Document:

exv10w16

 

Exhibit 10.16

FIRST AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

     THIS FIRST AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into this 24
day of October, 2006, by and among Silicon Valley Bank (“SVB”), as Lender and as Agent, Gold Hill
Venture Lending 03, LP (“Gold Hill”) and Cavium Networks, a California corporation (“Borrower”)
whose address is 805 E. Middlefield Road, Mountain View, California 94043.

Recitals

     A. SVB, Gold Hill and Borrower have entered into that certain Loan and Security Agreement
dated as of October 6, 2005 (as the same may from time to time be further amended, modified,
supplemented or restated, the “Loan Agreement”).

     B. SVB and Gold Hill have extended credit to Borrower for the purposes permitted in the Loan
Agreement.

     C. Borrower has requested that Lenders amend the Loan Agreement to (i) lower the interest rate
payable on the Advances, and (ii) with respect to Gold Hill only, eliminate the Final Payment and
Prepayment Fee.

     D. Lenders have agreed to so amend certain provisions 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 below.

Agreement

     Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby 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 Loan Agreement.

2. Amendments to Loan Agreement.

     2.1 Section 2.3 (Interest Rate, Payments). Section 2.3(c) is amended in its entirety and
replaced with the following:

     (c) Interest Rate. Borrower shall pay interest on each Payment Date
on the unpaid principal amount of each Advance until the Advance has been paid in
full, at the fixed rate equal to: (1) from the Funding Date through October 31,
2006, twelve percent (12%) per annum, and (2) from November 1, 2006 and
thereafter, ten and one half percent (10.5%) per annum. Interest is computed on
the basis of a three hundred sixty (360) day year for the actual number of days
elapsed. Any amounts outstanding

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during the continuance of an Event of Default shall bear interest at a per
annum rate equal to the applicable rate as set forth above, plus four percent (4%)
(the “Default Rate”).

          2.2 Section 13 (Definitions). The following additional defined terms and their respective
definitions are added in their proper alphabetical order in Section 13.1:

     “Gold Hill’s Term Loan” means the $2,750,000 Advance Gold Hill made to Borrower on
June 19, 2006 pursuant to this Agreement.

     “Maturity Date” is the earliest of (a) June 1, 2009, or (b) the occurrence of an Event
of Default.

     “SVB’s Term Loan” means the $1,250,000 Advance SVB made to Borrower on June 19, 2006
pursuant to this Agreement.

          2.3 Section 13 (Definitions). The following terms and their respective definitions set forth
in Section 13.1 are amended in their entirety and replaced with the following:

     “Final Payment” means the payment (in addition to and not a substitution for the
regularly monthly payments of principal plus accrued interest) due on the Maturity Date in
the amount of $37,500 payable to SVB on account of SVB’s Term Loan. There shall be no Final
Payment as to Gold Hill’s Term Loan.

     “Prepayment Fee” shall be an amount equal to three percent (3.0%) of the amount of
SVB’s Term Loan to be prepaid. There shall be no Prepayment Fee as to Gold Hill’s Term
Loan.

          2.4 Section 13 (Definitions). The definition of “Final Payment Percentage” set forth in
Section 13.1 is deleted.

     3. Limitation of Amendments.

          3.1 The amendments set forth in Section 2, above, are effective 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
amendment, waiver or modification of any other term or condition of any Loan Document, or (b)
otherwise prejudice any right or remedy which Lenders or Agent may now have or may have in the
future under or in connection with any Loan Document.

          3.2 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.

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

          4.1 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;

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

          4.3 The organizational documents of Borrower delivered to Agent in connection with this
Amendment prior to the date hereof remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;

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

          4.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the 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;

          4.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the 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; and

          4.7 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, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to or affecting
creditors’ rights.

     5. 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.

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     6. Lenders’ Expenses. Borrower shall pay all Lenders’ Expenses (including reasonable
attorney’s fees and expenses) incurred in connection with this Amendment in an amount not to exceed
$5,000.

