COLLATERAL ASSIGNMENT, PATENT MORTGAGE
AND SECURITY AGREEMENT
This Collateral Assignment, Patent Mortgage and Security Agreement is
made as of the 23rd day of April 1998, by and between CONDUCTUS, INC. a
Delaware corporation ("Assignor"), and Silicon Valley Bank, a California
banking corporation ("Assignee") whose address is 0000 Xxxxxx Xxxxx, Xxxxx
Xxxxx, XX 00000.
RECITALS
A. Assignee has agreed to lend to Assignor certain funds (the
"Loans"), pursuant to a Loan and Security Agreement dated of even date
herewith (the "Loan Agreement") and Assignor desires to borrow such funds
from Assignee.
B. In order to induce Assignee to make the Loans, Assignor has
agreed to assign certain intangible property to Assignee for purposes of
securing Assignor's "Obligations" (as defined in the Loan Agreement) to
Assignee (collectively, the "Obligations").
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. ASSIGNMENT, PATENT MORTGAGE AND GRANT OF SECURITY INTEREST. As
collateral security for the prompt and complete payment and performance of
all of Assignor's present or future indebtedness, obligations and liabilities
to Assignee, Assignor hereby assigns, transfers, conveys and grants a
security interest and mortgage to Assignee, as security, but not as an
ownership interest in and to Assignor's entire right, title and interest in,
to and under the following (all of which shall collectively be called the
"Collateral"):
(a) Any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not
the same also constitutes a trade secret, now of hereafter existing, created,
acquired or held, including without limitation those set forth on EXHIBIT A
attached hereto (collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to
Assignor now or hereafter existing, created, acquired or held;
(d) All patents, patent applications and like protections
including, without limitation, improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same,
including without limitation the patents and patent applications set forth on
EXHIBIT B attached hereto (collectively, the "Patents");
(e) Any trademark and servicemark rights, whether registered
or not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Assignor connected
with and symbolized by such trademarks, including without limitation those
set forth on EXHIBIT C attached hereto (collectively, the "Trademarks")
(f) Any and all claims for damages by way of past, present and
future infringements of any of the rights included above, with the right, but
not be obligation, to xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(g) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such
use to the extent permitted by such license or rights; and
(h) All amendments, extensions, renewals and extensions of any
of the Copyrights, Trademarks or Patents; and
(i) All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
-1-
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE
CONSTRUED AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE
ASSIGNOR'S OBLIGATIONS TO ASSIGNEE UNDER THE LOAN AGREEMENT.
2. AUTHORIZATION AND REQUEST. Assignor authorizes and requests that
the Register of Copyrights and the Commissioner of Patents and Trademarks
record this conditional assignment.
3. COVENANTS AND WARRANTIES. Assignor represents, warrants,
covenants and agrees as follows:
(a) Assignor is now the sole owner of the Collateral, except
for non-exclusive licenses granted by Assignor to its customers in the
ordinary course of business.
(b) Performance of this Assignment does not conflict with or
result in a breach of any agreement to which Assignor is bound, except to the
extent that certain intellectual property agreements prohibit the assignment
of the rights thereunder to a third party without the licensor's or other
party's consent and this Assignment constitutes an assignment.
(c) During the term of this Agreement, Assignor will not
transfer or otherwise encumber any interest in the Collateral, except for
non-exclusive licenses granted by Assignor in the ordinary course of business
or as set forth in this Assignment;
(d) To its knowledge, each of the Patents is valid and
enforceable, and no part of the Collateral has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part
of the Collateral violates the rights of any third party;
(e) Assignor shall promptly advise Assignee of any material
adverse change in the composition of the Collateral, including but not
limited to any subsequent ownership right of the Assignor in or to any
Trademark, Patent or Copyright not specified in this Assignment;
(f) Assignor shall (i) protect, defend and maintain the
validity and enforceability of the Trademarks, Patents and Copyrights, (ii)
use its best efforts to detect infringements of the Trademarks, Patents and
Copyrights and promptly advise Assignee in writing of material infringements
detected and (iii) not allow any Trademarks, Patents, or Copyrights to be
abandoned, forfeited or dedicated to the public without the written consent
of Assignee, which shall not be unreasonably withheld unless Assignor
determines that reasonable business practices suggest that abandonment is
appropriate.
(g) Assignor shall promptly register the most recent version
of any of Assignor's Copyrights, if not so already registered, and shall,
from time to time, execute and file such other instruments, and take such
further actions as Assignee may reasonably request from time to time to
perfect or continue the perfection of Assignee's interest in the Collateral;
(h) This Assignment creates, and in the case of after acquired
Collateral, this Assignment will create at the time Assignor first has rights
in such after acquired Collateral, in favor of Assignee a valid and perfected
first priority security interest in the collateral in the United States
securing the payment and performance of the Obligations upon making the
filings referred to in clause (i) below;
(i) To its knowledge, except for, and upon, the filing with
the United States Patent and Trademark office with respect to the Patents and
Trademarks and the Register of Copyrights with the respect to the Copyrights
necessary to perfect the security interests and assignment created hereunder
and except as has been already made or obtained, no authorization, approval
or other action by, and no notice to or filing with, any U.S. governmental
authority of U.S. regulatory body is required either (i) for the grant by
Assignor of the security interest granted hereby or for the execution,
delivery or performance of this Assignment by Assignor in the U.S. or (ii)
for the perfection in the United States or the exercise by Assignee of its
rights and remedies thereunder;
(j) All information heretofore, herein or hereafter supplied
to Assignee by or on behalf of Assignor with respect to the Collateral is
accurate and complete in all material respects.
(k) Assignor shall not enter into any agreement that would
materially impair or conflict with Assignor's obligations hereunder without
Assignee's prior written consent, which consent shall not be unreasonably
-2-
withheld. Assignor shall not permit the inclusion in any material contract
to which its becomes a party of any provisions that could or might in any way
prevent the creation of a security interest in Assignor's rights and interest
in any property included within the definition of the Collateral acquired
under such contracts, except that certain contracts may contain
anti-assignment provisions that could in effect prohibit the creation of a
security interest in such contracts.
