SCHEDULE 13D Page 13 of __
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS
OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
Void after 5:00 p.m.,
Pacific Time
on April 30, 2001
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
PHOENIX TECHNOLOGIES LTD.
Initial Number of Shares: 1,073,965
Date of Grant: February 15,
1996
Expiration Date: April 30,
2001
Purchase Price of Warrant $354,408.45
THIS CERTIFIES THAT, for value received pursuant to that certain Common
Stock and Warrant Purchase Agreement dated as of December 18, 1995 (the
"Purchase Agreement"), Intel Corporation and any person to whom the interest in
this Warrant is lawfully transferred pursuant to the term and conditions set
forth herein (the original holder hereof and such transferees are referred to
hereinafter as the "Holder") is entitled to purchase up to the above number (as
adjusted pursuant to Section 2 hereof) of fully paid and nonassessable shares of
the Common Stock (the "Shares") of Phoenix Technologies Ltd., a Delaware
corporation (the "Company"), at the applicable Per Share Exercise Price as set
forth in Section 1.1 hereof, subject to the provisions and upon the terms and
conditions set forth herein.
SCHEDULE 13D Page 14 of __
This Warrant is subject to the following terms and conditions:
1. EXERCISE.
1.1 (a) Per Share Purchase Price. The "Per Share
Purchase Price" at which this Warrant may be exercised shall be (i) $12.876875
to the extent it is exercised on or prior to December 31, 1997, (ii) $13.4621875
to the extent it is exercised in calendar year 1998, (iii) $14.0475 to the
extent it is exercised in calendar year 1999, (iv) $14.6328125 to the extent it
is exercised in calendar year 2000, and (v) $15.218125 to the extent it is
exercised from January 1, 2001 to April 30, 2001.
(b) In the event that an exercise of this
Warrant is subject to HSR Act Restrictions (as defined in 1.8(a) below), the Per
Share Purchase Price shall be set as of the date Holder provides Company with
the Common Stock Warrant Notice of Exercise. The Warrant will be deemed to have
been exercised on the date immediately following the date of the expiration or
early termination of all HSR Act Restrictions.
1.2 Exercisability.
(a) Vesting Schedule. Prior to December 15,
1996, all of the Shares shall be unvested and this Warrant shall not be
exercisable with respect to any of the Shares. Until terminated pursuant to
Section 1.3, this Warrant shall become vested and exercisable as to portions of
the Shares as follows:
Cumulative Number
On or after: of Shares Exercisable:
------------ ----------------------
December 15, 1996 214,793
December 15, 1997 429,586
December 15, 1998 644,379
December 15, 1999 1,073,965
SCHEDULE 13D Page 15 of __
(b) Corporate Event. A "Corporate Event" shall mean any of the
following, whether accomplished through one or a series of related transactions:
(i) the acquisition of all or substantially all the assets of the Company, (ii)
the acquisition of all or substantially all of the Company's desktop personal
computer and server BIOS technology, or (iii) an acquisition of the Company by
another corporation or entity by consolidation, merger, share purchase or
exchange, or other reorganization in which the holders of the Company's
outstanding voting stock immediately prior to such transaction own, immediately
after such transaction, securities representing less than fifty percent (50%) or
more of the voting power of the corporation or other entity surviving such
transaction, provided that "Corporate Event" shall not include any transaction
described in (i), (ii), or (iii) above if Intel Corporation, the Holder, or any
of their respective affiliates is the acquiror in such transaction.
(c) Acceleration of Vesting upon Corporate Event. Notwithstanding
Section 1.2(a), unless earlier terminated pursuant to Section 1.3, this Warrant
shall become exercisable in full immediately prior to the consummation of a
Corporate Event ("Acceleration"). Notwithstanding the foregoing, there shall
not be any Acceleration of this Warrant if (i) a Corporate Event is intended to
be accounted for as a "pooling of interests," (ii) such Acceleration would
preclude such accounting treatment, (iii) upon consummation of such Corporate
Event, to the extent (and only to the extent) that this Warrant is not fully
vested immediately prior to such consummation, this Warrant shall have been
assumed, converted or substituted by the acquiror pursuant to Section 2.3, and
(iv) the acquiror in such Corporate Event, as a condition to the closing of
such Corporate Event, assumes the Company's obligations under the Technology
Agreement between the Company and Intel Corporation dated as of December 18,
1995 (the "Technology Agreement").
