Issue Date: March 22, 2007 Warrant No. E-
Exhibit 99.3
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW,
AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR THE CORPORATION
HAS BEEN FURNISHED WITH AN OPINION OF LEGAL COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, TO THE
EFFECT THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER. SUBJECT TO COMPLIANCE WITH THE
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (I) MAY BE PLEDGED OR HYPOTHECATED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THIS WARRANT OR ANY OF THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT AND (II) MAY BE TRANSFERRED OR ASSIGNED TO AN AFFILIATE OF
THE HOLDER HEREOF.
WARRANT
TO PURCHASE COMMON STOCK
OF
Issue Date: March 22, 2007
|
Warrant No. E- |
THIS CERTIFIES that [ ] and its permitted assigns (the “Holder”), has the
right to purchase from BOOKHAM, INC., a Delaware corporation (the “Company”), upon the
terms and subject to the limitations on exercise and the conditions hereinafter set forth, up to
[ ] fully paid and nonassessable shares of the Company’s common stock, par value $0.01 per
share (the “Common Stock”), subject to adjustment as provided herein, at a price per share
equal to the Exercise Price (as defined below), at any time and from time to time beginning on
September 23, 2007 and ending at 6:00 p.m., eastern time, on March 22, 2012 (the “Expiration
Date”). This Warrant is issued pursuant to a Securities Purchase Agreement, dated as of March
22, 2007 (the “Securities Purchase Agreement”).
1. Exercise.
(a) Right to Exercise; Exercise Price. The Holder shall have the right to exercise
this Warrant at any time and from time to time during the period beginning on September 23, 2007
and ending on the Expiration Date as to all or any part of the shares of Common Stock covered
hereby (the “Warrant Shares”). The “Exercise Price” for each Warrant Share
purchased by the Holder upon the exercise of this Warrant shall be equal to $2.80, subject to
adjustment for the events specified in Section 5 below.
(b) Exercise Notice. In order to exercise this Warrant, the Holder shall send to the
Company by facsimile transmission, at any time prior to 6:00 p.m., eastern time, on the business
day on which the Holder wishes to effect such exercise (the “Exercise Date”), (i) a notice
of exercise in substantially the form attached hereto as Exhibit A (the “Exercise Notice”),
and (ii) in the case of a Cash Exercise (as defined below), the Holder shall pay the Exercise Price
to the Company by wire transfer. The Holder shall not be required to deliver the original Warrant
in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with
respect to less than all of the Warrant Shares shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining
number of Warrant Shares. The Exercise Notice shall state the name or names in which the shares of
Common Stock that are issuable on such exercise shall be issued. In the case of a dispute between
the Company and the Holder as to the calculation of the Exercise Price or the number of Warrant
Shares issuable hereunder (including, without limitation, the calculation of any adjustment
pursuant to Section 5 below), the Company shall issue to the Holder the number of Warrant Shares
that are not disputed within the time periods specified in Section 2 below and shall submit the
disputed calculations to a certified public accounting firm of national reputation (other than the
Company’s regularly retained accountants) within two (2) business days following the date on which
the Holder’s Exercise Notice is delivered to the Company. The Company shall cause such accountant
to calculate the Exercise Price and/or the number of Warrant Shares issuable hereunder and to
notify the Company and the Holder of the results in writing no later than three (3) business days
following the day on which such accountant received the disputed calculations (the “Dispute
Procedure”). Such accountant’s calculation shall be deemed conclusive absent manifest error.
The fees of any such accountant shall be borne by the party whose calculations were most at
variance with those of such accountant.
(c) Holder of Record. The Holder shall, for all purposes, be deemed to have become
the holder of record of the Warrant Shares specified in an Exercise Notice on the Exercise Date
specified therein, irrespective of the date of delivery of such Warrant Shares. Except as
specifically provided herein, nothing in this Warrant shall be construed as conferring upon the
Holder hereof any rights as a stockholder of the Company prior to the Exercise Date.
