Common Stock Purchase Warrant - Immersion Human Interface Corp. and Intel Corp.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Void after June 6, 2002
IMMERSION HUMAN INTERFACE CORPORATION
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Intel Corporation, a Delaware
corporation (the "Holder") is entitled to purchase one hundred thirteen thousand
(113,000) shares of Common Stock ("Shares") of Immersion Human Interface
Corporation, a California corporation, at a price of $0.15 per share ("Warrant
Price"), subject to adjustments as provided for in Section 5 and all other terms
and conditions set forth in this Warrant.
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
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(b) "Commission" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Act.
(c) "Company" shall mean IMMERSION HUMAN INTERFACE CORPORATION, a
California corporation, and any corporation which shall succeed to or assume the
obligations of IMMERSION HUMAN INTERFACE CORPORATION, under this Warrant.
(d) "Common Stock" shall mean shares of the Company's Common Stock.
(e) "Date of Grant" shall mean June 6, 1997.
(f) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.
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(g) "Purchase Agreement" shall mean that certain Series C Preferred
Stock and Common Stock Warrant Purchase Agreement dated June 6, 1997.
2. Issuance of Warrant and Consideration Therefor. This Warrant is
issued in consideration of the Holder's willingness to enter into commercial
relationships with the Company.
3. Term. Subject to Section 5 below, the purchase right represented
by this Warrant is exercisable only during the period commencing upon the
Date of Grant and ending on June 6, 2002 (the "Exercise Period").
4. Method of Exercise and Payment.
(a) Method of Exercise. During the Exercise Period and subject to
compliance with all applicable Federal and state securities laws, the purchase
right represented by this Warrant may be exercised, in whole or in part and from
time to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise or Conversion (the form of which is attached hereto as
Exhibit A), duly executed, at the principal office of the Company and (ii)
payment to the Company of the aggregate Warrant Price for the Shares being
purchased pursuant to one of the payment methods permitted under Section 4(c)
below.
(b) Conversion. In lieu of exercising this Warrant or any portion
hereof, Holder shall have the right to convert this Warrant or any portion
hereof during the Exercise Period into shares of Common Stock by executing and
delivering to the Company, at its principal office, the written Notice of
Exercise or Conversion in the form attached hereto as Exhibit A, specifying the
portion of the Warrant to be converted, and accompanied by this Warrant. The
number of Shares to be issued upon such conversion shall be that number of
shares equal to the quotient by dividing (x) the value of the converted portion
of the Warrant at the time the conversion right is exercised (determined by
subtracting the aggregate Warrant Price for the Shares represented by the
portion of the Warrant to be converted from the aggregate fair market value) by
(y) fair market value of one Share. Any portion of this Warrant that is
converted shall be immediately canceled. The fair market value shall be
determined pursuant to Section 4(d).
(c) Method of Payment. Payment shall be made either (1) by check
drawn on a United States bank and for United States funds made payable to the
Company, (2) by wire transfer of United States funds for the account of the
Company, (3) by cancellation of indebtedness of the Holder, (4) shares of stock
of the Company valued at fair market value as determined pursuant to Section
4(d), or (5) by payment of stock held in a public company with a value equal to
the average of the closing price of such stock for each of the fifteen (15)
consecutive trading days ending three (3) business days prior to the Exercise
Date.
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(d) Fair Market Value. If the Shares are traded in a public market,
the fair market value of the Shares shall be the closing price of the Shares
reported for the business day immediately before Holder delivers its Notice of
Exercise/Conversion to the Company. If the Shares are not traded in a public
market, the Board of Directors of the Company shall determine fair market value
in its reasonable good faith judgment.
(e) Investment Letter. Upon exercise or conversion of the Warrant
hereof, Holder shall either (i) execute and deliver to the Company an investment
letter in the form attached hereto as Exhibit B, or (ii) deliver to the Company
an opinion of counsel for Holder reasonably satisfactory to the Company, stating
that such exercise or conversion is exempt from the registration and prospectus
delivery requirements of the Act.
