Contract
Exhibit 4.5
EXECUTION COPY
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, OR AN EXEMPTION FROM REGISTRATION, UNDER SAID ACT AND LAWS.
SUCH SECURITIES ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A SECOND AMENDED AND
RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT, A THIRD AMENDED AND RESTATED
VOTING AGREEMENT AND A THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT, EACH
DATED AS OF DECEMBER 9, 2003, AND EACH AMONG THE ISSUER AND VARIOUS OF ITS
STOCKHOLDERS ARE ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER. THE SALE, TRANSFER,
ASSIGNMENT OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO THE TERMS OF EACH
SUCH AGREEMENT.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
VOLCANO THERAPEUTICS, INC.
Expires December 9, 2013
No. W-1
December 9,
2003
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Volcano Therapeutics, Inc., a Delaware corporation (together with its
successors and assigns, the “Issuer”), hereby certifies that
FFC PARTNERS II, L.P.
or its registered assigns is entitled to subscribe for and purchase at an initial
exercise price of $.01 per share, during the period specified in this Warrant, 3,352,070
shares (subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non-assessable Common Stock all subject to adjustment and upon the
terms and conditions as hereinafter provided. Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in Section 7
hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and shall
expire at 5:00 P.M., Eastern Time, on December 9, 2013 (such
period being the “Term”).
2.
Method of Exercise; Payment; Issuance of New Warrant; Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant
may be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method
of Exercise. The Holder hereof may exercise this Warrant, in whole or in
part, by the surrender of this Warrant (with the exercise form attached hereto duly
executed) at the principal office of the Issuer, and by the payment to the Issuer of an
amount of consideration therefore equal to the Warrant Price in effect on the date of
such exercise multiplied by the number of shares of Warrant Stock with respect to which
this Warrant is then being exercised, payable at such Holder’s election (i) by certified
or official bank check or wire transfer of immediately available funds or (ii) by
surrender to the Issuer for cancellation of a portion of this Warrant representing that
number of unissued shares of Warrant Stock which is equal to the quotient obtained by
dividing (A) the product obtained by multiplying the Warrant Price by the number of
shares of Warrant Stock being purchased upon such exercise by (B) the difference obtained
by subtracting the Warrant Price from the Current Market Price per share of Warrant Stock
as of the date of such exercise, or (iii) by a combination of the foregoing methods of
payment selected by the Holder of this Warrant. In any case where the consideration
payable upon such exercise is being paid in whole or in part pursuant to the provisions
of clause (ii) of this Section 2(b), such exercise shall be accompanied by written notice
from the Holder of this Warrant specifying the manner of payment thereof, and in the case
of application of clause (ii), containing a calculation showing the number of shares of
Warrant Stock with respect to which rights are being surrendered thereunder and the net
number of shares to be issued after giving effect to such surrender.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms and
conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be
dated the date of such exercise and delivered to the Holder hereof within a reasonable
time, not exceeding five Business Days after such exercise, and the Holder hereof shall
be deemed for all purposes to be the Holder of the shares of Warrant Stock so purchased
as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant
representing the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall have been
cancelled in payment or partial payment of the Warrant Price as hereinabove provided)
shall also be issued to the Holder hereof within such time.
(d) Transferability
of Warrant. Subject to the provisions of Section 2(e)
hereof, this Warrant may be transferred on the books of the Issuer by the Holder hereof
in person or by duly authorized attorney, upon surrender of this Warrant at the
principal office of the Issuer, properly endorsed (by the Holder executing an assignment
in the form attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at the
principal office of the Issuer for
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Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each
new Warrant to represent the right to purchase such number of shares of Warrant Stock as
the Holder hereof shall designate at the time of such exchange. All Warrants issued on
transfers or exchanges shall be dated the Closing Date and shall be identical to this
Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder’s own account and not as a nominee for
any other party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon
exercise hereof except pursuant to an effective registration statement, or an exemption
from registration, under the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant
and all certificates representing shares of Warrant Stock issued upon exercise hereof
shall be stamped or imprinted with a legend in substantially the following form:
“THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM
REGISTRATION, UNDER SAID ACT AND LAWS.
SUCH SECURITIES ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A RIGHT OF
FIRST REFUSAL AND CO-SALE AGREEMENT, A THIRD AMENDED AND RESTATED VOTING
AGREEMENT AND A THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT, EACH
DATED AS OF DECEMBER 9, 2003, AND EACH AMONG THE ISSUER AND VARIOUS OF ITS
STOCKHOLDERS ARE ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER. THE SALE,
TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO
THE TERMS OF SUCH AGREEMENT.”
