Exhibit 10.9

 

AMENDED AND RESTATED SECURED PROMISSORY NOTE

 

$150,000.00

 

May 14, 2002

 

 

Santa Clara, California

 

RECITAL

This Amended and Restated Secured Promissory Note dated as of May 14, 2002
(“Note”), is entered into by and between First Virtual Communications, Inc., a
Delaware corporation (the “Lender”), and Killko Caballero, an employee of the
Lender (the “Borrower”).

 

The Lender and the Borrower entered into a promissory note, dated August 14,
2001, in the original principal amount of Two Hundred Fifty Thousand and No/100
Dollars ($250,000.00) (the “Original Note”).  Pursuant to the terms of the
Original Note, Borrower paid One Hundred Thousand and No/100 Dollars
($100,000.00) of the principal of the Original Note in connection with the sale
of certain real property owned by Borrower.  The Lender and the Borrower desire
to amend and to restate the Original Note to reflect this payment by Borrower,
in accordance with the terms set forth below.

 

AGREEMENT

1.             For Value Received, the Borrower hereby unconditionally promises
to pay to the order of Lender, in lawful money of the United States of America
and in immediately available funds, the principal amount of One Hundred Fifty
Thousand and No/100 Dollars ($150,000.00), interest-free (the “Loan”), due and
payable on the dates and in the manner set forth below.

2.             Security.  This Secured Promissory Note (the “Note”) is secured
by the “Pledged Collateral” identified and described as security therefor in the
Stock Pledge Agreement (the “Stock Pledge Agreement”), dated August 14, 2001,
executed by Borrower in favor of Lender.

3.             Principal Repayment.

(a)           Maturity Date.  The entire outstanding principal balance of the
Loan shall be due and payable immediately in full on the Maturity Date (as
defined below), which for purposes of this Note, shall be the earliest to occur
of:

(i)            August 14, 2006;

(ii)           Ninety (90) days after either the resignation by Borrower of its
employment with Lender, or the termination of Borrower’s employment for Cause
(as defined below);

 

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(iii)         Immediately upon the insolvency of Borrower, including, but not
limited to, a bankruptcy or insolvency proceeding having been instituted by or
against Borrower, or a receiver being appointed for the Property (defined
below), or if Borrower makes an assignment for the benefit of creditors
(collectively, the “Maturity Date”).

(b)           Cause.  For purposes of this Note, “Cause” shall mean (i) gross
negligence or willful misconduct in connection with the performance of
Borrower’s duties to Lender which in the written determination of a majority of
the Board of Directors of Lender (the “Board”) has not been cured within thirty
(30) days following receipt by Borrower of written notice from the Board
identifying such acts of gross negligence or willful misconduct; (ii) commission
of a felony which in the written determination of a majority of the Board has
caused material injury to Lender’s business, or intentionally fraudulent or
other acts against the Lender, CUseeMe Networks, Inc., a Delaware Corporation
(“CUseeMe”), or their affiliates, employees, agents or customers which
demonstrates Borrower’s untrustworthiness or lack of integrity; (iii) dishonesty
relating to Lender’s business and intended to result in personal enrichment of
Borrower or his family at the expense of the Lender; (iv) material breach by
Borrower of that certain Employment and Non-Competition Agreement dated March
22, 2001 (the “Employment Agreement”) or of any agreement by and between
Borrower and Lender, which material breach has not been cured within thirty (30)
days following receipt by Borrower of written notice from the Board identifying
such willful material breach; or (v) Borrower engaging or in any manner
participating in any activity which is directly competitive with or
intentionally injurious to Lender or CUseeMe or their affiliates or which
violates any material provision of Section 7 of the Employment Agreement.

4.             Payments.  Any payment due hereunder shall be paid to Lender at
the address set forth in Section 7 below, or at such other place as Lender may
designate.  Any and all amounts payable hereunder will be due and payable
without set-off, deduction, or counter-claim.

