Contract
THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION
OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.
WARRANT
TO PURCHASE SHARES
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Company:
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GigOptix,
Inc., a Delaware corporation
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Number
of Shares:
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4,125
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Class
of Shares:
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Common
Stock
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Warrant
Price:
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$0.7272
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Issue
Date:
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Original
Issue Date: October 5, 2007;
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Reissue
Date: January 21, 2009
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Expiration
Date:
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The
10th
anniversary after the Original Issue Date
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Credit
Facility:
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This
Warrant is issued in connection with the Loan and Security Agreement
between Company and Silicon Valley Bank dated as of October 5, 2007, as
amended
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THIS WARRANT CERTIFIES THAT, for good
and valuable consideration, SILICON VALLEY BANK (Silicon Valley Bank, together
with any registered holder from time to time of this Warrant or any holder of
the shares issuable or issued upon exercise of this Warrant, "Holder") is
entitled to purchase the number of fully paid and
nonassessable shares of the class of securities (the "Shares") of the
Company at the Warrant Price, all as set forth above and as adjusted pursuant to
Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant.
ARTICLE
1. EXERCISE.
1.1 Method of
Exercise. Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company. Unless Holder is exercising
the conversion right set forth in Article 1.2, Holder shall also deliver to the
Company a check, wire transfer (to an account designated by the Company), or
other form of payment acceptable to the Company for the aggregate Warrant Price
for the Shares being purchased.
1.2 Conversion
Right. In lieu of exercising this Warrant as specified in
Article 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall
be determined pursuant to Article 1.3.
1
1.3 Fair Market
Value. If the Company’s shares are traded in a public market,
the fair market value of each Share shall be the closing price of a Share
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company (or in the instance where the Warrant is exercised
immediately prior to the effectiveness of the Company’s initial public offering,
the “price to public” per share price specified in the final prospectus relating
to such offering). If the Company’s securities are not traded in a
public market, the Board of Directors of the Company shall determine fair market
value in its reasonable good faith judgment.
1.4 Delivery of Certificate and
New Warrant. Promptly after Holder exercises or converts this
Warrant and, if applicable, the Company receives payment of the aggregate
Warrant Price, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been fully exercised or converted and has
not expired, a new Warrant representing the Shares not so acquired.
1.5 Replacement of
Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of
mutilation on surrender and cancellation of this Warrant, the Company shall
execute and deliver, in lieu of this Warrant, a new warrant of like
tenor.
1.6 Treatment of Warrant Upon
Acquisition of Company.
1.6.1
"Acquisition". For
the purpose of this Warrant, "Acquisition" means any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of the
Company's securities before the transaction beneficially own less than 50% of
the outstanding voting securities of the surviving entity after the
transaction.
1.6.2
Treatment of Warrant at
Acquisition.
A) Upon
the written request of the Company, Holder agrees that, in the event of an
Acquisition that is not an asset sale and in which the sole consideration is
cash, either (a) Holder shall exercise its conversion or purchase right under
this Warrant and such exercise will be deemed effective immediately prior to the
consummation of such Acquisition or (b) if Holder elects not to exercise the
Warrant, this Warrant will expire upon the consummation of such
Acquisition. The Company shall provide Holder with written notice of
its request relating to the foregoing (together with such reasonable information
as Holder may request in connection with such contemplated Acquisition giving
rise to such notice), which is to be delivered to Holder not less than ten (10)
days prior to the closing of the proposed Acquisition.
B) Upon
the written request of the Company, Holder agrees that, in the event of an
Acquisition that is an “arms length” sale of all or substantially all of the
Company’s assets (and only its assets) to a third party that is not an Affiliate
(as defined below) of the Company (a “True Asset Sale”), either (a) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise
will be deemed effective immediately prior to the consummation of such
Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant
will continue until the Expiration Date if the Company continues as a going
concern following the closing of any such True Asset Sale. The
Company shall provide Holder with written notice of its request relating to the
foregoing (together with such reasonable information as Holder may request in
connection with such contemplated Acquisition giving rise to such notice), which
is to be delivered to Holder not less than ten (10) days prior to the closing of
the proposed Acquisition.
2
C) Upon
the closing of any Acquisition other than those particularly described in
subsections (A) and (B) above, the successor entity shall assume the obligations
of this Warrant, and this Warrant shall be exercisable for the same securities,
cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this Warrant as if such Shares were outstanding on
the record date for the Acquisition and subsequent closing. The
Warrant Price and/or number of Shares shall be adjusted
accordingly.
