with respect to all of such
Stockholder's Existing Shares.
(b) Power; No Conflict. Such Stockholder has the legal capacity, power
and authority to enter into and perform all of his obligations under this
Agreement. The execution, delivery and performance of this Agreement by such
Stockholder will not violate any other agreement to which the Stockholder is a
party including, without limitation, any voting agreement, proxy arrangement,
pledge agreement, shareholders' agreement or voting trust.
4. Stop Transfer. Each Stockholder agrees that, prior to the Expiration
Date, it shall not request that the Company or any other person register the
transfer (by book-entry or otherwise) of any certificate representing any of
such Stockholder's Owned Shares, unless such transfer is made in compliance with
this Agreement and unless the transferee agrees in writing to be bound by the
provisions hereof for the benefit of the Purchasers. In the event of a stock
dividend or distribution, or any change in the shares by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Owned Shares" shall include all such stock dividends and
distributions and any shares of capital stock into which or for which any or all
of such Owned Shares may be changed or exchanged.
5. Confidentiality. Each Stockholder recognizes that successful
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Stockholder agrees that it
shall not disclose or discuss such matters with anyone not a party to this
agreement (other than its counsel and advisors, if any) without the prior
written consent of Purchasers, except for filings required pursuant to the
Exchange Act and the rules and regulations thereunder or disclosures
Stockholder's counsel advises are necessary in
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<PAGE>
order to fulfill its obligations imposed by law, in which event such Stockholder
shall give notice of such disclosure to Purchasers as promptly as practicable,
and in any event prior to the time any such filing or disclosure is made.
6. Miscellaneous.
(a) Modification and Waiver. No amendment or modification of the terms
or provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to or shall constitute a waiver of
any other provisions hereof. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof.
(b) Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof. Any
previous agreement or understandings between the parties regarding the subject
matter hereof are merged into and superseded by this Agreement.
(c) Severability. In case any provision in this Agreement (including
the Exhibit hereto) shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(d) Binding Agreement. This Agreement and the obligations hereunder
shall attach to the Owned Shares and shall be binding upon any person or entity
to which legal or beneficial ownership of such Owned Shares shall pass, whether
by operation of law or otherwise. Notwithstanding any transfer of Owned Shares,
the transferor shall remain liable for the performance of all obligations under
this Agreement of the transferor.
(e) Specific Performance. Each of the Stockholders recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and, therefore, in the
event of any such breach, the Purchasers shall be entitled to the remedy of
specific performance of such covenants and agreements and injunctive and other
equitable
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<PAGE>
relief in addition to any other remedy to which they may be entitled, at law or
in equity.
(F) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
(g) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the Stockholders have caused this Agreement to be
duly executed as of the day and year first above written.
STOCKHOLDERS:
Paymentech, Inc. Marshall Rose
By: /s/ Philip E. Taken By: /s/ Marshall T. Rose
----------------------- ----------------------
Date: 4/29/98 Date: 98-04-28
First USA Financial Einar Stefferud
By: /s/ Tracie Klein By: /s/ Einar Stefferud
----------------------- ---------------------
Date: 4/29/98 Date: 28 April 1998
General Electric Capital Stein Children's Trust
Corporation By: /s/ June L. Stein*
By: /s/ Thomas A. Crowley ---------------------
---------------------- Date: 4/29/98
Date: April 29, 1998
The Stein Company, Ltd.
First Data Corporation By: Stein & Stein, Inc.
By: /s/ Thomas Rossi By: /s/ June L. Stein
---------------------- ---------------------
Date: 4/30/98
June L. Stein
Sybase, Inc. By: /s/ June L. Stein
By: /s/ Robert Epstein ---------------------
---------------------- Date: 4/29/98
Date: 4/29/98
Lee H. Stein
By: /s/ Lee H. Stein
---------------------
Date: 4/29/98
*As Trustee of the three education trusts for Spencer M. Stein, Skyler M. Stein
and Serena G. Stein.
