Exhibit 10.21.1
Execution

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS
RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii)
RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR
(iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 8 OF THIS WARRANT.
TRANSPHORM, INC.
WARRANT TO PURCHASE SHARES OF
SERIES PREFERRED STOCK
THIS CERTIFIES THAT, for value received and subject to the provisions and upon
the terms and conditions set forth in this Warrant, LEADER EQUITY, LLC and its
assignees are entitled to subscribe for and purchase at the Warrant Price that
number of the fully paid and nonassessable shares of Series Preferred Stock of
TRANSPHORM, INC., a Delaware corporation (the "Company"), as is equal to the
nearest whole number derived from dividing $105,000 (the "Warrant Coverage") by
the Warrant Price.
1.    Definitions.   As used herein, capitalized terms not otherwise defined
herein shall have the following respective meanings:
(a)   "Act" means the Securities Act of 1933, as amended.
(b)   "Common Stock" means the Common Stock of the Company.
(c)   "Common Stock Equivalents" means, (i) with respect to any Convertible
Security, the number of shares of Common Stock that would result from full
conversion, exercise or exchange of a Convertible Security in one or more steps,
and (ii) with respect to a Unit, the number of shares of Common Stock resulting
after aggregating all Common Stock and Common Stock Equivalents underlying
Convertible Securities which are contained within a Unit.
(d)   "Convertible Security" means (i) any stock or securities directly or
indirectly convertible into or exchangeable for Common Stock and (ii) any
rights, warrants or options, except warrants issued with respect to bridge loan
financing from then existing investors, to subscribe for or purchase Common
Stock or stock or securities directly or indirectly convertible into or
exchangeable for Common Stock.
(e)   "Date of Grant" means November 03, 2010.
(f)   "Effective Price Per Share of Common Stock" means the sale price of a
single Convertible Security or Unit divided by the sum of (i) the number of
Common Stock Equivalents underlying such Convertible Security or Unit plus (ii)
the number determined by dividing (A) the number of additional shares of Common
Stock or Common Stock Equivalents that become issuable for no or nominal
additional consideration in connection with the next Qualified Financing in
which such Convertible Securities or Units are sold, including extraordinary
issuances of securities to employees, directors or consultants in connection
with the transaction but excluding warrants issued with respect to bridge loan
financing from then existing investors and excluding any additional shares of
Common Stock issuable upon conversion of previously-existing series of the
Company's preferred stock as a result of antidilution adjustments to rates of
conversion of such preferred stock triggered by the next Qualified Financing, by
(B) the aggregate number of shares of Common Stock and Common Stock Equivalents
underlying the Securities sold in the next Qualified Financing.
(g)   "Holder" means the initial holder of this Warrant set forth in the first
paragraph of this Warrant and any other person or entity which becomes a holder
of this Warrant pursuant to the terms of this Warrant.

