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EXHIBIT 10.21
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Void after
May 6, 2004
GLOBESPAN, INC.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
This Warrant is issued to Cisco Systems, Inc. (the "Holder") by
GlobeSpan, Inc., a Delaware corporation (the "Company"), pursuant to the terms
of that certain Series A Preferred Stock and Warrant Purchase Agreement (the
"Purchase Agreement") dated as of May 6, 1999, in connection with the Company's
issuance to the Holder of shares of Series A Preferred Stock of the Company. All
share numbers and per share price numbers in this Warrant are prior to the 1 for
3 reverse stock split currently contemplated by the Company. The share and
exercise price numbers set forth herein shall be appropriately adjusted to
reflect the actual stock split when it occurs.
1. Purchase of Shares. Subject to the terms and conditions
hereinafter set forth and set forth in the Purchase Agreement, the Holder is
entitled, upon surrender of this Warrant at the principal office of the Company
(or at such other place as the Company shall notify the Holder hereof in
writing), to purchase from the Company four hundred fifty thousand (450,000)
fully paid and nonassessable shares of the Common Stock of the Company. The
shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall
be subject to adjustment pursuant to Section 8 hereof.
2. Purchase Price. The purchase price for the Shares shall be as set
forth below, subject to adjustment pursuant to Section 8 hereof (such price, as
adjusted from time to time, is herein referred to as the "Exercise Price"):
(a) For the first one hundred twelve thousand five hundred
(112,500) Shares that the Holder purchases, the Holder shall pay a per share
price equal to the price per share of the Common Stock sold pursuant to the
Company's first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "IPO"),
exclusive of underwriters' commissions and discounts (the "IPO Price");
(b) For the second one hundred twelve thousand five hundred
(112,500) Shares that the Holder purchases, the Holder shall pay a per share
price equal to one hundred twenty-five percent (125%) of the IPO Price;
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(c) For the third one hundred twelve thousand five hundred
(112,500) Shares that the Holder purchases, the Holder shall pay a per share
price equal to one hundred fifty percent (150%) of the IPO Price;
(d) For the fourth one hundred twelve thousand five hundred
(112,500) Shares that the Holder purchases, the Holder shall pay a per share
price equal to one hundred seventy-five percent (175%) of the IPO Price; and
(e) If the Company's IPO shall have not occurred prior to the date
this Warrant becomes exercisable pursuant to Section 3(b) below, then the
Exercise Price of this Warrant (with respect to Section 3(b) below only) shall
be determined by setting the IPO Price at $3.34 per share in Sections 2(a),
2(b), 2(c) and 2(d) hereof.
3. Exercise Period.
(a) Except as set forth in Section 3(b) below, this Warrant shall
only become exercisable upon the closing of the issuance and sale of shares of
Common Stock of the Company in the Company's first underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "IPO"), and it shall remain exercisable thereafter until
and including the date five (5) years after the closing date of the IPO;
provided, however, that in the event of (a) the sale of all or substantially all
the assets of the Company or (b) of the merger of the Company into or
consolidation with any other entity (unless such merger is intended solely to
change the jurisdiction of incorporation), this Warrant shall, immediately prior
to the closing or date of such event, no longer be exercisable and become null
and void. In the event of a proposed transaction of the kind described above,
the Company shall notify the Holder at least fifteen (15) days prior to the
consummation of such event or transaction.
(b) Notwithstanding the foregoing Section 3(a), if the Company's
IPO shall have not occurred prior to (a) the sale of all or substantially all
the assets of the Company or (b) of the merger of the Company into or
consolidation with any other entity (unless such merger is intended solely to
change the jurisdiction of incorporation), this Warrant shall become exercisable
immediately prior to the closing or date of such event at an Exercise Price
determined as provided in Section 2(e); provided, however, that in the event of
(x) the sale of all or substantially all the assets of the Company or (y) of the
merger of the Company into or consolidation with any other entity (unless such
merger is intended solely to change the jurisdiction of incorporation), this
Warrant shall, upon the closing or date of such event, no longer be exercisable
and become null and void. In the event of a proposed transaction of the kind
described above, the Company shall notify the Holder at least fifteen (15) days
prior to the consummation of such event or transaction.
4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
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(i) the surrender of the Warrant, together with a duly executed
copy of the form of subscription attached hereto, to the Secretary of the
Company at its principal offices; and
(ii) the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Shares being purchased, except that
if Holder is subject to HSR Act Restrictions (as defined in Section 4(iii)
below) the Exercise Prices shall be paid to the Company within five (5) business
days of the termination of all HSR Act Restrictions.