(l) Upon any executive officer or Assignor obtaining actual
knowledge thereof, Assignor will promptly notify Assignee in writing of any
event that materially adversely affects the value of any material Collateral,
the ability of Assignor to dispose of any material Collateral of the rights
and remedies of Assignee in relation thereto, including the levy of any legal
process against any of the Collateral.
4. ASSIGNEE'S RIGHTS. Assignee shall have the right, but not the
obligation, to take, at Assignor's sole expense, any actions that Assignor is
required under this Assignment to take but which Assignor fails to take,
after fifteen (15) days' notice to Assignor. Assignor shall reimburse and
indemnify Assignee for all reasonable costs and reasonable expenses incurred
in the reasonable exercise of its rights under this section 4.
5. INSPECTION RIGHTS. Assignor hereby grants to Assignee and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Assignor, and any of Assignor's
plants and facilities that manufacture, install or store products (or that
have done so during the prior six-month period) that are sold utilizing any
of the Collateral, and to inspect the products and quality control records
relating thereto upon reasonable written notice to Assignor and as often as
may be reasonably requested, but not more than one (1) in every six (6)
months; provided, however, nothing herein shall entitle Assignee access to
Assignor's trade secrets and other proprietary information.
6. FURTHER ASSURANCES: ATTORNEY IN FACT.
(a) On a continuing basis, Assignor will, subject to any prior
licenses, encumbrances and restrictions and prospective licenses, make,
execute, acknowledge and deliver, and file and record in the proper filing
and recording places in the United States, all such instruments, including,
appropriate financing and continuation statements and collateral agreements
and filings with the United States Patent and Trademarks Office and the
Register of Copyrights, and take all such action as may reasonably be deemed
necessary or advisable, or as requested by Assignee, to perfect Assignee's
security interest in all Copyrights, Patents and Trademarks and otherwise to
carry out the intent and purposes of this Collateral Assignment, or for
assuring and confirming to Assignee the grant or perfection of a security
interest in all Collateral.
(b) Assignor hereby irrevocably appoints Assignee as Assignor's
attorney-in-fact, with full authority in the place and stead of Assignor and
in the name of Assignor, Assignee or otherwise, from time to time in
Assignee's discretion, upon Assignor's failure or inability to do so, to take
any action and to execute any instrument which Assignee may deem necessary or
advisable to accomplish the purposes of this Collateral Assignment,
including, without limitation:
(i) To modify, in its sole discretion, this Collateral
Assignment without first obtaining Assignor's apporval of or signature
modification by amending Exhibit A, Exhibit B and Exhibit C, thereof, as
appropriate, to include reference to any right, title or interest in any
Copyrights, Patents or Trademarks acquired by Assignor after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which Assignor no longer has or claims
any right, title or interest; and
(ii) To file, in its sole discretion, one or more financing
or continuation statements and amendments thereto, relative to any of the
Collateral without the signature of Assignor where permitted by law.
7. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default under the Assignment:
(a) An Event of Default occurs under the Loan Agreement; or
(b) Assignor breaches any warranty or agreement made by Assignor
in this Agreement.
8. REMEDIES. Upon the occurrence and continuance of an Event of
Default, Assignee shall have the right to exercise all the remedies of a
secured party under the California Uniform Commercial Code, including without
limitation the right to require Assignor to assemble the Collateral and any
tangible property in which
-3-
Assignee has a security interest and to make it available to Assignee at a
place designated by Assignee. Assignee shall have a nonexclusive, royalty
free license to use the Copyrights, Patents and Trademarks to the extent
reasonably necessary to permit Assignee to exercise its rights and remedies
upon the occurrence of an Event of Default. Assignor will pay any expenses
(including reasonable attorney's fees) incurred by Assignee in connection
with the exercise of any of Assignee's rights hereunder, including without
limitation any expense incurred in disposing of the Collateral. All of
Assignee's rights and remedies with respect to the Collateral shall be
cumulative.
9. INDEMNITY. Assignor agrees to defend, indemnify and hold harmless
Assignee and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any
other party in connection with the transactions contemplated by this
Agreement, and (b) all losses or expenses in any way suffered, incurred, or
paid by Assignee as a result of or in any way arising out of, following or
consequential to transactions between Assignee and Assignor, whether under
this Assignment or otherwise (including without limitation, reasonable
attorneys fees and reasonable expenses), except for losses arising form or
out of Assignee's gross negligence or willful misconduct.
10. REASSIGNMENT. At such time as Assignor shall completely satisfy all
of the obligations secured hereunder, Assignee shall execute and deliver to
Assignor all deed, assignments, and other instruments as may necessary or
proper to reinvest in Assignor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Assignee
pursuant hereto.
11. COURSE OF DEALING. No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
12. ATTORNEYS' FEES. If any action relating to this Assignment is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys fees, costs and
disbursements.
13. AMENDMENTS. This Assignment may be amended only by a written
instrument signed by both parties hereto.
14. COUNTERPARTS. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
15. CALIFORNIA LAW AND JURISDICTION. This Assignment shall be governed
by the laws of the State of California, without regard for choice of law
provisions. Assignor and Assignee consent to the nonexclusive jurisdiction
of any state or federal court located in Santa Xxxxx County, California.
16. CONFIDENTIALITY. In handling any confidential information, Assignee
shall exercise the same degree of care that it exercises with respect to its
own proprietary information of the same types to maintain the confidentiality
of any non-public information thereby received or received pursuant to this
Assignment except that the disclosure of this information may be made (i) to
the affiliates of the Assignee, (ii) to prospective transferee or purchasers
of an interest in the obligations secured hereby, provided that they have
entered into comparable confidentiality agreement in favor of Assignor and
have deliver a copy to Assignor, (iii) as required by law, regulation, rule
or order, subpoena judicial order or similar order and (iv) as may be
required in connection with the examination, audit or similar investigation
of Assignee.