(iii) The restrictions imposed by this Section 2(e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise
hereof shall terminate (A) when such securities shall have been effectively registered
under the Securities Act, or (B) upon the Issuer’s receipt of an opinion of counsel, in
form and substance reasonably satisfactory to the Issuer (it being understood that
in-house counsel to the Holder shall be deemed to be acceptable counsel), addressed to
the Issuer to the effect that such restrictions are no longer required to ensure
compliance with the Securities Act. Whenever such restrictions shall cease and terminate
as to any such securities, the Holder thereof shall be entitled to receive from the
Issuer (or its transfer agent and registrar), without expense (other than applicable
transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock,
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new stock certificates) of like tenor not bearing the applicable legends required by
paragraph (ii) above relating to the Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof or of any
shares of Warrant Stock issued upon such exercise, acknowledge in writing the extent, if
any, of its continuing obligation to afford to such Holder all rights to which such
Holder shall continue to be entitled after such exercise in accordance with the terms of
this Warrant, provided that if any such Holder shall fail to make any such
request, the failure shall not affect the continuing obligation of the Issuer to afford
such rights to such Holder.
(g) Qualified Public Offering. The Issuer will give the Holder notice of an
anticipated Qualified Public Offering no less than 10 Business Days prior to the
Qualified Public Offering. At any time after receiving such a notice and prior to the
Qualified Public Offering the Holder may exercise this Warrant pursuant to Section 2(b)
and state in the election notice that such exercise shall be subject to and conditioned
upon the occurrence of the Qualified Public Offering. Any such exercise by the Holder
shall be deemed to occur at the same time as the Qualified Public Offering. If the Holder
does not exercise this Warrant pursuant to this Section 2(g), any unexercised portion of
this Warrant shall be deemed to have been exercised in full pursuant to clause (ii) of
Section 2(b) of this Warrant at the same time as the Qualified Public Offering without
any action on the part of the Holder.
(h) Recapitalization,
Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) Without limiting any other provision hereof, in case the Issuer after the
Closing Date shall do any of the following (each a
“Triggering Event”) (a) consolidate
with or merge into any other Person and the Issuer shall not be the continuing or
surviving corporation of such consolidation or merger, or (b) permit any other Person to
consolidate with or merge into the Issuer and the Issuer shall be the continuing or
surviving Person but, in connection with such consolidation or merger, any Capital Stock
of the Issuer shall be changed into or exchanged for securities of any other Person or
cash or any other property, or (c) transfer all or substantially all of its properties or
assets to any other Person, or (d) effect a capital reorganization or reclassification of
its Capital Stock, or (e) enter into any other transaction similar to any of the
foregoing, then, and in the case of each such Triggering Event, the Issuer shall give the
Holder at least twenty (20) days prior notice of such Triggering Event. At any time after
receiving such a notice and prior to the Triggering Event the Holder may exercise this
Warrant pursuant to Section 2(b) and state in the election notice that such exercise
shall be subject to and conditioned upon the occurrence of the Triggering Event. Any such
exercise by the Holder shall be deemed to occur at the same time as the Triggering Event.
If the Holder does not exercise this Warrant pursuant to this Section 2(h), any
unexercised portion of this Warrant shall be deemed to have been exercised in full
pursuant to clause (ii) of Section 2(b) of this Warrant at the same time as the
Triggering Event without any action on the part of the Holder.
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3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.
(a) The Issuer represents, warrants, covenants and agrees that all shares of Warrant
Stock which may be issued upon the exercise of this Warrant, will, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable and free from all taxes, liens
and charges created by or through the Issuer with respect to issuance (other than
restrictions under federal and state securities laws). The Issuer further covenants and
agrees that during the period within which this Warrant may be exercised, the Issuer will
at all times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of this Warrant.
(b) If any shares of the Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder require
registration or qualification with any governmental authority under any federal or state
law before such shares may be so issued, the Issuer will in good faith use its best
efforts as expeditiously as possible at its expense to cause such shares to be duly
registered or qualified.
(c) The Issuer shall not by any action including, without limitation, amending the
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other action,
avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate to protect the rights of
the Holder hereof against impairment. Without limiting the generality of the foregoing,
without the consent of the Requisite Holders, the Issuer will (i) not permit the par
value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) take
all such action as may be reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock, free and clear of any
liens, claims, encumbrances and restrictions (other than as provided herein and
restrictions under federal and state securities laws) created by or through Issuer with
respect to such issuance upon the exercise of this Warrant, and (iii) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the Issuer to
perform its obligations under this Warrant.