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(h)   “IPO” means the initial public offering of the Company’s Common Stock
effected pursuant to a registration statement on Form S-1 (or its successor)
filed under the Act.
(i)   “Next Round Price” means the lowest Effective Price Per Share of Common
Stock at which Securities are sold in the Company’s next Qualified Financing
after the Date of Grant.
(j)   "Other Warrants" means any other warrants issued by the Company in
connection with the transaction with respect to which this Warrant was issued,
and any warrant issued upon transfer or partial exercise of or in lieu of this
Warrant. The term "Warrant" as used herein shall be deemed to include Other
Warrants unless the context clearly requires otherwise.
(k)   "Qualified Financing" means the first sale or issuance by the Company
after the Date of Grant and prior to the Company’s IPO of Securities of the
Company to investors in a single transaction or a series of related transactions
resulting in aggregate gross cash proceeds to the Company of not less than
$2,000,000.
(l)   “Securities” means Common Stock, Convertible Securities or Units.
(m)   “Series C Price” means $2.879 per share.
(n)   "Series Preferred" means (i) (A) the Company's presently authorized Series
C Preferred Stock if Holder exercises this Warrant for Series C Preferred Stock,
or (B) the type of Securities sold and issued by the Company in such Qualified
Financing if Holder exercises this Warrant for the Securities sold and issued
during the next Qualified Financing; (ii) after the conversion of all of the
outstanding shares of Series Preferred Stock into Common Stock, either
automatically or by vote of the requisite holders thereof, the Company's Common
Stock; (iii) upon any conversion, exchange, reclassification or change, any
security into which the securities described in clauses (i) or (ii) of this
definition may be converted, exchanged, reclassified or otherwise changed; or
(iv) if Pay to Play Provisions are applied to the Series Preferred and the
Holder participates in the subsequent Pay to Play round in an amount equal to
its pro-rata share of the round based on the number of Series Preferred Shares
issuable under the Warrant for either (i) (A) or (B) above, the security that a
holder of Series Preferred would have received had such holder participated in
the manner necessary to receive or retain the security having the rights more
favorable to the holder. “Pay to Play Provisions” means (i) provisions that
require the holder of a security to participate in a subsequent round of equity
financing or lose all or a portion of the benefit of antidilution protection
applicable to a security or have such security automatically convert to common
stock or another series of capital stock, or (ii) an exchange transaction having
the same or similar economic effect. The Holder must, at the time of Pay to Play
elect either (i) (A) or (B) above for purposes of establishing its pro-rata
amount in the Pay to Play round. For clarity, Holder does not have to exercise
its warrant into either (i) (A) or (B) above in order to participate in the Pay
to Play round of financing.
(o)   “Shares” means the shares of Series Preferred of Company issuable upon
exercise of this Warrant.
(p)  “Units” means any combination of Common Stock and Convertible Securities
issued by Company sold together as a single unit.
(q)   “Warrant Price” means, as it may be adjusted from time to time pursuant to
Section 5, (i) the Series C Price if Holder exercises this Warrant for Series C
Preferred Stock, or (ii) the Next Round Price if Holder exercises this Warrant
for the Securities sold and issued by the Company during the next Qualified
Financing.
2.    Term.   The purchase right represented by this Warrant is exercisable, in
whole or in part, at any time and from time to time from the Date of Grant
through the tenth anniversary of the Date of Grant.
Notwithstanding the foregoing, in the event of a Corporate Event (as defined in
Section 5(a)) where the consideration received by holders of Series Preferred in
such Corporate Event is all cash, then this Warrant (i) to the extent the cash
consideration per share of Series Preferred exceeds the Warrant Price, shall be
deemed exercised in

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accordance with the provisions of Section 3(b) immediately prior to the closing
of the Corporate Event, or (ii) to the extent the cash consideration per share
of Series Preferred does not exceed the Warrant Price, shall terminate.
3.    Method of Exercise; Payment; Issuance of New Warrant; Net Issuance.
(a)   Subject to Section 2 hereof, the purchase right represented by this
Warrant may be exercised by the Holder, in whole or in part and from time to
time, at the election of the Holder, by (a) the surrender of this Warrant (with
the notice of exercise substantially in the form attached hereto as Exhibit A-1
duly completed and executed) at the principal office of the Company and by the
payment to the Company, by certified or bank check, or by wire transfer to an
account designated by the Company (a "Wire Transfer") of an amount equal to the
then applicable Warrant Price multiplied by the number of Shares then being
purchased; (b) if in connection with a registered public offering of the
Company's securities, the surrender of this Warrant (with the notice of exercise
form attached hereto as Exhibit A-2 duly completed and executed) at the
principal office of the Company together with notice of arrangements reasonably
satisfactory to the Company for payment to the Company from the proceeds of the
sale of shares to be sold by the Holder in such public offering of an amount
equal to the then applicable Warrant Price per share multiplied by the number of
Shares then being purchased; or (c) exercise of the "net issuance" right
provided for in Section 3(b) hereof. The person or persons in whose name(s)
Shares shall be registered upon exercise of this Warrant shall be deemed to have
become the holder(s) of record of, and shall be treated for all purposes as the
record holder(s) of, the shares represented thereby (and such shares shall be
deemed to have been issued) immediately prior to the close of business on the
date or dates upon which this Warrant is exercised. In the event of any exercise
of this Warrant, certificates for the shares of stock so purchased shall be
delivered to the Holder as soon as possible and in any event within thirty (30)
days after such exercise and, unless this Warrant has been fully exercised or
expired, a new Warrant representing the portion of the Shares, if any, with
respect to which this Warrant shall not then have been exercised shall also be
issued to the Holder as soon as possible and in any event within such thirty-day
period; provided, however, that at such time as the Company is subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, if
requested by the Holder, the Company shall cause its transfer agent to deliver
the certificate representing Shares issued upon exercise of this Warrant to, or
credit the securities account of, a broker or other person (as directed by the
Holder exercising this Warrant) within the time period required to settle any
trade made by the Holder after exercise of this Warrant.
(b)   Right to Convert Warrant into Stock:  Net Issuance.
(i)    Right to Convert.   In addition to and without limiting the rights of the
Holder under the terms of this Warrant, the Holder shall have the right to
convert this Warrant or any portion thereof (the "Conversion Right") into shares
of Series Preferred as provided in this Section 3(b) at any time or from time to
time during the term of this Warrant. Upon exercise of the Conversion Right with
respect to a particular number of shares subject to this Warrant (the "Converted
Warrant Shares"), the Company shall deliver to the Holder (without payment by
the Holder of any exercise price or any cash or other consideration) that number
of shares of fully paid and nonassessable Series Preferred as is determined
according to the following formula:
X =
B – A
 
