1.3 Fair Market Value. The fair market value of each Share shall be the closing priceof a Share reported for the business day immediately before Holder delivers this Warrant togetherwith its Notice of Exercise to the Company.          1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises orconverts this Warrant and, if applicable, the Company receives payment of the aggregate WarrantPrice, the Company shall deliver to Holder certificates for the Shares acquired and, if thisWarrant has not been fully exercised or converted and has not expired, a new Warrant representingthe Shares not so acquired.          1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to theCompany 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 andamount to the Company or, in the case of mutilation on surrender and cancellation of this Warrant,the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.          1.6 Treatment of Warrant Upon Acquisition of Company.               1.6.1 “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale,license, or other disposition of all or substantially all of the assets of the Company, or anyreorganization, consolidation, or merger of the Company where the holders of the Company’ssecurities before the transaction beneficially own less than 50% of the outstanding votingsecurities of the surviving entity after the transaction.               1.6.2 Treatment of Warrant at Acquisition.A) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition thatis not an asset sale and in which the sole consideration is cash, either (a) Holder shall exerciseits conversion or purchase right under this Warrant and such exercise will be deemed effectiveimmediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercisethe Warrant, this Warrant will expire upon the consummation of such Acquisition. The Company shallprovide the Holder with written notice of its request relating to the foregoing (together with suchreasonable information as the Holder may request in connection with such contemplated Acquisitiongiving rise to such notice), which is to be delivered to Holder not less than ten (10) days priorto the closing of the proposed Acquisition.B) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition thatis an “arms length” sale of all or substantially all of the Company’s assets (and only its assets)to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset Sale”),either (a) Holder shall exercise its conversion or purchase right under this Warrant and suchexercise will be deemed effective immediately prior to the consummation of such Acquisition or (b)if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Dateif the Company continues as a going concern following the closing of any such True Asset Sale. TheCompany shall provide the Holder with written notice of its request relating to the foregoing(together with such reasonable information as the Holder may request in connection with suchcontemplated Acquisition giving rise to such notice), which is to be delivered to Holder not lessthan ten (10) days prior to the closing of the proposed Acquisition.
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C) Upon the written request of the Company, Holder agrees that, in the event of a stock for stock(or stock and cash) Acquisition of the Company by a publicly traded acquirer if, on the record datefor the Acquisition, the fair market value of the Shares (or other securities issuable uponexercise of this Warrant) is equal to or greater than three (3) times the Warrant Price, theCompany may require the Warrant to be deemed converted pursuant to Article 1.2 hereof and theHolder shall participate in the Acquisition as a holder of the Shares (or other securities issuableupon exercise of the Warrant) on the same terms as other holders of the same class of securities ofthe Company.D) Upon the closing of any Acquisition other than those particularly described in subsections (A),(B) and (C) above, the successor entity shall assume the obligations of this Warrant, and thisWarrant shall be exercisable for the same securities, cash, and property as would be payable forthe Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares wereoutstanding on the record date for the Acquisition and subsequent closing. The Warrant Priceand/or number of Shares shall be adjusted accordingly.As used herein “Affiliate” shall mean any person or entity that owns or controls directlyor indirectly ten (10) percent or more of the stock of Company, any person or entity that controlsor is controlled by or is under common control with such persons or entities, and each of suchperson’s or entity’s officers, directors, joint venturers or partners, as applicable.ARTICLE 2. ADJUSTMENTS TO THE SHARES.          2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on theshares of its common stock payable in common stock, or other securities, then upon exercise of thisWarrant, for each Share acquired, Holder shall receive, without cost to Holder, the total numberand kind of securities to which Holder would have been entitled had Holder owned the Shares ofrecord as of the date the dividend occurred. If the Company subdivides the shares of its commonstock by reclassification or otherwise into a greater number of shares or takes any other actionthat causes the outstanding shares of its common stock to become converted into a greater number ofshares of common stock, the number of Shares shall be proportionately increased and the WarrantPrice shall be proportionately decreased. If the outstanding shares of the Company’s common stockare combined or consolidated, by reclassification or otherwise, into a lesser number of shares, theWarrant Price shall be proportionately increased and the number of Shares shall be proportionatelydecreased.          2.2 Reclassification, Exchange, Combinations or Substitution. Upon anyreclassification, exchange, substitution, or other event that results in a change of the numberand/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shallbe entitled to receive, upon exercise or conversion of this Warrant, the number and kind ofsecurities and property that Holder would have received for the Shares if this Warrant had beenexercised or converted immediately before such reclassification, exchange, substitution, or otherevent. The Company or its successor shall promptly issue to Holder an amendment to this Warrantsetting forth the number and kind of such new securities or other property issuable upon exerciseor conversion of this Warrant as a result of such reclassification, exchange, substitution or otherevent that results in a change of the number and/or class of securities issuable upon exercise orconversion of this Warrant and the amended Warrant Price. The amendment to this Warrant shallprovide for adjustments which shall be as nearly equivalent as may be practicable to theadjustments provided for in this Article 2 including, without limitation, adjustments to theWarrant Price and to the number of securities or property issuable uponexercise of the new Warrant. The provisions of this Article 2.2 shall similarly apply tosuccessive reclassifications, exchanges, substitutions, or other events.