1.3 Termination. If the Technology Agreement is terminated in
accordance with its terms for any reason (except for a termination by Intel
Corporation due to the uncured breach by the Company of one of its material
obligations thereunder), then this Warrant shall immediately cease vesting,
expire, and be canceled to the extent that it is not vested and exercisable as
of the date of such termination of the Technology Agreement (the "Termination
Date"). To the extent (and only to the extent) that this Warrant would have been
exercisable by the Holder on the Termination Date, this Warrant shall be
exercised, if at all, by the Holder no later than the earlier of (i) four (4)
months after the Termination Date, and (ii) the Expiration Date; at which
earlier time this Warrant will expire and be canceled in its entirety to the
extent not so exercised.
1.4 Expiration. This Warrant shall expire and be canceled in its
entirety on the Expiration Date set forth above and must be exercised, if at
all, on or before the Expiration Date (subject only to the provisions of Section
1.8(a) below).
1.5 Method of Exercise; Payment.
(a) The purchase right represented by this Warrant may be
exercised by the Holder, in whole or in part, for up to the total number of
shares then exercisable, by the surrender of this Warrant (with the Common Stock
Warrant Notice of Exercise form attached hereto as Annex I duly executed) at the
principal office of the Company and by the payment to the Company in cash (by
certified check or wire transfer) or by surrender of shares of Common Stock of
the
SCHEDULE 13D Page 16 of __
Company valued at their Market Price (as defined below) (or, where applicable,
pursuant to the provisions of 1.8(a)), in an amount equal to the then applicable
Purchase Price Per Share multiplied by the number of Shares then being
purchased.
(b) In lieu of exercising this Warrant by payment of cash or
shares of Common Stock, when permitted by law and applicable regulations
(including Nasdaq and NASD rules), the Holder may pay such exercise price
through a "same day sale" commitment from the Holder and a broker-dealer that is
a member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the Holder irrevocably elects to exercise the Warrant and to sell a
portion of the Shares so purchased to pay for the exercise price and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company.
(c) In lieu of exercising this Warrant by payment of cash or
shares of Common Stock or by payment through a same day sale, the Holder may
elect to receive, without the payment by the Holder of any additional
consideration, a number of shares (rounded down to the nearest whole share)
equal to the value of this Warrant or any portion hereof by the surrender of
this Warrant or such portion to the Company (the "Net Exercise"), with the net
issue election initialed in the Common Stock Warrant Notice of Exercise annexed
hereto duly executed, at the office of the Company. Thereupon, the Company will
issue to the Holder such number of shares of Common Stock of the Company as is
computed using the following formula:
SCHEDULE 13D Page 17 of __
X = Y (A-B)
------
A
where X= the number of shares of Common Stock to be issued to the Holder
upon the Net Exercise pursuant to this Section 1.5;
Y= the number of Shares exercised under this Warrant for
which the net issue election is made pursuant to this
Section 1.5 (upon such Net Exercise, the number of shares
subject to further exercise under this Warrant shall be
reduced by this number);
A= the Market Price (as defined below) of one share of the
Company's Common Stock, at the time the net issue election
is made pursuant to this Section 1.5; and
B= the Per Share Purchase Price in effect under this Warrant
at the time the net issue election is made pursuant to this
Section 1.5.