     7. Effectiveness. This Amendment shall be deemed effective upon the satisfaction of all of
the following: (a) the due execution and delivery to Agent of this Amendment by each party hereto,
(b) the consummation of Gold Hill’s purchase from Borrower of 65,000 shares of Borrower’s Series D
Preferred Stock, and (c) the consummation of Gold Hill’s purchase from David Carlson of 50,000
shares of Borrower’s Series B Preferred Stock.

[Signature page follows.]

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

	 	 	 	 	 	 	 	 	 
	LENDERS:	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK, as Agent and as a Lender	 	CAVIUM NETWORKS	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Joseph S. Restago
	 	By:
	 	/s/ Arthur Chadwick	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Joseph S. Restago
	 	Name:
	 	Arthur Chadwick	 	 
	Title:

	 	 	 	Title:
	 	CFO	 	 
	GOLD HILL VENTURE LENDING 03, LP, as Lender	 	 	 	 	 	 
	By: Gold Hill Venture Lending Partners 03, LLC, 

General Partner	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Rob Helm	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	Rob Helm	 	 	 	 	 	 
	Title:

	 	Principal, Gold Hill Capital	 	 	 	 	 	 

5exv10w17

 

Exhibit 10.17

WARRANT TO PURCHASE STOCK

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT
TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

WARRANT TO PURCHASE STOCK

Company: Cavium Networks, a California corporation

Number of Shares: See Section 2.1

Class of Stock: Series B Preferred

Warrant Price:                     

Issue Date:                     

Expiration Date:                      (subject to Section 5.1)

     THIS WARRANT CERTIFIES THAT, for the agreed upon value of                     and for other good and
valuable consideration,                                         (“Holder”) is entitled to purchase the number of fully
paid and nonassessable shares of the class of securities (the “Shares”) of the company (the
“Company”) at the Warrant Price, all as set forth above and as adjusted pursuant to Article 2 of
this Warrant, subject to the provisions and upon the terms and conditions set forth in this
Warrant.

ARTICLE 1. EXERCISE.

     1.1 Method of Exercise. Holder may exercise this Warrant by delivering a duly
executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal
office of the Company. Unless Holder is exercising the conversion right set forth in Article 1.2,
Holder shall also deliver to the Company a check, wire transfer (to an account designated by the
Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for
the Shares being purchased.

     1.2 Conversion Right. In lieu of exercising this Warrant as specified in Article 1.1,
Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares
determined by dividing (a) the aggregate fair market value of the Shares or other securities
otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares shall be determined
pursuant to Article 1.3.

     1.3 Fair Market Value. If the Company’s common stock is traded in a public market and
the shares are common stock, the fair market value of each Share shall be the closing price of a
Share reported for the business day immediately before

 

 

Holder delivers its Notice of Exercise to the Company (or in the instance where the Warrant is
exercised immediately prior to the effectiveness of the Company’s initial public offering, the
“price to public” per share price specified in the final prospectus relating to such offering). If
the Company’s common stock is traded in a public market and the Shares are preferred stock, the
fair market value of a Share shall be the closing price of a share of the Company’s common stock
reported for the business day immediately before Holder delivers its Notice of Exercise to the
Company (or, in the instance where the Warrant is exercised immediately prior to the effectiveness
of the Company’s initial public offering of its common stock effected pursuant to an effective
registration statement on Form S-1 filed under the Act (an “IPO”), the initial “price to public”
per share price specified in the final prospectus relating to such offering), in both cases,
multiplied by the number of shares of the Company’s common stock into which a Share is convertible.
If the Company’s common stock is not traded in a public market, the Board of Directors of the
Company shall determine fair market value in its reasonable good faith judgment.

     1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or
converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant
Price, the Company shall deliver to Holder certificates for the Shares acquired and, if this
Warrant has not been fully exercised or converted and has not expired, a new Warrant representing
the Shares not so acquired.

     1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,
theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

     1.6 Treatment of Warrant Upon Acquisition of Company.

          1.6.1 “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale,
license, or other disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of the Company’s
securities before the transaction beneficially own less than 50% of the outstanding voting
securities of the surviving entity after the transaction.

          1.6.2 Treatment of Warrant at Acquisition.

     A) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition
in which the sole consideration is cash, other than a True Asset Sale, either (a) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise will be deemed
effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to
exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The
Company 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 such
contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less
than ten (10) days prior to the closing of the proposed Acquisition.