 
Y
 

Where:
X =
the number of shares of Series Preferred that shall be issued to Holder
 
 
 
 
Y =
the fair market value of one share of Series Preferred
 
 
 
 
A =
the aggregate Warrant Price of the specified number of Converted Warrant Shares
immediately prior to the exercise of the Conversion Right (i.e., the number of
Converted Warrant Shares multiplied by the Warrant Price)
 
 
 
 
B =
the aggregate fair market value of the specified number of Converted Warrant
Shares (i.e., the number of Converted Warrant Shares multiplied by the fair
market value of one Converted Warrant Share)

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(ii)    Method of Exercise.   The Conversion Right may be exercised by the
Holder by the surrender of this Warrant at the principal office of the Company
together with a written statement (which may be in the form of Exhibit A-1 or
Exhibit A-2 hereto) specifying that the Holder thereby intends to exercise the
Conversion Right and indicating the number of shares subject to this Warrant
which are being surrendered (referred to in Section 3(b)(i) hereof as the
Converted Warrant Shares) in exercise of the Conversion Right. Such conversion
shall be effective upon receipt by the Company of this Warrant together with the
aforesaid written statement, or on such later date as is specified therein (the
"Conversion Date"), and, at the election of the Holder, may be made contingent
upon the closing of the sale of the Company's Common Stock to the public in a
public offering pursuant to a registration statement under the Act (a "Public
Offering").
(iii)    Determination of Fair Market Value.   For purposes of this Section
3(b), "fair market value" of a share of Series Preferred (or Common Stock if the
Series Preferred has been automatically converted into Common Stock) as of a
particular date (the "Determination Date") shall mean:
(1)    If the Conversion Right is exercised in connection with and contingent
upon a Public Offering, and if the Company's registration statement relating to
such Public Offering ("Registration Statement") has been declared effective by
the Securities and Exchange Commission, then the initial "Price to Public"
specified in the final prospectus with respect to such Public Offering.
(2)    If the Conversion Right is not exercised in connection with and
contingent upon a Public Offering, then as follows:
(A)    If traded on a securities exchange, the fair market value of the Common
Stock shall be deemed to be the average of the closing prices of the Common
Stock on such exchange over the five trading days immediately prior to the
Determination Date, and the fair market value of the Series Preferred shall be
deemed to be such fair market value of the Common Stock multiplied (if the
Series Preferred is not then constituted as Common Stock) by the number of
shares of Common Stock into which each share of Series Preferred is then
convertible;
(B)    If traded on the Nasdaq Stock Market or other over-the-counter system,
the fair market value of the Common Stock shall be deemed to be the average of
the closing bid prices of the Common Stock over the five trading days
immediately prior to the Determination Date, and the fair market value of the
Series Preferred shall be deemed to be such fair market value of the Common
Stock multiplied (if the Series Preferred is not then constituted as Common
Stock) by the number of shares of Common Stock into which each share of Series
Preferred is then convertible; and
(C)    If there is no public market for the Common Stock, then fair market value
shall be reasonably determined in good faith by the board of directors of the
Company.
(iv)    In making a determination under clauses (A) or (B) above, if on the
Determination Date, five trading days had not passed since the IPO, then the
fair market value of the Common Stock shall be the average closing prices or
closing bid prices, as applicable, for the shorter period beginning on and
including the first trading day after the pricing of the IPO and ending on the
trading day prior to the Determination Date (or if such period includes only one
trading day the closing price or closing bid price, as applicable, for such
trading day). If closing prices or closing bid prices are no longer reported by
a securities exchange or other trading system, the closing price or closing bid
price shall be that which is reported by such securities exchange or other
trading system at 4:00 p.m. New York City time on the applicable trading day.
4.    Stock Fully Paid; Reservation of Shares.   All Shares that may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance
pursuant to the terms and conditions herein, be fully paid and nonassessable,
and free from all preemptive rights and taxes, liens and charges with respect to
the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a