IN WITNESS THEREOF, the parties hereto have executed this Assignment on the
day and year first above written.
ADDRESS OF ASSIGNOR: ASSIGNOR:
000 XXXX XXXXX XXXXXX CONDUCTUS, INC.
XXXXXXXXX, XXXXXXXXXX 00000
By:
------------------------
Name:
------------------------
-4-
EXHIBIT "A"
COPYRIGHTS
REG. NO. REG. DATE COPYRIGHT
-------- --------- ---------
SU TX 0-000-000 3/7/97 Squid Control Instrumentation
SU TX 0-000-000 6/2/97 PC Squid Configuration
-5-
EXHIBIT B
IP SUMMARY
4/9/98
US PATENT NO. 5,090,819
US APPLICATION NO. 07/569,435
Filed: 08/20/90 Issued: 2/25/92 Expires 8/20/10
For: Superconducting Bolometer Construction
Inventors: Xxxxxxxxxx, A.
-------------------------------------------------------------------------------
US PATENT NO. 5,219,826
US APPLICATION NO. 07/569,434
Filed: 08/20/90 Issue: 06/15/93 Expires 8/20/10
For: Superconducting Junctions and Method of Making Same
Inventors: Xxxxxxxxxx, A.
-------------------------------------------------------------------------------
US PATENT NO. 5,126,533
US APPLICATION NO. 07/494,738
Filed: 03/19/90 Issued: 06/30/92 Expires 3/19/10
For: Substrate Heater Utilizing Protective Heat Sinking Means
Inventors: Xxxxxx, N., Char, K.
-------------------------------------------------------------------------------
Page 1
IP SUMMARY
4/9/98
US PATENT NO. 5,132,282
US APPLICATION NO. 07/495,568
Filed: 03/16/90 Issued: 07/21/92 Expires 3/16/10
For: High Temperature Superconductor-Strontium Titanate Sapphire
Structures
Inventors: Xxxxxx, N., Char, K.
-------------------------------------------------------------------------------
US PATENT NO. 5,130,294
US APPLICATION NO. 07/565,691
Filed: 08/13/90 Issued: 07/14/92 Expires 8/13/10
For: High Temperature Superconductor-Calcium Titanate Structures
Inventors: Char, K.
-------------------------------------------------------------------------------
US PATENT NO. 5,207,884
US APPLICATION NO. 07/633,275
Filed: 12/24/90 Issued: 05/04/93 Expires 12/24/10
For: Superconductor Deposition System
Inventors: Char, K., Xxxxxx, N., Xxxxxx, X.X.
-------------------------------------------------------------------------------
Page 2
IP SUMMARY
4/9/98
US PATENT NO. 5,157,466
US APPLICATION NO. 07/672,664
Filed: 03/19/91 Issued: 10/20/92 Expires 3/19/11
For: Grain Boundary Junctions in HTS Films
Inventors: Char, K., Xxxxxxxx, X.X., Xxxxxx, N., Xxxxxxxxx, X.X
-------------------------------------------------------------------------------
US PATENT NO. 5,241,828
US APPLICATION NO. 07/915,440
Filed: 07/17/92 Issued: 09/07/93 Expires 7/17/12
For: Cryogenic Thermoelectric Cooler
Inventors: Xxxxxxxxxx, A.
-------------------------------------------------------------------------------
US PATENT NO. 5,651,016
US APPLICATION NO. 08/657,638
Filed: 5/30/96 Issued: 7/22/97 Expires 7/22/14
For: Ultrahigh Speed Laser
Inventors: Yu, R-C., Whiteley, S.R., Xxxxxx, H.
-------------------------------------------------------------------------------
Page 3
IP SUMMARY
4/9/98
US PATENT NO. 5,455,594
US APPLICATION NO. 08/288,659
Filed: 8/10/94 Issued: 10/03/95 Expires 10/3/12
For: Internal Thermal Isolation Layer For Array Antenna
Inventors: Xxxxxxx, X.X., Xxxxxxx, X.X., Xxxxxx, X.X., Mohnwinkel, C.,
Xxxxxx, B., Xxxxxxx, X.X.
-------------------------------------------------------------------------------
US PATENT NO. 5,432,151
US APPLICATION NO. 08/090,422
Filed: 07/12/93 Issued: 7/11/95 Expires 7/12/13
For: Process for Ion-Assisted Laser Deposition of Biaxially Textured
Intermediate Layer for Forming Superconducting Thin Film on
Substrate
Inventors: Xxxxx, R.E., Xxxxx, X.X., Xxxxxxxx, X.X., Xxxxxxx, P.
-------------------------------------------------------------------------------
US PATENT NO. 5,449,659
US APPLICATION NO. 07/973,966
Filed: 11/09/92 Issued: 09/12/95 Expires 11/9/12
For: Method of Bonding Multilayer Structures of Crystalline Materials
Inventors: Xxxxxxxx, S., Xxxxx, X.X.
-------------------------------------------------------------------------------
Page 4
IP SUMMARY
4/9/98
AU PATENT NO. 651,463
AU APPLICATION NO. 18818/92
Filed: 03/19/92 Issued: 11/09/94 Expires 3/19/12
For: Grain Boundary Junctions in HTS Films
Inventors: Char, K., Xxxxxxxx, X.X., Xxxxxx, N., Xxxxxxxxx, X.X.
-------------------------------------------------------------------------------
KR PATENT NO. 122283
KR APPLICATION NO. 93-702809
Filed: 03/19/92 Issued: 9/3/97 Expires
For: Grain Boundary Junctions in HTS Films
Inventors: Char, K., Xxxxxxxx, X.X., Xxxxxx, N., Xxxxxxxxx, X.X
-------------------------------------------------------------------------------
US PATENT NO. 5,366,953
US APPLICATION NO. 08/119,133
Filed: 12/22/93 Issued: 11/22/94 Expires 3/19/11
For: Method of Forming Grain Boundary Junctions in HTS Films
Inventors: Char, K.; Xxxxxxxx, X.X.; Xxxxxx, N.; Xxxxxxxxx, X.X.