 

 

     B) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition
that is an “arms length” sale of all or substantially all of the Company’s assets (and only its
assets) to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset
Sale”), either (a) Holder shall exercise its conversion or purchase right under this Warrant and
such exercise will be deemed effective immediately prior to the consummation of such Acquisition or
(b) if Holder elects not to exercise the Warrant, this Warrant will expire upon the consummation of
such True Asset Sale; provided, however, that this Warrant will continue until the Expiration Date
if the Company continues as a going concern following the closing of any such True Asset Sale. The
Company shall provide 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 such
contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less
than ten (10) days prior to the closing of the proposed Acquisition.

     C) Upon the request of the Company, Holder agrees that, in the event of a stock for stock
Acquisition of the Company by a publicly traded acquirer, if, on the effective date of a definitive
agreement for the Acquisition, the fair market value of the Shares (or other securities issuable
upon the exercise of this Warrant) is equal to or greater than three (3) times the Warrant Price,
the Company may require the Warrant to be deemed automatically exercised and the Holder shall
participate in the Acquisition as a holder of the Shares (or other securities issuable upon the
exercise of this Warrant) on the same terms as other holders of the same class of securities of the
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
this Warrant shall be exercisable for the same securities, cash, and property as would be payable
for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares
were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price
and/or number of Shares shall be adjusted accordingly.

As used herein “Affiliate” shall mean any person or entity that owns or controls directly
or indirectly ten (10) percent or more of the stock of Company, any person or entity that controls
or is controlled by or is under common control with such persons or entities, and each of such
person’s or entity’s officers, directors, joint venturers or partners, as applicable.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

     2.1 Number of Shares. The number of Shares subject to this Warrant shall be equal to
One Hundred Thousand Dollars ($100,000) divided by the Warrant Price as specified above and
adjusted as provided elsewhere herein. The aggregate Warrant Price of this Warrant shall at all
times be One Hundred Thousand Dollars ($100,000) notwithstanding anything in this Warrant to the
contrary or any adjustments under the provisions hereof. No adjustments as provided herein shall
be deemed to alter or adjust such aggregate Warrant Price.

     2.2 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the
Shares payable in common stock, or other securities, then upon exercise of this Warrant, for each
Share acquired, Holder shall receive, without cost to

 

 

Holder, the total number and kind of securities to which Holder would have been entitled had
Holder owned the Shares of record as of the date the dividend occurred. If the Company subdivides
the Shares by reclassification or otherwise into a greater number of shares or takes any other
action which increase the amount of stock into which the Shares are convertible, the number of
shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be
proportionately decreased. If the outstanding shares are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be
proportionately increased and the number of Shares shall be proportionately decreased.

     2.3 Reclassification, Exchange, Combinations or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall
be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of
securities and property that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or other event. Such
an event shall include any automatic conversion of the outstanding or issuable securities of the
Company of the same class or series as the Shares 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 an amendment
to this Warrant setting forth the number and kind of such new securities or other property issuable
upon exercise or conversion of this Warrant as a result of such reclassification, exchange,
substitution or other event that results in a change of the number and/or class of securities
issuable upon exercise or conversion of this Warrant. The amendment to this Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and
to the number of securities or property issuable upon exercise of the new Warrant. The provisions
of this Article 2.3 shall similarly apply to successive reclassifications, exchanges,
substitutions, or other events.

     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 in the Company’s Articles of Incorporation as if the Shares were
issued and outstanding on and as of the date of any such required adjustment. The Shares issuable
upon the exercise of this Warrant and the shares of common stock issuable upon conversion of the
Shares shall in no event be treated differently from other shares of the same series of the
Company’s Preferred Stock or the Company’s common stock issuable upon the conversion of such
Preferred Stock under the Company’s Articles of Incorporation as in effect from time to time.

     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 actions as may

 

 

be necessary or appropriate to protect Holder’s rights under this Article against impairment.