(d) Cancellation of Warrant. This Warrant shall be canceled upon its exercise in full
and, if this Warrant is exercised in part, the Company shall, at the time that it delivers Warrant
Shares to the Holder pursuant to such exercise as provided herein, issue a new warrant, and deliver
to the Holder a certificate representing such new warrant, with terms identical in all respects to
this Warrant (except that such new warrant shall be exercisable into the number of shares of Common
Stock with respect to which this Warrant shall remain unexercised); provided, however, that the
Holder shall be entitled to exercise all or any portion of such new warrant at
- 2 -
any time following the time at which this Warrant is exercised, regardless of whether the Company
has actually issued such new warrant or delivered to the Holder a certificate therefor.
2. Delivery of Warrant Shares Upon Exercise.
(a) Mechanics. Upon receipt of an Exercise Notice pursuant to Section 1 above, the
Company shall, (A) in the case of a Cash Exercise, no later than the close of business on the later
to occur of (i) the third (3rd) business day following the Exercise Date specified in such Exercise
Notice and (ii) the date on which the Company shall have received payment of the Exercise Price,
(B) in the case of a Cashless Exercise (as defined below), no later than the close of business on
the third (3rd) business day following the Exercise Date specified in such Exercise Notice, and (C)
with respect to Warrant Shares that are the subject of a Dispute Procedure, the close of business
on the third (3rd) business day following the determination made pursuant to Section 1(b) (each of
the dates specified in (A), (B) or (C) being referred to as a “Delivery Date”), issue and
deliver or caused to be delivered to the Holder the number of Warrant Shares as shall be determined
as provided herein. The Company shall effect delivery of Warrant Shares to the Holder, as long as
the Company’s designated transfer agent or co-transfer agent in the United States for the Common
Stock (the “Transfer Agent”) participates in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer program (“FAST”) and no restrictive legend is required
pursuant to the terms of this Warrant, the Securities Purchase Agreement or the Securities Act of
1933, as amended (the “Securities Act”), by crediting the account of the Holder or its
nominee at DTC (as specified in the applicable Exercise Notice) with the number of Warrant Shares
required to be delivered, no later than the close of business on such Delivery Date. In the event
that the Transfer Agent is not a participant in FAST, if the Holder so specifies in a Exercise
Notice or otherwise in writing on or before the Exercise Date or if a restrictive legend is
required pursuant to the terms of this Warrant, the Securities Purchase Agreement or the Securities
Act, the Company shall effect delivery of Warrant Shares by delivering to the Holder or its nominee
physical certificates representing such Warrant Shares, no later than the close of business on such
Delivery Date. Warrant Shares delivered to the Holder shall not contain any restrictive legend
unless such legend is required pursuant to the Securities Act.
(b) Failure to Timely Deliver Securities. If within five (5) business days following
the Delivery Date, the Company shall fail to issue and deliver a certificate to the Holder and
register such shares of Common Stock on the Company’s share register or credit the Holder’s balance
account with DTC for the number of shares of Common Stock to which the Holder is entitled upon such
Delivery Date, and if after such fifth (5th) business day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder
of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from
the Company, then the Company shall, within five (5) business days after the Holder’s request,
promptly honor its obligation to deliver to the Holder a certificate or certificates representing
such shares of Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased over the product of (A) such number of shares of Common Stock, times (B)
the price at which the sell order giving rise to such purchase obligation was executed.
“Closing Sale Price” means, for any security as of any date, the last closing sale price
for such security on The Nasdaq Global Market as reported by
- 3 -
Bloomberg, or, if The Nasdaq Global Market begins to operate on an extended hours basis and does
not designate the closing sale price as the case may be, then the last sale price of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if The Nasdaq Global Market is
not the principal securities exchange or trading market for such security, the last closing sale
price of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
sale price of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing sale price is reported for such security
by Bloomberg, the average of the sale prices of any market makers for such security as reported in
the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the
Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder.
3. Exercise Limitations. In no event shall a Holder be permitted to exercise this
Warrant, or part hereof, if, upon such exercise, the number of shares of Common Stock beneficially
owned by the Holder (other than shares which would otherwise be deemed beneficially owned except
for being subject to a limitation on conversion or exercise analogous to the limitation contained
in this Section 3), would exceed 4.99% of the number of shares of Common Stock then issued and
outstanding. As used herein, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder. To the extent
that the limitation contained in this Section 3 applies, the submission of an Exercise Notice by
the Holder shall be deemed to be the Holder’s representation that this Warrant is exercisable
pursuant to the terms hereof and the Company shall be entitled to rely on such representation
without making any further inquiry as to whether this Section 3 applies. Nothing contained herein
shall be deemed to restrict the right of a Holder to exercise this Warrant, or part thereof, at
such time as such exercise will not violate the provisions of this Section 3. This Section 3 may
not be amended unless such amendment is approved by the holders of a majority of the Common Stock
then outstanding; provided, however, that the percentage limitation contained in this Section 3 may
be increased from 4.99% to up to 9.9% upon sixty one (61) days’ prior written notice from the
Holder to the Company.