(d) The Issuer agrees that neither it nor its Affiliates will in the future issue
any press releases or other public disclosure, including any prospectus, proxy statement
or other materials filed with any governmental authority relating to a public offering of
the stock of the Issuer or any of its Subsidiaries, using the name of the Holder or its
Affiliates or referring to this Warrant without at least two (2) Business Days prior
notice to the Holder and without the prior written consent of the Holder unless (and only
to the extent that) the Issuer or its Affiliate is required to do so under law and then,
in any event, the Issuer or such Affiliate will consult with the Holder before issuing
such press release or other public disclosure.
4. Adjustment of Warrant Price and Warrant Share Number. The Warrant
Share Number and the Warrant Price shall be subject to adjustment from time to time
upon the happening of certain events, and the Holder hereof shall have additional
rights, as follows:
(a) Reserved.
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(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i)
in case of subdivision of shares, the Warrant Share Number shall be proportionately
increased (as at the effective date of such subdivision or, if the Issuer shall take a
record of holders of its Common Stock for the purpose of so subdividing, as at the
applicable record date, whichever is earlier) to reflect the increase in the total number
of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the
case of a combination of shares, the Warrant Share Number shall be proportionately
reduced (as at the effective date of such combination or, if the Issuer shall take a
record of holders of its Common Stock for the purpose of so combining, as at the
applicable record date, whichever is earlier) to reflect the reduction in the total
number of shares of Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other
distribution to its stockholders (without consideration therefor) of, shares of Common
Stock or any Common Stock Equivalent, the Warrant Share Number shall be adjusted, as at
the date the Issuer shall take a record of the holders of the Issuer’s Capital Stock for
the purpose of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that number determined
by multiplying the Warrant Share Number in effect immediately prior to such record date
(or if no such record is taken, then immediately prior to such payment or other
distribution), by a fraction (1) the numerator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or distribution (plus
in the event that the Issuer paid cash for fractional shares, the number of additional
shares which would have been outstanding had the Issuer issued fractional shares in
connection with said dividends), and (2) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately prior to such dividend or
distribution; or
(ii) Liquidating Dividends, etc. Make a distribution of its
property to the holders of its Common Stock as a dividend in liquidation or partial
liquidation or by way of return of capital other than as a dividend payable out of funds
legally available for dividends under the laws of the State of Delaware, the Holder of
this Warrant shall, upon exercise (including without limitation payment of the Warrant
Price), be entitled to receive, in addition to the number of shares of Warrant Stock
receivable thereupon, and without payment of any additional consideration therefor, an
amount payable in cash equal to the fair market value of such property as would have been
payable to such Holder had such Holder been the Holder of record of such Warrant Stock on
the record date for such distribution or if no such record is taken, on the date of such
distribution; and appropriate provision therefor shall be made a part of any such
distribution; or
(iii) Cash and Other Dividends. Declare, make or pay any
dividend or other distribution, whether in cash, securities or other property (other than
dividends and distributions subject to subparagraphs (i) and (ii) of this Section 4(c)),
with respect to its Common Stock or any Common Stock Equivalent, the Holder of this
Warrant shall, upon exercise (including, without limitation, payment of the Warrant
Price), be entitled to receive, in addition to the number of shares of Warrant Stock
receivable thereupon, and without payment of
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any additional consideration therefor, the amount and type of such cash, securities or property as
would have been payable to such Holder had such Holder been the Holder of record of such Warrant
Stock on the record date for such dividend or distribution or if no such record is taken, on the
date of such dividend or distribution; and appropriate provision therefor shall be made a part of
any such dividend or distribution.
(d) Issuance of Additional Shares of Common Stock. Unless the
holders of Series B Preferred Stock elect to waive the application of Article IV, Section 4(e) of
the Certificate of Incorporation, if the Issuer, at any time while this Warrant is outstanding,
shall issue any Additional Shares of Common Stock (otherwise than as provided in the foregoing
subsections (a) through (c) of this Section 4), at a price per share less than $3.00 or without
consideration, then the Warrant Share Number upon each such issuance shall be adjusted to that
number (rounded to the nearest one-tenth of a share) determined by multiplying the Warrant Share
Number then in effect by a fraction:
(i) the numerator of which shall be equal to the number of
shares of Common Stock outstanding immediately after the issuance of such Additional Shares of
Common Stock; and
(ii) the denominator of which shall be equal to the sum of (A)
the number of shares of Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus (B) the number of shares of Common Stock (rounded to
the nearest whole share) which the aggregate consideration for the total number of such Additional
Shares of Common Stock so issued would purchase at $3.00 per share.
The provisions of this Section 4(d) shall not apply under any of the circumstances for which an
adjustment is provided in Sections 4(a), 4(b) or 4(c). No adjustment of the Warrant Share Number
shall be made under this Section 4(d) upon the issuance of any Additional Shares of Common Stock
which are issued pursuant to any Common Stock Equivalent if any required adjustments shall have
been made pursuant to Section 4(e) or Section 4(f).