As used
herein “Affiliate” shall mean
any person or entity that owns or controls directly or indirectly ten (10)
percent or more of the voting securities of the Company, any person or entity
that controls or is controlled by or is under common control with such persons
or entities, and each of such person’s or entity’s officers, directors, joint
venturers or partners, as applicable.
ARTICLE
2. ADJUSTMENTS TO THE
SHARES.
2.1 Dividends, Splits,
Etc. If the Company declares or pays a dividend on the Shares
payable in securities, then upon exercise of this Warrant, for each Share
acquired, Holder shall receive, without cost to Holder, the total number and
kind of securities to which Holder would have been entitled had Holder owned the
Shares of record as of the date the dividend occurred. If the Company
subdivides the Shares by reclassification or otherwise into a greater number of
shares or takes any other action which increase the amount of securities into
which the Shares are convertible, the number of shares purchasable hereunder
shall be proportionately increased and the Warrant Price shall be
proportionately decreased. If the outstanding shares are combined or
consolidated, by reclassification or otherwise, into a lesser number of shares,
the Warrant Price shall be proportionately increased and the number of Shares
shall be proportionately decreased.
2.2 Reclassification, Exchange,
Combinations or Substitution. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other
event. Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series as
the Shares upon the closing of a registered public offering of the Company's
securities. The Company or its successor shall promptly issue to
Holder an amendment to this Warrant setting forth the number and kind of such
new securities or other property issuable upon exercise or conversion of this
Warrant as a result of such reclassification, exchange, substitution or other
event that results in a change of the number and/or class of securities issuable
upon exercise or conversion of this Warrant. The amendment to this
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Article 2 including,
without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new Warrant. The
provisions of this Article 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.
3
2.3 Adjustments for Diluting
Issuances. The Warrant Price and the number of Shares issuable
upon exercise of this Warrant shall be subject to adjustment, from time to time
in the manner set forth in the Company’s Articles of Organization or Operating
Agreement as if the Shares were issued and outstanding on and as of the date of
any such required adjustment. The provisions set forth for the Shares
in the Company’s Articles or Operating Agreement relating to the above in effect
as of the Issue Date may not be amended, modified or waived, without the prior
written consent of Holder unless such amendment, modification or waiver affects
the rights associated with the Shares in the same manner as such amendment,
modification or waiver affects the rights associated with all other shares of
the same series and class as the Shares granted to Holder.
2.4 No
Impairment. The Company shall not, by amendment of its
Articles or Operating Agreement, or through a reorganization, transfer of
assets, consolidation, merger, dissolution, issue, or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed under this Warrant by the Company,
but shall at all times in good faith assist in carrying out of all the
provisions of this Article 2 and in taking all such action as may be necessary
or appropriate to protect Holder's rights under this Article against
impairment.
2.5 Fractional
Shares. No fractional Shares shall be issuable upon exercise
or conversion of this Warrant and the number of Shares to be issued shall be
rounded down to the nearest whole Share. If a fractional share
interest arises upon any exercise or conversion of the Warrant, the Company
shall eliminate such fractional share interest by paying Holder the amount
computed by multiplying the fractional interest by the fair market value of a
full Share.
2.6 Certificate as to
Adjustments. Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the Company’s expense,
promptly compute such adjustment, and furnish Holder with a certificate of its
Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based. The Company shall, upon written request,
furnish Holder a certificate setting forth the Warrant Price in effect upon the
date thereof and the series of adjustments leading to such Warrant
Price.
ARTICLE
3. REPRESENTATIONS AND
COVENANTS OF THE COMPANY.
3.1 Representations and
Warranties. The Company represents and warrants to Holder as
follows:
(a) The
initial Warrant Price referenced on the first page of this Warrant is not
greater than (i) the price per share at which the Shares were last issued in an
arms-length transaction in which at least $500,000 of the Shares were sold and
(ii) the fair market value of the Shares as of the date of this
Warrant.
4
(b) All
Shares which may be issued upon the exercise of the purchase right represented
by this Warrant, and all securities, if any, issuable upon conversion of the
Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, and free of any liens and encumbrances except for restrictions on
transfer provided for herein or under applicable federal and state securities
laws.
(c) As
of the Issue Date the Company had authorized ___________ shares of its common
stock and it had issued ____________ shares of its common stock, and it had not
issued any shares of preferred stock.
