Warrant to Purchase Shares - 3dfx Interactive inc. and Silicon Valley Bank
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES
OF SERIES B PREFERRED STOCK
Company: 3D\fx Interactive, Inc., a California corporation (the
"Company"), and any corporation that shall succeed to the
obligations of the Company under this Warrant.
Number of Shares: 17,045
--------------------------------
Class of Stock: Series B Preferred Stock
--------------------------------
Exercise Price: $2.20 per share
--------------------------------
Expiration Date: December 31, 2001
--------------------------------
Date of Grant: February , 1996
--------------------------------
THIS CERTIFIES THAT, for value received, Silicon Valley Bank is
entitled to purchase 17,045 shares of the Company's Series B Preferred Stock
(the "Shares") at an Exercise Price of $2.20 per share (as may be adjusted
pursuant to Section 5 hereof), subject to the provisions and upon the terms and
conditions set forth herein.
1. Definitions.
As used herein, the following terms, unless the context otherwise
requires, shall have the following meanings:
(a) "Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations
thereunder, as shall be in effect at the time.
(b) "Common Stock" shall mean shares of the presently
authorized common stock of the Company and any stock into which such common
stock may hereafter be exchanged.
-1-
<PAGE> 2
(c) "Holder" shall mean any person who shall at the time
be the holder of this Warrant.
(d) "Shares" shall mean the shares of the Series B
Preferred Stock that the Holder is entitled to purchase upon exercise of this
Warrant, as adjusted pursuant to Section 5 hereof.
(e) "Warrant Price" shall mean the Exercise Price at which
this Warrant may be exercised, as may be adjusted pursuant to Section 5 hereof.
2. Term.
A. The purchase right represented by this Warrant is exercisable,
in whole or in part, at any time on or before the Expiration Date; provided,
however, this Warrant shall expire, if not previously exercised, immediately
upon the closing of the issuance of shares of Common Stock of the Company in an
underwritten public offering, pursuant to an effective registration statement
under the Securities Act of 1933, as amended, in which the aggregate proceeds
received by the Company equal at least $7,500,000 and the public offering price
is not less than $3.00 per share of Common Stock (appropriately adjusted for
stock splits, stock dividends and stock combinations).
B. The Company shall notify Holders if an event or transaction of
the kind described in Section 2.A. above is proposed, at least thirty (30) days
prior to the closing of such event or transaction and if the Company fails to
deliver such written notice at such time, anything to the contrary in this
Warrant notwithstanding, the Warrant will not expire until thirty (30) days
after the Company delivers such notice to the Holders. Such notice shall also
contain such details of the proposed event or transaction as are reasonable in
the circumstances and notice that this Warrant is expected to expire upon
closing thereof. If such closing does not take place, the Company shall promptly
notify the holders that such proposed transaction has been terminated. Anything
to the contrary in this Warrant notwithstanding, the holders may rescind any
exercise of their Warrants within thirty (30) days of such notice of termination
of the proposed transaction if the exercise of their Warrants occurred after the
Company notified such holders that an event or transaction of the kind described
in Section 2. A above was proposed or if the exercise were otherwise
precipitated by such proposed event or transaction. In the event of such
rescission, the Warrants will continue to be exercisable on the same terms and
conditions.
3. Method of Exercise; Payment; Issuance of New Warrant.
Subject to Section 2 hereof, the purchase right represented by
this Warrant may be exercised by the Holder, in whole or in part, by the
surrender of this
-2-
<PAGE> 3
Warrant (with the notice of exercise form attached hereto as Appendix A duly
executed) at the principal office of the Company and by the payment to the
Company, by check made payable to the Company drawn on a United States bank and
for United States funds of an amount equal to the then applicable Warrant Price
per share multiplied by the number of Shares then being purchased. In the event
of any exercise of the purchase right represented by this Section 3,
certificates for the Shares so purchased shall be delivered to the Holder within
thirty (30) days of receipt of such payment and, unless this Warrant has been
fully exercised or expired, a new Warrant representing the portion of the
Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder within such thirty (30) day period.
4. Exercise Price.
The Warrant Price at which this Warrant may be exercised shall be
the Exercise Price, as adjusted from time to time pursuant to Section 5 hereof.
5. Adjustment of Number and Kind of Shares and Adjustment of
Warrant Price.
A. Certain Definitions. As used in this Section 5 the following
terms shall have the following respective meanings:
1. Options: rights, options or warrants to subscribe for,
purchase or otherwise acquire either shares of Series B Preferred Stock or
Convertible Securities; and
2. Convertible Securities: any evidences of indebtedness,
shares of stock or other securities directly or indirectly convertible into or
exchangeable for Series B Preferred Stock.
B. Adjustments. The number and kind of securities purchasable
upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:
1. Reclassification, Reorganization, Consolidation or
Merger. In the case of any reclassification of the Series B Preferred Stock, or
any reorganization, consolidation or merger of the Company with or into another
corporation (other than a merger or reorganization with respect to which the
Company is the continuing corporation and which does not result in any
reclassification of the Series B Preferred Stock), the Company, or such
successor corporation, as the case may be, shall execute a new warrant,
providing that the Holder shall have the right to exercise such new warrant and
upon such exercise to receive, in lieu of each share of
-3-
<PAGE> 4
the Series B Preferred Stock theretofore issuable upon exercise of this Warrant,
the number and kind of securities receivable upon such reclassification,
reorganization, consolidation or merger by a holder of shares of the Series B
Preferred Stock of the Company for each share of the Series B Preferred Stock.