4. Payment of the Exercise Price; Cashless Exercise. The Holder may pay the Exercise
Price in either of the following forms or, at the election of Holder, a combination thereof:
(a) through a cash exercise (a “Cash Exercise”) by delivering immediately available
funds, or
(b) if an effective Registration Statement is not available for the resale of all of the
Warrant Shares issuable hereunder at the time an Exercise Notice is delivered to the Company,
through a cashless exercise (a “Cashless Exercise”), as hereinafter provided. The Holder
may effect a Cashless Exercise by surrendering this Warrant to the Company and noting on the
Exercise Notice that the Holder wishes to effect a Cashless Exercise, upon which the Company shall
issue to the Holder the number of Warrant Shares determined as follows:
- 4 -
| X = Y x (A-B)/A | ||
where:
|
X = the number of Warrant Shares to be issued to the Holder; | |
| Y = the number of Warrant Shares with respect to which this Warrant is being exercised (which shall include both the number of Warrant Shares issued to the Holder and the number of Warrant Shares subject to the portion of the Warrant being cancelled in payment of the Exercise Price); | ||
| A = the Market Price (as defined below) as of the Exercise Date; and | ||
| B = the Exercise Price. |
(c) When used herein, the following terms shall have the respective meanings indicated:
(i) “Market Price” means, as of a particular date, the daily VWAP on the Trading Day occurring
immediately prior to (but not including) such date.
(ii) “VWAP” on a Trading Day means the volume weighted average price of the Common Stock for
such Trading Day on the Principal Market as reported by Bloomberg Financial Markets or, if
Bloomberg Financial Markets is not then reporting such prices, by a comparable reporting service of
national reputation selected by the Holder and reasonably satisfactory to the Company. If the
Common Stock is not listed on an exchange or market as of the Exercise Date, the Market Price shall
be deemed to be the amount most recently determined by the Board of Directors of the Company (the
“Board”) to represent the fair market value per share of the Common Stock (including without
limitation a determination for purposes of granting Common Stock options or issuing Common Stock
under any plan, agreement or arrangement with employees of the Company); and, upon request of the
Holder, the Board (or a representative thereof) shall, as promptly as reasonably practicable but in
any event not later than 10 days after such request, notify the Holder of the Market Price and
furnish the Holder with reasonable documentation of the Board’s determination of such Market Price.
Notwithstanding the foregoing, if the Board has not made such a determination within the
three-month period prior to the Exercise Date, then (A) the Board shall make, and shall provide or
cause to be provided to the Holder notice of, a determination of the Market Price within 15 days of
a request by the Holder that it do so, and (B) the exercise of this Warrant pursuant to Section
4(b) shall be delayed until such determination is made and notice thereof is provided to the
Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock
split or other similar transaction during such period.
(iii) “Principal Market” means the principal exchange or market on which the Common Stock is
listed or traded.
(iv) “Trading Day” means any day on which the Common Stock is purchased and sold on the
Principal Market.
5. Anti-Dilution Adjustments; Distributions; Other Events. The Exercise Price and the
number of Warrant Shares issuable hereunder shall be subject to adjustment from time to time as
provided in this Section 5. In the event that any adjustment of the Exercise Price
- 5 -
required herein results in a fraction of a cent, the Exercise Price shall be rounded up or down to
the nearest one hundredth of a cent.
