THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY
COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT AGREEMENT
TO PURCHASE SHARES OF THE SERIES B PREFERRED STOCK OF
QUANTUM EFFECT DESIGN, INC.
DATED AS OF SEPTEMBER 30, 1997 (THE "EFFECTIVE DATE")
WHEREAS, Quantum Effect Design, Inc., a California corporation (the
"Company") has entered into a Loan and Security Agreement dated as of
September 30, 1997, and related Promissory Note (collectively, the "Loan")
with Comdisco, Inc., a Delaware corporation (the "Warrantholder"); and
WHEREAS, the Company desires to grant the Warrantholder, in
consideration for such Loan, the right to purchase shares of the Series B
Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Loan and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
The Company hereby grants to the Warrantholder, and the
Warrantholder is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe to and purchase, from the Company, 62,500
fully paid and non-assessable shares of the Company's Series B Preferred
Stock ("Preferred Stock") at a purchase price of $1.60 per share (the
"Exercise Price"). The number and purchase price of such shares are subject
to adjustment as provided in Section 8 hereof.
2. TERM OF THE WARRANT AGREEMENT
Except as otherwise provided for herein, the term of this Warrant
Agreement and the right to purchase Preferred Stock as granted herein shall
commence on the Effective Date and shall be exercisable for a period of (i)
six (6) years or (ii) three (3) years from the effective date of the
Company's initial public offering, whichever is longer.
Notwithstanding the previous sentence, if all of the Preferred Stock
is converted into shares of Common Stock in connection with a registration of
the Company's Common Stock under the 1933 Act, then this Warrant shall
automatically become exercisable for that number of shares of Common Stock
equal to the number of shares of Stock received thereupon had been
simultaneously converted into shares of Common Stock immediately prior to
such event, and the Exercise Price shall be automatically adjusted to equal
the amount obtained by dividing (i) the aggregate Exercise Price of the
shares of Preferred Stock for this which this Warrant was exercisable
immediately prior to such conversion, by (ii) the number of shares of Common
Stock for which this Warrant is exercisable immediately after such conversion.
3. EXERCISE OF THE PURCHASE RIGHTS
The purchase rights set forth in this Warrant Agreement are
exercisable by the Warrantholder, in whole or in part, at any time, or from
time to time, prior to the expiration of the term set forth in Section 2
above, by
1.
tendering to the Company at its principal office a notice of exercise in the
form attached hereto as Exhibit I (the "Notice of Exercise"), duly completed
and executed. Promptly upon receipt of the Notice of Exercise and the payment
of the purchase price in accordance with the terms set forth below, and in no
event later than twenty-one (21) days thereafter, the Company shall issue to
the Warrantholder a certificate for the number of shares of Preferred Stock
purchased and shall execute the acknowledgment of exercise in the form
attached hereto as Exhibit II (the "Acknowledgment of Exercise") indicating
the number of shares which remain subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election after
(i) by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as
determined below. If the Warrantholder elects the Net Issuance method, the
Company will issue Preferred Stock in accordance with the following formula:
Y(A-B)
X = --------
A
Where X = the number of shares of Preferred Stock to be issued to the
Warrantholder
Y = the number of shares of Preferred Stock requested to be
exercised under this Warrant Agreement
A = the fair market value of one (1) share of Preferred Stock.
B = the Exercise Price.
For purposes of the above calculation, current fair market value of Preferred
Stock shall mean with respect to each share of Preferred Stock:
(i) if the exercise is in connection with an initial public offering of
the Company's Common Stock, and if the Company's Registration Statement
relating to such public offering has been declared effective by the SEC, then
the fair market value per share shall be the product of (x) the initial
"Price to Public" specified in the final prospectus with respect to the
offering and (y) the number of shares of Common Stock into which each share
of Preferred Stock is convertible at the time of such exercise;
(ii) if this Warrant is exercised after, and not in connection with the
Company's initial public offering; and:
(a) if traded on a securities exchange, the fair market value shall
be deemed to be the product of (x) the average of the closing prices over
a twenty-one (21) day period ending three days before the day the current
fair market value of the securities is being determined and (y) the
number of shares of Common Stock into which each share of Preferred Stock
is convertible at the time of such exercise; or
(b) if actively traded over-the-counter, the fair market value
shall be deemed to be the product of (x) the average of the closing bid
and asked prices quoted on the NASDAQ System (or similar system) over the
twenty-one (21) day period ending three days before the date the current
fair market value of the securities is being determined and (y) the
number of shares of Common Stock into which each share of Preferred Stock
is convertible at the time of such exercise:
(iii) if at any time the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
current fair market value of Preferred Stock shall be the product of (x) the
highest price per share with the Company could obtain from a willing buyer
(not a current employee or director) for shares of Common Stock sold by the
Company, from authorized but unissued shares, as determined in good faith by
its Board of Directors and (y) the number of shares of Common Stock into
which each share of Preferred Stock is convertible at the time of such
exercise, unless the Company shall become subject to a merger, acquisition or
other consolidation pursuant to which the Company is not the surviving party,
in which case the fair market value of Preferred Stock shall be deemed to be
the value received by the holders of the Company's Preferred Stock on a
common equivalent basis pursuant to such merger or acquisition.