-------------------------------------------------------------------------------
Page 5
IP SUMMARY
4/9/98
US PATENT NO. 5,233,500
US APPLICATION NO. 07/893,416
Filed: 06/01/92 Issued: 08/03/93 Expires 6/1/12
For: Package for Cascaded Microwave Devices
Inventors: Xxxxx, X-X., Xxxxxxx, X.X.
-------------------------------------------------------------------------------
US PATENT NO. 5,351,007
US APPLICATION NO. 07/891,591
Filed: 06/01/92 Issued: 09/27/94 Expires 6/1/12
For: Superconducting Magnetic Resonance Probe Coil
Inventors: Xxxxxxx, X.X., Xxxxx, X-X.
-------------------------------------------------------------------------------
AU PATENT NO. 677590
AU APPLICATION NO. 44004/93
Filed: 05/28/93 Issued: 8/21/97 Expires
For: Superconducting Magnetic Resonance Probe Coil
Inventors: Xxxxxxx, X.X., Xxxxx, X-X.
-------------------------------------------------------------------------------
Page 6
IP SUMMARY
4/9/98
US PATENT NO. 5,276,398
US APPLICATION NO. 07/929,900
Filed: 08/11/92 Issued: 01/04/94 Expires 6/1/12
For: Superconducting Magnetic Resonance Probe Coil
Inventors: Xxxxxxx, X.X., Xxxxx, X-X.
-------------------------------------------------------------------------------
US PATENT NO. 5,532,592
US APPLICATION NO. 08/012,500
Filed: 02/02/93 Issued: 7/2/96 Expires 7/2/13
For: SQUID Control Apparatus with Non-Cryogenic Flux-Locked Loop
Disposed in Closed Proximity to the SQUID (as amended)
Inventors: Xxxxxxxxx, M.S.
-------------------------------------------------------------------------------
US PATENT NO. 5,280,013
US APPLICATION NO. 07/968,280
Filed: 10/29/92 Issued: 1/18/94 Expires 7/5/11
For: Method of Preparing HTS Films on Opposite Sides of a Substrate
Inventors: Xxxxxx, N., Xxxxxxxxxx, A., Xxxx, X.X., Xxxxx, X.X.
-------------------------------------------------------------------------------
Page 7
EXHIBIT "C"
CONDUCTUS TRADEMARK LIST
----------------------------------------------------------------------------------------
TRADEMARK NUMBER DATE COUNTRY
----------------------------------------------------------------------------------------
CONDUCTUS 1,746,909 1/19/93 US
----------------------------------------------------------------------------------------
CONDUCTUS and 1,742,131 12/22/92 US
design
----------------------------------------------------------------------------------------
MR. SQUID 1,812,785 12/21/93 US
----------------------------------------------------------------------------------------
TOO GOOD TO 1,753,065 2/16/93 US
RESIST
----------------------------------------------------------------------------------------
CONDUCTUS B533,237 2/17/93 Australia
----------------------------------------------------------------------------------------
CONDUCTUS 134,199 1/17/91 Austria
----------------------------------------------------------------------------------------
CONDUCTUS 482,967 4/2/91 Benelux
----------------------------------------------------------------------------------------
CONDUCTUS 414,967 7/9/93 Canada
----------------------------------------------------------------------------------------
CONDUCTUS 1592354 5/16/90 France
----------------------------------------------------------------------------------------
CONDUCTUS 11177397 1/13/91 Germany
----------------------------------------------------------------------------------------
CONDUCTUS 401727 C/90 12/31/92 Italy
----------------------------------------------------------------------------------------
CONDUCTUS (cl. 9) 66274/1990 2/26/93 Japan
----------------------------------------------------------------------------------------
CONDUCTUS (cl. 10) 2451964 9/30/92 Japan
----------------------------------------------------------------------------------------
CONDUCTUS (cl. 11) 2703995 2/28/95 Japan
----------------------------------------------------------------------------------------
CONDUCTUS 233430 3/2/92 S. Korea
----------------------------------------------------------------------------------------
CONDUCTUS 383,556 7/1/91 Switzerland
----------------------------------------------------------------------------------------
CONDUCTUS 00531974 8/16/91 Taiwan
----------------------------------------------------------------------------------------
CLEARSITE Pending Japan, Europe, US
Canada
----------------------------------------------------------------------------------------
-7-
STATE OF CALIFORNIA )
) ss.
COUNTY OF______________ )
On ___________________, 1998, before me, _________________________________
___________________________________________, Notary Public, personally appeared
_________________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
------------------------
(Seal)
-8-
EXHIBIT "A"
COPYRIGHTS
REG. NO. REG. DATE COPYRIGHT
-------- --------- ---------
SU TX 0-000-000 3/7/97 Squid Control Instrumentation
SU TX 0-000-000 6/2/97 PC Squid Configuration
-5-
EXHIBIT "B"
PATENTS
DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
---------- ------- ---------- ----------- ------
-6-
EXHIBIT "C"
TRADEMARKS
XXXX COUNTRY SERIAL NO. STATUS
---- ------- ---------- ------
-7-
STATE OF CALIFORNIA )
) ss.
COUNTY OF______________ )
On ___________________, 1998, before me, _________________________________
___________________________________________, Notary Public, personally appeared
_________________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
------------------------
(Seal)
-8-
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
-------------------------
WARRANT TO PURCHASE STOCK
WARRANT TO PURCHASE 15,000 ISSUE DATE: APRIL 23, 1998
SHARES OF THE COMMON EXPIRATION DATE: APRIL 23, 2003
STOCK OF CONDUCTUS, INC. INITIAL EXERCISE PRICE: $3.625 PER SHARE
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other
good and valuable consideration, SILICON VALLEY BANK ("Holder") is entitled to
purchase the number of fully paid and non-assessable shares of the class of
securities (the "Shares") of the corporation (the "Company") at the initial
exercise price per Share (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 Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased.