(a) Adjustment upon Issuance of Shares of Common Stock. If the Company, at any time
after the date on which this Warrant is originally issued (the “Issue Date”) issues or
sells, or in accordance with this Section 5 is deemed to have issued or sold, any shares of Common
Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding any Excluded Securities (as defined below)), for a consideration per
share less than a price (the “Applicable Price”) equal to the Exercise Price in effect
immediately prior to such issue or sale or deemed issuance or sale (the foregoing a "Dilutive
Issuance"), then immediately after such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount equal to the product of (A) the Exercise Price in effect immediately
prior to such Dilutive Issuance and (B) the quotient determined by dividing (1) the sum of (I) the
product derived by multiplying the Exercise Price in effect immediately prior to such Dilutive
Issuance and the number of shares of Common Stock Deemed Outstanding (as defined below) immediately
prior to such Dilutive Issuance plus (II) the consideration, if any, received by the Company upon
such Dilutive Issuance, by (2) the product derived by multiplying (I) the Exercise Price in effect
immediately prior to such Dilutive Issuance by (II) the number of shares of Common Stock Deemed
Outstanding immediately after such Dilutive Issuance. For purposes of determining the adjusted
Exercise Price under this Section 5(a), the following shall be applicable:
(i) Issuance of Options. If the Company in any manner grants or sells any
rights, warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities (as defined below) (“Options”) and the lowest price
per share for which one share of Common Stock is issuable upon the exercise of any
such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the granting or sale of such Option for such
price per share. For purposes of this Section 5(a)(i), the “lowest price per share
for which one share of Common Stock is issuable upon the exercise of any such
Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option” shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with respect
to any one share of Common Stock upon the granting or sale of the Option, upon
exercise of the Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option. Except as contemplated below, no
further adjustment of the Exercise Price shall be made upon the actual issuance of
such shares of Common Stock or of such Convertible Securities upon the exercise of
such Options or upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities. “Convertible
Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Common
Stock.
(ii) Issuance of Convertible Securities. If the Company in any manner
issues
- 6 -
or sells any Convertible Securities and the lowest price per share for which one
share of Common Stock is issuable upon the conversion, exercise or exchange thereof
is less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such Convertible Securities for such price per share. For the
purposes of this Section 5(a)(ii), the “lowest price per share for which one share
of Common Stock is issuable upon the conversion, exercise or exchange thereof” shall
be equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to one share of Common Stock upon the
issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security. Except as contemplated below, no further
adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of this Warrant has been or is to
be made pursuant to other provisions of this Section 5(a), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such
issue or sale.
(iii) Change in Option Price or Rate of Conversion. If the purchase or
exercise price provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion, exercise or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into or
exercisable or exchangeable for shares of Common Stock increases or decreases at any
time, the Exercise Price in effect at the time of such increase or decrease shall be
adjusted to the Exercise Price which would have been in effect at such time had such
Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the
case may be, at the time initially granted, issued or sold. For purposes of this
Section 5(a)(iii), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Warrant are increased or decreased in
the manner described in the immediately preceding sentence, then such Option or
Convertible Security and the shares of Common Stock deemed issuable upon exercise,
conversion or exchange thereof shall be deemed to have been issued as of the date of
such increase or decrease. No adjustment pursuant to this Section 5(a) shall be made
if such adjustment would result in an increase of the Exercise Price then in effect.
(iv) Calculation of Consideration Received. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options will be deemed to have
been issued for a consideration equal to one cent ($0.01), with the balance of the
consideration allocated to such other securities. If any shares of Common Stock,
Options or Convertible Securities are issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor will be deemed to be the net
amount received by the Company therefor. If any shares of Common
- 7 -
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be
the fair value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company will
be the Closing Sale Price of such security on the date of receipt. “Closing
Sale Price” means, for any security as of any date, the last closing trade price
for such security on The Nasdaq Global Market, as reported by Bloomberg, or, if The
Nasdaq Global Market begins to operate on an extended hours basis and does not
designate the closing trade price, then the last trade price of such security prior
to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if The Nasdaq Global
Market is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or
if the foregoing do not apply, the last trade price of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no last trade price is reported for such security by
Bloomberg, the average of the ask prices, respectively, of any market makers for
such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Closing Sale Price cannot be calculated
for a security on a particular date on any of the foregoing bases, the Closing Sale
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the amount
of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring valuation
(the “Valuation Event”), the fair value of such consideration will be
determined within five (5) Business Days after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holders. The determination of such appraiser shall
be final and binding upon all parties absent manifest error and the fees and
expenses of such appraiser shall be borne jointly by the Company and the Holders.
(v) Record Date. If the Company takes a record of the holders of shares of
Common Stock for the purpose of entitling them (A) to receive a dividend or other
distribution payable in shares of Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or sale
of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the date of
the granting of such right of subscription or purchase, as the case may be.