(e) Issuance of Common Stock Equivalents. The following provisions shall be applicable
to the issuance of Common Stock Equivalents:
(i) Except as provided in clause (ii) of this Section 4(e), if
the Issuer, at any time while this Warrant is outstanding, shall issue any Common Stock Equivalent and
the price per share for which Additional Shares of Common Stock may be issuable thereafter pursuant
to such Common Stock Equivalent (determined by dividing (x) the price received upon issuance of
such Common Stock Equivalent plus the aggregate exercise price payable pursuant to the terms of
such Common Stock Equivalent by (y) the maximum number of Additional Shares of Common Stock
issuable pursuant to such Common Stock Equivalent, whether or not such Common Stock Equivalent is
actually then exercisable, convertible or exchangeable in whole or in part, as of the date of such
issuance) shall be less than $3.00, then the Warrant Share Number upon each such issuance shall be
adjusted as provided in the first sentence of Section 4(d) on the basis that (1) the maximum number
of Additional Shares of Common Stock issuable pursuant to all such Common Stock Equivalents shall
be deemed to have been issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable
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in whole or in part) as of the date of such issuance, and (2) the aggregate consideration for
such maximum number of Additional Shares of Common Stock shall be deemed to be the
consideration received upon issuance of such Common Stock Equivalent plus the aggregate
exercise price payable pursuant to the terms of such Common Stock Equivalent.
(ii) If the Issuer, no later than 30 days after the Closing Date,
shall issue shares of its Series B Preferred Stock, the Warrant Share Number upon each such
issuance shall be increased by 12% of the number of shares of Series B Preferred Stock so
issued.
(iii) No adjustment of the Warrant Share Number shall be made
under this Section 4(e) upon the issuance of any Convertible Security which is issued pursuant
to the exercise of any warrants or other subscription or purchase rights therefor, if any
adjustment shall previously have been made in the Warrant Share Number then in effect upon the
issuance of such warrants or other rights pursuant to this Section 4(e).
(f) Adjustments of Exercise Price and Conversion Rights of Common Stock
Equivalents. If the Issuer, at any time while this Warrant is outstanding, shall, after
any issuance of any Common Stock Equivalent, amend or adjust the price per share for which
Additional Shares of Common Stock may be issuable thereafter pursuant to such Common Stock
Equivalent, and the price per share, after giving effect to such amendment or adjustment, for
which Additional Shares of Common Stock may be issuable thereafter pursuant to such Common
Stock Equivalent (determined by dividing (x) the price received upon original issuance of such
Common Stock Equivalent plus the aggregate price, as so amended or adjusted, payable pursuant
to the terms of such Common Stock Equivalent by (y) the maximum number of Additional Shares of
Common Stock issuable pursuant to such Common Stock Equivalent, as so amended or adjusted,
whether or not such Common Stock Equivalent is actually then exercisable, convertible or
exchangeable in whole or in part, as of the date of such amendment or adjustment) shall be
less than $3.00, then the Warrant Share Number upon each such amendment or adjustment shall be
adjusted as provided in the first sentence of Section 4(d) on the basis that (1) the maximum
number of Additional Shares of Common Stock issuable pursuant to such Common Stock Equivalent
shall be deemed to have been issued (whether or not such Common Stock Equivalent is actually
then exercisable, convertible or exchangeable in whole or in part) as of the date of such
amendment or adjustment and after giving effect thereto, and (2) the aggregate consideration
for such maximum number of Additional Shares of Common Stock shall be deemed to be the minimum
consideration receivable by the Issuer for the original issuance of such Additional Shares of
Common Stock pursuant to such Common Stock Equivalent, as so amended or adjusted, plus the
aggregate exercise price payable pursuant to the terms of such Common Stock Equivalent, as so
amended or adjusted. If at any time while this Warrant is outstanding, after issuance of any
Common Stock Equivalent, the number of Additional Shares of Common Stock into which such
Common Stock Equivalent is convertible or exchangeable increases, by adjustment of the
conversion or exchange ratio or price or otherwise (each, an
“Adjustment Event”), then the
Warrant Share Number upon each such Adjustment Event shall be adjusted as provided in the
first sentence of Section 4(d) on the basis that (1) the maximum number of Additional Shares
of Common Stock issuable pursuant to such Common Stock Equivalent as a result of such
Adjustment Event shall be deemed to have been issued (whether or not such Common Stock
Equivalent is actually then exercisable, convertible or exchangeable in
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whole or in part) as of the date of such Adjustment Event and after giving effect thereto, and (2)
the aggregate consideration for such maximum number of Additional Shares of Common Stock shall be
deemed to be the consideration, if any, paid to the Issuer to effect such Adjustment Event.
