THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH
RULE 144 UNDER SAID ACT OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
-----------------------
WARRANT TO PURCHASE 11,000 SHARES OF COMMON STOCK
April 15, 1997
THIS CERTIFIES THAT, for value received, Lease Management Services, Inc.,
("Holder") is entitled to subscribe for and purchase Eleven Thousand (11,000)
shares of the fully paid and nonassessable Common Stock ("the Shares") of
Intuitive Surgical, Inc., a Delaware corporation (the "Company"), at the
Warrant Price (as hereinafter defined), subject to the provisions and upon
the terms and conditions hereinafter set forth. As used herein, the term
"Common Stock" shall mean the Company's presently authorized Common Stock,
and any stock into which such Common Stock may hereafter be exchanged.
1. WARRANT PRICE. The Warrant Price shall initially be Five and 00/100
dollars ($5.00) per share, subject to adjustment as provided in Section 7
below.
2. CONDITIONS TO EXERCISE. The purchase right represented by this Warrant
may be exercised at any time, or from time to time, in whole or in part
during the term commencing on the date hereof and ending on the earlier of:
(a) 5:00 P.M. California time on the sixth annual anniversary of this
Warrant Agreement; or
(b) the effective date of the merger of the Company with or into, the
consolidation of the Company with, or the sale by the Company of all or
substantially all of its assets to another corporation or other entity
(other than such a transaction wherein the shareholders of the Company
retain or obtain a majority of the voting capital stock of the
surviving, resulting, or purchasing corporation); provided that the
Company shall notify the registered Holder of this Warrant of the
proposed effective date of the merger, consolidation, or sale at least
30 days prior to the effectiveness thereof.
In the event that, although the Company shall have given notice of a
transaction pursuant to subparagraph (b) hereof, the transaction does
not close on approximately the day specified by the Company, unless
otherwise elected by the Holder any exercise of the Warrant subsequent
to the giving of such notice shall be rescinded and the Warrant shall
again be exercisable until terminated in accordance with this Paragraph
2.
3. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF SHARES; ISSUANCE OF NEW WARRANT.
(a) CASH EXERCISE. Subject to Section 2 hereof, the purchase right
represented by this Warrant may be exercised by the Holder hereof, in whole
or in part, by the surrender of this
Page 2 of 10
Warrant (with a duly executed Notice of Exercise in the form attached hereto)
at the principal office of the Company (as set forth in Section 18 below) and
by payment to the Company, by check, of an amount equal to the then
applicable Warrant Price per share multiplied by the number of shares then
being purchased. In the event of any exercise of the rights represented by
this Warrant, certificates for the shares of stock so purchased shall be in
the name of, and delivered to, the Holder hereof, or as such Holder may
direct (subject to the terms of transfer contained herein and upon payment by
such Holder hereof of any applicable transfer taxes). Such delivery shall be
made within 10 days after exercise of the Warrant and at the Company's
expense and, unless this Warrant has been fully exercised or expired, a new
Warrant having terms and conditions substantially identical to this Warrant
and representing the portion of the Shares, if any, with respect to which
this Warrant shall not have been exercised, shall also be issued to the
Holder hereof within 10 days after exercise of the Warrant.
(b) NET ISSUE EXERCISE. In lieu of exercising this Warrant pursuant to
Section 3(a), Holder may elect to receive shares equal to the value of this
Warrant (or of any portion thereof remaining unexercised) by surrender of
this Warrant at the principal office of the Company together with notice of
such election, in which event the Company shall issue to Holder the number of
shares of the Company's Common Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock purchasable under this Warrant
(at the date of such calculation).
A = the fair market value of one share of the Company's Common Stock
(at the date of such calculation).
B = Warrant exercise price (as adjusted to the date of such
calculation).