- 8 -
(vi) Floor Price. No adjustment pursuant to Section 5(a) shall cause the
Exercise Price to be less than $2.36, as adjusted for any stock dividend, stock
split, stock combination, reclassification or similar transaction.
“Excluded Securities” means shares of Common Stock issued or deemed to be issued by the
Company or warrants: (A) in connection with any employee benefit plan which has been approved by
the Board of Directors of the Company or a committee thereof, pursuant to which the Company’s
securities may be issued to any employee, officer, consultant or director for services provided to
the Company, (B) as consideration, including as part of an earn-out, in an acquisition by the
Company or any of its subsidiaries of a business enterprise or assets approved by the Board of
Directors of the Company or a committee thereof, (C) upon conversion of the Warrants (as defined in
the Securities Purchase Agreement), (D) upon exercise of Options or Convertible Securities which
are outstanding on the date immediately preceding the Issue Date, provided that such issuance is
made pursuant to the terms of such Options or Convertible Securities in effect on the date
immediately preceding the Issue Date and the exercise, conversion or similar price and the number
of shares underlying such Option or Convertible Security are not amended or changed after the date
immediately proceeding the Issue Date and the other material terms of such Options or Convertible
Securities are not otherwise amended or changed after the date immediately preceding the Issue
Date, (E) in connection with any share split, share dividend, recapitalization or similar
transaction by the Company for which adjustment is made pursuant to this Warrant, or (F) in
connection with the formation of a joint venture, strategic alliance or other bona fide commercial
relationship with a third party approved by the Company’s Board of Directors or a committee
thereof.
(b) Subdivision or Combination of Common Stock. If the Company, at any time after
Issue Date, subdivides (by any stock split, stock dividend, recapitalization, reorganization,
reclassification or otherwise) the outstanding shares of Common Stock into a greater number of
shares, then, effective upon the close of business on the record date for effecting such
subdivision, the Exercise Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company, at any time after the Issue Date, combines (by reverse
stock split, recapitalization, reorganization, reclassification or otherwise) the outstanding
shares of Common Stock into a smaller number of shares, then, effective upon the close of business
on the record date for effecting such combination, the Exercise Price in effect immediately prior
to such combination will be proportionally increased.
(c) Distributions. If, at any time after the Issue Date, the Company declares or
makes any distribution of cash or any other assets (or rights to acquire such assets) to holders of
Common Stock, including without limitation any dividend or distribution to the Company’s
stockholders in shares (or rights to acquire shares) of capital stock of a subsidiary (a
“Distribution”), the Company shall deliver written notice of such Distribution (a
“Distribution Notice”) to the Holder at least fifteen (15) days prior to the earlier to
occur of (i) the record date for determining stockholders entitled to such Distribution (the
“Record Date”) and (ii) the date on which such Distribution is made (the “Distribution
Date”) (the earlier of such dates being referred to as the “Determination Date”). In
the Distribution Notice to a Holder, the Company shall indicate whether the Company has elected (A)
to deliver to such Holder, upon any exercise of this Warrant on or after the Determination Date,
the same amount and type of assets (including, without limitation, cash) being distributed as
though the Holder were, on the
- 9 -
Determination Date, a holder of a number of shares of Common Stock into which this Warrant is
exercisable as of such Determination Date (such number of shares to be determined without giving
effect to any limitations on such exercise) or (B) upon any exercise of this Warrant on or after
the Determination Date, to reduce the Exercise Price applicable to such exercise by reducing the
Exercise Price in effect on the business day immediately preceding the Record Date by an amount
equal to the fair market value of the assets to be distributed divided by the number of
shares of Common Stock as to which such Distribution is to be made, such fair market value to be
reasonably determined in good faith by the Company’s Board of Directors. If the Company does not
notify the Holders of its election pursuant to the preceding sentence on or prior to the
Determination Date, the Company shall be deemed to have elected clause (A) of the preceding
sentence.
