DEFAULT
WAIVER AND FOURTH AMENDMENT

    TO

    LOAN
AND SECURITY AGREEMENT

    


    THIS DEFAULT WAIVER AND FOURTH
AMENDMENT TO LOAN AND
SECURITY AGREEMENT (this “Amendment”) is made as of
December 31, 2008 (the “Amendment Effective Date”)
between SILICON VALLEY
BANK, a California chartered bank, with its principal place of business
at 3003 Tasman Drive, Santa Clara, California 95054 (“Bank”) and GIGOPTIX, LLC, an Idaho
limited liability company (“Borrower,”) whose address is
2400 Geng Rd., Suite 100, Palo Alto, CA 94303.

     

    Recitals

     

    A.           Bank
and Borrower have entered into that certain Loan and Security Agreement dated as
of October 5, 2007, as amended by that certain First Amendment to Loan and
Security Agreement dated as of August 21, 2008, that certain Default Waiver and
Second Amendment to Loan and Security Agreement dated as of September 26, 2008,
and that certain Third Amendment to Loan and Security Agreement dated as of
October 27, 2008 (the “Existing
Loan Agreement.”)

     

    B.           Bank
has extended credit to Borrower for the purposes permitted in the Existing Loan
Agreement.

     

    C.           Borrower
is in default under the Existing Loan Agreement. Borrower has requested that
Bank waive the default and extend the maturity of the Existing Loan Agreement as
more fully set forth herein.

     

    D.           Bank
has agreed to waive one specific default and to extend the maturity of the Loan
Agreement, but only to the extent, in accordance with the terms, subject to the
conditions and in reliance upon the representations and warranties set forth in
this Amendment.

     

    Agreement

     

    Now,
Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which are acknowledged, and
intending to be legally bound, the parties hereto agree as follows:

     

    1.           Definitions.  Capitalized
terms used but not defined in this Amendment shall have the meanings given to
them in the Existing Loan Agreement.  The Existing Loan Agreement, as
modified by this Amendment, and as it may be further amended from time to time
in a writing signed by the parties, is sometimes referred to herein as the
“Loan
Agreement.”

     

    2.           Amendments
to Existing Loan Agreement.

     

    2.1           Section 13 (Definitions).  The
following term and its definition set forth in Section 13.1 are amended
in their entirety and replaced with the following:

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    “Maturity
Date” is
February 28, 2009.

    


    2.2           Section 13
(Definitions).  The following term and its definition are added
to Section 13.1:

     

    “Guarantor” is any present or future
guarantor of the Obligations.

     

    2.3           Section
2.1.1(f)    Maturity.    Section
2.1.1(f) of the Existing Loan Agreement is deleted in its entirety and is
replaced by the following:

     

    (f)           Maturity.  Unless
otherwise terminated pursuant to subsection 2.1(g) or (h) below, this Agreement
shall terminate and all Obligations outstanding hereunder shall be immediately
due and payable on the Maturity Date.

     

    2.4           Section  6.5(a)  Accounts.  Section
6.5(a) is deleted in its entirety and replaced by the following:

     

    (a)           To permit Bank to monitor
Borrower’s financial performance and condition, Borrower and all of Borrower’s
United States Subsidiaries shall maintain their primary operating deposit
accounts and securities accounts with Bank and Bank’s
affiliates.  Borrower shall maintain at least $800,000 on deposit with
Bank and Bank’s affiliates at all times.  Each Guarantor shall
maintain all of its depository, operating and securities accounts with Bank,
Bank’s affiliates, or the depository institutions specified in the Perfection
Certificate delivered to Bank in connection with the Default Waiver and Fourth
Amendment to Loan and Security Agreement between Borrower and
Bank.

     

    3.           Acknowledgement
of Defaults; Consent to Merger.

     

    3.1           Borrower
acknowledges that it is in default under Section 7.3 of the Existing Loan
Agreement.  Borrower completed its merger with an affiliate of Lumera
Corporation without obtaining Bank’s prior consent (the “Existing
Default.”)