-6-
<PAGE>
EXHIBIT A
Irrevocable Proxy
In order to secure the performance of the duties of the undersigned
pursuant to the Stockholders' Agreement, dated as of April __, 1998 (the
"Stockholders' Agreement"), by the undersigned, and certain other stockholders
in favor of SOFTBANK Technology Ventures IV L.P. and SOFTBANK Holdings Inc.
(collectively, the "Purchasers"), the undersigned hereby irrevocably appoints
Ronald Fisher and Bradley Feld, and each of them, the attorneys, agents and
proxies, with full power of substitution in each of them, for the undersigned,
and in the name, place and stead of the undersigned, to vote (or cause to be
voted) or, if applicable, to give consent, in such manner as each such attorney,
agent and proxy or his substitute shall in his sole discretion deem proper to
record such vote (or consent) in the manner, and with respect to the matters,
set forth in Section 2 of the Stockholders' Agreement with respect to all shares
of Common Stock, par value $0.001 per share, of First Virtual Holdings
Incorporated, a Delaware corporation (the "Company"), which the undersigned is
or may be entitled to vote at any meeting of the Company held after the date
hereof, whether annual or special and whether or not an adjourned meeting, or,
if applicable, to given written consent with respect thereto. This Proxy is
coupled with an interest, shall be irrevocable and binding on any successor in
interest of the undersigned and shall not be terminated by operation of law upon
the occurrence of any event, including, without limitation, the death or
incapacity of the undersigned. This Proxy shall operate to revoke and render
void any prior proxy as to the shares of Common Stock heretofore granted by the
undersigned. This Proxy shall terminate upon the Expiration Date (as defined in
the Stockholders' Agreement).
Dated: _______________________ _________________________
A-1
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.
<PAGE>
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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<PAGE>
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 850,000 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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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.
10 Langley Road, Suite 403
Newton Center, Massachusetts 02169
Facsimile No.: (617) 928-9301
Attention:
(b) if to a Stockholder, at such Stockholder's address as set forth on
Exhibit A hereto.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
STOCKHOLDERS OPTIONEES
Huberfeld Bodner Family SOFTBANK Technology
Foundation Ventures IV L.P.
By:/s/ Murray Huberfeld By: STV IV LLC
-------------------- Its General Partner
Title: President
By: /s/Bradley A. Feld
---------------------
Millenco LP Title: Managing Director
By:/s/ Terry Feeney
--------------------
Title: CAO SOFTBANK Holdings Inc.
Murray Huberfeld/David By: /s/ Ronald Fisher
Bodner Partnership --------------------
Title: Vice Chairman
By:/s/ Murray Huberfeld
---------------------
Title: Partner
------------------
/s/ Seth J. Antine
- ------------------------
Seth J. Antine
/s/ Rita Folger
- ------------------------
Rita Folger
/s/ Isaac Weiss
- ------------------------
Isaac Weiss
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<PAGE>
EXHIBIT A
OPTIONS TO OPTIONS TO
BE PURCHASED BE PURCHASED AGGREGATE
NO. OF BY SOFTBANK BY SOFTBANK PURCHASE
NAME SHARES TECHNOLOGY HOLDINGS PRICE
- -------------- ------ ------------ ------------ ---------
Huberfeld
Bodner Family
Foundation
152 West 57th
Street
54th Floor
New York, NY
10019 400 200 200 $73,282.45
Millenco LP
111 Broadway
New York, NY
10006 130 65 65 23,816.79
Murray
Huberfeld/David
Bodner
Partnership
152 West 57th
St., 54th Floor
New York, NY
10019 35 17 18 6,412.21
Seth J. Antine
2120 Bay Ave.
Brooklyn, NY
11210 60 30 30 10,992.37
Rita Folger
521 Fifth Ave.
New York, NY
10175 20 10 10 3,664.12
Isaac Weiss
3070 Bedford
Ave.