For purposes of this Section 1.5, "Market Price" means as to a share of
Common Stock the average of the closing prices of sales on all domestic
securities exchanges on which the Common Stock may at the time be listed, or, if
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day the Common Stock is not so listed, the average of the
representative bid and asked prices quoted in the Nasdaq National Market as of
4:00 P.M., New York time, on such day, or, if on any day the Common Stock is not
quoted in the Nasdaq National Market, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of thirty (30) Trading
Days immediately preceding the date the net issue election or other exercise is
made pursuant to this Section 1.5; provided, however, that if the Common Stock
is listed on any domestic securities exchange the term "Trading Days" as used in
this sentence means Trading Days on which such exchange is open for trading. If
at any time the Common Stock is not listed on any domestic securities exchange
or quoted in the Nasdaq National Market or the domestic over-the-counter market,
the "Market Price" shall be the fair value thereof determined jointly by the
Company and the Holder; provided, however, that if such parties are unable to
reach agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Company and the Holder. The
determination of such appraiser shall be final and binding on the Company and
the Holder, and the fees and expenses of such appraiser shall be paid by the
Company, provided that such fees and expenses shall be paid for by the Holder in
the event that the appraiser's determination of the Market Price is no more than
5% higher than, or is lower than, the last amount previously offered by the
Company.
1.6 Limitations on Exercise. The exercise of this Warrant, and the
issuance of the Shares will be subject to and conditioned upon compliance by the
Company and the Holder with all applicable state and federal laws and
regulations and with all applicable requirements of any stock exchange or
automated quotation system on which the Company's common stock may
SCHEDULE 13D Page 18 of __
be listed or quoted at the time of such issuance or transfer. The Company shall,
at its sole cost and expense, use its best efforts to make all filings, notices
and applications required by the Company (excluding filings, notices and
applications required by the Holder), and take all other actions necessary to
permit the exercise of this Warrant by the Holder and the issuance of the Shares
to the Holder, and the Holder shall cooperate with all reasonable requests of
the Company in connection therewith. This Warrant may not be exercised as to
fewer than 50,000 Shares unless it is exercised as to all Shares as to which the
Option is then exercisable.
1.7 Issuance of New Warrant. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased will be delivered to the Holder within four (4) business days after
receipt of such payment and, unless this Warrant has been fully exercised or has
expired, a new Warrant representing the portion of the Shares, if any, with
respect to which this Warrant will not then have been exercised will also be
issued to the Holder within a reasonable time.
1.8 Hart-Scott-Rodino Compliance.
(a) The Company hereby acknowledges that the exercise of this
Warrant by Holder may subject the Company and/or the Holder to the filing
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act") and that the Holder may be prevented from closing the exercise of
this Warrant until the expiration or early termination of all waiting periods
imposed by the HSR Act ("HSR Act Restrictions"). If on or before the Expiration
Date, the Holder (i) has sent the Common Stock Warrant Notice of Exercise to the
Company, (ii) has irrevocably elected to exercise this Warrant for the number of
Shares specified in such notice subject only to the removal of HSR Act
Restrictions, and (iii) the Holder has not been able to complete the exercise of
this Warrant prior to the Expiration Date solely because of HSR Act
Restrictions, then, for so long as the Holder actively continues in its effort
to remove the HSR Act Restrictions, the Holder shall be entitled to complete the
process of exercising this Warrant for such number of Shares in accordance with
the procedures contained herein notwithstanding the fact that completion of the
exercise of this Warrant would take place after the Expiration Date.
Notwithstanding the preceding sentence, this Warrant shall no longer be subject
to the provisions of this Section 1.8 and shall completely expire and be
canceled in its entirety no later than April 30, 2002 and must be exercised, if
at all, on or before such date. If an exercise by Holder is subject to HSR Act
Restrictions, the amount payable upon such exercise shall be paid to the Company
within two (2) business days of the expiration or notice of early termination of
all HSR Act Restrictions.
(b) The Company agrees to perform all activities, including a
responsive HSR Act filing, reasonably necessary to support Holder's effort to
remove HSR Act Restrictions.