     

    3.2           Borrower
has asked Bank to extend the maturity to February 28, 2009, to waive the
Existing Default, and to consent to the merger.  Subject to the terms
and conditions and in reliance on the representations and warranties set forth
in this Amendment: (a) Bank agrees to amend the Existing Loan Agreement to
extend the maturity, as set forth in Section 2.2
above;  (b) Bank waives the Existing Default; and (c) Bank consents to
the merger.  Bank reserves each of its rights and remedies, including
without limitation its rights to terminate the Loan Agreement, accelerate the
maturity, and exercise its creditor remedies, if any Event of Default occurs
after the Effective Date of this Amendment, or if any Event of Default of which
Bank is unaware has occurred as of the Effective Date.

     

    4.           Limitation
of Amendment, Waiver and Consent.

     

    4.1           The
amendment set forth in Section 2 above, and the
waiver and consent set forth in Section 3 above, are effective
only for the purposes set forth herein and shall be limited precisely as written
and shall not be deemed to (a) be a consent to any other default or any
amendment, waiver or modification of any other term or condition of any Loan
Document, or (b) otherwise prejudice any right or remedy which Bank may now
have or may have in the future under or in connection with any Loan
Document.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    4.2           This
Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.

     

    5.           Representations and
Warranties.  To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:

     

    5.1           Immediately
after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred
and is continuing;

     

    5.2           Borrower
has the power and authority to execute and deliver this Amendment and to perform
its obligations under the Existing Loan Agreement, as amended by this
Amendment;

     

    5.3           The
organizational documents of Borrower delivered to Bank contemporaneously and in
connection with the execution of this Amendment are true, accurate and complete
and have not been amended, supplemented or restated and are and continue to be
in full force and effect;

     

    5.4           The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Existing Loan Agreement, as amended by
this Amendment, have been duly authorized;

     

    5.5           The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Existing Loan Agreement, as amended by
this Amendment, do not and will not contravene (a) any law or regulation
binding on or affecting Borrower, (b) any contractual restriction with a
Person binding on Borrower, (c) any order, judgment or decree of any court
or other governmental or public body or authority, or subdivision thereof,
binding on Borrower, or (d) the organizational documents of
Borrower;

     

    5.6           The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Existing Loan Agreement, as amended by
this Amendment, do not require any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as already has been obtained or
made;

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    5.7           The
Current Report on Form 8-K filed by GigOptix, Inc. with the Securities and
Exchange Commission on December 10, 2008 (the “Form 8-K”) accurately describes
the transaction taking place involving the Borrower, GigOptix, Inc. and Lumera
Corporation, (the “merger”).  Borrower’s corporate structure continues
to be as described in that Form 8-K.  Borrower is a separate legal
entity, wholly owned by GigOptix, Inc. a Delaware corporation, which also owns
Lumera Corporation.  With the exception of certain deposit accounts
identified in the Perfection Certificate, Borrower owns substantially the same
assets, and it operates substantially the same business, as it did before the
merger.  Borrower has assumed no debt or other liabilities of
GigOptix, Inc. or Lumera Corporation.  There is no inter-company debt
between Borrower and any of its affiliates;

     

    5.8           Stellar
Technologies, LLC has cancelled all Subordinated Debt of Borrower, and has
converted the Subordinated Debt to equity.  Borrower is not indebted
to Stellar Technologies in any amount; and

     

    5.9           
This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms.

     

    6.           Release by
Borrower.

     

    6.1           FOR GOOD AND VALUABLE
CONSIDERATION, Borrower hereby forever relieves, releases, and discharges
Bank and its present or former employees, officers, directors, agents,
representatives, attorneys, and each of them, from any and all claims, debts,
liabilities, demands, obligations, promises, acts, agreements, costs and
expenses, actions and causes of action, of every type, kind, nature, description
or character whatsoever, whether known or unknown, suspected or unsuspected,
absolute or contingent, arising out of or in any manner whatsoever connected
with or related to facts, circumstances, issues, controversies or claims
existing or arising from the beginning of time through and including the date of
execution of this Amendment (collectively “Released
Claims”).  Without limiting the foregoing, the Released Claims
shall include any and all liabilities or claims arising out of or in any manner
whatsoever connected with or related to the Loan Documents, the Recitals hereto,
any instruments, agreements or documents executed in connection with any of the
foregoing or the origination, negotiation, administration, servicing and/or
enforcement of any of the foregoing.

     

    6.2           In
furtherance of this release, Borrower expressly acknowledges and waives any and
all rights under Section 1542 of the California Civil Code, which provides as
follows:

     

    “A general release does not
extend to claims which the creditor does not know or expect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” (Emphasis
added.)