Brooklyn, NY
11210 10 5 5 1,832.06
------ ------ ------ -----------
Total 655 327 328 $120,000.00
====== ====== ====== ===========
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EXHIBIT I
VOTING AGREEMENT
THIS VOTING AGREEMENT is made and entered into as of June 2, 1998 (this
"Agreement") by and among (i) SOFTBANK Technology Ventures IV L.P., a Delaware
limited partnership, and SOFTBANK Holdings Inc., a Delaware corporation
(collectively, "SOFTBANK"), and (ii) Lee H. Stein ("Stein"), June L. Stein,
Paymentech Merchant Services, Inc., a Nevada corporation ("Paymentech"), and
First USA Financial, Inc., a Delaware corporation (collectively, the "Principal
Stockholders").
RECITALS
WHEREAS, on April 30, 1998, First Virtual Holdings Incorporated, a
Delaware corporation (the "Company"), and SOFTBANK entered into a Purchase
Agreement (the "Purchase Agreement"), pursuant to which SOFTBANK intends to
acquire 10 million shares of the Company's Common Stock, par value $0.001 per
share (the "Common Stock"); and
WHEREAS, the parties hereto wish to enter into certain agreements
regarding the composition of the Company's Board of Directors as provided
herein.
NOW, THEREFORE, in consideration of the covenants set forth herein, and
for other good and valuable consideration, intending to be legally bound hereby,
the parties agree as follows:
1. Composition and Nomination of Board of Directors.
1.1 Initial Board Members. Immediately following the Company's 1998
Annual Meeting of Stockholders, the Board of Directors of the Company shall
consist of the persons elected by the stockholders of the Company as
contemplated by Section 4(c) of the Purchase Agreement.
1.2 Board Composition Requirements. For so long as this Agreement
remains in effect, the Parties hereto intend that one member of the Company's
Board of Directors shall be the designee of (and must at all times be acceptable
to) Stein, one member of the Company's Board of Directors shall be the designee
of (and must at all times be acceptable to) Paymentech and the remaining members
of the Company's Board of Directors shall be designees of (and must at all times
be acceptable to) SOFTBANK. The Board
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<PAGE>
composition requirements set forth in this Section 1.2 are herein referred to as
the "Board Composition Requirements."
1.3 Nominating Procedures. Following the initial election of the
directors specified in Section 1.1 hereof, in connection with each meeting of
stockholders of the Company at which directors of the Company are to be elected,
the parties hereto shall cause their designees on the Board to nominate a slate
of nominees for director which meets the Board Composition Requirements for so
long as this Agreement remains in effect.
The nominees so selected by the Board of Directors shall be presented
and voted upon at the meeting of stockholders as a slate, and each of the
parties hereto agrees to vote all shares of capital stock of the Company (the
"Capital Stock") over which it has voting power in favor of such slate of
directors and in favor of no other nominee or slate.
1.4 Removal of Directors. Except as otherwise provided in this Section
1.4, each of the parties hereto agrees not to take any action to remove, with or
without cause, any director of the Company. Notwithstanding the foregoing:
(a) (i) SOFTBANK shall at all times have the right to remove and to
cause the other parties hereto to remove, with or without
cause, any or all of the directors designated by SOFTBANK or
any other director other than a director designated
hereunder by Stein or Paymentech.
(ii) Stein at all times shall have the right to remove and to
cause the other parties hereto to remove, with or without
cause, the director designated by Stein.
iii) Paymentech shall have the right to remove and to cause the
other parties hereto to remove, with or without cause, the
director designated by Paymentech.
(b) If at any time Stein or Paymentech is no longer entitled to
designate a director under this
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<PAGE>
Agreement, any director then serving who is a designee of such party shall
resign.
(c) If a director shall fail to resign as contem plated by clause (b)
above, or if any party hereto determines to remove any director as contemplated
by clause (a) above and any such director shall fail to resign, then, at the
written request of any party hereto, the parties hereto shall immediately cause
a special meeting of stockholders of the Company to be called and held for the
purpose of removing such director. Each of the parties hereto agrees to vote, in
person or by proxy, all its shares of Capital Stock which are entitled to vote
at such meeting in favor of such removal and to take all other necessary and
appropriate action to cause such removal.