SCHEDULE 13D Page 19 of __
2. ADJUSTMENT OF NUMBER OF SHARES AND PER SHARE PURCHASE PRICE. The
number of Shares purchasable upon the exercise of this Warrant, and the Per
Share Purchase Price, will be subject to adjustment from time to time as
provided in this Section 2:
2.1 Subdivision or Combination of Common Stock. If the Company
at any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the Per Share Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares of Common
Stock obtainable upon exercise of this Warrant shall be proportionately
increased. If the Company at any time combines (by reverse stock split or
otherwise) its outstanding shares of Common Stock into a smaller number of
shares, the Per Share Purchase Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Common Stock obtainable upon exercise of this Warrant shall be proportionately
decreased.
2.2 Stock Dividends. If the Company at any time while this
Warrant remains outstanding and unexpired pays a dividend, without receipt of
consideration therefor, to the holders of Common Stock payable in shares of
Common Stock, Preferred Stock, other capital stock or other securities
convertible into or exchangeable for Common Stock, Preferred Stock or other
capital stock ("Convertible Securities"), or options to purchase Common Stock,
Preferred Stock, other capital stock or Convertible Securities ("Options"), the
Holder shall, upon exercise of this Warrant be entitled to receive, in addition
to the number of Shares receivable thereupon, the amount of Common Stock,
Preferred Stock, other capital stock, Convertible Securities, or Options which
such Holder would have received had it been Holder of record of such Shares as
of the date on which holders of Common Stock received or became entitled to
receive such additional shares of Common Stock, Preferred Stock, other capital
stock, Convertible Securities or Options. Any adjustment under this Section 2.2
will become effective on the record date or, if there is no record date, on the
date of issuance.
2.3 Reorganization, Reclassifications, Mergers or Sales. Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of the Company's assets or other transaction
(including, without limitation, any Corporate Event), in each case that is
effected in such a way that the holders of Common Stock are entitled to receive
(either directly or upon subsequent liquidation) stock, securities or assets, or
a combination thereof, with respect to or in exchange for Common Stock is
referred to herein as an "Organic Change." Prior to the consummation of any
Organic Change, the Company shall, subject to Section 1.2(c), make appropriate
provision (in form and substance reasonably satisfactory to the Holder) to
insure that the Holder shall thereafter have the right to acquire and receive,
upon exercise of this Warrant in accordance with its terms and upon payment of
the Per Share Exercise Price then in effect, in lieu of each Share of Common
Stock immediately theretofore acquirable and receivable upon the exercise of
this Warrant, such shares of stock, securities or assets as may be issued or
payable with respect to each share of Common Stock immediately theretofore
acquirable and receivable upon exercise of the Warrant had such Organic Change
not taken place. The Company shall not effect
SCHEDULE 13D Page 20 of __
any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor entity (if other than the Company) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument (in form and substance reasonably satisfactory to the Holder), the
obligation to deliver to such Holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such Holder may be entitled to
acquire.
2.4 Certain Events. If (i) any event occurs of a type that
would have an effect on the rights granted under this Warrant similar to the
effect of any event described by the other provisions of this Section 2 and (ii)
such event is not expressly provided for by such other provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then an appropriate adjustment in
the Per Share Purchase Price and the number of shares of Common Stock obtainable
upon exercise of this Warrant so as to protect the rights of the holder of the
Warrant shall be made.
SCHEDULE 13D Page 21 of __
2.5 Notices.
(a) Within four (4) business days of any
adjustment of the Per Share Purchase Price, the Company shall give written
notice thereof to the Holder, setting forth and certifying in reasonable detail
the facts causing such adjustment and the calculation of such adjustment. The
Company will give due consideration to, and consult with counsel regarding, any
objection Holder has to the matters described in such notice, and will make any
corrections to such notice deemed necessary to conform with the terms of this
Warrant.
(b) The Company shall give written notice to the
Holder at least ten (10) business days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution (cash or otherwise) upon the Common Stock, (B) with respect to any
pro rata subscription or other offer to holders of Common Stock (C) for
determining rights to vote with respect to any Organic Change, dissolution or
liquidation.