(g) Reserved.
(h) Other
Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the determination of the price per share and the making
of adjustments in the Warrant Share Number provided in, and to the other provisions of, this
Section 4:
(i) Computation
of Consideration. The consideration received by the Issuer
shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or
any Common Stock Equivalent shall be issued for a cash consideration, the consideration received by
the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are
offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of
Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering
without a subscription offering, the public offering price, in any such case excluding any amounts
paid or receivable for accrued interest or accrued dividends and without deduction of any
compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with the issue thereof; to the
extent that such issuance shall be for a consideration other than cash, then, except as herein
otherwise expressly provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for any Additional Shares of
Common Stock issuable pursuant to any Common Stock Equivalent shall be the consideration received
by the Issuer for issuing such Common Stock Equivalent, plus the additional consideration payable
to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalent. In case of
the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in
payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common
Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or
satisfied. In case of the issuance at any time of any Additional Shares of Common Stock or Common
Stock Equivalents as a unit with any note or other security, the Issuer shall be deemed to have
received no consideration for such Additional Shares of Common Stock or Common Stick Equivalents;
provided that, with respect to any Common Stock Equivalent which provides for payment of an
exercise price as a condition to the issuance of Additional Shares of Common Stock pursuant
thereto, the Issuer shall be deemed to have received consideration for such Common Stock Equivalent
equal to such exercise price. In any case in which the property, securities or other consideration
to be received or paid shall be other than cash, the Board shall promptly notify the Holder of this
Warrant of its good faith determination of the fair market value of such consideration.
(ii) Readjustment
of Warrant Share Number. Upon the
expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Share Number, if such
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Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the
number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that
they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall
no longer be computed as set forth above, and the Warrant Share Number shall forthwith be
readjusted and thereafter be the number which it would have been (but reflecting any other
adjustments in the Warrant Share Number made pursuant to the provisions of this Section 4 after the
issuance of such Common Stock Equivalent) had the adjustment of the Warrant Share Number been made
in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually
issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the
number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued
and only the consideration actually received by the Issuer (computed as in clause (i) of this
Section 4(h)) shall be deemed to have been received by the Issuer.
(iii) Outstanding
Common Stock. The number of shares of
Common Stock at any time outstanding shall (a) not include any Warrant Stock or any shares of
Common Stock then directly or indirectly owned or held by or for the account of the Issuer or any
of its Subsidiaries, and (b) shall be deemed to include the maximum number of shares of Common
Stock issuable upon conversion, exercise or exchange of any then outstanding Common Stock
Equivalents (whether or not such Common Stock Equivalents are actually then exercisable,
convertible or exchangeable in whole or in part), other than the Warrants.
(iv) When
Adjustment Not Required. If the Issuer shall
take a record of the holders of its Common Stock for the purpose of a subdivision or combination of its
Common Stock or for the purpose of entitling them to receive a dividend or distribution and shall,
thereafter and before the distribution to stockholders thereof, legally abandon its plan to effect
such subdivision or combination or pay or deliver such dividend or
distribution, then thereafter no
adjustment shall be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(i) Other
Action Affecting Common Stock. In case after the Closing Date hereof,
the Issuer shall take any action affecting its Common Stock, other than an action described in any
of the foregoing Sections 4(a) through 4(h), inclusive, and the failure to make any adjustment
would not fairly protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Share Number shall be adjusted
in such manner and at such time as the Board may in good faith determine to be equitable in the
circumstances.
(j) Adjustment
of Warrant Price. Upon each adjustment in the
Warrant Share Number pursuant to any of the foregoing provisions of this Section 4, the Warrant
Price shall be adjusted, to the nearest ten thousandth of one cent, to the product obtained by
multiplying the Warrant Price immediately prior to such adjustment in the Warrant Share Number by a
fraction, the numerator of which shall be the Warrant Share Number immediately before giving effect
to such adjustment and the denominator of which shall be the Warrant Share Number immediately after
giving effect to such adjustment; provided, however, that if at any time, as a result of
any adjustments hereunder, the Warrant Price shall be less than the par value per share of Warrant
Stock, then the price payable per share of Warrant Stock by the Holder
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hereunder in the event of an exercise of this Warrant at such time in whole or in part shall be an
amount equal to the par value per share of such Warrant Stock.
5.
Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be
adjusted pursuant to Section 4 hereof (for purposes of this Section 5, an “adjustment”), the Issuer
shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated (including a description of the basis on which the Board made
any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to
such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this
Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this
Warrant with respect to the matters set forth in such certificate may at the option of the
Requisite Holders of this Warrant be submitted to an independent accounting firm not then regularly
engaged by the Issuer chosen by the Issuer and reasonably acceptable to the Requisite Holders,
which firm shall deliver a written opinion as to such matters to the Issuer and the Holders within
thirty days after submission to it of such dispute. Such opinion shall be final and binding on the
parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer.
6.
Fractional Shares. No fractional shares of Warrant Stock will be issued in
connection with any exercise hereof, but in lieu of such fractional shares, the Issuer shall make a
cash payment therefor equal in amount to the fair market value of such fractional shares.
7.
Definitions. For the purposes of this Warrant, the following terms have the
following meanings:
“Additional
Shares of Common Stock” means all shares of Common Stock issued by the
Issuer after the Closing Date, and all shares of Other Common, if any, issued by the Issuer after
the Closing Date, except (i) the Warrant Stock, (ii) shares of Common Stock issued or issuable upon
conversion of shares of Series A Preferred Stock or Series B Preferred Stock outstanding on the
Closing Date, (iii) shares of Common Stock issued or issuable upon exercise of employee stock
options outstanding on the Closing Date, (iv) shares of Common Stock issued or issuable upon
exercise of options and warrants to purchase Common Stock which are outstanding on the Closing
Date, (v) shares of Common Stock issued or deemed issued after the Closing Date to officers,
directors, consultants, advisors or employees of the Issuer, pursuant to a stock grant, option or
purchase plan or other employee stock incentive program or arrangement approved by a two-thirds
majority of the Board, plus any shares repurchased by the Issuer from such persons, (vi) all shares
of Common Stock issued or deemed issued after the Closing Date in connection with research and
development partnerships, licensing or collaborative arrangements, borrowings from financial
institutions, equipment financing and similar transactions approved by a two-thirds majority of the
Board, and (vii) all shares of Common Stock issuable upon exercise of other options or warrants
issued and outstanding on the Closing Date.
“Affiliate” means, with respect to any Person, (a) each Person that, directly or indirectly,
owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, 5% or more of
the Voting Stock of such Person, (b) each Person that controls, is controlled by or is under common
control with such Person, (c) each of such Person’s officers, directors, joint
11
venturers and partners and (d) in the case of the Issuer, the immediate family members, spouses and
lineal descendants of individuals who are Affiliates of the Issuer. For the purposes of this
definition, “control” of a Person shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise.
“Board” shall mean the Board of Directors of the Issuer.
“Business
Day” means any day except a Saturday, a Sunday or a legal holiday in New York City.
“Capital
Stock” means and includes (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including, without limitation,
shares of preferred or preference stock, (ii) all partnership interests (whether general or
limited) in any Person which is a partnership, (iii) all membership interests or limited liability
company interests in any limited liability company, and (iv) all equity or ownership interests in
any Person of any other type.
“Certificate
of Incorporation” means the Certificate of Incorporation of the Issuer as
in effect on the Closing Date, and as hereafter from time to time amended, modified, supplemented
or restated in accordance with its terms and pursuant to applicable law.
“Closing
Date” means December 9, 2003.
“Common
Stock” means the Common Stock and any other Capital Stock into which such stock may
hereafter be changed.
“Common
Stock Equivalent” means any Convertible Security or warrant, option or other
right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible
Security or any stock appreciation right or other right to receive any payment based upon the value
of the Common Stock or Other Common Stock.
“Convertible
Securities” means evidences of indebtedness, shares of Capital Stock or
other Securities (including the Series A Preferred Stock and Series B Preferred Stock) which are or
may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term
“Convertible Security” means one of the Convertible Securities.
