THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR THE RULES AND
REGULATIONS THEREUNDER.
WARRANT TO PURCHASE
SHARES OF
FAROUDJA, INC.
COMMON STOCK
Faroudja, Inc., a Delaware corporation (the "Company") hereby issues to
Xxxxxxx Investors, LLC (the "Holder") this warrant to purchase from the Company,
at any time or from time to time on or before the third anniversary of the date
of this warrant (or any earlier date specified by the Company in a written
notice given by the Company to the Holder), for a price per share equal to $.15,
65,152 shares of common stock of the Company.
This warrant is subject to the following terms and conditions:
1. EXERCISE. The rights represented by this warrant may be exercised, at
any time or from time to time in whole or in part, by (a) the surrender of this
warrant, along with the purchase form attached as exhibit A-1 (the "Purchase
Form"), properly executed, at the address of the Company set forth in
section 8.2 (or such other address as the Company may designate by notice in
writing to the Holder at its address set forth in section 8.2) and (b) the
payment to the Company of the exercise price by check, payable to the order of
the Company, for the number of shares specified in the Purchase Form, together
with any applicable stock transfer taxes. A certificate representing the shares
so purchased and, in the event of an exercise of fewer than all the rights
represented by this warrant, a new warrant in the form of this warrant issued in
the name of the Holder or its designee(s) and representing a new warrant to
purchase a number of shares equal to the number of shares as to which this
warrant was theretofore exercisable less the number of shares as to which this
warrant shall theretofore have been exercised, shall be delivered to the Holder
or such designee(s) as promptly as practicable, but in no event later than three
business days, after this warrant shall have been so exercised.
2. ADJUSTMENT OF THE NUMBER OF SHARES. If the Company shall (a) pay a
dividend in common stock or make a distribution in common stock, (b) subdivide
its outstanding common stock, (c) combine its outstanding common stock into a
smaller number of shares of common stock or (d) issue by reclassification of its
common stock, spin-off, split-up, recapitalization, merger, consolidation or any
similar corporate event or
arrangement other securities of the Company, the kind and number of shares of
common stock purchasable upon exercise of this warrant shall be adjusted
immediately prior to the exercise of this warrant so that the Holder shall be
entitled to receive the kind and number of shares or other securities of the
Company to which the Holder would have been entitled to receive after the
happening of any of the events described above had this warrant been exercised
immediately prior to the happening of such event or the record date with respect
to such event.
3. RESERVATION OF SHARES. From and after the date of this warrant, the
Company shall at all times reserve and keep available for issuance upon the
exercise of this warrant a number of its authorized but unissued shares of
common stock sufficient to permit the exercise in full of this warrant.
4. TRANSFER. Subject to applicable law, this warrant may be transferred
at any time, in whole or in part, to any entity, entities, person or persons.
Any transfer shall be effected by the surrender of this warrant, along with the
form of assignment attached as exhibit A-2, properly executed, at the address of
the Company set forth in section 7.2 (or such other address as the Company may
designate by notice in writing to the Holder at its address set forth in
section 7.2). Thereupon, the Company shall issue in the name or names specified
by the Holder a new warrant or warrants of like tenor and representing a warrant
or warrants to purchase in the aggregate a number of shares equal to the number
of shares to which this warrant was theretofore exercisable less the number of
shares as to which this warrant shall theretofore have been exercised.
5. PAYMENT OF TAXES. The Company shall cause all shares of common stock
issued upon the exercise of this warrant to be validly issued, fully paid and
nonassessable and not subject to preemptive rights. The Company shall pay all
expenses in connection with, and all taxes and other governmental charges that
may be imposed with respect to, the issuance or delivery of the shares of common
stock upon exercise of this warrant, unless such tax or charge is imposed by law
upon the Holder.
6. PIGGYBACK REGISTRATION.
6.1 INCLUSION IN REGISTRATION. If at any time after the date of this
warrant until the expiration of this warrant, the Company proposes to register
any of its shares of common stock under the Securities Act of 1933 (other than
in connection with a merger or pursuant to Form S-8 or S-4 or a comparable
registration statement) it will promptly give notice to the Holder of its
intention to do so. If the Holder notifies the Company within twenty (20) days
after receipt of any such notice of its desire to include any Warrant Shares (as
defined in section 6.3) in such proposed registration, the Company shall afford
the Holder the opportunity to have such Warrant Shares registered under such
registration statement.