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sufficient number of shares of its Series Preferred to provide for the exercise
of the rights represented by this Warrant and, while applicable, a sufficient
number of shares of its Common Stock to provide for the conversion of the Series
Preferred into Common Stock.
5.    Adjustment of Warrant Price and Number of Shares.   The number and kind of
securities purchasable upon the exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
(a)   Corporate Events.   In case of any reclassification or change of
securities of the class issuable upon exercise of this Warrant (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any
merger of the Company with or into another corporation (other than a merger with
another corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant) (each, a
“Corporate Event”), the Company, or such successor corporation, as the case may
be, shall duly execute and deliver to the Holder a new Warrant (in form and
substance satisfactory to the Holder), or the Company shall make appropriate
provision without the issuance of a new Warrant, so that the Holder shall have
the right to receive upon exercise of this Warrant, at a total purchase price
not to exceed that payable upon the exercise of the unexercised portion of this
Warrant, and in lieu of the shares of Series Preferred theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such Corporate Event by a holder
of the number of shares of Series Preferred then purchasable under this Warrant.
Any new Warrant shall provide for adjustments that shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5(a) shall similarly apply to successive Corporate
Events.
(b)   Subdivision or Combination of Shares.   If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its
outstanding shares of Series Preferred, the Warrant Price shall be
proportionately decreased and the number of Shares issuable hereunder shall be
proportionately increased in the case of a subdivision and the Warrant Price
shall be proportionately increased and the number of Shares issuable hereunder
shall be proportionately decreased in the case of a combination.
(c)   Stock Dividends and Other Distributions.   If the Company at any time
while this Warrant is outstanding and unexpired shall (i) pay a dividend with
respect to Series Preferred payable in Series Preferred, then the Warrant Price
shall be adjusted, from and after the date of determination of shareholders
entitled to receive such dividend or distribution, to that price determined by
multiplying the Warrant Price in effect immediately prior to such date of
determination by a fraction (A) the numerator of which shall be the total number
of shares of Series Preferred outstanding immediately prior to such dividend or
distribution, and (B) the denominator of which shall be the total number of
shares of Series Preferred outstanding immediately after such dividend or
distribution; or (ii) make any other distribution with respect to Series
Preferred (except any distribution specifically provided for in Sections 5(a)
and 5(b)), then, in each such case, provision shall be made by the Company such
that the Holder shall receive upon exercise of this Warrant a proportionate
share of any such dividend or distribution as though it were the holder of the
Series Preferred (or Common Stock issuable upon conversion thereof) as of the
record date fixed for the determination of the shareholders of the Company
entitled to receive such dividend or distribution.
(d)   Adjustment of Number of Shares.   Upon each adjustment in the Warrant
Price, the number of Shares of Series Preferred purchasable hereunder shall be
adjusted, to the nearest whole share, to the product obtained by multiplying the
number of Shares purchasable immediately prior to such adjustment in the Warrant
Price by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such adjustment and the denominator of which shall be the
Warrant Price immediately thereafter.
(e)   Antidilution Rights.   The other antidilution rights applicable to the
Shares of Series Preferred purchasable hereunder are set forth in the Company's
Certificate of Incorporation, as amended through the Date of Grant, a true and
complete copy of which is attached hereto as Exhibit B (the "Charter"). The
Company shall promptly provide the Holder with any restatement, amendment,
modification or waiver of the Charter promptly after the same has been made. If
the Company proposes a restatement, amendment, modification or waiver of
anti-dilution rights that treats