“Current
Market Price” as in effect on any day means the average of the daily market
prices of the Common Stock for the period of 30 consecutive trading days ending three trading days
preceding such date. The market price for each such day shall be the last sale price on such day as
reported on the New York Stock Exchange Consolidated Tape, or, if the Common Stock is not listed on
the New York Stock Exchange, Inc. or reported on such Consolidated Tape, then the last sale price
on such day on the principal domestic stock exchange on which such Common Stock is then listed or
admitted to trading, or, if no sale takes place on such day on such exchange, the average of the
closing bid and asked prices on such day as officially quoted on such exchange, or, if the Common
Stock is not then listed or admitted to trading on any domestic stock exchange but is quoted in the
Nasdaq Stock Markets National Market System (“NMS/NASDAQ”) of the National Association of
Securities Dealers, Inc. Automated Quotation
12
System (“NASDAQ”), then the Current Market Price for each such trading day shall be the last sale
price on such day as quoted by NMS/NASDAQ, or, if no sale takes place on such day or if the Common
Stock is neither listed or admitted to trading on any domestic stock exchange nor quoted on such
NMS/NASDAQ, then the Current Market Price for each such trading day shall be the average of the
reported closing bid and asked price quotations on such day in the over-the-counter market, as
reported by NASDAQ, or, if not so reported, as furnished by the National Quotation Bureau, Inc., or
if such firm at the time is not engaged in the business of reporting such prices, as furnished by
any similar firm then engaged in such business as selected by the Issuer, or if there is no such
firm, as furnished by any member of the National Association of Securities Dealers, Inc. selected
by the Issuer with the written approval of the Requisite Holders (which approval shall not be
unreasonably withheld). If at any time such Common Stock is not listed on any domestic exchange or
quoted in the domestic over-the-counter market, the Current Market Price shall be deemed to be the
fair market value per share of such Common Stock as determined in good faith by the Board by notice
to the Requisite Holders, provided that if the determination of “Current Market Price” is being
made immediately prior to the effectiveness of the Company’s initial public offering of Common
Stock, the “Current Market Price” shall mean the “price to public” per share specified in the final
prospectus relating to that offering. In determining the fair market value of any shares of Common
Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed
by agreement or by federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights, or to minority or non-control
ownership positions. In the event that
the Requisite Holders challenge the determination of Current Market Price by the Board with another
proposed market price for each share of Common Stock, and independent appraiser selected by the
board of directors of the Issuer shall determine the Current Market Price, and the Issuer shall
bear the cost of such appraisal only if the difference between its challenged Current Market Price
and the one determined by the independent appraiser is greater than that between the market price
proposed by the Requisite Holders and the one determined by the independent appraiser; otherwise,
the Requisite Holders shall bear the cost of such appraisal.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any similar federal
statute at the time in effect.
“Holders” mean the Persons who shall from time to time own any Warrant. The term “Holder”
means one of the Holders.
“Independent
Appraiser” means a nationally recognized investment banking firm or other
nationally recognized firm, in each case, that is regularly engaged in the business of appraising
the Capital Stock or assets of corporations or other entities as going concerns, and which is not
affiliated with either the Issuer or the Holder of any Warrant.
“Issuer” has the meaning specified in the first paragraph hereof.
“Other
Common” means any Capital Stock of the Issuer of any class which shall be authorized at
any time after the date of this Warrant (other than Common Stock) and which shall have the right to
participate in the distribution of earnings and assets of the Issuer without limitation as to
amount.
13
“Person” means an individual, a corporation, a partnership, a trust, a limited
liability company, an unincorporated organization or a government organization or an
agency or political subdivision thereof.
“Qualified
Public Offering” means the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement under the
Securities Act, covering the offer and sale of Common Stock in which (1) the public
offering price equals or exceeds $10.00 per share (adjusted to reflect subsequent
stock dividends, stock splits or recapitalization) and (2) the aggregate gross
offering proceeds (before underwriters discounts and commissions and before expenses)
equals or exceeds $50 million.
“Requisite
Holders” means at any time the Holders of Warrants (other than
the Issuer or any Subsidiary thereof) exercisable for a majority of the shares of
Warrant Stock issuable under the Warrants at the time outstanding.
“Securities” means any debt or equity securities of the Issuer, whether now or
hereafter authorized, any instrument convertible into or exchangeable for Securities
or a Security, and any option, warrant or other right to purchase or acquire any
Security. “Security” means one of the Securities.
“Series B
Preferred Stock” means the Issuer’s Series B Preferred Stock
having the terms provided in the Certificate of Incorporation as of the Closing Date.
“Securities
Act” means the Securities Act of 1933, as amended, or any similar
federal statute then in effect.
“Subsidiary” means any corporation at least 50% of whose outstanding Voting Stock
shall at the time be owned directly or indirectly by the Issuer or by one or more of
its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.
“Voting
Stock”, any class or classes (however designated) of capital stock having
ordinary voting power for the election of a majority of the members of the Board (or
other governing body) of the corporation, other than Capital Stock having such power
only by reason of the happening of a contingency.
“Warrants” means this Warrant and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions of Section 2(c) or
2(d) hereof or of any of such other Warrants.
“Warrant
Price” means the exercise price per share of Common Stock specified in
the first paragraph of this Warrant and such other exercise prices as shall result
from the adjustments specified in Section 4 hereof.
“Warrant
Share Number” means at any time the aggregate number of shares
of Warrant Stock which may at such time be purchased upon exercise of this Warrant,
after giving effect to all prior adjustments to such number made or required to be
made under the terms hereof.