2.
Upon partial exercise by either cash or Net Issuance, the Company
shall promptly issue an amended Warrant Agreement representing the remaining
number of shares purchasable hereunder. All other terms and conditions of
such amended Warrant Agreement shall be identical to those contained herein,
including, but not limited to the Effective date hereof.
4. RESERVATION OF SHARES.
(a) AUTHORIZATION AND RESERVATION OF SHARES. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved
a sufficient number of shares of its Preferred Stock to provide for the
exercise of the rights to purchase Preferred Stock as provided for herein.
(b) REGISTRATION OR LISTING. If any shares of Preferred Stock
required to be reserved hereunder require registration with or approval of
any governmental authority under any Federal or State law (other than any
registration under the Securities Act of 1933, as amended ("1933 Act"), as
then in effect, or any similar Federal statute then enforced, or any state
securities law, required by reason of any transfer involved in such
conversion), before such shares may be issued upon conversion, the Company
will, at its expense and as expeditiously as possible, use its best efforts
to cause such shares to be duly registered, listed or approved for listing on
such domestic securities exchange, as the case may be.
5. NO FRACTIONAL SHARES OR SCRIP.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of the Warrant, but in lieu of such fractional
shares the Company shall make a cash payment therefor upon the basis of the
Exercise Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
This Warrant Agreement does not entitle the Warrantholder to any
voting rights or other rights as a shareholder of the Company prior to the
exercise of the Warrant.
7. WARRANTHOLDER REGISTRY.
The Company shall maintain a registry showing the name and address
of the registered holder of this Warrant Agreement.
8. ADJUSTMENT RIGHTS.
The purchase price per share and the number of shares of Preferred
Stock purchasable hereunder are subject to adjustment, as follows:
(a) MERGER AND SALE OF ASSETS. If at any time there shall be a
capital reorganization of the shares of the Company's stock (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or a merger or consolidation of the Company with or
into another corporation whether or not the Company is the surviving
corporation, or the sale of all or substantially all of the Company's
properties and assets to any other person (hereinafter referred to as a
"Merger Event"), then, as a part of such Merger Event, lawful provision shall
be made so that the Warrantholder shall thereafter be entitled to receive,
upon exercise of the Warrant, the number of shares of preferred stock or
other securities of the successor corporation resulting from such Merger
Event, equivalent in value to that which would have been issuable if
Warrantholder had exercised this Warrant immediately prior to the Merger
Event. In any such case, appropriate adjustment (as determined in good faith
by the Company's Board of Directors) shall be made in the application of the
provisions of this Warrant Agreement with respect to the rights and interest
of the Warrantholder after the Merger Event to the end that the provisions of
this Warrant Agreement (including adjustments of the Exercise Price and
number of shares of Preferred Stock purchasable) shall be applicable to the
greatest extent possible.
3.
(b) RECLASSIFICATION OF SHARES. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under
this Warrant Agreement exist into the same or a different number of
securities of any other class or classes, this Warrant Agreement shall
thereafter represent the right to acquire such number and kind of securities
as would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
Agreement immediately prior to such combination, reclassification, exchange,
subdivision or other change.