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the Holder differently than the other holders of the Shares of Series Preferred
purchasable hereunder with respect to such antidilution rights, then such
restatement, amendment, modification or waiver shall require the consent of the
Holder.
6.    Notice of Adjustments.   Whenever the Warrant Price or the number of
Shares purchasable hereunder shall be adjusted pursuant to Section 5 hereof, the
Company shall deliver to Holder a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price and the number of Shares purchasable hereunder
after giving effect to such adjustment. In addition, whenever the conversion
price or conversion ratio of the Series Preferred shall be adjusted, the Company
shall deliver to Holder a certificate signed by its chief financial officer,
chief operating officer or chief executive officer setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, and the conversion price or
ratio of the Series Preferred after giving effect to such adjustment.
7.    Fractional Shares.   No fractional shares of Series Preferred will be
issued in connection with any exercise or conversion hereunder, but in lieu of
such fractional shares the Company shall make a cash payment therefor based on
the fair market value of the Series Preferred on the date of exercise or
conversion as reasonably determined in good faith by the Company's Board of
Directors.
8.    Compliance with Act; Disposition of Warrant or Shares of Series Preferred.
(a)   Compliance with Act.   The Holder, by acceptance hereof, agrees that this
Warrant, and the shares of Series Preferred to be issued upon exercise hereof
and any Common Stock issued upon conversion thereof are being acquired for
investment and that the Holder will not offer, sell or otherwise dispose of this
Warrant, or any shares of Series Preferred to be issued upon exercise hereof or
any Common Stock issued upon conversion thereof except under circumstances which
will not result in a violation of the Act or any applicable state securities
laws. Upon exercise of this Warrant, unless the Shares being acquired are
registered under the Act and any applicable state securities laws or an
exemption from such registration is available, the Holder shall confirm in
writing that the shares of Series Preferred so purchased (and any Common Stock
issued upon conversion thereof) are being acquired for investment and not with a
view toward distribution or resale in violation of the Act and shall confirm
such other matters related thereto as may be reasonably requested by the
Company. This Warrant and all shares of Series Preferred issued upon exercise of
this Warrant and all Common Stock issued upon conversion thereof (unless
registered under the Act and any applicable state securities laws) shall be
stamped or imprinted with a legend in substantially the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO,
(ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION
LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE
COMPLYING WITH THE PROVISIONS OF SECTION 8 OF THE WARRANT UNDER WHICH THESE
SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY."
Said legend shall be removed by the Company, upon the request of the Holder, at
such time as the restrictions on the transfer of the applicable security shall
have terminated. In addition, in connection with the issuance of this Warrant,
the Holder specifically represents to the Company by acceptance of this Warrant
as follows:
(1)    The Holder is aware of the Company's business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this Warrant. 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. Holder understands that the purchase of this Warrant
and its underlying securities involves substantial risk. Holder has experiences
as an investor in