1.2 CONVERSION RIGHT. In lieu of exercising this Warrant as specified in
Section 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 Section 1.4.
1.3 ALTERNATIVE STOCK APPRECIATION RIGHT. At Holder's option, the Company
shall pay Holder the fair market value of the Shares issuable upon conversion of
this Warrant pursuant to Section 1.2 in cash in lieu of such Shares.
1.4 FAIR MARKET VALUE. If the Shares are traded in a public market, the
fair market value of the Shares shall be the closing price of the Shares (or the
closing price of the Company's stock into which the Shares are convertible)
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company. If the Shares 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. The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a reputable
investment banking firm to undertake such valuation. If the valuation of such
investment banking firm is greater than that determined by the Board of
Directors, then all fees and expenses of such investment banking firm shall be
paid by the Company. In all other circumstances, such fees and expenses shall
be paid by Holder.
1.5 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, 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.
1.6 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, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.7 REPURCHASE ON SALE, MERGER OR CONSOLIDATION OF THE COMPANY.
1.7.1. "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.
1.7.2. ASSUMPTION OF WARRANT. If upon the closing of any Acquisition the
successor entity assumes the obligations of this Warrant, then 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 shall be adjusted
accordingly.
-9-
WARRANT TO PURCHASE STOCK
-----------------------------------------------------------------
1.7.3. NONASSUMPTION. If upon the closing of any Acquisition the successor
entity does not assume the obligations of this Warrant and Holder has not
otherwise exercised this Warrant in full, then the unexercised portion of this
Warrant shall be deemed to have been automatically converted pursuant to Section
1.2 and thereafter Holder shall participate in the acquisition on the same terms
as other holders of the same class of securities of the Company.
1.7.4. PURCHASE RIGHT. Notwithstanding the foregoing, at the election of
Holder, the Company shall purchase the unexercised portion of this Warrant for
cash upon the closing of any Acquisition for an amount equal to (a) the fair
market value of any consideration that would have been received by Holder in
consideration of the Shares had Holder exercised the unexercised portion of this
Warrant immediately before the record date for determining the shareholders
entitled to participate in the proceeds of the Acquisition, less (b) the
aggregate Warrant Price of the Shares, but in no event less than zero.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, 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 or subdivision occurred.
2.2 RECLASSIFICATION, EXCHANGE 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 to common
stock pursuant to the terms of the Company's Articles of Incorporation upon the
closing of a registered public offering of the Company's common stock. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new 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 Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 ADJUSTMENTS FOR COMBINATIONS, ETC. 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.
2.4 ADJUSTMENTS FOR DILUTING ISSUANCES. The Warrant Price and the number
of Shares issuable upon exercise of this Warrant or, if the Shares are Preferred
Stock, the number of shares of common stock issuable upon conversion of the
Shares, shall be subject to adjustment, from time to time in the manner set
forth on Exhibit A in the event of Diluting Issuances (as defined on Exhibit A).
2.5 NO IMPAIRMENT. The Company shall not, by amendment of its Articles of
Incorporation 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. If the Company takes any action
affecting the Shares or its common stock other than as described above that
adversely affects Holder's rights under this Warrant, the Warrant Price shall be
adjusted downward and the number of Shares issuable upon exercise of this
Warrant shall be adjusted upward in such a manner that the aggregate Warrant
Price of this Warrant is unchanged.
2.6 FRACTIONAL SHARES. No fractional Shares shall be issuable upon
exercise or conversion of the 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 amount computed
by multiplying the fractional interest by the fair market value of a full Share.
2.7 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the Warrant
Price, the Company at its expense shall 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 hereby represents and
warrants to the 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-
-10-
WARRANT TO PURCHASE STOCK
-----------------------------------------------------------------
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.
(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 non-assessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 NOTICE OF CERTAIN EVENTS. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (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 20 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 common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock 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.
3.3 INFORMATION RIGHTS. So long as the Holder holds this Warrant and/or
any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of recognized standing and
(c) within forty-five (45) days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
3.4 REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The Company
agrees that the Shares or, if the Shares are convertible into common stock of
the Company, such common stock, shall be subject to the registration rights set
forth on Exhibit B, if attached.
ARTICLE 4. MISCELLANEOUS.
4.1 TERM: NOTICE OF EXPIRATION. This Warrant is exercisable, in whole or
in part, at any time and from time to time on or before the Expiration Date set
forth above. The Company shall give Holder written notice of Holder's right to
exercise this Warrant in the form attached as Appendix 2 not more than 90 days
and not less than 30 days before the Expiration Date. If the notice is not so
given, the Expiration Date shall automatically be extended until 30 days after
the date the Company delivers the notice to Holder.
4.2 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:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and the
Shares issuable upon exercise 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, if reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or 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 Holders notice of
proposed sale.
4.4 TRANSFER PROCEDURE. Subject to the provisions of Section 4.2, Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) by giving the Company notice of the portion of
the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the transferee(s) (and Holder if applicable). Unless
the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company.
-11-
WARRANT TO PURCHASE STOCK
-----------------------------------------------------------------
4.5 NOTICES. All notices and other communications from the Company to the
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 the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
4.6 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.
4.7 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.
4.8 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.
CONDUCTUS, INC.
BY
-------------------------------
CHAIRMAN OF THE BOARD, PRESIDENT
OR VICE PRESIDENT
BY
-------------------------------
SECRETARY OR ASS'T SECRETARY
WARRANT TO PURCHASE STOCK
-----------------------------------------------------------------
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ____________ shares of the
Common/Series ____ Preferred [strike one] Stock of______________ pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to _______ of the Shares covered by the
Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
__________________________
(NAME)
__________________________
__________________________
(ADDRESS)
3. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
-------------------------------------
(Signature)
-------------------------------------
(Date)
APPENDIX 2
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
_____________, __
(Name of Holder)
(Address of Holder)
Attn: Chief Financial Officer
Dear ____________:
This is to advise you that the Warrant issued to you described below will
expire on ________________, 19__.