3.2 Notice of Certain
Events. If the Company proposes at any time (a) to declare any
dividend or distribution upon any of its securities, whether in cash, property,
shares, or other securities and whether or not a regular cash dividend; (b) to
offer for sale any shares of the Company's securities, other than (i) pursuant
to the Company's stock option or other compensatory plans, (ii) in connection
with commercial credit arrangements or equipment financings, or (iii) in
connection with strategic transactions for purposes other than capital raising;
(c) to effect any reclassification or recapitalization of any of its securities;
(d) to merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the Company's securities
for cash, then, in connection with each such event, the Company shall give
Holder: (1) at least 10 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of securities will be entitled thereto)
or for determining rights to vote, if any, in respect of the matters referred to
in (a) and (b) above; (2) in the case of the matters referred to in (c) and (d)
above at least 10 days prior written notice of the date when the same will take
place (and specifying the date on which the holders of shares will be entitled
to exchange their shares for securities or other property deliverable upon the
occurrence of such event); and (3) in the case of the matter referred to in (e)
above, the same notice as is given to the holders of such registration
rights. Company will also provide information requested by
Holder reasonably necessary to enable Holder to comply with Holder’s accounting
or reporting requirements.
3.3 Registration Under
Securities Act of 1933, as amended. The Company agrees that
the Shares or, if the Shares are convertible into other securities of the
Company, such securities, shall have certain “piggyback,” registration rights
pursuant to and as set forth in the Company’s Investor Rights Agreement or
similar agreement, whether in existence now or later. The provisions
set forth in the Company’s Investors’ Right Agreement or similar agreement
relating to the above in effect as of the Issue Date may not be amended,
modified or waived without the prior written consent of Holder unless such
amendment, modification or waiver affects the rights associated with the Shares
in the same manner as such amendment, modification, or waiver affects the rights
associated with all other shares of the same series and class as the Shares
granted to Holder.
3.4 No Shareholder
Rights. Except as provided in this Warrant, Holder will not
have any rights as a shareholder of the Company until the exercise of this
Warrant.
5
ARTICLE
4. REPRESENTATIONS,
WARRANTIES OF HOLDER. Holder represents and warrants to the
Company as follows:
4.1 Purchase for Own
Account. This Warrant and the securities to be acquired upon
exercise of this Warrant by Holder will be acquired for investment for Holder’s
account, not as a nominee or agent, and not with a view to the public resale or
distribution within the meaning of the Act. Holder also represents
that Holder has not been formed for the specific purpose of acquiring this
Warrant or the Shares.
4.2 Disclosure of
Information. Holder 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 acquisition of this Warrant and its
underlying securities. Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to Holder or to which Holder has
access.
4.3 Investment
Experience. Holder understands that the purchase of this
Warrant and its underlying securities involves substantial
risk. Holder has experience as an investor in securities of companies
in the development stage and acknowledges that Holder can bear the economic risk
of such Holder’s investment in this Warrant and its underlying securities and
has such knowledge and experience in financial or business matters that Holder
is capable of evaluating the merits and risks of its investment in this Warrant
and its underlying securities and/or 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 Holder to be aware of
the character, business acumen and financial circumstances of such
persons.
4.4 Accredited Investor
Status. Holder is an “accredited investor” within the meaning
of Regulation D promulgated under the Act.
4.5 The
Act. Holder understands that this Warrant and the Shares
issuable upon exercise or conversion hereof have not been registered under the
Act in reliance upon a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of Holder’s investment intent as
expressed herein. Holder understands that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held indefinitely unless
subsequently registered under the Act and qualified under applicable state
securities laws, or unless exemption from such registration and qualification
are otherwise available.
ARTICLE
5. MISCELLANEOUS.
5.1 Term. This
Warrant is exercisable in whole or in part at any time and from time to time on
or before the Expiration Date.
5.2 Legends. This
Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:
6
THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION
OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.
5.3 Compliance with Securities
Laws on Transfer. This Warrant and the Shares issuable upon
exercise of this Warrant (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) may not be transferred or assigned in
whole or in part without compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation, the
delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company, as reasonably requested by the
Company). The Company shall not require Silicon Valley Bank (“Bank”)
to provide an opinion of counsel if the transfer is to Bank’s parent company,
SVB Financial Group (formerly Silicon Valley Bancshares), or any other affiliate
of Bank. Additionally, the Company shall also not require an opinion
of counsel if there is no material question as to the availability of current
information as referenced in Rule 144(c), Holder represents that it has complied
with Rule 144(d) and (e) in reasonable detail, the selling broker represents
that it has complied with Rule 144(f), and the Company is provided with a copy
of Holder's notice of proposed sale.