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          2.3 Intentionally Omitted.          2.4 No Impairment. The Company shall not, by amendment of its Certificate ofIncorporation 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 observanceor 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 2and in taking all such action as may be necessary or appropriate to protect Holder’s rights underthis Article against impairment.          2.5 Fractional Shares. No fractional Shares shall be issuable upon exercise orconversion of this Warrant and the number of Shares to be issued shall be rounded down to thenearest whole Share. If a fractional share interest arises upon any exercise or conversion of theWarrant, the Company shall eliminate such fractional share interest by paying Holder the amountcomputed by multiplying the fractional interest by the fair market value of a full Share computedas set forth in Article 1.3 above.          2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, theCompany shall promptly notify Holder in writing, and, at the Company’s expense, promptly computesuch adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forthsuch adjustment and the facts upon which such adjustment is based. The Company shall, upon writtenrequest, furnish Holder a certificate setting forth the Warrant Price in effect upon the datethereof and the series of adjustments leading to such Warrant Price.ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.          3.1 Representations and Warranties. The Company represents and warrants and covenantsto the Holder as follows: all Shares which may be issued upon the exercise of the purchase rightrepresented by this Warrant shall, upon issuance, be duly authorized, validly issued, fully paidand nonassessable, and free of any liens and encumbrances except for restrictions on transferprovided 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 anydividend or distribution upon any of its stock, whether in cash, property, stock, or othersecurities and whether or not a regular cash dividend; (b) to offer for sale to stockholdersgenerally any shares of the Company’s capital stock (or other securities convertible into suchcapital stock), other than (i) pursuant to the Company’s stock option or other compensatory plans,(ii) in connection with commercial credit arrangements or equipment financings, or (iii) inconnection with strategic transactions for purposes other than capital raising; (c) to effect anyreclassification or recapitalization of any of its stock; (d) to merge or consolidate with or intoany other corporation, or sell, lease, license, or convey all or substantially all of its assets,or to liquidate, dissolve or wind up, then, in connection with each such event, the Company shallgive Holder: (1) at least 10 days prior written notice of the date on which a record will be takenfor such dividend, distribution, or subscription rights (and specifying the date on which theholders of common stock will be entitled thereto) or for determining rights to vote, if any, inrespect of the matters referred to in (a) and (b) above; and (2) in the case of the mattersreferred to in (c) and (d) above at least 10 days prior written notice of the date when the samewill take place (and specifying the date on which the holders of common stock will be entitled toexchange their
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common stock for securities or other property deliverable upon the occurrence of such event).Company will also provide information requested by Holder reasonably necessary to enable the Holderto comply with the Holder’s accounting or reporting requirements.          3.3 No Shareholder Rights. Except as provided in this Warrant, the Holder will nothave any rights as a shareholder of the Company until the exercise of this Warrant.ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and warrantsto the Company as follows:          4.1 Purchase for Own Account. This Warrant and the securities to be acquired uponexercise of this Warrant by the Holder will be acquired for investment for the Holder’s account,not as a nominee or agent, and not with a view to the public resale or distribution within themeaning of the Act. Holder also represents that the Holder has not been formed for the specificpurpose of acquiring this Warrant or the Shares.          4.2 Disclosure of Information. The Holder has received or has had full access to allthe information it considers necessary or appropriate to make an informed investment decision withrespect to the acquisition of this Warrant and its underlying securities. The Holder further hashad an opportunity to ask questions and receive answers from the Company regarding the terms andconditions of the offering of this Warrant and its underlying securities and to obtain additionalinformation (to the extent the Company possessed such information or could acquire it withoutunreasonable effort or expense) necessary to verify any information furnished to the Holder or towhich the Holder has access.          