Issuer:
Issue Date:
Class of Security Issuable:
Exercise Price per Share:
Number of Shares Issuable:
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any questions
you may have concerning exercise of the Warrant. This is your only notice of
pending expiration.
(Name of Issuer)
By
-----------------------------
Its
----------------------------
WARRANT TO PURCHASE STOCK
-----------------------------------------------------------------
EXHIBIT A
ANTI-DILUTION PROVISIONS
In the event of the issuance (a "Diluting Issuance") by the Company, after
the Issue Date of the Warrant, of securities at a price per share less than the
Warrant Price, or, if the Shares are common stock, less than the then conversion
price of the Company's Preferred Stock, then the number of shares of common
stock issuable upon conversion of the Shares, or if the Shares are common stock,
the number of Shares issuable upon exercise of the Warrant, shall be adjusted as
a result of Diluting Issuances in accordance with the Holder's standard form of
Anti-Dilution Agreement in effect on the Issue Date.
Under no circumstances shall the aggregate Warrant Price payable by the
Holder upon exercise of the Warrant increase as a result of any adjustment
arising from a Diluting Issuance.
EXHIBIT B
REGISTRATION RIGHTS
The Shares (if common stock), or the common stock issuable upon conversion of
the Shares, shall be deemed "registrable securities" or otherwise entitled to
"piggy back" registration rights in accordance with the terms of the following
agreement (the "Agreement") between the Company and its investor(s):
------------------------------------------------------------------------
[Identify Agreement by date, title and parties. If no Agreement exists,
indicate by "none".]
The Company agrees that no amendments will be made to the Agreement which
would have an adverse impact on Holder's registration rights thereunder without
the consent of Holder. By acceptance of the Warrant to which this Exhibit B is
attached, Holder shall be deemed to be a party to the Agreement.
If no Agreement exists, then the Company and the Holder shall enter into
Holder's standard form of Registration Rights Agreement as in effect on the
Issue Date of the Warrant.
-----------------------------------------------------------------
SILICON VALLEY BANK
REGISTRATION RIGHTS AGREEMENT
ISSUER: CONDUCTUS, INC.
ADDRESS: 000 X. XXXXX XXXXXX
XXXXXXXXX, XXXXXXXXXX 00000
DATE: APRIL 23, 1998
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the above date by and
between SILICON VALLEY BANK ("Purchaser"), whose address is 0000 Xxxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxxxxx 00000 and the above Company, whose address is set
forth above.
RECITALS
A. Concurrently with the execution of this Agreement, the Purchaser is
purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant
to which Purchaser has the right to acquire from the Company the Shares (as
defined in the Warrant).
B. By this Agreement, the Purchaser and the Company desire to set forth
the registration rights of the Shares all as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares (if Common
Stock) or all shares of Common Stock of the Company issuable or issued upon
conversion of the Shares and (ii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, any stock referred to in (i).
(c) The terms "Holder" or "Holders" means the Purchaser or qualifying
transferees under subsection 1.8 hereof who hold Registrable Securities.
(d) The term "SEC" means the Securities and Exchange Commission.
1.2 COMPANY REGISTRATION.
(a) Registration. If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its shareholders, other than a registration on Form S-1 or S-8
relating solely to employee stock option or purchase plans, or a registration on
Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on
any other form (other than Form X-0, X-0, X-0 or S-18, or their successor forms)
or any successor to such forms, which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state securities
laws); and
(ii) include in such registration (and compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 30 days after receipt of such written notice from the
Company, by any Holder or Holders, except as set forth in subsection 1.2(b)
below.
(b) Underwriting. If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to
subsection 1.2(a)(i). In such event the right of any Holder to registration
pursuant to this subsection 1.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent
-1-
SILICON VALLEY BANK REGISTRATION RIGHTS AGREEMENT
-----------------------------------------------------------------
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company.
1.3 EXPENSES OF REGISTRATION. All expenses incurred in connection with
any registration, qualification or compliance pursuant to this Section 1
including without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and
expenses of any special audits incidental to or required by such registration,
shall be borne by the Company except the Company shall not be required to pay
underwriters' fees, discounts or commissions relating to Registrable Securities.
All expenses of any registered offering not otherwise borne by the Company shall
be borne pro rata among the Holders participating in the offering and the
Company.
1.4 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. Except as
otherwise provided in subsection 1.3, at its expense the Company will:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the Holders of a
majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to 120 days.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
1.5 INDEMNIFICATION.
(a) The Company will indemnify each Holder of Registrable Securities and
each of its officers, directors and partners, and each person controlling such
Holder, with respect to which such registration, qualification or compliance has
been effected pursuant to this Rights Agreement, and each underwriter, if any,
and each person who controls any underwriter of the Registrable Securities held
by or issuable to such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Securities Exchange
Act of 1934, as amended ("Exchange Act"), or any state securities law applicable
to the Company or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any such state law and relating to action or inaction
required of the Company in connection with any such registration, qualification
of compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, within a
reasonable amount of time after incurred for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.5(a) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld); and provided further, that the Company will
not be liable in any such case to the extent that any such claim, loss, damage
or liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company
-2-
SILICON VALLEY BANK REGISTRATION RIGHTS AGREEMENT
-----------------------------------------------------------------
by an instrument duly executed by such Holder or underwriter specifically for
use therein.
(b) Each Holder will, if Registrable Securities held by or issuable to
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, expenses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder
specifically for use therein; provided, however, that the indemnity agreement
contained in this subsection 1.5(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld); and provided further, that the total amount for
which any Holder shall be liable under this subsection 1.5(b) shall not in any
event exceed the aggregate proceeds received by such Holder from the sale of
Registrable Securities held by such Holder in such registration.