(c) SUBDIVISION OR COMBINATION OF SHARES. If the Company at any time
shall combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) STOCK DIVIDENDS. If the Company at any time shall pay a dividend
payable in, or make any other distribution (except any distribution
specifically provided for in the foregoing subsections (a) or (b)) of the
Company's stock, then the Exercise Price shall be adjusted, from and after
the record date of such dividend or distribution to that price determined by
multiplying the Exercise Price in effect immediately prior to such record
date by a fraction (i) the numerator of which shall be the total number of
all shares of the Company's stock outstanding immediately prior to such
dividend or distribution, and (ii) the denominator of which shall be the
total number of all shares of the Company's stock outstanding immediately
after such dividend or distribution. The Warrantholder shall thereafter be
entitled to purchase, at the Exercise Price resulting from such adjustment,
the number of shares of Preferred Stock (calculated to the nearest whole
share) obtained by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Preferred Stock issuable upon
the exercise hereof immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.
(e) ANTIDILUTION RIGHTS. Additional antidilution rights applicable
to the Preferred Stock purchasable hereunder are as set forth in the
Company's Amended and Restated Articles of Incorporation, as amended through
the Effective Date, a true and complete copy of which is attached hereto as
Exhibit IV (the "Charter"). The Company shall promptly provide the
Warrantholder with any restatement, amendment, modification or waiver of the
Charter. The Company shall provide Warrantholder with prior written notice of
any issuance of its stock or other equity security to occur after the
Effective Date of this Warrant, other than those issuances described in
Section 2g(i) through 2g(iv) of the Charter, which notice shall include (a)
the price at which such stock or security is to be sold, (b) the number of
shares to be issued, and (c) such other information as necessary for
Warrantholder to determine if a dilutive event has occurred.
(f) NOTICE OF ADJUSTMENTS. If: (i) the Company shall declare any
dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company shall offer for subscription pro rata t
the holders of any class of its Preferred or other convertible stock any
additional shares of stock of any class or other rights; (iii) there shall be
any Merger Event; (iv) there shall be an initial public offering; or (v)
there shall be any voluntary dissolution, liquidation or winding up of the
Company; then, in connection with each such event, the Company shall send to
the Warrantholder: (A) at least twenty (20) days' prior written notice of the
date on which the books of the company shall close or a record shall be taken
for such dividend, distribution, subscription rights (specifying the date on
which the holders of Preferred Stock shall be entitled thereto) or for
determining rights to vote in respect of such merger Event, dissolution,
liquidation or winding up; (B) in the case of any such Merger Event,
dissolution, liquidation or winding up, at least twenty (20) days' prior
written notice of the date when the same shall take place (and specifying the
date on which the holders of Preferred Stock shall be entitled to exchange
their Preferred Stock for securities or other property deliverable upon such
Merger Event, dissolution, liquidation or winding up); and (C) in the case of
a public offering, the Company shall give the Warrantholder at least twenty
(20) days written notice prior to the effective date thereof.
Each such written notice shall set forth, in reasonable detail, (i)
the event requiring the adjustment, (ii) the amount of the adjustment, (iii)
the method by which such adjustment was calculated, (iv) the Exercise Price,
and (v) the number of shares subject to purchase hereunder after giving
effect to such adjustment, and shall be given by first class mail, postage
prepaid, addressed to the Warrantholder, at the address as shown on the books
of the Company.
4.
(g) TIMELY NOTICE. Failure to timely provide such notice required by
subsection (f) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained
in any insufficient notice received by Warrantholder. The notice period shall
begin on the date Warrantholder actually receives a written notice containing
all the information specified above.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) RESERVATION OF PREFERRED STOCK. The Preferred Stock issuable
upon exercise of the Warrantholder's rights has been duly and validly
reserved and, when issued in accordance with the provisions of this Warrant
Agreement, will be validly issued, fully paid and non-assessable, and will be
free of any taxes, liens, charges or encumbrances of any nature whatsoever,
provided, however, that the Preferred Stock issuable pursuant to this Warrant
Agreement may be subject to restrictions on transfer under state and/or
Federal securities laws. The Company has made available to the Warrantholder
true, correct and complete copies of its Charter and Bylaws, as amended. The
issuance of certificates for shares of Preferred Stock upon exercise of the
Warrant Agreement shall be made without charge to the Warrantholder for any
issuance tax in respect thereof, or other cost incurred by the Company in
connection with such exercise and the related issuance of shares of Preferred
Stock. The Company shall not be required to pay any tax which may be payable
in respect of any transfer involved and the issuance and delivery of any
certificate in a name other than that of the Warrantholder.