5.             Prepayment.  Borrower may prepay the unpaid principal of this
Note in whole or in part, without penalty, at any time.

6.             Default and Remedies.

(a)           Default.  Each of the following events shall be deemed an “Event
of Default” hereunder:

(i)            Borrower fails to pay timely any of the principal amount due
under this Note on the date the same becomes due and payable;

(ii)           The breach by Borrower of any other covenant or agreement under
this Note;

(iii)         The default by Borrower of his obligations under the Stock Pledge
Agreement or any other instrument evidencing or securing this Note;

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(iv)          The death of Borrower, but only if Borrower’s personal
representative fails to pay all outstanding obligations under this Note within
ninety (90) days thereof; or

(v)            The appointment of a receiver for any part of the Property of, or
an assignment for the benefit of creditors by, or the commencement of any
proceedings under any bankruptcy or insolvency laws by or against Borrower.

(b)           Remedies.  Upon the occurrence of an Event of Default hereunder,
Lender may, with notice to Borrower, declare the entire principal amount of this
Note and any amounts due thereon due and payable within ninety (90) days of such
Event of Default, and exercise any and all of the remedies provided under the
Stock Pledge Agreement or at law or in equity.

7.             Notice.  All notices or other communications required or given
hereunder shall be in writing and shall be deemed effectively given when
presented personally or on the date of receipt (or refusal of delivery) if sent
by overnight courier service or U.S. Mail (certified or registered, postage
prepaid, return receipt requested) to the parties at the addresses given below
or such other addresses as the parties may hereafter designate in writing.  The
date shown on the courier’s confirmation of delivery or return receipt shall be
conclusive as to the date of receipt.

 

Borrower:

 

Killko Caballero

 

 

22451 Citation Drive

 

 

Los Gatos, CA  95033

 

 

 

 

Lender:

 

First Virtual Communications, Inc.

 

 

3393 Octavius Drive

 

 

Santa Clara, CA  95054

 

 

Attn:  Chief Financial Officer

 

 

8.             Termination of Original Note.  Borrower and Lender hereby agree
that the Original Note is terminated and replaced, in its entirety, by this
Note.

9.             Waiver.  Borrower waives diligence, presentment, protest and
demand and also notice of protest, demand, dishonor, acceleration, intent to
accelerate, and nonpayment of this Note, and shall pay all costs of collection
when incurred, including, without limitation, reasonable attorneys’ fees, costs
and other expenses.  The right to plead any and all statutes of limitations as a
defense to any demands hereunder is hereby waived to the full extent permitted
by law.

10.          Non-Transferable.  The right of Borrower to request and receive the
Loan hereunder, as well as the other benefits under this Note, shall not be
assignable or otherwise transferable by Borrower.

 

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11.          Miscellaneous.

(a)           Costs.  Borrower shall pay all costs, including, without
limitation, reasonable attorneys’ fees and expenses incurred by Lender in
collecting the sums due hereunder or in connection with the release of any
security for this Note.

(b)           Modification.  This Note may be modified only by a written
agreement executed by Borrower and Lender.

(c)           Successors and Assigns.  The terms of this Note shall inure to the
benefit of and bind Borrower and Lender and their respective heirs, legal
representatives and successors and assigns.

(d)           Time.  Time is of the essence with respect to all matters set
forth in this Note.

(e)           Destroyed Note.  If this Note is destroyed, lost or stolen,
Borrower will deliver a new note to Lender on the same terms and conditions as
this Note with a notation of the unpaid principal in substitution of the prior
Note.  Lender shall furnish to Borrower reasonable evidence that the Note was
destroyed, lost or stolen and any security or indemnity that may be reasonably
required by Borrower in connection with the replacement of this Note.

(f)            Severability.  If any provision of this Note shall be held to be
invalid or unenforceable, such determination shall not affect the remaining
provisions of this Note.

