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EXHIBIT 4.4
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
Issued: July 1, 1996 SB-1
ACCELGRAPHICS, INC.
WARRANT TO PURCHASE
14,000 SHARES OF
SERIES B PREFERRED STOCK
1. Number and Price of Shares Subject to Warrant.
(a) Warrant Purchase Agreement. This Series B Preferred Stock
Warrant is executed and delivered by AccelGraphics, Inc., a California
corporation (the "COMPANY") pursuant to that certain Master Equipment Lease No.
053-0021 dated as of July 1, 1996 (the "AGREEMENT"), executed and delivered by
the Company and Phoenix Leasing Incorporated (the "PURCHASER").
(b) Term. Subject to the terms and conditions herein set
forth, at Purchaser's option, Purchaser is entitled to purchase from the Company
at any time after the date of this Warrant and on or before the earlier of (i)
July 1, 2006, or (ii) the closing of a transaction or series of transactions
involving the Company's sale of all or substantially all of its assets or the
acquisition of the Company by another entity by means of merger or other
transaction as a result of which shareholders of the Company immediately prior
to such acquisition possess a minority of the voting power of the surviving
entity immediately following such acquisition (a "MERGER"), or (iii) the closing
of the initial public offering of the Company's Common Stock registered under
the Securities Act of 1933, as amended (the "1933 ACT"), up to 14,000 shares
(which number of shares is subject to adjustment as described below) of fully
paid and nonassessable Series B Preferred Stock of the Company.
(c) Warrant Price. Subject to adjustment as hereinafter
provided, the purchase price of one share of Series B Preferred Stock shall be
equal to $1.50 per share. The purchase price of one share of Series B Preferred
Stock (or such securities as may be substituted for one share of Series B
Preferred Stock pursuant to the provisions hereinafter set forth) payable from
time to time upon the exercise of this Warrant (whether such price be the price
specified above or an adjusted price determined as hereinafter provided) is
referred to herein as the "WARRANT PRICE."
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2. Adjustment of Warrant Price and Number of Shares. The number and
kind of securities issuable upon the exercise of this Warrant shall be subject
to adjustment from time to time upon the happening of certain events as follows:
(a) Adjustment for Dividends in Stock or Other Securities or
Property. In case at any time or from time to time on or after the date hereof
the holders of the Series B Preferred Stock of the Company (or any shares of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date fixed for the
determination of eligible shareholders, shall have become entitled to receive,
without payment therefor, other or additional stock or other securities or
property (other than cash) of the Company by way of dividend, then and in each
case, the holder of this Warrant shall, upon the exercise hereof, be entitled to
receive, in addition to the number of shares of Series B Preferred Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of such other or additional stock or other securities or
property (other than cash) of the Company which such holder would hold on the
date of such exercise had it been the holder of record of such Series B
Preferred Stock on the date hereof and had thereafter, during the period from
the date hereof to and including the date of such exercise, retained such shares
and/or all other additional stock available by it as aforesaid during such
period, giving effect to all adjustments called for during such period by
paragraphs (b) and (c) of this Section 2.
(b) Adjustment for Reclassification, Reorganization or Merger.
In case of any reclassification or change of the outstanding securities of the
Company or of any reorganization of the Company (or any other corporation the
stock or securities of which are at the time receivable upon the exercise of
this Warrant) or any similar corporate reorganization on or after the date
hereof, then and in each such case the holder of this Warrant, upon the exercise
hereof at any time after the consummation of such reclassification, change,
reorganization, merger or conveyance, shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the exercise hereof
prior to such consummation, the stock or other securities or property to which
such holder would have been entitled upon such consummation if such holder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in paragraphs (a) and (c) of this Section 2; and in each
such case, the terms of this Section 2 shall be applicable to the shares of
stock or other securities properly receivable upon the exercise of this Warrant
after such consummation.
(c) Stock Splits and Reverse Stock Splits. If at any time on
or after the date hereof the Company shall subdivide its outstanding shares of
Series B Preferred Stock into a greater number of shares, the Warrant Price in
effect immediately prior to such subdivision shall thereby be proportionately
reduced and the number of shares receivable upon exercise of the Warrant shall
thereby be proportionately increased; and, conversely, if at any time on or
after the date hereof the outstanding number of shares of Series B Preferred
Stock shall be combined into a smaller number of shares, the Warrant Price in
effect immediately prior to such combination shall thereby be proportionately
increased and the number of shares receivable upon exercise of this Warrant
shall thereby be proportionately decreased.
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3. No Fractional Shares. No fractional shares of Series B Preferred
Stock will be issued in connection with any exercise hereunder. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the Fair Market Value (as
defined below) of one share of Series B Preferred Stock on the date of exercise.
4. No Shareholder Rights. This Warrant represents only the right to
purchase shares of Series B Preferred Stock of the Company and shall not
otherwise entitle its holder to any of the rights of a shareholder of the
Company unless and until it is exercised in accordance with the terms hereof.