     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 the 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 shall promptly notify Holder in writing, and, at the Company’s expense, promptly compute
such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

     3.1 Representations and Warranties. The Company represents and warrants to the Holder
as follows:

          (a) The initial Warrant Price referenced on the first page of this Warrant is not greater than
the price per share at which the Shares were last issued in an arms-length transaction in which at
least $500,000 of the Shares were sold.

          (b) All Shares which may be issued upon the exercise of the purchase right represented by this
Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and
encumbrances except for restrictions on transfer provided for herein or under applicable federal
and state securities laws.

          (c) The Capitalization Table as of [date] previously provided to Holder remains true and
complete as of the Issue Date.

     3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any
dividend or distribution upon any of its stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend; (b) to offer for sale additional shares of
any class or series of the Company’s stock which such issuance (i) would be subject to Holder’s
pre-emptive right under Section 6.8 of the Loan and Security Agreement between Holder and the
Company dated as of November 1, 2002, (ii) would trigger under the Company’s Articles of
Incorporation, as in effect from time to time, anti-dilution protection for the Preferred Stock
issuable under this Warrant, or (iii) would otherwise cause any other adjustment under the
Company’s Articles of Incorporation, as in effect from time to time, to the shares of Preferred
Stock issuable under this Warrant or the Common Stock issuable upon conversion of such Preferred
Stock; (c) to effect any reclassification or recapitalization of any of its 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 10 days prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on which the holders
of 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 (b),
(c) and (d) above at least 10 days prior written notice of the date when the same will take place
(and specifying the date on which the holders of common stock will be entitled to exchange their
common stock for securities or other property deliverable upon the occurrence of such events
described in (c) and (d)); 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 Registration Under the Act. The Company agrees that the Shares or, if the Shares
are convertible into common stock of the Company, such common stock, shall have certain “Piggyback”
and “S3” registration rights and other rights incidental to such registration rights pursuant to
and as set forth in the Company’s First Amended and Restated Investors’ Rights Agreement dated
April 12, 2000 (the “Investors’ Rights Agreement”) or similar agreement. The provisions set forth
in the Company’s Investors’ Right Agreement or similar agreement relating to the above in effect as
of the Issue Date may not be amended, modified or waived without the prior written consent of
Holder unless such amendment, modification or waiver affects the rights associated with the Shares
in the same manner as such amendment, modification, or waiver affects the rights associated with
all other shares of the same series and class as the Shares granted to the Holder.

     3.4 No Shareholder Rights. Except as provided in this Warrant, the Holder will not
have 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 warrants
to the Company as follows:

     4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon
exercise of this Warrant by 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 the
meaning of the Act. Holder also represents that the Holder has not been formed for the specific
purpose of acquiring this Warrant or the Shares.

     4.2 Disclosure of Information. The Holder has received or has had full access to all
the information it considers necessary or appropriate to make an informed investment decision with
respect to the acquisition of this Warrant and its underlying securities. The 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 the Holder or to
which the Holder has access.

       4.3 Investment Experience. The Holder understands that the purchase of this
Warrant and its underlying securities involves substantial risk. The Holder has experience as an
investor in securities of companies in the development

 

 

stage and acknowledges that the 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 the 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 the Holder to be aware of the character, business acumen and
financial circumstances of such persons.

     4.4 Accredited Investor Status. The Holder is an “accredited investor” within the
meaning of Regulation D promulgated under the Act.

     4.5 The Act. The Holder understands that this Warrant and the Shares issuable upon
exercise or conversion hereof have not been registered un 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. The Holder understands that this Warrant and the
Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently
registered under the Act and qualified under applicable state securities laws, or unless exemption
from such registration and qualification are otherwise available.

ARTICLE 5. MISCELLANEOUS.

     5.1 Term. This Warrant is exercisable in whole or in part at any time and from time
to time from the Issue Date through, if not earlier terminated upon the consummation of an
Acquisition or True Asset Sale, subject to Section 1.6.2, the earlier of (a) the Expiration Date
set forth above or (b) five (5) years after the closing of the Company’s IPO.

     5.2 Legends. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE ACT, OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND
PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF
LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION.

