Exhibit 10.18
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
June __, 1996
MONOLITHIC SYSTEM TECHNOLOGY, INC.
a California corporation
COMMON STOCK PURCHASE WARRANT AGREEMENT
THIS CERTIFIES THAT, for value received, FIELD(1) (hereinafter, the
"Holder"), is entitled, upon the terms and subject to the conditions hereinafter
set forth, to purchase from Monolithic System Technology, Inc., a California
corporation (the "Company"), that number of fully paid and nonassessable shares
of the Company's Common Stock at the purchase price per share as set forth in
Section 1 below.
This Warrant is one of a duly authorized series of warrants
(collectively, the "Warrants") issued in accordance with and subject to all
terms and conditions of the Note and Warrant Purchase Agreement dated June __,
1996 (the "Purchase Agreement") among the Company and each of the Purchasers
identified in the Schedule of Purchasers attached thereto pursuant to which the
Company purchased the Warrants and the Company's 8.25% Promissory Notes with an
aggregate principal amount of $15 million (the "Notes"). The term "Purchase
Agreement" shall include the agreement, in each of its respective forms, used in
connection with the purchase and sale of the Warrants to certain investors
resident in the United States and to certain additional non-U.S. investors
pursuant to the requirements of Regulation S promulgated under the United States
Securities Act of 1933, as amended (the "Securities Act"). The term "Warrants"
shall refer to all Warrants issued pursuant to the Purchase Agreement in each of
its respective forms.
TERMS AND CONDITIONS OF WARRANT
1. NUMBER OF SHARES: EXERCISE PRICE; TERM.
(a) The Holder shall be entitled to subscribe for and purchase
up to that number of shares of the fully paid and nonassessable Common Stock of
the Company (the "Shares") determined by dividing (i) FIELD(2) by (ii) the
Exercise Price in effect at the time of such subscription and purchase.
(b) Until the earlier of (i) the closing of the initial public
offering of the Company's Common Stock (the "IPO Closing") pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission (the "IPO Closing") and (ii) one year from the date of this
Warrant, the Exercise Price shall equal $6.50 per Share. After the earlier of
(i) the IPO Closing and (ii) the date one year from the date of this Warrant,
the Exercise Price shall equal $8.50 per Share.
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(c) The Holder may exercise this Warrant at any time and from
time to time prior to 5:00 p.m. (California Time) on May 31, 1998 (the
"Expiration Date"). This Warrant shall expire and cease to be exercisable after
the Expiration Date.
2. EXERCISE OF WARRANT.
(a) This Warrant may be exercised by the Holder as to the
whole or any lesser number of the Shares covered hereby, at any time and from
time to time prior to the Expiration Date, upon surrender of this Warrant to the
Company at its principal executive office together with the Notice of Exercise
and Investment Representation Statement annexed hereto as EXHIBITS A and B,
respectively, duly completed and executed by the Holder, and payment to the
Company of the aggregate Exercise Price for the Shares to be purchased in the
form of (i) a check made payable to the Company, (ii) forgiveness (evidenced by
a writing signed by the holder of the respective Note) of outstanding principal
owed by the Company under the Notes in an amount equal to the aggregate Exercise
Price for the Shares to be purchased, or (iii) any combination of (i) and (ii).
Certificates for the Shares so purchased shall be delivered to the Holder within
a reasonable time not to exceed 21 days after exercise of the stock purchase
rights represented by this Warrant. The exercise of this Warrant shall be deemed
to have been effected on the day on which the Holder surrenders this Warrant to
the Company and satisfies all of the requirements of this Section 2. Upon such
exercise, the Holder will be deemed a shareholder of record of those Shares for
which the warrant has been exercised with all rights of a shareholder
(including, without limitation, all voting rights with respect to such Shares
and all rights to receive any dividends with respect to such Shares). If this
Warrant is to be exercised in respect of less than all of the Shares covered
hereby, the Holder shall be entitled to receive a new warrant covering the
number of Shares in respect of which this Warrant shall not have been exercised
and for which it remains subject to exercise. Such new warrant shall be in all
other respects identical to this Warrant.
(b) In the event (i) the Exercise Price in effect at the time
of exercise of this Warrant by the Holder is $6.50 and (ii) the per-share price
at which shares of the Company's Common Stock are sold to the public at the IPO
Closing is less than $12.50, the Company shall pay to the Holder an amount equal
to the product determined by the following equation:
Z=X*Y*[I-(P / IPO)], where
Z = the amount to be paid by the Company to the
Holder pursuant to this subSection 2(b);
X = the number of Shares for which the Holder
exercised the Warrant at an Exercise Price
of $6.50;
Y = $6.50;
P = the per-share price at which shares of
the Company's Common Stock are sold to the
public at the IPO Closing; and
IPO = $12.50;
PROVIDED, however, that in no event shall the value calculated as "Z" above
exceed the product of (i) X and (ii) $1.50. The Company may satisfy any
obligation to the Holder pursuant to this Section 2(b) by delivery to the Holder
of (i) a check made payable to the Holder or (ii) a note in an amount equal to
the value of "Z" and in form and substance equivalent to the Notes (including,
without limitation, with respect to interest rate and maturity date).
3. COVENANTS OF THE COMPANY. The Company covenants and agrees
that all equity securities which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and payment therefore in accordance
herewith, will be duly authorized, validly issued, fully
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paid, and nonassessable shares of capital stock of the Company. The Company
further covenants and agrees that, during the period within which the stock
purchase rights represented by this Warrant may be exercised, the Company will
at all times have duly authorized and duly reserved for issuance upon the
exercise of the purchase rights evidenced by this Warrant a number of shares of
its Common Stock sufficient for such issuance.