(c) The Company shall also give written notice to
the Holder at least ten (10) business days prior to the date on which any
Organic Change, dissolution or liquidation shall take place.
3. TRANSFERABILITY OF WARRANT.
3.1 Majority Owned Subsidiary. A "Majority Owned Subsidiary" shall
mean a subsidiary of which Intel Corporation beneficially owns, either directly
or indirectly, at least 50% of the voting securities.
3.2 Institutional Investor. An "Institutional Investor" shall mean
any person considered to be an "accredited investor" under Rule 501(a)(1) of
Regulation D promulgated under the Act, provided however, that "Institutional
Investor" shall not include any person or affiliate of a person that is a
significant competitor of the Company.
3.3 Limitation on Transfer. To the extent this Warrant is not
vested and exercisable pursuant to Section 1.2, this Warrant may not be
transferred or assigned in whole or in part in any manner other than to a
Majority Owned Subsidiary. To the extent this Warrant is vested and exercisable
pursuant to Section 1.2, this Warrant may be transferred or assigned in whole or
in part, but only to a Majority Owned Subsidiary, or, subject to the provisions
of Section 3.4, to an Institutional Investor. The Holder agrees to provide the
Company with five (5) business days prior written notice of any transfer or
assignment of any portion of this Warrant to a Majority Owned Subsidiary.
3.4 Right of First Offer. Before any vested and exercisable portion
of this Warrant may be sold or otherwise transferred (including without
limitation a transfer by gift or operation of law, but excluding any transfer to
a Majority Owned Subsidiary), the Company and/or its assignee(s) will have a
right of first offer to purchase the portion of this Warrant to be sold or
SCHEDULE 13D Page 22 of __
transferred (the "Offered Portion") on the terms and conditions set forth in
this Section 3.4 (the "Right of First Offer").
(a) Notice of Proposed Transfer. The Holder of This Warrant
will deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Offered Portion;
(ii) the name of each proposed purchaser or other transferee ("Proposed
Transferee") up to a maximum of five (5) such Proposed Transferees; (iii) the
number of Shares subject to the Offered Portion; (iv) the bona fide cash price
or other consideration for which the Holder proposes to transfer the Offered
Portion (the "Offered Price"); and (v) that the Holder will offer to sell the
Offered Portion to the Company and/or its assignee(s) at the Offered Price as
provided in this Section 3.4.
(b) Exercise of Right of First Offer. At any time within four
(4) business days after the date of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase all
(but not less than all) of the Offered Portion proposed to be transferred to any
one or more of the Proposed Transferees named in the Notice, at the purchase
price determined in accordance with subsection (c) below.
(c) Purchase Price. The purchase price for the Offered Portion
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the value of the non-cash
consideration shall be determined jointly by the Company and the Holder;
provided, however, that if such parties are unable to reach agreement within a
reasonable period of time, such per share amounts paid shall be determined by an
appraiser jointly selected by the Company and the Holder. The determination of
such appraiser shall be final and binding on the Company and the Holder. The
fees and expenses of such appraiser shall be paid for by the Company, provided
that such fees and expenses shall be paid for by the Holder in the event that
the appraiser's determination of the value of such consideration is no more than
5% higher, or is lower than, the last amount previously offered by the Company.
(d) Holder's Right to Transfer. If the Offered Portion
proposed in the Notice to be transferred to a given Proposed Transferee is not
purchased by the Company and/or its assignee(s) as provided in this Section 3.4,
then the Holder may sell or otherwise transfer such Offered Portion to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 60 days after the date of the
Notice, and provided further, that: (i) any such sale or other transfer is
effected in compliance with all applicable securities laws; and (ii) the
Proposed Transferee agrees in writing that the provisions of this Section 3 will
continue to apply to the Offered Portion in the hands of such Proposed
Transferee. If the Offered Portion described in the Notice is not transferred to
the Proposed Transferee within such 60 day period, then a new Notice must be
given to the Company, and the Company will again be offered the Right of First
Offer before any portion of this Warrant held by the Holder may be sold or
otherwise transferred.