(g)           Joint and Several Liability.  If this Note is now, or hereinafter
shall be, signed by more than one party or person, it shall be the joint and
several obligation of such parties or persons and shall be binding upon such
parties and upon their respective successors and assigns.

(h)           Attorney’s Fees.  In the event of any litigation concerning this
Note, the Prevailing Party shall be entitled to a reasonable sum for attorneys’
fees, costs, and litigation expenses, whether or not such action is prosecuted
to judgment.  “Prevailing Party” shall mean, without limitation, a party who
agrees to dismiss an action upon payment by the other party of sums allegedly
due or performance of the covenants allegedly breached, or who obtains
substantially the relief sought by that party.  In the event that Lender is the
Prevailing Party, Lender shall also be entitled to reasonable costs associated
with the collection of the Loan.

12.          Governing Law.  This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.

 

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In Witness Whereof, Borrower has executed this Amended and Restated Secured
Promissory Note as of the date first above written.

 

 

BORROWER:

 

 

 

 

 

/s/ Killko Caballero

 

 

Killko Caballero

 

 

 

Accepted and Agreed to:

 

 

 

 

 

LENDER:

 

 

 

 

 

By:

/s/ Timothy A. Rogers

 

 

Name:

Timothy A. Rogers

 

 

Title:

Chief Financial Officer,
Senior Vice President of Finance
and Treasurer

 

 

 

 

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STOCK PLEDGE AGREEMENT

THIS STOCK PLEDGE AGREEMENT (the “Pledge Agreement”), effective as of August 14,
2001, is made by KILLKO CABALLERO, an individual, with a residence at 22451
Citation Drive, Los Gatos, California  95033 (“Pledgor”), in favor of FIRST
VIRTUAL COMMUNICATIONS, INC., INC., a Delaware corporation, with its principal
place of business at 3393 Octavius Drive, Santa Clara, California  95054
(“Pledgee”).

RECITAL

WHEREAS, Pledgor has concurrently herewith executed that certain Secured
Promissory Note (the “Note”), dated of even date herewith, in favor of Pledgee
in the amount of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00);
and

WHEREAS, Pledgee is willing to accept the Note from Pledgor, but only upon the
condition, among others, that Pledgor shall have executed and delivered to
Pledgee this Pledge Agreement and the Pledged Collateral (as defined below);

NOW, THEREFORE, in consideration of the foregoing recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, Pledgor hereby agrees as
follows:

AGREEMENT

1.             As security for the full, prompt and complete payment and
performance when due (whether by stated maturity, by acceleration or otherwise)
of all indebtedness of Pledgor to Pledgee created under the Note, together with,
without limitation, the prompt payment of all expenses, including, without
limitation, reasonable attorneys’ fees and legal expenses, incidental to the
collection of the foregoing and the enforcement or protection of Pledgee’s lien
in and to the collateral pledged hereunder (all such indebtedness being the
“Liabilities”), Pledgor hereby pledges to Pledgee, and grants to Pledgee, a
first priority security interest in all of the following (collectively, the
“Pledged Collateral”):

(a)           Two Hundred Fifty Thousand (250,000) shares of Common Stock of
Pledgee owned by Pledgor (the “Pledged Shares”), and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares; and

(b)           all voting trust certificates held by Pledgor evidencing the right
to vote any Pledged Shares subject to any voting trust,

Pledgor agrees to deliver to Pledgee the stock certificates representing said
Pledged Shares along with an executed but otherwise blank Assignment Separate
From Certificate in the form attached hereto as Exhibit A.

 

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The term “indebtedness” is used herein in its most comprehensive sense and
includes any and all advances, debts, obligations and liabilities heretofore,
now or hereafter made, incurred or created, whether voluntary, or involuntary,
and whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether recovery upon such indebtedness may be
or hereafter becomes unenforceable.