The aggregate warrant price of the new warrant shall be the aggregate Warrant
Price in effect immediately prior to the reclassification, reorganization,
consolidation or merger. Such new warrant shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 5 including, without limitation, adjustments to the Warrant
Price and to the number of shares issuable upon exercise of this Warrant. The
provisions of this subsection B.1 shall similarly apply to successive
reclassification, reorganizations, consolidations or mergers.
2. Split, Subdivision or Combination or Shares. If the
Company at any time while this Warrant remains outstanding and unexpired shall
split, subdivide or combine the Series B Preferred Stock for which this Warrant
is then exercisable, the Warrant Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination. Any adjustment under this subsection B.2 shall become effective
when the split, subdivision or combination becomes effective.
3. Stock Dividends. If the Company at any time while this
Warrant remains outstanding and unexpired shall pay a dividend with respect to
the Series B Preferred Stock for which this Warrant is then exercisable, payable
in shares of the Series B Preferred Stock, Options or Convertible Securities,
the Warrant Price shall be adjusted, from and after the date of determination of
the stockholders entitled to receive such dividend or distributions, to that
price determined by multiplying the Warrant Price in effect immediately prior to
such date of determination by a fraction (i) the numerator of which shall be the
total number of shares of Series B Preferred Stock outstanding immediately prior
to such dividend or distribution, and (ii) the denominator of which shall be the
total number of shares of the Series B Preferred Stock outstanding immediately
after such dividend or distribution (including shares of Series B Preferred
Stock issuable upon exercise, conversion or exchange of any Options or
Convertible Securities issued as such dividend or distribution). If the Options
or Convertible Securities issued as such dividend or distribution by their terms
provide, with the passage of time or otherwise, for any decrease in the
consideration payable to the Company, or any increase in the number of shares
issuable upon exercise, conversion or exchange thereof (by change of rate or
otherwise), the Warrant Price shall, upon any such decrease or increase becoming
effective, be reduced to reflect such decrease or increase as if such decrease
or increase became effective immediately prior to the issuance of the Options or
Convertible Securities as the dividend or distribution. Any adjustment under
this subsection B.3 shall become effective on the record date.
-4-
<PAGE> 5
C. Adjustment of Number of Shares. Upon each adjustment in the
Warrant Price pursuant to this Section 5, the number of Shares issuable upon
exercise of this Warrant shall be adjusted to the product obtained by
multiplying the number of Shares issuable immediately prior to such adjustment
in the Warrant Price by a fraction (i) the numerator of which shall be the
Warrant Price immediately prior to such adjustment, and (ii) the denominator of
which shall be the Warrant Price immediately after such adjustment.
6. Notice of Adjustments.
Whenever the Warrant Price shall be adjusted pursuant to Section
5 hereof, the Company shall issue a certificate signed by its chief financial
officer or chief executive officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Warrant Price after giving effect
to such adjustment, and shall cause a copy of such certificate to be mailed (by
first class mail, postage prepaid) to the Holder.
7. Compliance With Act; Transferability of Warrant;
Disposition of Shares.
A. Legends. This Warrant and the Shares issued upon exercise
thereof shall be imprinted with a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
B. Transferability and Non-negotiability of Warrant and Shares.
This Warrant and the Shares issued upon exercise thereof may not be transferred
or assigned in whole or in part without compliance with applicable federal and
state securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, if reasonably requested by the Company).
Subject to the provisions of this Section 7.B, title to this Warrant may be
transferred in the same manner as a negotiable instrument transferable by
endorsement and delivery.
-5-
<PAGE> 6
8. Miscellaneous.
No fractional shares of the Shares shall be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Warrant Price then in
effect. The terms and provisions of this Warrant shall inure to the benefit of,
and be binding upon, the Company and the Holders hereof and their respective
successors and assigns. This Warrant shall be governed by and construed under
the laws of the State of California as applied to contracts entered into between
residents of the State of California to be wholly performed in the State of
California. The titles of the sections and subsections of this Warrant are for
convenience only and are not to be considered in construing this Warrant. All
pronouns used in the Warrant shall be deemed to include masculine, feminine and
neuter forms.
3D\FX INTERACTIVE, INC.
By: /s/ Gary Martin
--------------------------------------
Title: CFO
--------------------------------------
-6-
<PAGE> 7
APPENDIX A
NOTICE OF EXERCISE
TO:_____________
1. The undersigned hereby elects to purchase ________________
shares of the ______________ of 3D\fx Interactive, Inc. pursuant to terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full, together with all applicable transfer taxes, if any.
2. Please issue a certificate or certificates representing said
shares of the _______________ in the name of the undersigned or in such other
name as is specified below:
3. The undersigned represents it is acquiring the shares of
____________ solely for its own account and not as a nominee for any other party
and not with a view toward the resale or distribution thereof.
---------------------------------
(Name)
---------------------------------
(Address)
---------------------------------
---------------------------------
---------------------------------
(Taxpayer Identification Number)
--------------------------------
[print name of Holder]
By:
--------------------------
Title:
--------------------------
Date:
--------------------------