4. TRANSFER, EXCHANGE, OR LOSS OF WARRANT.
(a) This Warrant may not be assigned or transferred except as
provided in this Section 4 and in accordance with and subject to the provisions
of the Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder (collectively, the "Securities Act"). Any purported
transfer or assignment made other than in accordance with this Section 4 shall
be null and void and of no force or effect.
(b) Prior to any transfer of this Warrant, other than in an
offering registered under the Securities Act, the Holder shall notify the
Company of its intention to effect such transfer, indicating the circumstances
of the proposed transfer and, upon request, furnish the Company with an opinion
of its counsel, in form and substance satisfactory to counsel for the Company,
to the effect that the proposed transfer may be made without registration under
the Securities Act or qualification under any applicable state securities laws.
The Company will promptly notify the Holder if the opinion of counsel furnished
to the Company is satisfactory to counsel for the Company. Unless the Company
notifies the Holder within ten (10) days after its receipt of such opinion that
such opinion is not satisfactory to counsel for the Company, the Holder may
proceed to effect the transfer.
(c) Unless a registration statement under the Securities Act
is effective with respect to the Shares or any other security issued upon
exercise of this Warrant, the certificate representing such Shares or other
securities shall bear the following legend, in addition to any legend imposed by
applicable state securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
(d) Upon receipt by the Company of satisfactory evidence of
loss, theft, destruction, or mutilation of this Warrant and of indemnity
satisfactory to the Company, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date and any such lost, stolen, or destroyed Warrant shall
thereupon become void. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not the Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
5. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which such holder would otherwise be
entitled, such holder shall be entitled, at its option, to receive either (i) a
cash payment equal to the excess of the Fair Market Value for such fractional
share above the Exercise
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Price for such fractional share (as mutually determined by the Company and the
Holder) or (ii) a whole share if the Holder tenders the Exercise Price for one
whole share.
6. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the
holder hereof to any voting rights, dividend rights, or other rights as a
shareholder of the Company prior to the exercise hereof.
7. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday or a Sunday or a legal holiday.
8. ADJUSTMENTS. The Exercise Price per Share and the number of
Shares purchasable hereunder shall be subject to adjustment from time to time
as follows:
(a) MERGER. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the Company
is not the surviving corporation, then, as a part of such merger or
consolidation, lawful provision shall be made so that the holder of this Warrant
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the aggregate Exercise Price
then in effect, the number of shares of stock or other securities or property of
the successor corporation resulting from such merger or consolidation, to which
a holder of the stock deliverable upon exercise of this Warrant would have been
entitled in such merger or consolidation if this Warrant had been exercised
immediately before such merger or consolidation. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the merger or
consolidation.
(b) RECLASSIFICATION, ETC. If the Company shall, at any time,
by subdivision, combination, or reclassification of securities or otherwise,
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, the Exercise Price shall be adjusted such that this Warrant 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
immediately prior to such subdivision, combination, reclassification or other
change.
(c) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the
Company at any time while this Warrant remains outstanding and unexpired shall
split, subdivide or combine the securities as to which purchase rights under
this Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination.
9. NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price or
number of Shares issuable upon exercise hereof shall be adjusted pursuant to
Section 8 hereof, the Company shall issue a written notice 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 Exercise
Price and number of Shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such notice to be mailed to the holder of
this Warrant.
10. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
any successors or assigns of the Company.
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(b) GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of California as applied to
agreements between California residents entered and to be performed entirely
within California.
(c) ATTORNEYS' FEES. In any litigation, arbitration, or court
proceeding between the Company and the holder relating hereto, the prevailing
party shall be entitled to reasonable attorneys' fees and expenses incurred in
enforcing this Warrant.
(d) AMENDMENTS. This Warrant may be amended and the observance
of any term of this Warrant may be waived only with the written consent of the
Company and the holders of then-outstanding Warrants exercisable for a majority
of the shares of the Company's Common Stock then issuable upon exercise of all
outstanding unexercised Warrants sold pursuant to the Purchase Agreement.
(e) NOTICE. Any notice, request, or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered, sent by facsimile, or mailed by
registered or certified mail, postage prepaid, or by recognized overnight
courier or personal delivery at the respective addresses or facsimile number of
the parties as set forth below. Any Party hereto may by notice so given change
its address for future notice hereunder. Notice shall conclusively be deemed to
have been given when received.
If to the Holder: At the address set forth for the
Holder in the Schedule of Purchasers
to the Purchase Agreement.
If to the Company: Monolithic System Technology, Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Financial Officer
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
(f) INVESTOR RIGHTS. All Shares issuable upon exercise of this
Warrant are subject to the registration rights provisions of the Second Amended
and Restated Investor Rights Agreement dated July 26, 1995 (the "Rights
Agreement"), as such agreement may be amended from time to time, as evidenced by
an Addendum to the Rights Agreement executed by the original holder of this
Warrant in connection with its purchase of the Notes and this Warrant pursuant
to the Purchase Agreement.
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IN WITNESS WHEREOF, the Company and the Holder have caused this Common
Stock Purchase Warrant Agreement to be executed as of the date first above
written.
MONOLITHIC SYSTEM TECHNOLOGY, INC.
By:
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Name:
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Title:
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Acknowledged and Agreed:
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By:
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Name:
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Title:
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