2.             Pledgor hereby represents and warrants to Pledgee as follows:

(a)           Pledgor is, at the time of delivery of the Pledged Shares to
Pledgee hereunder, and at all times which this Pledge Agreement is in effect
shall be, the sole holder of record and the sole beneficial owner of the Pledged
Collateral, free and clear of any lien thereon or affecting title thereto,
except for the lien created by this Pledge Agreement.

(b)           None of the Pledged Shares have been transferred in violation of
securities registration, securities disclosure or similar laws of any
jurisdiction to which such transfer may be subject with respect to which such
transfer could have a material adverse effect.

(c)           No consent, approval, authorization or other order of any person
and no consent or authorization of any governmental authority or regulatory body
is required to be made or obtained by Pledgor either (i) for the pledge by
Pledgor of the Pledged Collateral pursuant to this Pledge Agreement or for the
execution, delivery, or performance of this Pledge Agreement by Pledgor; or (ii)
for the exercise by Pledgee of the voting or other rights provided for in this
Pledge Agreement or the remedies in respect of the Pledged Collateral pursuant
to this Pledge Agreement, except as may be required in connection with such
disposition by laws affecting thc offering and sale of securities generally.

(d)           The pledge, grant of a security interest in, and delivery of the
Pledged Collateral pursuant to this Pledge Agreement, will create a valid first
priority lien on and in the collateral pledged by Pledgor, and the proceeds
thereof, securing the payment of the Liabilities.

(e)           This Pledge Agreement has been duly executed and delivered by
Pledgor and constitutes a legal, valid, and binding obligation of Pledgor
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, or other similar laws affecting the rights of
creditors generally or by the application of general equity principles.

(f)            Pledgor covenants, warrants, and represents to Pledgee that all
representations and warranties contained in this Pledge Agreement shall be true
at the time of Pledgor’s execution of this Pledge Agreement, and shall continue
to be true until the Liabilities have been paid or otherwise satisfied in full.

3.             Upon prior notice to Pledgor, Pledgee in its name or in the name
of its nominee or of Pledgor may, but shall not be obligated to:  (a) collect by
legal proceedings or otherwise all dividends (except cash dividends other than
liquidating dividends), interest, principal payments and other sums now or
hereafter payable upon or on account of said Pledged Collateral; (b) enter into
any extension, reorganization, deposit, merger or consolidation agreement, or
any agreement in any way relating to or affecting the Pledged Collateral, and in
connection therewith may

 

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deposit or surrender control of such Pledged Collateral thereunder, accept other
property in exchange for such Pledged Collateral and do and perform such acts
and things as it may deem proper, and any money or property received in exchange
for such Pledged Collateral shall be applied to the indebtedness or thereafter
held by it pursuant to the provisions hereof; (c) insure, process and preserve
the Pledged Collateral; (d) cause the Pledged Collateral to be transferred to
its name or to the name of its nominee; and (e) exercise as to such Pledged
Collateral all the rights, powers and remedies of an owner, except that so long
as no “Event of Default” (as defined in the Note), exists under the Note and no
default exists hereunder Pledgee shall not exercise its rights under subsections
(d) and (e) or this paragraph 3 and Pledgor shall retain all voting rights as to
the Pledged Shares.

4.             Pledgor agrees to pay prior to delinquency all taxes, charges,
liens and assessments against the Pledged Collateral, and upon the failure of
Pledgor to do so, Pledgee at its option may pay any of them and shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same.

5.             Pledgor agrees that Pledgor:

(a)           may sell, transfer or otherwise dispose of, or grant an option or
warrant with respect to, all or a portion of the Pledged Collateral so long as
the proceeds therefrom are used first to pay any outstanding Liabilities.  If
any Pledged Collateral, or any part thereof, is sold, transferred or otherwise
disposed of as allowed in this Section 5, the security interest of Pledgee shall
continue in the Pledged Collateral notwithstanding such sale, transfer or other
disposition, and the Pledgor will deliver any proceeds thereof to the Pledgee to
be held as Pledged Collateral hereunder;

(b)           will not create or permit to exist any lien or encumbrance upon or
with respect to any of the Pledged Collateral;

(c)           shall, at Pledgor’s own expense, promptly execute, acknowledge,
and deliver all such instruments and take all such actions as Pledgee from time
to time may reasonably request in order to ensure to Pledgee the benefits of the
lien in and to the Pledged Collateral intended to be created by this Pledge
Agreement; and

(d)           shall maintain, preserve and defend the title to the Pledged
Collateral and the lien of Pledgee thereon against the claim of any other
person.