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Notwithstanding anything in this section 6 to the contrary, the Company
shall have the right at any time after it shall have given any notice pursuant
to this section 6 (irrespective of whether a written request for inclusion of
any Warrant Shares shall have been made), to elect to postpone or not to file
such proposed registration statement or to withdraw the same after filing but
prior to the effective date thereof.
6.2 UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares being sold by the Company, the Company shall
not be required under this section 6 to include any Warrant Shares in such
underwriting unless the Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it, and then only in
such quantity as will not, in the opinion of the underwriters, jeopardize the
success of the offering by the Company. If the total number of shares,
including the Warrant Shares, requested by shareholders, including the Holder,
to be included in the offering exceeds the number of shares sold other than by
the Company that the underwriters reasonably believe compatible with the success
of the offering, then the number of selling shareholders' shares that may be
included in the offering shall be apportioned pro rata among the selling
shareholders according to the total number of shares entitled to be included in
the offering owned by each selling shareholder or in such other proportions as
shall mutually be agreed to by the selling shareholders.
6.3 DEFINITION. As used in this section 6, the term "Warrant Shares"
means shares of common stock of Faroudja issued or issuable upon the exercise of
this warrant.
7. MISCELLANEOUS.
7.1 SECURITIES ACT RESTRICTIONS. The Holder acknowledges that this
warrant may not be sold, transferred or otherwise disposed of without
registration under the Securities Act of 1933 (the "Act") or an applicable
exemption from the registration requirements of the Act and, accordingly, this
warrant and all certificates representing the common stock and any other
securities issuable upon the exercise of this warrant shall bear a legend in the
form set forth on the top of page one of this warrant.
7.2 NOTICES. All notices and other communications under this
agreement shall be in writing and may be given by any of the following methods:
(a) personal delivery; (b) facsimile transmission; (c) registered or certified
mail, postage prepaid, return receipt requested; or (d) overnight delivery
service. Notices shall be sent to the appropriate party at its, his or her
address or facsimile number given below (or at such other address or facsimile
number for that party as shall be specified by notice given under this
section 7.2):
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if to the Holder, to it at:
Xxxxxxx Investors, LLC
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
East-West Capital Associates
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Fax: (000) 000-0000
if to the Company, to it at:
Faroudja, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, CFO
Fax: (000) 000-0000
with a copy to:
Xxxxxxxxx, Xxxxx, Fields & Younger
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
All such notices and communications shall be deemed received upon (a) actual
receipt by the addressee, (b) actual delivery to the appropriate address or (c)
in the case of a facsimile transmission, upon transmission by the sender and
issuance by the transmitting machine of a confirmation slip confirming that the
number of pages constituting the notice have been transmitted without error. In
the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above. However, such mailing shall in no way alter the time at
which the facsimile notice is deemed received.
7.3 AMENDMENT. This warrant may be modified or amended or the
provisions of this warrant may be waived only with the written consent of the
Company and the Holder.
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7.4 GOVERNING LAW. This warrant shall be governed by the law of the
state of Delaware, without regard to the provisions thereof relating to
conflicts of laws.
December 31, 1996
FAROUDJA, INC.
By: /s/ Xxxxxxx Xxxxx
----------------------------------------------------
Xxxxxxx Xxxxx,
President and CEO
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EXHIBIT A-1
PURCHASE FORM
[To be executed only upon exercise of warrant]
The undersigned registered owner of this warrant irrevocably exercises this
warrant for the purchase of ________________ shares of common stock of Faroudja,
Inc. and herewith makes payment therefor, all at the price and on the terms and
conditions specified in this warrant and requests that certificates for the
shares of common stock hereby purchased be issued in the name of and delivered
to _________________________________ whose address is
________________________________________________________ and, if such shares of
common stock shall not include all of the shares of common stock issuable as
provided in this warrant, that a new warrant of like tenor and date for the
balance of the shares of common stock issuable hereunder be delivered to the
undersigned.
Dated:
-------------------------
----------------------------------------
(Name of Registered Owner)
----------------------------------------
(Signature of Registered Owner)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
A-1
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EXHIBIT A-2
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of this warrant hereby
sells, assigns and transfers to the assignee named below all of the rights of
the undersigned under this warrant with respect to the number of shares of
common stock set forth below:
No. of shares
Name and Address of Assignee Common Stock
---------------------------- --------------
and does hereby irrevocably constitute and appoint ___________________________
attorney-in-fact to register such transfer on the books of Faroudja, Inc.
maintained for the purpose, with full power of substitution in the premises.
Dated: Print Name:
------------------ ------------------------
Signature:
--------------------------
Witness:
----------------------------
A-2
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