3.5 Encumbrances on Warrant. The Holder may grant a lien or
security interest in, or pledge, hypothecate or encumber this Warrant only if
each party to whom such lien or security interest is granted, or to whom such
pledge, hypothecation or other encumbrance is made, agrees in a writing
reasonably satisfactory to the Company that: (i) such lien, security interest,
pledge, hypothecation or encumbrance will not apply to any portion of this
Warrant in the event such portion is acquired by the Company (and/or its
assignees) in accordance with Section 3.4; and
SCHEDULE 13D Page 23 of __
(ii) the provisions of this Section 3 will continue to apply to this Warrant (or
any portion thereof) in the hands of such party and any transferee of such
party. Purchaser may not grant a lien or security interest in, or pledge,
hypothecate or encumber, any portion of this Warrant that is not vested and
exercisable.
4. MISCELLANEOUS.
4.1 Legends. Any certificate for Shares issued upon exercise hereof
will be imprinted with a legend in substantially the form set forth in the
Common Stock Warrant Notice of Exercise form attached hereto as Annex I.
4.2 Investor Rights Agreement. This Warrant and the Shares are
subject to the terms and conditions of that certain Investor Rights Agreement
between the Company and Intel Corporation dated as of December 18, 1995.
4.3 Successors and Assigns. The terms and provisions of this
Warrant will inure to the benefit of, and be binding upon, the Company and the
Holder and their respective successors and assigns of the Holder and of the
Company.
4.4 Governing Law. This Warrant will be governed by and construed
under the internal laws of the State of Delaware, without reference to
principles of conflict of laws or choice of laws.
4.5 Headings. The headings and captions used in this Warrant are
used for convenience only and are not to be considered in construing or
interpreting this Warrant. All references in this Warrant to sections and
annexes will, unless otherwise provided, refer to sections and hereof and
annexes attached hereto, all of which annexes are incorporated herein by this
reference.
4.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement will be given in writing and will be deemed
effectively given upon personal delivery to the party to be notified, or three
(3) days after deposit with the United States Post Office, by registered or
certified mail, postage prepaid, or by deposit with a nationally recognized
courier service such as Fedex, or by facsimile with confirmed receipt and
addressed to the party to be notified.
PHOENIX TECHNOLOGIES LTD.
SCHEDULE 13D Page 24 of __
By:
_________________________________________
Name: Jack Kay
Title: President and Chief Executive Officer
ANNEX I TO
WARRANT
________ , 199__
Phoenix Technologies Ltd.
2770 De La Cruz Boulevard
Santa Clara, California 95050
Attn: Legal Department
Common Stock Warrant Notice of Exercise
Gentlemen:
On this date the undersigned hereby acquires from Phoenix
Technologies Ltd., a Delaware corporation (the "Company"), an aggregate of
_________ shares of the Company's Common Stock (the "Warrant Shares"), by
exercise, for such number of shares, of that certain Warrant to Purchase Shares
of Common Stock (the "Warrant"), dated as of __________, 199_, from the Company
to the original holder of the Warrant. However, if this exercise of the Warrant
is subject to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act") filing requirements, this Warrant shall be deemed to have been exercised
on the date immediately following the date of the expiration or early
termination of all HSR Act restrictions.
SCHEDULE 13D Page 25 of __
1. Investment Representations and Warranties. The
undersigned represents and warrants that:
1.1 Purchase for Own Account. The
Warrant Shares to be purchased by the undersigned will be acquired for
investment for the undersigned's own account, not as a nominee or agent, and
not with a view to the public resale or distribution thereof within the meaning
of the Securities Act of 1933, as amended (the "1933 Act"), and the undersigned
has no present intention of selling, granting any participation in, or
otherwise distributing the same. The undersigned also represents that it has
not been formed for the specific purpose of acquiring the Warrant Shares.
1.2 Disclosure of Information. The
undersigned has received or has had full access to all the information it
considers necessary or appropriate to make an informed investment decision with
respect to the Warrant Shares to be purchased by the undersigned.