6.             At the option of Pledgee and without necessity of demand or
notice, all or any part of the indebtedness of Pledgor shall become due and
payable irrespective of any agreed maturity, within ninety (90) days of the
happening of any of the following events: (a) failure to keep or perform any of
the terms or provisions of this Pledge Agreement; (b) the occurrence of an
“Event of Default” under the Note; or (c) the levy of any attachment, execution
or other process against the Pledged Collateral.

7.             All advances, charges, costs and expenses, including reasonable
attorneys’ fees, incurred or paid by Pledgee in connection with an “Event of
Default” under the Note or the levy

 

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of any attachment, execution or other process against the Pledged Collateral
shall become a part of the indebtedness secured hereunder and shall be paid to
Pledgee by the undersigned within ninety (90) days of receipt of Pledgee’s
request therefor.

8.             In the event of the nonpayment of any indebtedness within ninety
(90) days of the due date thereof, whether by acceleration or otherwise, or
within ninety (90) days of the happening of any of the events specified in
Section 6 above, Pledgee may then, or at any time thereafter, at its election,
apply, set off, collect or sell in one or more sales, or take such steps as may
be necessary to liquidate and reduce to cash in the hands of Pledgee in whole or
in part, with or without any previous demands or demand of performance or notice
or advertisement, the whole or any part of the Pledged Collateral in such order
as Pledgee may elect, and any such sale may be made either at public or private
sale at its place of business or elsewhere, or at any broker’s board or
securities exchange, either for cash or upon credit or for future delivery;
provided, however, that if such disposition is at private sale, then the
purchase price of the Pledged Collateral shall be equal to the public market
price then in effect, or, if at the time of sale no public market for the
Pledged Collateral exists, then, in recognition of the fact that the sale of the
Pledged Collateral would have to be registered under the Securities Act of 1933
and that the expenses of such registration are commercially unreasonable for the
type and amount of collateral pledged hereunder, Pledgee and Pledgor hereby
agree that such private sale shall be at a purchase price mutually agreed to by
Pledgee and Pledgor or, if the parties cannot agree upon a purchase price, then
at a purchase price established by a majority of three independent appraisers
knowledgeable of the value of such collateral, one named by Pledgor within ten
(10) days after written request by the Pledgee to do so, one named by Pledgee
within such ten (10) day period, and the third named by the two appraisers so
selected, with the appraisal to be rendered by such body within thirty (30) days
after the appointment of the third appraiser.  The cost of such appraisal,
including all appraisers’ fees, shall be charged against the proceeds of sale as
an expense of such sale.  Pledgee may be the purchaser of any or all Pledged
Collateral so sold and hold the same thereafter in its own right free from any
claim of Pledgor or right of redemption.  Demands of performance, notices of
sale, advertisements and presence of property at sale are hereby waived, and
Pledgee is hereby authorized to sell hereunder any evidence of debt pledged to
it.  Any sale hereunder may be conducted by any officer or agent of Pledgee.

9.             The proceeds of the sale of any of the Pledged Collateral and all
sums received or collected by Pledgee from or on account of such Pledged
Collateral shall be applied by Pledgee to the payment of expenses incurred or
paid by Pledgee in connection with any sale, transfer or delivery of the Pledged
Collateral, to the payment of any other costs, charges, attorneys’ fees or
expenses mentioned herein, and to the payment of the indebtedness or any part
hereof, all in such order and manner as Pledgee in its discretion may
determine.  Pledgee shall then pay any balance to Pledgor.