(f) Delivery of Certificate. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be delivered to the Holder within fifteen (15) days of delivery
of the Notice of Exercise and, unless this Warrant has been fully exercised or
has expired, a new warrant representing the portion of the Shares with respect
to which this Warrant shall not then have been exercised shall also be issued to
the Holder within such fifteen (15) day period.
(g) No Fractional Shares. No fractional 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 fair market
value per Common Stock as of the date of exercise.
5. Sale, Merger, or Consolidation of the Company.
(a) "Acquisition". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets (including intellectual property) of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
(b) Assumption of Warrant. If, upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of this Warrant as if such Shares
were outstanding on the record date for the Acquisition and subsequent closing.
The Warrant Price shall be adjusted accordingly.
(c) Non-Assumption. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and Holder has
not otherwise exercised or converted this Warrant, then this Warrant shall be
deemed to have been automatically converted
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pursuant to Section 4(b) and thereafter Holder shall participate in the
Acquisition on the same terms as other holders of the same class of securities
of the Company.
6. Adjustment of Warrant Price and Number of Shares. The number of
securities issuable 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:
(a) Stock Splits, Stock Dividends and Combinations. In case the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding Common Stock, the Warrant Price
in effect immediately prior to such subdivision or the issuance of such stock
dividend shall be proportionately decreased, and the number of Shares shall be
proportionately increased, and in case the Company shall at any time combine the
outstanding shares of Common Stock, the Warrant Price in effect immediately
prior to such combination shall be proportionately increased, and the number of
Shares shall be proportionately decreased, effective at the close of business on
the date of such subdivision, stock dividend or combination, as the case may be.
(b) Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise of
this Warrant, Holder shall be entitled to receive, upon exercise of this
Warrant, the number and kind of securities and property that Holder would have
received for the Shares if this Warrant had been exercised immediately before
such reclassification, exchange, substitution, or other event. The provisions of
this Section 6(b) shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events.
(c) Adjustments for Combinations, Etc. If the outstanding
Shares are combined or consolidated, by reclassification or otherwise, into a
lesser number of shares, the Warrant Price shall be proportionately increased.
7. Rights of Shareholders. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise of
this Warrant for any purpose, nor shall anything contained herein be construed
to confer upon the Holder, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised
and the Common Stock issuable upon exercise hereof shall have become
deliverable, as provided herein.
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8. Replacement of Warrants. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant, the Company
at its expense shall execute and deliver, in lieu of this Warrant, a new warrant
of like tenor.
9. Exchange of Warrant. Subject to the other provisions of this Warrant,
on surrender of this Warrant for exchange, properly endorsed and subject to the
provisions of this Warrant with respect to compliance with the Act, the Company
at its expense shall issue to or on the order of the Holder a new warrant or
warrants of like tenor, in the name of the Holder or as the Holder (on payment
by the Holder of any applicable transfer taxes) may direct, for the number of
Common Stock issuable upon exercise thereof.
10. Transferability. Subject to such restrictions on transfer as may be
contained in this Warrant or in the Purchase Agreement of even date herewith,
this Warrant is transferable on the books of the Company at its principal office
by the above named holder of record in person or by duly authorized attorney,
upon surrender of this Warrant properly endorsed. The Company may treat the
holder of record of this Warrant as the absolute owner hereof for all purposes
and shall not be affected by any notice to the contrary.
11. Reservation of Shares. The Corporation at all times shall reserve and
keep available out of its authorized but unissued shares of Common Stock solely
for the purpose of effecting the exercise of this Warrant such number of shares
of Common Stock as from time to time shall be sufficient to effect the exercise
of this Warrant.
12. Expiration. Subject to Section 5 above, the right to exercise or
convert this Warrant shall expire at 5:00 P.M. California time, on June 6 2002.