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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. The Holder is acquiring this Warrant for its own
account for investment purposes only and not with a view to, or for the resale
in connection with, any "distribution" thereof in violation of the Act.
(2)    The Holder understands that this Warrant has 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 the Holder's investment intent
as expressed herein.
(3)    The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. The Holder is aware of the provisions of
Rule 144, promulgated under the Act.
(4)    The Holder is an "accredited investor" as such term is defined in Rule
501 of Regulation D promulgated under the Act.
(b)   Disposition of Warrant or Shares.   With respect to any offer, sale or
other disposition of this Warrant or any shares of Series Preferred acquired
pursuant to the exercise of this Warrant, the Holder agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof,
together with a written opinion of counsel, or other evidence, if reasonably
satisfactory to the Company, to the effect that such offer, sale or other
disposition may be effected without registration or qualification (under the Act
as then in effect or any federal or state securities law then in effect) of this
Warrant or such shares of Series Preferred or Common Stock and indicating
whether or not under the Act certificates for this Warrant or such shares of
Series Preferred to be sold or otherwise disposed of require any restrictive
legend as to applicable restrictions on transferability in order to ensure
compliance with such law. Upon receiving such written notice and reasonably
satisfactory opinion or other evidence, the Company, as promptly as practicable
but no later than fifteen (15) days after receipt of the written notice, shall
notify the Holder that the Holder may sell or otherwise dispose of this Warrant
or such shares of Series Preferred or Common Stock, all in accordance with the
terms of the notice delivered to the Company. If a determination has been made
pursuant to this Section 8(b) that the opinion of counsel or other evidence is
not reasonably satisfactory to the Company, the Company shall so notify the
Holder promptly with details thereof after such determination has been made.
Notwithstanding the foregoing, this Warrant or such shares of Series Preferred
or Common Stock may, as to such federal laws, be offered, sold or otherwise
disposed of (i) pursuant to an effective registration statement covering such
securities or (ii) in accordance with Rule 144 or 144A under the Act, provided
that the Company shall have been furnished with such information as the Company
may reasonably request to provide a reasonable assurance that the provisions of
Rule 144 or 144A have been satisfied. Each certificate representing this Warrant
or the shares of Series Preferred thus transferred (except a transfer pursuant
to an effective registration statement or Rule 144 or 144A) shall bear a legend
as to the applicable restrictions on transferability in order to ensure
compliance with such laws, unless in the aforesaid opinion of counsel for the
Holder, such legend is not required in order to ensure compliance with such
laws. The Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.
(c)   Applicability of Restrictions.   Neither any restrictions of any legend
described in this Warrant nor the requirements of Section 8(b) above shall apply
to any transfer of, or grant of a security interest in, this Warrant (or the
Series Preferred or Common Stock obtainable upon exercise thereof) or any part
hereof (i) to a partner of the Holder if the Holder is a partnership or to a
member of the Holder if the Holder is a limited liability company, (ii) to a
partnership of which the Holder is a partner or to a limited liability company
of which the Holder is a member, or (iii) to a single affiliate of the Holder if
the Holder is a corporation, where, in each case, the transferee is an
“accredited investor”; provided, however, in any such transfer, if applicable,
the transferee shall on the Company's request agree in writing to be bound by
the terms of this Warrant as if an original holder hereof.

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(d)   Market Stand-off Agreement.   The Holder hereby agrees that the Holder
shall not sell or otherwise transfer, make any short sale of, grant any option
for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, of any Common Stock (or other securities) of the
Company held by the Holder (other than those included in the registration)
during the one hundred eighty (180) day period following the effective date of a
registration statement of the Company filed under the Securities Act (or such
other period as may be requested by the Company or an underwriter to accommodate
regulatory restrictions on the publication or other distribution of research
reports and analyst recommendations and opinions, including, but not limited to,
the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4));
provided, that all officers and directors of the Company and holders of at least
one percent (1%) of the Company’s voting securities are bound by and have
entered into similar agreements. The obligations described in this clause (d)
shall not apply to a registration relating solely to employee benefit plans on
Form S-l or Form S-8 or similar forms that may be promulgated in the future, or
a registration relating solely to a transaction on Form S-4 or similar forms
that may be promulgated in the future. The Company may impose stop-transfer
instructions and may stamp each such certificate with the second legend set
forth in clause (a) above with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of such one
hundred eighty (180) day or other period. The Holder agrees to execute a market
standoff agreement with said underwriters in customary form consistent with the
provisions of this clause (d).
9.    Rights as Shareholders; Information.   No Holder, as a holder of this
Warrant, shall be entitled to vote or receive dividends or be deemed the holder
of Series Preferred or any other securities of the Company which may at any time
be issuable upon the exercise or conversion hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised or
converted and the Shares purchasable upon the exercise or conversion hereof
shall have become deliverable, as provided herein. Notwithstanding the
foregoing, the Company will transmit to the Holder such information, documents
and reports as are generally distributed to the holders of any class or series
of the securities of the Company concurrently with the distribution thereof to
the shareholders. In addition, the Company agrees to provide in a timely manner
any information reasonably requested by the Holder to enable the Holder and its
affiliates to comply with their accounting reporting requirements.
10.    Additional Rights.
(a)   Acquisition Transactions.   The Company shall provide the Holder with at
least twenty (20) days' written notice prior to closing thereof of the terms and
conditions of any of the following transactions (to the extent the Company has
notice thereof): (i) the sale, lease, exchange, conveyance or other disposition
of all or substantially all of the Company's property or business, or (ii) its
merger into or consolidation with any other corporation (other than a
wholly-owned subsidiary of the Company), or any transaction (including a merger
or other reorganization) or series of related transactions, in which more than
50% of the voting power of the Company is disposed of.
(b)   Exercise Prior to Expiration.   To the extent this Warrant is not
previously exercised as to all of the Shares subject hereto, and if the fair
market value of one share of the Series Preferred is greater than the Warrant
Price then in effect, this Warrant shall be deemed automatically exercised
pursuant to Section 3(b) above (even if not surrendered) immediately before its
expiration. For purposes of such automatic exercise, the fair market value of
one share of the Series Preferred upon such expiration shall be determined
pursuant to Section 3(b). To the extent this Warrant or any portion thereof is
deemed automatically exercised pursuant to this Section 10(b), the Company
agrees to promptly notify the Holder of the number of Shares, if any, the Holder
is to receive by reason of such automatic exercise.
11.    Representations and Warranties.   The Company represents and warrants to
the Holder as of the Date of Grant as follows:
(a)   This Warrant has been duly authorized and executed by the Company and is a
valid and binding obligation of the Company enforceable in accordance with its
terms, subject to laws of general application relating to