1.5 Vacancies. (a) If a vacancy is created on the Board of Directors by
reason of the death, disability, removal or resignation of any one of the
directors, the parties hereto shall take all necessary and appropriate action,
including calling a special meeting of stockholders and voting their shares of
Capital Stock at such meeting in such a manner, to ensure that such vacancy is
filled in a manner consistent with the Board Composition Requirements.
2. Action by Shareholders to Reconstitute Board of Directors. If at any
time and for any reason the Board of Directors shall fail to satisfy the Board
Composition Requirements, then, at the written request of any party hereto, the
other parties hereto shall cause to be called a special meeting of the
stockholders to be held for the purpose of taking whatever action may be
necessary to ensure that the Board is constituted so as to satisfy the Board
Composition Requirements as promptly as practicable.
3. Certificate of Incorporation and Bylaws. Each of the parties hereto
shall vote all shares of Capital Stock over which it may have or share voting
power and shall take all other actions necessary and appropriate (including,
without limitation, removing any director) to ensure that the Company's
Certificate of Incorporation and Bylaws do not at any time conflict with the
provisions of this Agreement. Without limiting the foregoing, each party hereto
shall vote all shares of Capital Stock over which it has or shares voting power
to ensure that the Company's Certificate of Incorporation and By-laws provide
for a Board of no less than 5 and no more than seven directors.
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<PAGE>
4. Effectiveness; Termination. Regardless of when executed, this
Agreement shall not be effective until, and shall become effective immediately
upon the occurrence of, the Closing (as defined in the Purchase Agreement). All
rights hereunder shall terminate (1) as to all Principal Stockholders and
SOFTBANK, on the second anniversary of the Closing Date (as defined in the
Purchase Agreement) and (2) as to any Principal Stockholder, at such time as
such Principal Stockholder shall beneficially own less than 75% of the number of
shares of the Company's Common Stock beneficially owned by such Principal
Stockholder as of April 30, 1998.
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. 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.
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<PAGE>
5.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
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 or on the third business day after mailing or
if mailed to the party to whom notice is to be given by first class mail,
registered or certified, postage prepaid, return receipt requested, and
addressed as follows (until any such address is changed by notice duly given):
(a) if to SOFTBANK, to:
SOFTBANK Holdings Inc.
10 Langley Road, Suite 403
Newton Center, Massachusetts 02169
Facsimile No.: (617) 928-9301
Attention: Ronald Fisher
Vice Chairman
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telephone: (212) 558-3504
Telecopier: (212) 558-3588
Attention: Stephen A. Grant, Esq.
(b) if to Lee H. Stein or June L. Stein, to:
P.O. Box 2771
Rancho Santa Fe, California 92067
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<PAGE>
with a copy to:
Matt A. Kirmayer
Gray Cary Ware & Freiderich
4365 Executive Drive, Ste. 1600
San Diego, California 92121
(c) if to Paymentech, to:
Pamela H. Patsley, President & Chief
Executive Officer
Paymentech, Inc.
1601 Elm Street, Suite 900
Dallas, Texas 76201
with a copy to:
Philip E. Taken, Chief Administrative
Officer and General Counsel
Paymentech, Inc.
1601 Elm Street, Suite 900
Dallas, Texas 76201
(d) if to First USA Financial, Inc., to:
Tracie Klein
First USA Financial, Inc.
1601 Elm Street, 46th Floor
Dallas, Texas 75201
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SOFTBANK TECHNOLOGY
VENTURES IV L.P.
By: STV IV LLC
Its General Partner
By: /s/ Bradley A. Feld
------------------------
Name: Bradley A. Feld
Title: Managing Director
SOFTBANK HOLDINGS INC.
By: /s/ Ronald D. Fisher
------------------------------
Name: Ronald D. Fisher
Title: Vice Chairman
/s/ Lee H. Stein
---------------------------------
LEE H. STEIN
/s/ June L. Stein
---------------------------------
JUNE L. STEIN
PAYMENTECH MERCHANT SERVICES, INC.
By: /s/ Philip E. Taken
------------------------------
Name: Philip E. Taken
Title: CAO & General Counsel
FIRST USA FINANCIAL, INC.
By: /s/ Tracie Klein
------------------------------
Name: Tracie Klein
Title: Vice President
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