(iii) the Company hereby acknowledges that exercise of this
Warrant by Holder may subject the Company and/or the Holder to the filing
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 ("HSR
Act") and that Holder may be prevented from exercising 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 last day upon which this Warrant
is exercisable Holder has complied with Section 4(i) above and Holder has not
been able to complete the exercise of this Warrant prior to the last day upon
which this Warrant is exercisable because of HSR Act Restrictions, the Holder
shall be entitled to complete the process of exercising this Warrant in
accordance with the procedures contained herein notwithstanding the fact that
completion of the exercise of this Warrant would take place after the last day
upon which this Warrant is exercisable.
5. Net Exercise. In lieu of exercising this Warrant pursuant to Section
4, the Holder may elect to receive, without the payment by the Holder of any
additional consideration, shares of Common Stock 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 notice of such election, in
which event the Company shall issue to the Holder hereof a number of shares of
Common Stock computed using the following formula:
Y(A - B)
X = --------
A
Where: X = The number of shares of Common Stock to be issued to the
Holder pursuant to this net exercise;
Y = The number of Shares in respect of which the net issue
election is made;
A = The fair market value of one share of the Common Stock at
the time the net issue election is made;
B = The Exercise Price (as adjusted to the date of the net
issuance).
For purposes of this Section 5, the fair market value of one share of Common
Stock as of a particular date shall be determined as follows: (i) if traded on a
securities exchange or
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through the Nasdaq National Market, the value shall be deemed to be the average
of the closing prices of the securities on such exchange over the thirty (30)
day period ending three (3) days prior to the net exercise election; (ii) if
traded over-the-counter, the value shall be deemed to be the average of the
closing bid or sale prices (whichever is applicable) over the thirty (30) day
period ending three (3) days prior to the net exercise; and (iii) if there is no
active public market, the value shall be the fair market value thereof, as
determined in good faith by the Board of Directors of the Company; provided,
that, if the Warrant is being exercised upon the closing of the Qualified IPO,
the value will be the initial "Price to Public" of one share of such Common
Stock specified in the final prospectus with respect to such offering.
6. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter, and in any event
within thirty (30) days of the delivery of the subscription notice.
7. Issuance of Shares. The Company covenants that the Shares, when
issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
8. Adjustment of Exercise Price and Number of Shares. The number of
and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the Company
shall at any time prior to the expiration of this Warrant subdivide its Common
Stock, by split-up or otherwise, or combine its Common Stock, or issue
additional shares of its Common Stock or Preferred Stock as a dividend with
respect to any shares of its Common Stock, the number of Shares issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made to the
purchase price payable per share, but the aggregate purchase price payable for
the total number of Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 8(a) shall become effective
at the close of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.
(b) Reclassification or Reorganization. In case of any
reclassification, capital reorganization, or change in the Common Stock of the
Company (other than as a result of a subdivision, combination, or stock dividend
provided for in Section 8(a) above), then, as a condition of such
reclassification, reorganization, or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of
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stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of
shares of Common Stock as were purchasable by the Holder immediately prior to
such reclassification, reorganization, or change. In any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
so that the provisions hereof shall thereafter be applicable with respect to any
shares of stock or other securities and property deliverable upon exercise
hereof, and appropriate adjustments shall be made to the purchase price per
share payable hereunder, provided the aggregate purchase price shall remain the
same.
(c) Notice of Adjustment. When any adjustment is required to be
made in the number or kind of shares purchasable upon exercise of the Warrant,
or in the Exercise Price, the Company shall promptly notify the Holder of such
event and of the number of shares of Common Stock or other securities or
property thereafter purchasable upon exercise of this Warrant.
9. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
10. No Stockholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
Shares, including (without limitation) the right to vote such Shares, receive
dividends or other distributions thereon, exercise preemptive rights or be
notified of shareholder meetings, and such Holder shall not be entitled to any
notice or other communication concerning the business or affairs of the Company.
11. Transferability; Successors and Assigns. This Warrant and the
Shares issued upon its exercise may only be transferred in accordance with the
terms set forth in the Purchase Agreement. The terms and provisions of this
Warrant and the Purchase Agreement shall inure to the benefit of, and be binding
upon, the Company and the Holder hereof and their respective successors and
assigns.
12. Amendments and Waivers. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder. Any waiver or amendment effected
in accordance with this Section shall be binding upon the Holder, each future
holder of such Shares, and the Company.
13. Governing Law. This Warrant shall be governed by the laws of the
State of California as applied to agreements among California residents made and
to be performed entirely within the State of California.
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IN WITNESS WHEREOF, the Company has executed this Warrant on the day
and year first indicated above.
GLOBESPAN, INC.
By: ______________________________
Xxxxxx X. XxXxxxxx
Chief Financial Officer
Address: 000 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxxxx 00000
SIGNATURE PAGE TO CISCO WARRANT