(b) DUE AUTHORITY. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire
the shares of Preferred Stock, have been duly authorized by all necessary
corporate action on the part of the Company, and the Loans and this Warrant
Agreement are not inconsistent with the Company's Charter or Bylaws, do not
contravene any law or governmental rule, regulation or order applicable to
it, do not and will not contravene any provision of, or constitute a default
under, any indenture, mortgage, contract or other instrument to which it is a
party or by which it is bound, and the Loans and this Warrant Agreement
constitute legal, valid and binding agreements of the Company, enforceable in
accordance with their respective terms.
(c) CONSENTS AND APPROVALS. No consent or approval of, giving of
notice to, registration with, or taking of any other action in respect of any
state, Federal or other governmental authority or agency is required with
respect to the execution, delivery and performance by the Company of its
obligations under this Warrant Agreement, except for the filing of notices
pursuant to Regulation D under the 1933 Act and any filing required by
applicable state securities law, which filings will be effective by the time
required thereby.
(d) ISSUED SECURITIES. All issued and outstanding shares of Common
Stock, Preferred Stock or any other securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. All
outstanding shares of Common Stock, Preferred Stock and any other securities
were issued in full compliance with all Federal and state securities laws. In
addition, as of June 30, 1997:
(i) The authorized capital of the Company consisted of (A)
15,500,000 shares of Common Stock and (B) 4,300,000 shares of preferred
stock, consisting of 1,800,000 shares designated as Series A Preferred
Stock, all of which are issued and outstanding and 2,500,000 shares
designated as Series B Preferred Stock. 2,500,000 of which are issued
and outstanding and are convertible into 4,300,000 shares of Common
Stock. In addition, the Company has reserved 9,000,000 shares of Common
Stock for issuance under its two Incentive Stock Option Plans. There are
no other options, warrants, conversion privileges or other rights
presently outstanding to purchase or otherwise acquire any authorized
but unissued shares of the Company's capital stock or other securities
of the Company.
(ii) Except as set forth on Schedule V hereto, in accordance with
the Company's Charter, no shareholder of the Company has preemptive
rights to purchase new issuances of the Company's capital stock.
(e) INSURANCE. The Company has in full force and effect insurance
policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarity situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
5.
(f) OTHER COMMITMENTS TO REGISTER SECURITIES. Except as set forth on
Schedule V, the Company is not, pursuant to the terms of any other agreement
currently in existence, under any obligation to register under the 1933 Act
any of its presently outstanding securities or any of its securities which
may hereafter be issued.
(g) EXEMPT TRANSACTION. Subject to the accuracy of the
Warrantholder's representations in Section 10 hereof, the issuance of the
Preferred Stock upon exercise of this Warrant will constitute a transaction
exempt from (i) the registration requirements of Section 5 of the 1933 Act,
in reliance upon Section 4(2) thereof, and (ii) the qualification
requirements of the applicable state securities laws.
(h) COMPLIANCE WITH RULE 144. At the written consent of the
Warrantholder, who proposes to sell Preferred Stock issuable upon the
exercise of the Warrant in compliance with Rule 144 promulgated by the
Securities and Exchange Commission, the Company shall furnish to the
Warrantholder, within ten days after receipt of such request, a written
statement confirming the Company's compliance with the filing requirements of
the Securities and Exchange Commission as set forth in such Rule, as such
Rule may be amended from time to time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
This Warrant Agreement has been entered into by the Company
in reliance upon the following representations and covenants of the
Warrantholder:
(a) INVESTMENT PURPOSE. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights
contained herein will be acquired for investment and not with a view to the
sale or distribution of any part thereof, and the Warrantholder has no
present intention of selling or engaging in any public distribution of the
same except pursuant to a registration or exemption.
(b) PRIVATE ISSUE. The Warrantholder understands (i) that the
Preferred Stock issuable upon exercise of this Warrant is not registered
under the 1933 Act or qualified under applicable state securities laws on the
ground and the issuance contemplated by this Warrant Agreement will be exempt
from the registration and qualifications requirements thereof, and (ii) that
the Company's reliance on such exemption is predicated on the representation
set forth in this Section 10.