(d) Convertible Securities; Purchase Rights. If, at any time after the Issue Date,
the Company issues any securities or other instruments which are convertible into or exercisable or
exchangeable for Common Stock (“Convertible Securities”) or options, warrants or other
rights to purchase or subscribe for Common Stock or Convertible Securities (“Purchase
Rights”) to the record holders of the Common Stock, whether or not such Convertible Securities
or Purchase Rights are immediately convertible, exercisable or exchangeable, then the Holders shall
be entitled, upon any exercise of this Warrant after the date of record for determining
stockholders entitled to receive such Convertible Securities or Purchase Rights (or if no such
record is taken, the date on which such Convertible Securities or Purchase Rights are issued), to
receive the aggregate number of Convertible Securities or Purchase Rights which the Holder would
have received with respect to the shares of Common Stock issuable upon such exercise (without
giving effect to any limitations on such exercise contained in this Warrant or the Securities
Purchase Agreement) had the Holder been the holder of such shares of Common Stock on the record
date for the determination of stockholders entitled to receive such Convertible Securities or
Purchase Rights (or if no such record is taken, the date on which such Convertible Securities or
Purchase Rights were issued).
(e) Major Transactions. In the event of a Major Transaction (as defined below), the
Company will give the Holder at least ten (10) Trading Days written notice prior to the earlier of
(x) the closing or effectiveness of such Major Transaction and (y) the record date for the receipt
of such shares of stock or securities or other assets. In the event of a Major Transaction, the
Holder shall be permitted (but not required) to exercise this Warrant in whole or in part at any
time prior to the record date for the receipt of such consideration and shall be entitled to
receive, for each share of Common Stock issuable to the Holder upon such exercise, the same per
share consideration payable to the other holders of Common Stock in connection with such Major
Transaction. If and to the extent any portion of this Warrant remains unexercised following such
record date, then, following the record date, the Holder shall receive upon exercise hereof the
kind and amount of securities, cash or other property which the Holder would have been entitled to
receive pursuant to such Major Transaction if such exercise had taken place immediately prior to
such record date. In such case, appropriate adjustment (as determined in good faith by the Board)
shall be made in the application of the provisions set forth herein with respect to the rights and
interests thereafter of the Holder, to the end that the provisions set forth in this Section 5
shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities, cash
or other property thereafter deliverable upon exercise of this Warrant and the Company shall cause
the surviving entity to assume in writing the obligations of the Company under this
- 10 -
Warrant. Notwithstanding the foregoing, in the case of any Major Transaction with respect to
which the consideration to be paid by the acquiror for Common Stock is a combination of
publicly-traded securities and cash or non-publicly-traded securities or assets, then the Holder
shall have the right, upon written notice to the Company to the following: (i) at the time of
consummation of the Major Transaction, the Company shall pay the Holder an amount equal to the
Black Scholes Value multiplied by a fraction, the numerator of which shall be the fair market value
(as determined in good faith by the Board) of the amount of such cash or non-publicly-traded
securities or assets receivable by a holder of one share of Common Stock as of the time of the
consummation of the Major Transaction, and the denominator of which shall be the fair market value
(as determined in good faith by the Board) of all consideration receivable by a holder of one share
of Common Stock as of the time of consummation of the Major Transaction; and (ii) from and after
the time of consummation of the Major Transaction, this Warrant shall be automatically adjusted
such that, for each share of Common Stock underlying this Warrant immediately prior to the
consummation of the Major Transaction, this Warrant shall become exercisable for solely the amount
of publicly-traded securities receivable by a holder of one share of Common Stock at the time of
consummation of the Major Transaction, and the Exercise Price shall be adjusted to be equal to the
Exercise Price in effect immediately prior to the consummation of the Major Transaction multiplied
by a fraction, the numerator of which is the fair market value of the amount of such
publicly-traded securities receivable by a holder of one share of Common Stock at the time of the
consummation of the Major Transaction, and the denominator of which is the fair market value of all
consideration receivable by a holder of one share of Common Stock at the time of consummation of
the Major Transaction and the Company shall cause the surviving entity to assume in writing the
obligations of the Company under this Warrant. Notwithstanding the foregoing, if there shall occur
a Major Transaction in which the Common Stock is converted into or exchanged for consideration a
majority of the fair market value of which (as determined in good faith by the Board) does not
consist of publicly-traded equity securities, then the Holder shall have the right, upon written
notice to the Company, to require the Company (or any such successor or surviving entity) to redeem