Dated: June 6, 1997
IMMERSION HUMAN INTERFACE
CORPORATION
By: /s/ Louis B. Rosenberg
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Louis B. Rosenberg, President
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EXHIBIT A
NOTICE OF EXERCISE OR CONVERSION
Date: _____________________, 19___
Immersion Human Interface Corporation
2158 Paragon Drive
San Jose, CA 95131
Attention:
-------------------
Dear M :
------------------
The undersigned hereby elects to exercise or convert the enclosed Warrant
dated _______________, 1997 issued to it by Immersion Human Interface
Corporation (the "Company").
The undersigned elects to:
/_/ Exercise the Warrant and to purchase thereunder __________ shares of
the Common Stock of the Company (the "Shares") at an exercise price of $0.15 per
Share, or an aggregate purchase price of ____________ Dollars ($_________ ) (the
"Purchase Price"). Pursuant to the terms of the Warrant, the undersigned has
delivered the Purchase Price herewith in full, of which Purchase Price,
$_________ is to be paid by tender of _________ shares of the Company's Common
Stock which are delivered herewith in form suitable for transfer.
/_/ Convert the value of _________ shares of the Common Stock issuable
pursuant to the Warrant.
Very truly yours,
Warrant Holder
By:
----------------------------
Title:
-------------------------
Accepted and Acknowledged:
Immersion Human Interface Corporation
By:
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Dated: , 19__
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EXHIBIT B
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO IMMERSION HUMAN
INTERFACE CORPORATION ALONG WITH THE SUBSCRIPTION FORM BEFORE THE COMMON STOCK
ISSUABLE UPON EXERCISE OF THE WARRANT DATED JUNE ___, 1997 WILL BE ISSUED.
INVESTMENT LETTER
__________________, 19___
Immersion Human Interface Corporation
2158 Paragon Drive
San Jose, CA 95131
Attention:
-------------------------------------
Gentlemen:
The undersigned, ______________________ ("Purchaser"), intends to acquire
up to ___________________ shares of the Common Stock (the "Stock") of Immersion
Human Interface Corporation (the "Company") from pursuant to the exercise of
certain warrants to purchase stock held by the Purchaser. The Stock will be
issued to Purchaser in a transaction not involving a public offering and
pursuant to an exemption from registration under the Securities Act of 1933, as
amended (the "1933 Act") and applicable state securities laws. In connection
with such purchase and in order to comply with the exemptions from registration
relied upon by the Company, Purchaser represents, warrants and agrees as
follows:
The Purchaser is an accredited investor within the meaning of Rule 501
under the 1933 Act and has such knowledge and experience in financial and
business matters that the Purchaser is capable of evaluating the merits and
risks of the purchase of the Stock and of protecting Purchaser's interests in
connection therewith.
Purchaser is acquiring the Stock for its own account, to hold for
investment, and Purchaser shall not make any sale, transfer or other disposition
of the Stock in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission (the "SEC") or
in violation of any applicable state securities law.
Purchaser has been advised that the Stock has not been registered under
the 1933 Act or state securities laws on the ground that this transaction is
exempt from registration, and that reliance by Intel on such exemptions is
predicated in part on Purchaser's representations set forth in this letter.
Purchaser has been informed that under the 1933 Act, the Stock must be held
indefinitely unless it is subsequently registered under the 1933 Act or unless
an exemption from such
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registration (such as Rule 144) is available with respect to any proposed
transfer or disposition by Purchaser of the Stock. Purchaser further agrees that
Intel may refuse to permit Purchaser to sell, transfer or dispose of the Common
Stock (except as permitted under Rule 144) unless there is in effect a
registration statement under the 1933 Act and any applicable state securities
laws covering such transfer, or unless Purchaser furnishes an opinion of counsel
reasonably satisfactory to counsel for the Company, to the effect that such
registration is not required.
Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Stock, or any substitutions therefor, a legend stating in
substance:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
Purchaser has carefully read this letter and has discussed its
requirements and other applicable limitations upon Purchaser's resale of the
Stock with Purchaser's counsel.
Very truly yours,
-------------------------------------------
Purchaser
By
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Title
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