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bankruptcy, insolvency and the relief of debtors and the rules of law or
principles at equity governing specific performance, injunctive relief and other
equitable remedies.
(b)   The Shares have been duly authorized and reserved for issuance by the
Company and, when issued in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and free from preemptive rights.
(c)   The rights, preferences, privileges and restrictions granted to or imposed
upon the Series Preferred and the holders thereof are as set forth in the
Charter, and on the Date of Grant, each share of the Series Preferred
represented by this Warrant is convertible into one share of Common Stock.
(d)   The shares of Common Stock issuable upon conversion of the Shares have
been duly authorized and reserved for issuance by the Company and, when issued
in accordance with the terms of the Charter will be validly issued, fully paid
and nonassessable.
(e)   The execution and delivery of this Warrant are not, and the issuance of
the Shares upon exercise of this Warrant in accordance with the terms hereof
will not be, inconsistent with the Company's Charter or by-laws, do not and will
not contravene any law, governmental rule or regulation, judgment or order
applicable to the Company, and do not and will not conflict with or contravene
any provision of, or constitute a default under, any indenture, mortgage,
contract or other instrument of which the Company is a party or by which it is
bound or require the consent or approval of, the giving of notice to, the
registration or filing with or the taking of any action in respect of or by, any
Federal, state or local government authority or agency or other person, except
for the filing of notices pursuant to federal and state securities laws, which
filings will be effected by the time required thereby.
(f)   There are no actions, suits, audits, investigations or proceedings pending
or, to the knowledge of the Company, threatened against the Company in any court
or before any governmental commission, board or authority which, if adversely
determined, could have a material adverse effect on the ability of the Company
to perform its obligations under this Warrant.
(g)   The number of shares of Common Stock of the Company outstanding on the
Date of Grant, on a fully diluted basis (assuming the conversion of all
outstanding convertible securities and the exercise of all outstanding options
and warrants), does not exceed 25,452,332 shares.
12.    Modification and Waiver.   This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
13.    Notices.   Any notice, request, communication or other document required
or permitted to be given or delivered to the Holder or the Company shall be
delivered, or shall be sent by certified or registered mail, postage prepaid, to
the Holder at its address as shown on the books of the Company or to the Company
at the address indicated therefor on the signature page of this Warrant. Such
notice, request, communication or other document may also be delivered by any
other means of transmission so long as reasonable confirmation of receipt by the
addressee is obtained.
14.    Binding Effect on Successors.   This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Series Preferred issuable upon the exercise or
conversion of this Warrant shall survive the exercise, conversion and
termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the Holder.
15.    Lost Warrants or Stock Certificates.   The Company covenants to the
Holder that, upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate,