this Warrant from the Holder for a purchase price, payable in cash on the closing date of such
Major Transaction, equal to the Black Scholes Value. “Black Scholes Value” means the value
of this Warrant based on the Black Scholes Option Pricing Model obtained from the “OV” function on
Bloomberg using (i) a price per share of Common Stock equal to the greater of (A) the arithmetic
average of the VWAP of the Common Stock for the five Trading Days immediately preceding the date of
consummation of the applicable Major Transaction and (B) the VWAP of the Common Stock for the
Trading Day immediately preceding the date of consummation of the applicable Major Transaction,
(ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of the date of consummation of the applicable Major Transaction
and (iii) an expected volatility equal to the greater of 50% and the 100 day volatility obtained
from the HVT function on Bloomberg determined as of the Trading Day immediately following the
public announcement of the applicable Major Transaction. “Major Transaction” means that
the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or
merge with or into (whether or not the Company is the surviving
corporation) another person or
entity, immediately following which transaction the prior stockholders of the Company fail to own,
directly or indirectly, at least 50% of the voting power of the surviving entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or
assets of the Company to another person or entity, or (iii) allow another person or entity to make
a purchase, tender or exchange offer that is accepted by
- 11 -
the holders of more than the 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the person or entity or persons or entities making or party to, or
associated or affiliated with the persons or entities making or party to, such purchase, tender or
exchange offer), or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another person or entity whereby such other person or entity acquires more than
the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by
the other person or entity or other persons or entities making or party to, or associated or
affiliated with the other persons or entities making or party to, such stock purchase agreement or
other business combination), or (v) reorganize, recapitalize or reclassify its Common Stock, or
(vi) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by
issued and outstanding Common Stock.
(f) Adjustments; Additional Shares, Securities or Assets. In the event that at any
time, as a result of an adjustment made pursuant to this Section 5, the Holder of this Warrant
shall, upon exercise of this Warrant, become entitled to receive securities or assets (other than
Common Stock), then, wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets; and thereafter the
number of such shares and/or other securities or assets shall be subject to adjustment from time to
time in a manner and upon terms as nearly equivalent as practicable to the provisions of this
Section 5. Any adjustment made herein pursuant to Section 5(b) that results in a decrease in the
Exercise Price shall also effect a proportional increase in the number of shares of Common Stock
into which this Warrant is exercisable.
6. Fractional Interests.
No fractional shares or scrip representing fractional shares shall be issuable upon the
exercise of this Warrant, but on exercise of this Warrant, the Holder hereof may purchase only a
whole number of shares of Common Stock. If, on exercise of this Warrant, the Holder hereof would
be entitled to a fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, the Company shall, in lieu of issuing any such fractional share, pay to the Holder an
amount in cash equal to the product resulting from multiplying such fraction by the Market Price as
of the Exercise Date.
7. Transfer of this Warrant.
The Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant, in whole
or in part, as long as such transfer or other disposition is made pursuant to an effective
registration statement or an exemption from the registration requirements of the Securities Act of
1933, as amended, and is otherwise made in accordance with the applicable provisions of the
Securities Purchase Agreement. Upon such transfer or other disposition (other than a pledge), the
Holder shall deliver this Warrant to the Company together with a written notice to the Company,
substantially in the form of the Transfer Notice attached hereto as Exhibit B (the “Transfer
Notice”), indicating the person or persons to whom this Warrant shall be transferred
- 12 -
and, if less than all of this Warrant is transferred, the number of Warrant Shares to be covered by
the part of this Warrant to be transferred to each such person. Within three (3) business days of
receiving a Transfer Notice and the original of this Warrant, the Company shall deliver to the each
transferee designated by the Holder a Warrant or Warrants of like tenor and terms for the
appropriate number of Warrant Shares and, if less than all this Warrant is transferred, shall
deliver to the Holder a Warrant for the remaining number of Warrant Shares.
8. Benefits of this Warrant.
This Warrant shall be for the sole and exclusive benefit of the Holder of this Warrant and
nothing in this Warrant shall be construed to confer upon any person other than the Holder of this
Warrant any legal or equitable right, remedy or claim hereunder.
9. Reservation of Stock. The Company will at all times reserve and keep available,
solely for issuance and delivery upon the exercise of this Warrant, such number of Warrant Shares
and other securities, cash and/or property, as from time to time shall be issuable upon the
exercise of this Warrant.