(c) DISPOSITION OF WARRANTHOLDER'S RIGHTS. In no event will the
Warantholder make a disposition of any of its rights to acquire Preferred
Stock or Preferred Stock issuable upon exercise of such rights unless and
until (i) it shall have notified the Company of the proposed disposition, and
(ii) if requested b the Company, it shall have furnished the Company with an
opinion of counsel (which counsel may either be inside or outside counsel to
the Warrantholder) satisfactory to the Company and its counsel to the effect
that (A) appropriate action necessary for compliances with the 1933 Act has
been taken, or (B) an exemption from the registration requirements of the
1933 Act is available. Notwithstanding the foregoing, the restrictions
imposed upon the transferability of any of its rights to acquire Preferred
Stock or Preferred Stock issuable on the exercise of such rights do not apply
to transfers from the beneficial owner of any of the aforementioned
securities to its nominee or from such nominee to its beneficial owner, and
shall terminate as to any particular share of Preferred Stock when (1) such
security shall have been effectively registered under the 1933 Act and sold
by the holder thereof in accordance with such registration or (2) such
security shall have been sold without registration in compliance with Rule
144 under the 1933 Act, or (3) a letter shall have been issued to the
Warrantholder at its request by the staff of the Securities and Exchange
Commission or a ruling shall have been issued to the Warrantholder at its
request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security
is transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever
the restrictions imposed hereunder shall terminate, as hereinabove provided,
the Warantholder or holder of a share of Preferred Stock then outstanding as
to which such restrictions have terminated shall be entitled to receive from
the Company, without expense to such holder, one or more new certificates for
the Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.
(d) FINANCIAL RISK. The Warrantholder has such knowledge and
experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment, and has the ability to bear the
economic risks of its investment.
6.
(e) RISK OF REGISTRATION. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission
pursuant to Section 12 of the 1934 Act (the "1934 Act"), or file reports
pursuant to Section 15(d), of the 1934 Act*, or if a registration statement
covering the securities under the 1933 Act is not in effect when it desires
to sell (i) the rights to purchase Preferred Stock pursuant to this Warrant
Agreement, or (ii) the Preferred Stock issuable upon exercise of the right to
purchase. It may be required to hold such securities for an indefinite
period. The Warrantholder also understands that any sale of its rights of the
Warrantholder to purchase Preferred Stock or Preferred Stock which might be
made by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.
(f) ACCREDITED INVESTOR. Warrantholder is an "accredited investor"
within the meaning of the Securities and Exchange Rule 501 of Regulation D,
as presently in effect.
11. RIGHT OF FIRST OFFER.
In accordance with the provisions of Section 8 of the
Charter, if the Company proposes to offer any "Junior Shares" or
"Convertible Securities" (as defined in the Charter) ("Shares"), the
Company shall promptly provide Warrantholder with an offer to sell
Warrantholder on the same terms and conditions a portion of such
Shares equal to the proportion that the number of shares of Preferred
Stock to be issued upon exercise hereunder or number of shares of
common stock upon conversion thereof, bears to the total number of
shares of common stock of the Company then outstanding (assuming full
conversion of all shares of referred Stock and exercise of all options).
12. TRANSFERS.
Subject to the terms and conditions contained in Section 10
hereof, this Warrant Agreement and all rights hereunder are
transferable in whole or in part by the Warrantholder and any
successor transferee, only to an Affiliate as defined in the 1933 Act,
of Warrantholder, provided, however, in no event shall the number of
transfers of the rights and interests in all of the Warrants exceed
three (3) transfers. The transfer shall be recorded on the books of
the Company upon receipt by the Company of a notice of transfer in the
form attached hereto as Exhibit III (the "Transfer Notice"), at its
principal offices and the payment to the Company of all transfer taxes
and other governmental charges imposed on such transfer.
13. MISCELLANEOUS.
(a) EFFECTIVE DATE. The provisions of the Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been
executed and delivered by the Company on the date hereof. This Warrant
Agreement shall be binding upon any successors or assigns of the Company.
(b) ATTORNEY'S FEES. In any litigation, arbitration or court
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party shall be entitled to attorneys' fees and expenses and all
costs of proceedings incurred in enforcing this Warrant Agreement.
(c) GOVERNING LAW. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State
of Illinois.
(d) COUNTERPARTS. This Warrant Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(e) NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal
delivery, facsimile transmission (provided that the original is sent by
personal delivery or mall as hereafter set forth) or seven (7) days after
deposit in the United States mail, by registered or certified mail, addressed
(i) to the Warrantholder at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx Xxxx, Venture Group, cc: Legal Department, Attention:
General Counsel, (and/or, if by facsimile, (000) 000-0000 and (000) 000-0000
and (ii) to the Company at 0000-0 Xxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxx,
Xxxxxxxxxx 00000, Attention: President (and/or if by facsimile, (408)
565-0335 or at such other address as any such party may subsequently
designate by written notice to the other party.