4.3 Investment Experience. The Holder understands that the purchase of this Warrantand its underlying securities involves substantial risk. The Holder has experience as an investorin securities of companies in the development stage and acknowledges that the Holder can bear theeconomic risk of such Holder’s investment in this Warrant and its underlying securities and hassuch knowledge and experience in financial or business matters that the Holder is capable ofevaluating the merits and risks of its investment in this Warrant and its underlying securitiesand/or has a preexisting personal or business relationship with the Company and certain of itsofficers, directors or controlling persons of a nature and duration that enables the Holder to beaware of the character, business acumen and financial circumstances of such persons.          4.4 Accredited Investor Status. The Holder is an “accredited investor” within themeaning of Regulation D promulgated under the Act.          4.5 The Act. The Holder understands that this Warrant and the Shares issuable uponexercise or conversion hereof have not been registered under the Act in reliance upon a specificexemption therefrom, which exemption depends upon, among other things, the bona fide nature of theHolder’s investment intent as expressed herein. The Holder understands that this Warrant and theShares issued upon any exercise or conversion hereof must be held indefinitely unless subsequentlyregistered under the Act and qualified under applicable state securities laws, or unless exemptionfrom such registration and qualification are otherwise available.
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ARTICLE 5. MISCELLANEOUS.          5.1 Term. This Warrant is exercisable in whole or in part at any time and from timeto time on or before the Expiration Date.          5.2 Legends. This Warrant and the Shares shall be imprinted with a legend insubstantially the following form:THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATEAND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED,SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTEREDUNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGALCOUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCHOFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.          5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuableupon exercise of this Warrant may not be transferred or assigned in whole or in part withoutcompliance with applicable federal and state securities laws by the transferor and the transferee(including, without limitation, the delivery of investment representation letters and legalopinions reasonably satisfactory to the Company, as reasonably requested by the Company). TheCompany shall not require [Silicon Valley Bank (“Bank”)][Holder] to provide an opinion of counselif the transfer is to [Bank’s parent company, SVB Financial Group (formerly Silicon ValleyBancshares), or any other affiliate of Bank][any affiliate of Holder]. Additionally, the Companyshall also not require an opinion of counsel if there is no material question as to theavailability of Rule 144, including, without limitation, current information as referenced in Rule144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, theselling broker represents that it has complied with Rule 144(f), and the Company is provided with acopy of Holder’s notice of proposed sale.          5.4 Transfer Procedure. After receipt by Holder of the executed Warrant, [Bank willtransfer all of this Warrant to Holder’s parent company, SVB Financial Group][Holder may transferthis Warrant to any affiliate of Holder], by execution of an Assignment substantially in the formof Appendix 2. Subject to the provisions of Article 5.3 and upon providing Company with writtennotice, [SVB Financial Group and any subsequent Holder][any subsequent Holder] may transfer all orpart of this Warrant or the Shares issuable upon exercise of this Warrant (or the Shares issuabledirectly or indirectly, upon conversion of the Shares, if any) to any transferee, provided,however, in connection with any such transfer, [SVB Financial Group or any subsequent Holder][anysubsequent Holder] will give the Company notice of the portion of the Warrant being transferredwith the name, address and taxpayer identification number of the transferee and Holder willsurrender this Warrant to the Company for reissuance to the transferee(s) (and Holder ifapplicable).          5.5 Notices. All notices and other communications from the Company to the Holder, orvice versa, shall be deemed delivered and effective when given personally or mailed by first-classregistered or certified mail, postage prepaid, at such address as may have been furnished to theCompany or the Holder, as the case may (or on the first business day after transmission byfacsimile) be, in writing by the Company or such Holder from time to time.
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Effective upon receipt of the fully executed Warrant and the initial transfer described inArticle 5.4 above, all notices to the Holder shall be addressed as follows until the Companyreceives notice of a change of address in connection with a transfer or otherwise:[SVB Financial Group