1.3 Investment Experience. The
undersigned understands that the purchase of the Warrant Shares involves
substantial risk. The undersigned: (a) has experience as an investor in
securities of companies and acknowledges that it is able to fend for itself,
can bear the economic risk of its investment in the Warrant Shares and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of this investment in the Warrant Shares and
protecting its own interests in connection with this investment and/or (b) has
a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables the undersigned to be aware of the character, business acumen and
financial circumstances of such persons.
1.4 Accredited Investor Status. The
Investor is an "accredited investor" within the meaning of Regulation D
promulgated under the 1933 Act.
1.5 Restricted Securities. The
undersigned understands that the Warrant Shares to be purchased by the
undersigned hereunder, are characterized as "restricted securities" under the
1933 Act inasmuch as they are being acquired from the Company in a transaction
not involving a public offering and that under the 1933 Act and applicable
regulations thereunder such securities may be resold without registration under
the 1933 Act only in certain limited circumstances. The undersigned is familiar
with Rule 144 of the
SCHEDULE 13D Page 26 of __
SEC, as presently in effect, and understands the resale limitations imposed
thereby and by the 1933 Act. The undersigned understands that the Company is
under no obligation to register any of the securities sold hereunder except as
provided in the Investor Rights Agreement between the Company and Intel
Corporation dated as of December 18, 1995 (the "Investor Rights Agreement").
1.6 Further Limitations on Disposition.
Without in any way limiting the representations set forth above, the
undersigned further agrees not to make any disposition of all or any portion of
the Warrant Shares unless and until:
(a) there is then in effect a
registration statement under the 1933 Act covering such proposed disposition
and such disposition is made in accordance with such registration statement; or
(b) the undersigned has notified
the Company of the proposed disposition and has furnished the Company with a
statement of the circumstances surrounding the proposed disposition, and the
undersigned has furnished the Company, at the expense of the undersigned or its
transferee, with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such securities under the
1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) of
this Section 1.6, no such registration statement or opinion of counsel will be
required for any transfer of any Warrant Shares in compliance with SEC Rule 144,
Rule 144A or Rule 145(d), or if such transfer otherwise is exempt, in the view
of the Company's legal counsel, from the registration requirements of the 1933
Act.
1.7 Investor Rights Agreement. The
undersigned agrees and acknowledges that the Warrant Shares are subject to the
terms and conditions or the Investor Rights Agreement.
2. Legends. The undersigned understands that
certificates evidencing the Warrant Shares will bear each of the legends set
forth below:
SCHEDULE 13D Page 27 of __
2.1 THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
2.2 THE SHARES EVIDENCED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN A CERTAIN INVESTOR RIGHTS
AGREEMENT BETWEEN THE COMPANY AND INTEL CORPORATION DATED AS OF DECEMBER 18,
1995, A COPY OF WHICH IS AVAILABLE FOR EXAMINATION AT THE ISSUER'S PRINCIPAL
OFFICE.
2.3 Any legends required by any applicable
state securities laws.
The undersigned agrees that, to ensure and enforce compliance
with the restrictions imposed by applicable law and those referred to in the
foregoing legend, or elsewhere herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, with respect to any
certificate or other instrument representing Warrant Shares.
3. Net Exercise Election. If applicable, the
undersigned elects to purchase the Warrant Shares by Net Exercise (as defined in
the Warrant), by initialing in the following space (please initial only if Net
Exercise chosen): __________.
4. Same Day Sale Election. If applicable, the
undersigned elects to purchase the Warrant Shares by "same day sale" pursuant to
the provisions of Section 1.5(b) of the Warrant, by initialing on the following
space (please initial only if Same Day Sale chosen): ________________.
SCHEDULE 13D Page 28 of __
By:
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Name:
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Title:
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Address:
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Date signed:
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[SIGNATURE PAGE -- PHOENIX TECHNOLOGIES LTD.
COMMON STOCK WARRANT NOTICE OF EXERCISE]