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the Company will make and deliver a new Warrant or stock certificate, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.
16.    Descriptive Headings.   The descriptive headings of the various Sections
of this Warrant are inserted for convenience only and do not constitute a part
of this Warrant. The language in this Warrant shall be construed as to its fair
meaning without regard to which party drafted this Warrant.
17.    Governing Law.   This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of California.
18.    Survival of Representations, Warranties and Agreements.   All
representations and warranties of the Company and the Holder contained herein
shall survive the Date of Grant, the exercise or conversion of this Warrant (or
any part hereof) or the termination or expiration of rights hereunder. All
agreements of the Company and the Holder contained herein shall survive
indefinitely until, by their respective terms, they are no longer operative.
19.    Remedies.   In case any one or more of the covenants and agreements
contained in this Warrant shall have been breached, the Holder (in the case of a
breach by the Company), or the Company (in the case of a breach by the Holder),
may proceed to protect and enforce their or its rights either by suit in equity
and/or by action at law, including, but not limited to, an action for damages as
a result of any such breach and/or an action for specific performance of any
such covenant or agreement contained in this Warrant.
20.    Severability.   The invalidity or unenforceability of any provision of
this Warrant in any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction, or affect any other provision of
this Warrant, which shall remain in full force and effect.
21.    Recovery of Litigation Costs.   If any legal action or other proceeding
is brought for the enforcement of this Warrant, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Warrant, the successful or prevailing party or parties shall
be entitled to recover reasonable attorneys' fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled.
22.    Entire Agreement.   This Warrant constitutes the entire agreement between
the parties pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations, and undertakings of the
parties, whether oral or written, with respect to such subject matter.

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The Company has caused this Warrant to be duly executed and delivered as of the
Date of Grant specified above.
TRANSPHORM, INC.
 
 
 
 
By
/s/ Primit Parikh
Title
PRESIDENT & COO
Address:
115 Castilian Drive
Goleta CA - 93117

Signature Page to Warrant

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Execution
EXHIBIT A-1
NOTICE OF EXERCISE
To:    TRANSPHORM, INC. (the “Company”)
1.    The undersigned hereby:
¨
elects to purchase _________ shares of Series Preferred Stock of the Company
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the purchase price of such shares in full, or
 
 
¨
elects to exercise its net issuance rights pursuant to Section 3(b) of the
attached Warrant with respect to __________ Shares of Series Preferred Stock.

2.    Please issue a certificate or certificates representing __________ shares
in the name of the undersigned or in such other name or names as are specified
below:
 
(Name)
 
 
 
(Address)

3.    The undersigned represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares, all except as in
compliance with applicable securities laws. The undersigned confirms and
acknowledges the investment representations, warranties and covenants made in
Section 8(a) of the Warrant continue to be true as of the date hereof and agrees
to comply with the covenants of the Holder set forth in the Warrant.
 
(Signature)

 
(Date)

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EXHIBIT A-2
NOTICE OF EXERCISE
To:    TRANSPHORM, INC. (the "Company")
1.    Contingent upon and effective immediately prior to the closing (the
"Closing") of the Company's public offering contemplated by the Registration
Statement on Form S___ , filed_______, 200__, the undersigned hereby:
¨    elects to purchase________shares of Series Preferred Stock of the Company
(or such lesser number of shares as may be sold on behalf of the undersigned at
the Closing) pursuant to the terms of the attached Warrant, or
¨    elects to exercise its net issuance rights pursuant to Section 3(b) of the
attached Warrant with respect to________Shares of Series Preferred Stock.
2.    Please deliver to the custodian for the selling shareholders a stock
certificate representing such________shares.
3.    The undersigned has instructed the custodian for the selling shareholders
to deliver to the Company $________or, if less, the net proceeds due the
undersigned from the sale of shares in the aforesaid public offering. If such
net proceeds are less than the purchase price for such shares, the undersigned
agrees to deliver the difference to the Company prior to the Closing.
 
(Signature)

 
(Date)

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EXHIBIT B
CHARTER