10.          Upon the transfer of all or any part of the indebtedness Pledgee
may transfer all or any part of the Pledged Collateral and shall be fully
discharged thereafter from all liability and responsibility with respect to such
Pledged Collateral so transferred, and the transferee shall be vested with all
the rights and powers of Pledgee hereunder with respect to such Pledged

 

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Collateral so transferred; but with respect to any Pledged Collateral not so
transferred Pledgee shall retain all rights and powers hereby given.

11.          Until all indebtedness shall have been paid in full the power of
sale and all other rights, powers and remedies granted to Pledgee hereunder
shall continue to exist and may be exercised by Pledgee at any time and from
time to time irrespective of the fact that the indebtedness or any part thereof
may have become barred by any statute of limitations, or that the personal
liability of Pledgor may have ceased.

12.          Pledgee may at any time deliver the Pledged Collateral or any part
thereof to Pledgor and the receipt thereof by Pledgor shall be a complete and
full acquittance for the Pledged Collateral so delivered, and Pledgee shall
thereafter be discharged from any liability or responsibility therefor.

13.          The rights, powers and remedies given to Pledgee by this Pledge
Agreement shall be in addition to all rights, powers and remedies given to
Pledgee by virtue of any statute or rule of law.  Any forbearance, failure or
delay by Pledgee in exercising any right, power or remedy hereunder shall not be
deemed to be a waiver of such right, power or remedy, and any single or partial
exercise of any right, power or remedy hereunder shall not preclude the further
exercise thereof, and every right, power and remedy of Pledgee shall continue in
full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by Pledgee.

14.          If any provision of this Pledge Agreement is held to be
unenforceable for any reason, it shall be adjusted, if possible, rather than
voided in order to achieve the intent of the parties to the extent possible.  In
any event, all other provisions of this Pledge Agreement shall be deemed valid
and enforceable to the full extent possible.

15.          This Pledge Agreement shall be governed by, and construed in
accordance with, the laws of the State of California as applied to contracts
made and performed entirely within the State of California by residents of such
State.

16.          All notices or other communications required or given hereunder
shall be in writing and shall be deemed effectively given when presented
personally or on the date of receipt (or refusal of delivery) if sent by
overnight courier service or U.S. Mail (certified or registered, postage
prepaid, return receipt requested) to the parties at the addresses given below
or such other addresses as the parties may hereafter designate in writing.  The
date shown on the courier’s confirmation of delivery or return receipt shall be
conclusive as to the date of receipt.

Borrower:

KILLKO CABALLERO

 

 

 

22451 Citation Drive

 

 

 

Los Gatos, CA  95033

 

 

 

 

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Lender:

FIRST VIRTUAL COMMUNICATIONS, INC.

 

 

 

3393 Octavius Drive

 

 

 

Santa Clara, CA  95054

 

 

 

Attn:  Chief Financial Officer

 

 

 

17.          Exhibit A is attached hereto and incorporated herein by this
reference.

IN WITNESS WHEREOF, Pledgor has executed this Pledge Agreement effective as of
the date and year first above written.

 

 

 

 

 

 

 

 

 

 

 

PLEDGOR:

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Kilko Caballero

 

 

 

 

 

 

KILLKO CABALLERO

 

 

 

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Exhibit A

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

 

                KILLKO CABALLERO hereby sells, assigns and transfers
unto                                                       a total of
                            (       ) shares of the                      stock
of FIRST VIRTUAL COMMUNICATIONS, INC., standing in the undersigned’s name on the
books of said corporation represented by Certificate Nos.              
delivered herewith and does hereby irrevocably constitute and appoint
                            to transfer said stock on the books of said
corporation with full power of substitution.

 

Dated:

 

 

 

 

 

 

 

 

 

 

KILLKO CABALLERO

 

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