(c) Each party entitled to indemnification under this subsection 1.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense; and provided further, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in prejudice to the
Indemnifying Party; and provided further, that an Indemnified Party (together
with all other Indemnified Parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
1.6 INFORMATION BY HOLDER. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.7 RULE 144 REPORTING. With a view to making available to Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees at all times to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, after 90 days after the effective date
of the first registration filed by the Company for an offering of its securities
to the general public;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to furnish to
such Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as the Holder may reasonably request in complying with any rule or
regulation of the SEC allowing the Holder to sell any such securities without
registration.
1.8 TRANSFER OF REGISTRATION RIGHTS. Holders' rights to cause the Company
to register their securities and keep information available, granted to them by
the Company under subsections 1.2 and 1.7 may be assigned to a transferee or
assignee of a Holder's Registrable Securities not sold to the public, provided,
that the Company is given
-3-
SILICON VALLEY BANK REGISTRATION RIGHTS AGREEMENT
-----------------------------------------------------------------
written notice by such Holder at the time of or within a reasonable time after
said transfer, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being assigned. The Company may prohibit the transfer of any Holders' rights
under this subsection 1.8 to any proposed transferee or assignee who the Company
reasonably believes is a competitor of the Company.
2. GENERAL.
2.1 WAIVERS AND AMENDMENTS. With the written consent of the record or
beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities. Upon the effectuation of
each such waiver, consent, agreement of amendment or modification, the Company
shall promptly give written notice thereof to the record holders of the
Registrable Securities who have not previously consented thereto in writing.
This Agreement or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, except to
the extent provided in this subsection 2.1.
2.2 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
2.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.4 ENTIRE AGREEMENT. Except as set forth below, this Agreement and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
2.5 NOTICES. ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Holder, at such Holder's address as set forth in the heading
to this Agreement, or at such other address as such Holder shall have furnished
to the Company in writing, or (b) if to the Company, at the Company's address
set forth in the heading to this Agreement, or at such other address as the
Company shall have furnished to the Holder in writing.
2.6 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreements shall not in any way be affected or impaired thereby.
2.7 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
2.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
COMPANY:
CONDUCTUS, INC.
BY
------------------------------
PRESIDENT OR VICE PRESIDENT
BY
------------------------------
SECRETARY OR ASS'T SECRETARY
PURCHASER:
SILICON VALLEY BANK
BY
-------------------------------
TITLE
----------------------------
-4-
-----------------------------------------------------------------
SILICON VALLEY BANK
ANTIDILUTION AGREEMENT
ISSUER: CONDUCTUS, INC.
ADDRESS: 000 X. XXXXX XXXXXX
XXXXXXXXX, XXXXXXXXXX 00000
DATE: APRIL 23, 1998
THIS AGREEMENT is entered into as of the above date by and between SILICON
VALLEY BANK ("Purchaser"), whose address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx 00000, and the above Company, whose address is set forth above.
RECITALS
A. Concurrently with the execution of this Antidilution Agreement, the
Purchaser is purchasing from the Company a Warrant to Purchase Stock (the
"Warrant") pursuant to which Purchaser has the right to acquire from the Company
the Shares (as defined in the Warrant).
B. By this Antidilution Agreement, the Purchaser and the Company desire
to set forth the adjustment in the number of Shares issuable upon exercise of
the Warrant as a result of a Diluting Issuance (as defined in Exhibit A to the
Warrant).
C. Capitalized terms used herein shall have the same meaning as set forth
in the Warrant.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. DEFINITIONS. As used in this Antidilution Agreement, the following
terms have the following respective meanings:
(a) "Option" means any right, option, or warrant to subscribe for,
purchase, or otherwise acquire common stock or Convertible Securities.
(b) "Convertible Securities" means any evidences of indebtedness, shares
of stock, or other securities directly or indirectly convertible into or
exchangeable for common stock.
(c) "Issue" means to grant, issue, sell, assume, or fix a record date for
determining persons entitled to receive, any security (including Options),
whichever of the foregoing is the first to occur.
(d) "Additional Common Shares" means all common stock (including reissued
shares) issued (or deemed to be issued pursuant to Section 2) after the date of
the Warrant. Additional Common Shares does not include, however, any common
stock issued in a transaction described in Sections 2.1 and 2.2 of the Warrant;
any common stock Issued upon conversion of preferred stock outstanding on the
date of the Warrant; the Shares; or common stock Issued as incentive or in a
nonfinancing transaction to employees, officers, directors, or consultants to
the Company.
(e) The shares of common stock ultimately Issuable upon exercise of an
Option (including the shares of common stock ultimately Issuable upon conversion
or exercise of a Convertible Security Issuable pursuant to an Option) are deemed
to be Issued when the Option is Issued. The shares of common stock ultimately
Issuable upon conversion or exercise of a Convertible Security (other than a
Convertible Security Issued pursuant to an Option) shall be deemed Issued upon
Issuance of the Convertible Security.
2. DEEMED ISSUANCE OF ADDITIONAL COMMON SHARES. The shares of common
stock ultimately Issuable upon exercise of an Option (including the shares of
common stock ultimately Issuable upon conversion or exercise of a Convertible
Security Issuable pursuant to an Option) are deemed to be Issued when the Option
is Issued. The shares of common stock ultimately Issuable upon conversion or
exercise of a Convertible Security (other than a Convertible Security Issued
pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible
Security. The maximum amount of common stock Issuable is determined without
regard to any future adjustments permitted under the instrument creating the
Options or Convertible Securities.