7.
(f) REMEDIES. In the event of any default hereunder, the
non-defaulting party may proceed to protect and enforce its rights either by
suit in equity and/or by action at law, including but not limited to an
action for damages as a result of any such default, and/or an action for
specific performance for any default where Warrantholder will not have an
adequate remedy at law and where damages will not be readily ascertainable.
The Company expressly agrees that it shall not oppose an application by the
Warrantholder or any other person entitled to the benefit of this Agreement
requiring specific performance of any or all provisions hereof or enjoining
the Company from continuing to commit any such breach of this Agreement.
(g) NO IMPAIRMENT OF RIGHTS. The Company will not, by amendment of
its Charter or through any other means, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate in order to protect the
rights of the Warrantholder against impairment.
(h) SURVIVAL. The representations, warranties, covenants and
conditions of the respective parties contained herein or made pursuant to
this Warrant Agreement shall survive the execution and delivery of this
Warrant Agreement.
(i) SEVERABILITY. In the event any one or more of the provisions of
this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision,
which comes closest to the intention of the parties underlying the invalid,
illegal or unenforceable provision.
(j) AMENDMENTS. Any provision of this Warrant Agreement may be
amended by a written instrument signed by the Company and by the
Warrantholder.
(k) ADDITIONAL DOCUMENTS. The Company, upon execution of this
Warrant Agreement, shall provide the Warrantholder with an officer's
certificate with respect to the representations, warranties and covenants set
forth in subparagraphs (a) through (d), (f) and (g) of Section 9 above. The
Company shall also supply such other documents as the Warrantholder may from
time to time reasonable request.
8.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be executed by its officers thereunto duly authorized as of the
Effective Date.
COMPANY:
QUANTUM EFFECT DESIGN, INC.
By: \s\ Xxxxxx X. Xxxxxxx
-------------------------
Title: President and CEO
----------------------
WARRANTHOLDER:
COMDISCO, INC.
By: \s\ Xxxxx X. Xxxx
----------------------------
Title: Xxxxx X. Xxxx, President
-------------------------
Comsdisco Ventures Division
-------------------------------
9.
EXHIBIT I
NOTICE OF EXERCISE
TO:
-----------------------------
(1) The Undersigned Warrantholder hereby elects to purchase ______ shares
of the Series B Preferred Stock of Quantum Effect Design, Inc. pursuant
to the terms of the Warrant Agreement dated the 30th day of September,
1997 (the "Warrant Agreement") between Quantum Effect Design, Inc. and
the Warrantholder, and tenders herewith payment of the purchase price
for such shares in full, together with all applicable transfer taxes,
if any.
(2) In exercising its rights to purchase the Series B Preferred Stock of
Quantum Effect Design, Inc., the undersigned hereby confirms and
acknowledges the investment representations and warranties made in
Section 10 of the Warrant Agreement.
(3) Please issue a certificate or certificates representing said shares of
Series B Preferred Stock in the name of the undersigned or in such
other name as is specified below.
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(Name)
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(Address)
Warrantholder: COMDISCO, INC.
By:
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Title:
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Date:
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10.
EXHIBIT II
ACKNOWLEDGEMENT OF EXERCISE
The undersigned _______________________________, hereby acknowledges
receipt of the "Notice of Exercise" from Comdisco, Inc. to purchase ___
shares of the Series B Preferred Stock of Quantum Effect Design, Inc.,
pursuant to the terms of the Warrant Agreement, and further acknowledges that
____ shares remain subject to purchase under the terms of the Warrant
Agreement.
Company: QUANTUM EFFECT DESIGN, INC.
By:
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Title:
----------------------------------
Date:
-----------------------------------
11.
EXHIBIT III
TRANSFER NOTICE
(To transfer or assign the foregoing Warrant Agreement execute this
form and supply required information. Do not use this form to purchase
shares.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to:
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(Please Print)
whose address is
------------------------------------------
----------------------------------------------------------
Dated:
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Holder's Signature:
------------------------------
Holder's Address:
--------------------------------
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Signature Guaranteed:
-------------------------------------
NOTE: The signature to this Transfer Notice must correspond with the name
as it appears on the face of the Warrant Agreement, without alteration
or enlargement or any change whatsoever. Officers of corporations and
those acting in a fiduciary or other representative capacity should
file proper evidence of authority to assign the foregoing Warrant
Agreement.
12.