     5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable
upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion
of the Shares, if any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the transferee (including,
without limitation, the delivery of

 

 

investment representation letters and legal opinions reasonably satisfactory to the Company, as
reasonably requested by the Company). The Company shall not require Holder to provide an opinion
of counsel if the transfer is to      (Holder’s parent company) or any other affiliate
of Holder. Additionally, the Company shall also not require an opinion of counsel if there is no
material question as to the availability of current information as referenced in Rule 144(c),
Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling
broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of
Holder’s notice of proposed sale.

     5. 4 Transfer Procedure. Upon receipt by Holder of the executed Warrant,
Holder will transfer all of this Warrant to ___, Holder’s parent company, by execution
of an Assignment substantially in the form of Appendix 2. Subject to the provisions of Article 5.3
and upon providing Company with written notice, ___and any subsequent Holder may
transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the
Shares issuable directly or indirectly, upon conversion of the Shares, if any) to any transferee,
provided, however, in connection with any such transfer, ___or any subsequent
Holder will give the Company notice of the portion of the Warrant being transferred with the name,
address and taxpayer identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable). The Company may
refuse to transfer this Warrant or the Shares to any person who directly competes with the Company,
unless, in either case, the stock of the Company is publicly traded.

     5.5 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 (or on the first business day after transmission by
facsimile) be, in writing by the Company or such holder from time to time. Effective upon receipt
of the fully executed Warrant and the initial transfer described in Article 5.4 above, all notices
to the Holder shall be addressed as follows until the Company receives notice of a change of
address in connection with a transfer or otherwise:

     Notice to the Company shall be addressed as follows until the Holder receives notice of a
change in address:

Cavium Networks

2610 Augustine Drive

Santa Clara, CA 95054

Attn: Chief Financial Officer

Telephone: 408-844-8420

Facsimile: 408-844-8418

     5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.

 

 

     5.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the
terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to
collect from the other party all costs incurred in such dispute, including reasonable attorneys’
fees.

     5.8 Notice of Expiration Date. In the event that Holder has not exercised all of this
Warrant, sixty (60) days prior to the Expiration Date, the Company shall send Holder notice in
accordance with Section 5.5 above of (a) the fair market value of one Share (or other security
issuable upon the exercise hereof) as determined in accordance with Section 1.3 above, and (b) the
Expiration Date. In the event that the Company fails to comply with this Section 5.8, the
Expiration Date shall be extended by a number of days sufficient that Holder will at all times have
received the 60-day notice period contemplated by this Section 5.8 prior to the Expiration Date..

     5.9 Counterparts. This Warrant may be executed in counterparts, all of which together
shall constitute one and the same agreement.

     5.10 Governing Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to its principles regarding
conflicts of law.

Cavium Networks

			
	By:	 	
 

			
	Name:	 	
 
(Print)

Title:

Holder

			
	By:	 	
 

			
	Name:	 	
 
(Print)

			
	Title:	 	
 

 

 

APPENDIX 1

NOTICE OF EXERCISE

     1. Holder elects to purchase ___shares of the Series B Preferred Stock of
___pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.

[or]

     1. Holder elects to convert the attached Warrant into Shares/cash [strike one] in the manner
specified in the Warrant. This conversion is exercised for ___of the Shares
covered by the Warrant.

[Strike paragraph that does not apply.]

     2. Please issue a certificate or certificates representing the shares in the name specified
below:

 

Holder’s Name

 

 

(Address)

     3. By its execution below and for the benefit of the Company, Holder hereby restates each of
the representations and warranties in Article 4 of the Warrant as the date hereof.

	 	 	 	 	 
	 	 	HOLDER:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	(Date):	 	 
	 

	 	 	 	 

 

 

APPENDIX 2

ASSIGNMENT

     For value received, ___hereby sells, assigns and transfers unto

	 	 	 	 	 
	Name:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Tax ID:
	 	 	 	 
	 

	 	 	 	 

     that certain Warrant to Purchase Stock issued by Cavium Networks (the “Company”),
on ___(the “Warrant”) together with all rights, title and interest
therein.

	 	 	 	 	 
	 
	 	 	 	 
	 	 	Holder
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

Date: ______________ ___, 20___

By its execution below, and for the benefit of the Company, ___makes each of
the representations and warranties set forth in Article 4 of the Warrant as of the date hereof.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}]]