3. ADJUSTMENT OF WARRANT PRICE FOR DILUTING ISSUANCES.
3.1 WEIGHTED AVERAGE ADJUSTMENT. If the Company Issues Additional Common
Shares after the date of the Warrant and the consideration per Additional Common
Share (determined pursuant to Section 9) is less than the
-1-
SILICON VALLEY BANK ANTIDILUTION AGREEMENT
-----------------------------------------------------------------
Warrant Price in effect immediately before such Issue, the Warrant Price in
effect immediately before such Issue shall be reduced, concurrently with such
Issue, to a price (calculated to the nearest hundredth of a cent) determined by
multiplying the Warrant Price by a fraction:
(a) the numerator of which is the amount of common stock outstanding
immediately before such Issue plus the amount of common stock that the aggregate
consideration received by the Company for the Additional Common Shares would
purchase at the Warrant Price in effect immediately before such Issue, and
(b) the denominator of which is the amount of common stock outstanding
immediately before such Issue plus the number of such Additional Common Shares.
3.2 ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the Warrant
Price, the number of Shares issuable upon exercise of the Warrant shall be
increased to equal the quotient obtained by dividing (a) the product resulting
from multiplying (i) the number of Shares issuable upon exercise of the Warrant
and (ii) the Warrant Price, in each case as in effect immediately before such
adjustment, by (b) the adjusted Warrant Price.
3.3 SECURITIES DEEMED OUTSTANDING. For the purpose of this Section 3, all
securities issuable upon exercise of any outstanding Convertible Securities or
Options, warrants, or other rights to acquire securities of the Company shall be
deemed to be outstanding.
4. NO ADJUSTMENT FOR ISSUANCES FOLLOWING DEEMED ISSUANCES. No adjustment
to the Warrant Price shall be made upon the exercise of Options or conversion of
Convertible Securities.
5. ADJUSTMENT FOLLOWING CHANGES IN TERMS OF OPTIONS OR CONVERTIBLE
SECURITIES. If the consideration payable to, or the amount of common stock
Issuable by, the Company increases or decreases, respectively, pursuant to the
terms of any outstanding Options or Convertible Securities, the Warrant Price
shall be recomputed to reflect such increase or decrease. The recomputation
shall be made as of the time of the Issuance of the Options or Convertible
Securities. Any changes in the Warrant Price that occurred after such Issuance
because other Additional Common Shares were Issued or deemed Issued shall also
be recomputed.
6. RECOMPUTATION UPON EXPIRATION OF OPTIONS OR CONVERTIBLE SECURITIES.
The Warrant Price computed upon the original Issue of any Options or Convertible
Securities, and any subsequent adjustments based thereon, shall be recomputed
when any Options or rights of conversion under Convertible Securities expire
without having been exercised. In the case of Convertible Securities or Options
for common stock, the Warrant Price shall be recomputed as if the only
Additional Common Shares Issued were the shares of common stock actually Issued
upon the exercise of such securities, if any, and as if the only consideration
received therefor was the consideration actually received upon the Issue,
exercise or conversion of the Options or Convertible Securities. In the case of
Options for Convertible Securities, the Warrant Price shall be recomputed as if
the only Convertible Securities Issued were the Convertible Securities actually
Issued upon the exercise thereof, if any, and as if the only consideration
received therefor was the consideration actually received by the Company
(determined pursuant to Section 9), if any, upon the Issue of the Options for
the Convertible Securities.
7. LIMIT ON READJUSTMENTS. No readjustment of the Warrant Price pursuant
to Sections 5 or 6 shall increase the Warrant Price more than the amount of any
decrease made in respect of the Issue of any Options or Convertible Securities.
8. 30 DAY OPTIONS. In the case of any Options that expire by their terms
not more than 30 days after the date of Issue thereof, no adjustment of the
Warrant Price shall be made until the expiration or exercise of all such
Options.
9. COMPUTATION OF CONSIDERATION. The consideration received by the
Company for the Issue of any Additional Common Shares shall be computed as
follows:
(a) CASH shall be valued at the amount of cash received by the
Corporation, excluding amounts paid or payable for accrued interest or accrued
dividends.
(b) PROPERTY. Property other than cash shall be computed at the fair
market value thereof at the time of the Issue as determined in good faith by the
Board of Directors of the Company.
(c) MIXED CONSIDERATION. The consideration for Additional common Shares
Issued together with other property of the Company for consideration that covers
both shall be determined in good faith by the Board of Directors.
(d) OPTIONS AND CONVERTIBLE SECURITIES. The consideration per Additional
Common Share for Options and Convertible Securities shall be determined by
dividing:
(i) the total amount, if any, received or receivable by the Company for
the Issue of the Options or Convertible Securities, plus the minimum amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Company upon exercise of the Options or
conversion of the Convertible Securities, by
(ii) the maximum amount of common stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) ultimately Issuable upon the exercise of
such Options or the conversion of such Convertible Securities.
10. GENERAL.
10.1 GOVERNING LAW. This Antidilution Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between
-2-
SILICON VALLEY BANK ANTIDILUTION AGREEMENT
-----------------------------------------------------------------
California residents entered into and to be performed entirely within
California.
10.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
10.3 ENTIRE AGREEMENT. Except as set forth below, this Antidilution
Agreement and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
10.4 NOTICES. ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Purchaser at Purchaser's address as set forth in the heading
to this Agreement, or at such other address as Purchaser shall have furnished to
the Company in writing, or (b) if to the Company, at the Company's address set
forth in the heading to this Agreement, or at such other address as the Company
shall have furnished to the Purchaser in writing.
10.5 SEVERABILITY. In case any provision of this Antidilution Agreement
shall be invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Antidilution Agreement shall
not in any way be affected or impaired thereby.
10.6 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Antidilution Agreement.
10.7 COUNTERPARTS. This Antidilution Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
COMPANY:
CONDUCTUS, INC.
BY
------------------------------
PRESIDENT OR VICE PRESIDENT
BY
-------------------------------
SECRETARY OR ASS'T SECRETARY
PURCHASER:
SILICON VALLEY BANK
BY
-------------------------------
TITLE
----------------------------
-3-