5. Exercise of Warrant.
(a) Method of Exercise. This Warrant may be exercised by the
holder hereof, in whole or in part and from time to time, by the surrender of
this Warrant at the principal office of the Company, accompanied by the
completed and executed Notice of Exercise (attached hereto as Exhibit A) and
payment of the Warrant Price. The Warrant Price may be paid (i) by check, of an
amount equal to the then applicable Warrant Price per share multiplied by the
number of shares of Series B Preferred Stock then being purchased, (ii) by
cancellation of any present or future indebtedness from the Company to the
holder hereof in an amount equal to the then applicable Warrant Price per share
multiplied by the number of shares of Series B Preferred Stock then being
purchased, or (iii) pursuant to the net exercise provisions set forth in Section
5(b) below. This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the shares of Series B
Preferred Stock issuable upon such exercise shall be treated for all purposes as
the holder of such shares of record as of the close of business on such date. As
promptly as practicable on or after such date and in any event within five (5)
business days thereafter, the Company at its expense shall issue and deliver to
the person or persons entitled to receive the same a certificate or certificates
for the number of full shares of Series B Preferred Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share as provided
above, and, unless this Warrant has been fully exercised or has expired, a new
Warrant representing the portion of the shares of Series B Preferred Stock, if
any, with respect to which this Warrant shall not have been exercised, shall
also be issued to the holder hereof.
(b) Net Issue Exercise.
(i) In lieu of exercising this Warrant in the manner
provided above in Section 5(a), the holder hereof may elect to receive shares
equal to the value of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
the Notice of Exercise (attached hereto as Exhibit A) in which event the Company
shall issue to holder a number of shares of the Company's Series B Preferred
Stock computed using the following formula:
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X = Y (A - B)
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A
Where: X = The number of shares of Series B Preferred Stock
to be issued to holder.
Y = The number of shares of Series B Preferred Stock
purchasable under this Warrant (at the date of such
calculation).
A = The Fair Market Value (as defined below) of one
share of the Company's Series B Preferred Stock (at
the date of such calculation).
B = The Warrant Price (as adjusted to the date of
such calculation).
(ii) The term "FAIR MARKET VALUE" means the price per
share which the Company could obtain from a willing buyer for the shares sold by
the Company from authorized but unissued shares, as such price shall be
determined in good faith by the Board of Directors of the Company.
6. Certificate of Adjustment. Whenever the Warrant Price or number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, the Company shall promptly deliver to the record holder of this
Warrant a certificate of an officer of the Company setting forth the nature of
such adjustment and a brief statement of the facts requiring such adjustment.
7. Transfer of Warrant. Except for transfers to any wholly-owned
subsidiary or parent of, or to any corporation or entity that is within the
meaning of the 1933 Act, controlling, controlled by or under common control with
Purchaser, this Warrant may not be transferred by Purchaser without the written
consent of the Company.
8. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
9. Registration Rights. Purchaser shall have the registration rights
contained in the Amended and Restated Rights Agreement dated as of March 7, 1996
between the Company and certain shareholders of the Company, as set forth on
Exhibit A thereto (the "RIGHTS AGREEMENT").
10. Financial Information. The Company shall deliver to Purchaser,
concurrent with delivery to any of the Holders, as defined in the Rights
Agreement, all information delivered to any of the Holders pursuant to Section
4.2(a) of the Rights Agreement and all other information
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delivered to any of the Holders from time to time pursuant to the Rights
Agreement as in effect from time to time during the term hereof. If the Rights
Agreement is terminated for any reason and for so long as the Company is not
subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the
Securities Exchange Act of 1934, as amended, the Company shall deliver to
Purchaser all information that was required to be delivered to any of the
Holders pursuant to Section 4.2(a) of the Rights Agreement, as in effect on the
date hereof.
11. Miscellaneous. This Warrant shall be governed by the laws of the
State of California. The headings in this Warrant are for purposes of
convenience and reference only, and shall not be deemed to constitute a part
hereof. This Warrant may be changed, waived, discharged or terminated only by an
instrument in writing signed by the Company and the registered holder hereof.
All notices and other communications from the Company to the holder of this
Warrant shall be mailed by first class registered or certified mail, postage
prepaid, to the address furnished to the Company in writing by the last holder
of this Warrant who shall have furnished an address to the Company in writing.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provisions.
12. Attorney's Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Warrant, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
13. Notice. The Company shall give Purchaser written notice of any
sale, merger, consolidation or public offering referred to in Section 1(b) or
any cash dividend declared on the Company's Series B Preferred Stock at least
ten (10) days prior to the closing of any such sale, merger, consolidation or
public offering or the record date fixed for the determination of shareholders
eligible for such dividend and shall deliver a copy of the preliminary
prospectus with respect to any such public offering to Purchaser promptly after
it becomes available.
This Series B Preferred Stock Warrant is issued as of the 1st day of
July, 1996.
ACCELGRAPHICS, INC.
By: /s/ Xxxxx X. Xxxx
______________________________
Xxxxx X. Xxxx, Chief Financial
Officer and Vice President,
Operations
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EXHIBIT A
NOTICE OF EXERCISE
To: Secretary of AccelGraphics, Inc.
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___) hereby irrevocably elects to purchase ________ shares of the
Series B Preferred Stock of AccelGraphics, Inc. covered by such Warrant. The
undersigned herewith makes payment of $____________, representing the full
purchase price for such shares at the price per share provided for in such
Warrant. Such payment takes the form of (check applicable box or boxes):
\ \ a check for $_______ in lawful money of the United States;
\ \ cancellation of $________ of indebtedness from the Company to
the undersigned; or
\ \ the cancellation of such portion of the attached Warrant as is
exercisable for a total of ________ Warrant Shares (using a
Fair Market Value of $_________ per share for purposes of this
calculation).
Date: _____________ Signature: ____________________
Address: ____________________
____________________
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