14
“Warrant
Stock” means Common Stock issuable upon exercise of any Warrant or Warrants or
otherwise issuable pursuant to any Warrant or Warrants.
8.
Information. The Issuer shall deliver to the Holder hereof and to each holder of shares of
Warrant Stock the documents and other information required under
Article 6 of the Note and Warrant
Purchase Agreement, dated as of the Closing Date, among the Issuer, the guarantors signatory
thereto, FFC Partners II, L.P. and FFC Executive Partners II, L.P. within the applicable time
period specified therein and regardless of whether or not that Agreement is then in effect.
9.
Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant
may be amended, or compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), by a written instrument or written instruments executed
by the Issuer and the Requisite Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during
which this Warrant may be exercised, change the manner of payment of the Warrant Price or modify
any provision of this Section 9 without the consent of the Holder of this Warrant.
10.
Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF.
11.
Notices. All notices and other communications provided for hereunder shall be in
writing and delivered by hand or sent by first class registered mail, return receipt requested, or
sent by telecopy (with such telecopy to be confirmed promptly in writing sent by first class
registered mail, return receipt requested), and if to the Holder of this Warrant or of Warrant
Stock issued pursuant hereto, addressed to such Holder at its last known address or telecopy number
appearing on the books of the Issuer maintained for such purposes, and if to the Issuer, addressed
to:
Volcano Therapeutics, Inc.
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Facsimile: 000-000-0000
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Facsimile: 000-000-0000
or to such other address or addresses or telecopy number or numbers as any such party may most
recently have designated in writing to the other parties hereto by such notice. All such
communications shall be deemed to have been given or made when so delivered by hand, upon actual
receipt if sent by telecopy, or three business days after being so mailed.
12.
Remedies. The Issuer stipulates that the remedies at law of the Holder of this
Warrant in the event of any default or threatened default by the Issuer in the performance of or
compliance with any of the terms of this Warrant are not and will not be adequate and that, to the
fullest extent permitted by law, such terms may be specifically enforced by a decree for the
15
specific performance of any agreement contained herein or by an injunction against a violation of
any of the terms hereof or otherwise. Time is of the essence in this Warrant.
13.
Successors and Assigns. This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof
and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall
be enforceable by any such Holder or Holder of Warrant Stock.
14.
Modification and Severability. If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision hereof is found to be
unenforceable, then such provision shall be deemed modified to the extent necessary to make it
enforceable by such court or agency. If any such provision is not enforceable as set forth in the
preceding sentence, the unenforceability of such provision shall not affect the other provisions of
this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been
contained herein.
15.
Integration. This Warrant replaces all prior agreements, supersedes all prior
negotiations and constitutes the entire agreement of the parties with respect to the transactions
contemplated herein.
16.
Headings. The headings of the Sections of this Warrant are for convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.
16
| VOLCANO THERAPEUTICS, INC. | ||||||||
| By: | /s/ Xxxxx Xxxxxxxxxx | |||||||
| Name: | Xxxxx Xxxxxxxxxx | |||||||
| Title: | President & CEO | |||||||
EXERCISE FORM
[ ]
The undersigned hereby irrevocably elects to exercise the right to purchase
represented by the attached Warrant for, and to purchase thereunder,
shares of
Common Stock, par value $.01 per share (the “Common
Stock”), of Volcano Therapeutics, Inc. (the
“Issuer”), as provided for therein, and tenders herewith payment of the Warrant Price in full in
accordance with the terms of the attached Warrant.
Please issue a certificate or certificates for such shares of Common Stock in the following
name or names and denominations:
If said number of shares of Common Stock shall not be all the shares of Common Stock issuable
upon exercise of the attached Warrant, a new Warrant is to be issued in the name of the undersigned
for the balance remaining of such shares of Common Stock less any fraction of a share of Common
Stock paid in cash.
Dated:
|
Signature | |||||||
| Address | ||||||||
17
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells,
assigns and transfers unto the within Warrant and all rights evidenced
thereby and does irrevocably constitute and appoint , attorney, to transfer the
said Warrant on the books of the within named corporation.
Dated:
|
Signature | |||||||
| Address | ||||||||
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells,
assigns and transfers unto
the right to purchase shares of the
Common Stock issuable upon exercise of the attached Warrant, and does irrevocably constitute
and appoint , attorney, to transfer that part of the said Warrant on the
books of the within named corporation.
Dated:
|
Signature | |||||||
| Address | ||||||||
FOR USE BY THE ISSUER ONLY:
This
Warrant No. W-___ cancelled (or transferred or
exchanged) this ___ day of , 20_,
shares of Common Stock issued therefor in the name of , Warrant No.
W- ___ issued for ___ shares of Common Stock in the name of
18