10. Loss, Theft, Destruction or Mutilation of Warrant.
Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of indemnity reasonably satisfactory to
the Company, and upon surrender of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.
11. No Rights as Stockholder.
Until the exercise of this Warrant, the Holder shall not have or exercise any rights by virtue
hereof as a stockholder of the Company. Notwithstanding the foregoing, in the event (i) the
Company effects a split of the Common Stock by means of a stock dividend and the Exercise Price of
and the number of Warrant Shares are adjusted as of the date of the distribution of the dividend
(rather than as of the record date for such dividend), and (ii) the Holder exercises this Warrant
between the record date and the distribution date for such stock dividend, the Holder shall be
entitled to receive, on the distribution date, the stock dividend with respect to the shares of
Common Stock acquired upon such exercise, notwithstanding the fact that such shares were not
outstanding as of the close of business on the record date for such stock dividend.
12. Notice or Demands.
Any notice, demand or request required or permitted to be given by the Company or the Holder
pursuant to the terms of this Warrant shall be in writing and shall be deemed delivered (i) when
delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day
that is not a business day, in which case such delivery will be deemed to be made on the next
succeeding business day, (ii) on the next business day after timely delivery to an overnight
courier and (iii) on the business day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), addressed as follows:
- 13 -
If to the Company:
Bookham, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Tel: 000-000-0000
Fax: 000-000-0000
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
and if to the Holder, at such address as the Holder shall have furnished the Company in writing.
13. Amendments.
Neither this Warrant nor any term hereof may be amended or waived except pursuant to a written
instrument executed by the Company and the Warrant Holders holding warrants issued by the Company
pursuant to the Securities Purchase Agreement which are exercisable for at least two-thirds (2/3)
of the number of shares into which all of the then outstanding warrants issued by the Company
pursuant to the Securities Purchase Agreement are exercisable (without regard to any limitation
contained herein on such exercise). Any amendment or waiver effected in accordance with this
Section 13 shall be binding upon each Warrant Holder, each future Warrant Holder and the Company.
Notwithstanding the foregoing, this Warrant may be amended and the observance of any term hereunder
may be waived without the written consent of the Holder only if such amendment and waiver applies
to the warrants issued to Warrant Holders pursuant to the Securities Purchase Agreement all in the
same fashion. The failure of any party to exercise any right or remedy under this Warrant or
otherwise, or the delay by any party in exercising such right or remedy, shall not operate as a
waiver thereof. No waiver of any term, provision or condition of this Warrant, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or
continuing waiver of any such term, provision or condition or as a waiver of any other term,
provision or condition of this Warrant.
14. Applicable Law.
This Warrant is issued under and shall for all purposes be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within the State of New York.
- 14 -
15. Pronouns. All pronouns or any variation thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity
or entities may require.
16. Headings. The headings in this Warrant are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
17. Entire Agreement.
This Warrant, the Securities Purchase Agreement and the Registration Rights Agreement (as
defined in the Securities Purchase Agreement) (the “Transaction Documents”) constitute the
entire agreement among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than those set forth or
referred to herein and therein. This Warrant, the Securities Purchase Agreement and the
Registration Rights Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
[Signature Page to Follow]
- 15 -
IN WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as of the Issue
Date.
| BOOKHAM, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
EXHIBIT A to WARRANT
EXERCISE NOTICE
The undersigned Holder hereby irrevocably exercises the right to purchase
of the shares of Common Stock (“Warrant Shares”) of
evidenced by the attached Warrant (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be
made as:
a Cash Exercise with respect to
Warrant Shares; and/or
a Cashless Exercise with respect to
Warrant Shares, as
permitted by Section 4(b) of the attached Warrant.
2. Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the
sum of $ to the Company in accordance with the terms of the Warrant.
Date: |
||||
| Name of Registered Holder |
||||
By: |
||||
| Name: | ||||
| Title: | ||||
- 17 -
EXHIBIT B to WARRANT
TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells, assigns and
transfers unto the person or persons named below the right to purchase shares of
the Common Stock of evidenced by the attached Warrant.
Date: |
|||||
| Name of Registered Holder |
|||||
By: |
|||||
| Name: | |||||
| Title: | |||||
| Transferee Name and Address: | |||||
- 18 -