     

    6.3           By
entering into this release, Borrower recognizes that no facts or representations
are ever absolutely certain and it may hereafter discover facts in addition to
or different from those which it presently knows or believes to be true, but
that it is the intention of Borrower hereby to fully, finally and forever settle
and release all matters, disputes and differences, known or unknown, suspected
or unsuspected; accordingly, if Borrower should subsequently discover that any
fact that it relied upon in entering into this release was untrue, or that any
understanding of the facts was incorrect, Borrower shall not be entitled to set
aside this release by reason thereof, regardless of any claim of mistake of fact
or law or any other circumstances whatsoever.  Borrower acknowledges
that it is not relying upon and has not relied upon any representation or
statement made by Bank with respect to the facts underlying this release or with
regard to any of such party’s rights or asserted rights.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    6.4           This
release may be pleaded as a full and complete defense and/or as a
cross-complaint or counterclaim against any action, suit, or other proceeding
that may be instituted, prosecuted or attempted in breach of this
release.  Borrower acknowledges that the release contained herein
constitutes a material inducement to Bank to enter into this Amendment, and that
Bank would not have done so but for Bank’s expectation that such release is
valid and enforceable in all events.

     

    6.5           Borrower
hereby represents and warrants to Bank, and Bank is relying thereon, as
follows:

     

    (a)           Except
as expressly stated in this Amendment, neither Bank nor any agent, employee or
representative of Bank has made any statement or representation to Borrower
regarding any fact relied upon by Borrower in entering into this
Amendment.

     

    (b)           Borrower
has made such investigation of the facts pertaining to this Amendment and all of
the matters appertaining thereto, as it deems necessary.

     

    (c)           The
terms of this Amendment are contractual and not a mere recital.

     

    (d)           This
Amendment has been carefully read by Borrower, the contents hereof are known and
understood by Borrower, and this Amendment is signed freely, and without duress,
by Borrower.

     

    (e)           Borrower
represents and warrants that it is the sole and lawful owner of all right, title
and interest in and to every Released Claim and every other matter which it
releases herein, and that it has not heretofore assigned or transferred, or
purported to assign or transfer, to any person, firm or entity any Released
Claims or other matters herein released.  Borrower shall indemnify
Bank, defend and hold it harmless from and against all claims based upon or
arising in connection with prior assignments or purported assignments or
transfers of any Released Claims or matters released herein.

    


    7.           Integration.  This
Amendment and the Loan Documents represent the entire agreement about this
subject matter and supersede prior negotiations or agreements.  All
prior agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Amendment and the Loan
Documents merge into this Amendment and the Loan Documents.

     

    8.           Counterparts.  This
Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    9.           Effectiveness.  This
Amendment shall be deemed effective as of the “Amendment Effective Date,”
which is the date set forth in the preamble hereto, provided that each of the
following conditions precedent has been satisfied: (a) the due execution and
delivery of this Amendment by Borrower and Bank; (b) Borrower has provided an
updated perfection certificate and borrowing resolutions, and such other
instruments, agreements and other items as Bank may request; (c) GigOptix, Inc.
has executed and delivered to Bank an unconditional guaranty of Borrower’s
Obligations, and GigOptix, Inc. has issued and delivered to Bank a new warrant
to replace the Warrant that was issued in 2007, which guaranty and warrant shall
be in form and substance satisfactory to Bank; and (d) Bank shall have
received from Borrower an amendment fee in an amount equal to $3,000, and Bank’s
legal fees and costs in connection with the preparation of this Amendment and
related searches and filings.

     

    [Signature
page follows.]


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    In Witness
Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

    


    
      
        	
                BANK

              	 
      	
                BORROWER

              
	 
      	 
      	 
      
	
                Silicon
      Valley Bank

              	 
      	
                GIGOPTIX,
      LLC,

              
	 
      	 
      	
                an
      Idaho limited liability company

              
	 
      	 
      	 
      
	
                By:  

              	
                              /s/
      Liam Fairbairn

              	 
      	
                By:  

              	
                              /s/
      Avi S. Katz

              
	
                Name: Liam
      Fairbairn

              	 
      	
                Name: Avi
      S. Katz

              
	
                Title:  
      Relationship Manager

              	 
      	
                Title:  President