5.4 Transfer
Procedure. After receipt by Bank of the executed Warrant, Bank
will transfer all of this Warrant to SVB Financial Group by execution of an
Assignment substantially in the form of Appendix 2. Subject to the
provisions of Article 5.3 and upon providing the Company with written notice,
SVB Financial Group and any subsequent Holder may transfer all or part of this
Warrant or the Shares issuable upon exercise of this Warrant (or the Shares
issuable directly or indirectly, upon conversion of the Shares, if any) to any
transferee, provided, however, in connection with any such transfer, SVB
Financial Group or any subsequent Holder will give the Company notice of the
portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if
applicable). The Company may refuse to transfer this Warrant or the
Shares to any person who directly competes with the Company, unless, in either
case, the shares of the Company are publicly traded.
5.5 Notices. All
notices and other communications from the Company to Holder, or vice versa,
shall be deemed delivered and effective when given personally or mailed by
first-class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company or Holder, as the case may (or on the
first business day after transmission by facsimile) be, in writing by the
Company or such Holder from time to time. Effective upon receipt of
the fully executed Warrant and the initial transfer described in Article 5.4
above, all notices to Holder shall be addressed as follows until the Company
receives notice of a change of address in connection with a transfer or
otherwise:
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SVB
Financial Group
Attn:
Treasury Department
0000
Xxxxxx Xxxxx, XX 000
Xxxxx
Xxxxx, XX 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
Notice to
the Company shall be addressed as follows until Holder receives notice of a
change in address:
0000 Xxxx Xxxx, Xxxxx 000
Xxxx Xxxx,
XX 00000
Attn: Xxx Xxxx, Chief Executive
Officer
Telephone:
Fax:
5.6 Waiver. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
5.7 Attorneys’
Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys’ fees.
5.8 Automatic Conversion upon
Expiration. In the event that, upon the Expiration Date, the
fair market value of one Share (or other security issuable upon the exercise
hereof) as determined in accordance with Section 1.3 above is greater than the
Warrant Price in effect on such date, then this Warrant shall automatically be
deemed on and as of such date to be converted pursuant to Section 1.2 above as
to all Shares (or such other securities) for which it shall not previously have
been exercised or converted, and the Company shall promptly deliver a
certificate representing the Shares (or such other securities) issued upon such
conversion to Holder.
5.9 Counterparts. This
Warrant may be executed in counterparts, all of which together shall constitute
one and the same agreement.
5.10 Governing
Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
[Signature
page follows.]
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“COMPANY”
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Date: January
21, 2009
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By:
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/s/
Xxx Xxxx
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Name:
Xxx Xxxx
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(Print)
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Title:
Chief Executive Officer
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“HOLDER”
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SILICON
VALLEY BANK
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By:
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/s/
Xxxx Xxxxxxxxx
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Name:
Xxxx Xxxxxxxxx
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(Print)
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Title: Relationship
Manager
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APPENDIX
1
NOTICE OF
EXERCISE
1. Holder
elects to purchase ___________ shares of GigOptix, LLC pursuant to the terms of
the attached Warrant, and tenders payment of the purchase price of the shares in
full.
[or]
1. Holder
elects to convert the attached Warrant into Shares/cash [strike one] in the
manner specified in the Warrant. This conversion is exercised for
_____________________ of the Shares covered by the Warrant.
[Strike paragraph that does not
apply.]
2. Please
issue a certificate or certificates representing the shares in the name
specified below:
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Holders
Name
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(Address)
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3. By
its execution below and for the benefit of the Company, Holder hereby restates
each of the representations and warranties in Article 4 of the Warrant as the
date hereof.
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HOLDER:
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By:
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Name:
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Title:
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(Date):
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10
APPENDIX
2
ASSIGNMENT
For value
received, Silicon Valley Bank hereby sells, assigns and transfers
unto
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Name:
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SVB
Financial Group
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Address:
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0000
Xxxxxx Xxxxx (XX-000)
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Xxxxx
Xxxxx, XX 00000
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Tax
ID:
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00-0000000
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that
certain Warrant to Purchase Shares issued by GigOptix, Inc (the
“Company”), on ____________, 2008 (the “Warrant”) together with all rights,
title and interest therein.
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SILICON
VALLEY BANK
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By:
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Name:
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Title:
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Date:
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By its
execution below, and for the benefit of the Company, SVB Financial Group makes
each of the representations and warranties set forth in Article 4 of the Warrant
and agrees to all other provisions of the Warrant as of the date
hereof.
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By:
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Title:
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