(c) FAIR MARKET VALUE. For purposes of this Section 3, Fair Market Value of
one share of the Company's Common Stock shall mean:
(i) In the event of an Initial Public Offering, the per share Fair
Market Value for the Common Stock shall be the Offering Price at which
the underwriters sell Common Stock to the public; or
(ii) The average of the closing bid and asked prices of the Common
Stock quoted in the Over-The-Counter Market Summary, the last reported
sale price of the Common Stock or the closing price quoted on the
Nasdaq National Market System ("NMS") or on any exchange on which the
Common Stock is listed, whichever is applicable, as published in the
Western Edition of The Wall Street Journal for the ten (10) trading
days prior to the date of determination of fair market value; or
(iii) If the Company shall be subject to a merger, acquisition or other
consolidation in which the Company is not the surviving entity,
pursuant to Section 2(b), the per share Fair Market Value for the
Common Stock shall be the value received per share of Common Stock by
all holders of the Common Stock as determined by the Board of
Directors; or
(iv) If the Common Stock is not publicly traded, the per share fair
market value of the Common Stock shall be as determined in good faith
by the Company's Board of
2
Page 3 of 10
Directors unless Holder electes to have such fair market value
determined by an appraiser, which election must be made by Holder
within ten (10) business days of the date the Company notifies Holder
of the fair market value as determined by its Board of Directors. In
the event of such an appraisal, the cost thereof shall be borne by the
Holder unless such appraisal results in a fair market value in excess
of 115% of that determined by the Company's Board of Directors, in
which event the Company shall bear the cost of such appraisal.
In the event of 3(c)(iii) or 3(c)(iv), above, the Company's Board of
Directors shall prepare a certificate, to be signed by an authorized
Officer of the Company, setting forth in reasonable detail the basis
for and method of determination of the per share Fair Market Value of
the Common Stock. The Board will also certify to the Holder that this
per share Fair Market Value will be applicable to all holders of the
Company's Common Stock. Such certification must be made to Holder at
least thirty (30) business days prior to the proposed effective date of
the merger, consolidation, sale, or other triggering event as defined
in 3(c)(iii) and 3(c)(iv).
(d) AUTOMATIC EXERCISE. To the extent this Warrant is not previously
exercised, it shall be automatically exercised in accordance with Sections
3(b) and 3(c) hereof (even if not surrendered) immediately before: (i) its
expiration or (ii) the consummation of any consolidation or merger of the
Company, or any sale or transfer of a majority of a company's assets
pursuant to Section 2(b).
4. REPRESENTATIONS AND WARRANTIES OF HOLDER AND RESTRICTIONS ON TRANSFER
IMPOSED BY THE SECURITIES ACT OF 1933.
(a) Representations and Warranties by Xxxxxx. The Holder represents and
warrants to the Company with respect to this purchase as follows:
(i) The Holder has substantial experience in evaluating and
investing in private placement transactions of securities of companies
similar to the Company so that the Holder is capable of evaluating the
merits and risks of its investment in the Company and has the capacity
to protect its interests.
(ii) The Holder is acquiring the Warrant and the Shares of Common
Stock issuable upon exercise of the Warrant (collectively the
"Securities") for investment for its own account and not with a view
to, or for resale in connection with, any distribution thereof. The
Holder understands that the Securities have not been registered under
the Act by reason of a specific exemption from the registration
provisions of the Act which depends upon, among other things, the bona
fide nature of the investment intent as expressed herein. In this
connection, the Holder understands that, in the view of the Securities
and Exchange Commission (the "SEC"), the statutory basis for such
exemption may be unavailable if this representation was predicated
solely upon a present intention to hold the Securities for the minimum
capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the
Securities or for a period of one year or any other fixed period in the
future.
(iii) The Holder acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or an
exemption from such registration is available. The Holder is aware of
the provisions of Rule 144 promulgated under the Act ("Rule 144") which
permits limited resale of securities purchased in a private placement
subject to the satisfaction of certain conditions, including, in case
the securities have been held for less than three years, the existence
of a public market for
3
Page 4 of 10
the shares, the availability of certain public information about the
Company, the resale occurring not less than two years after a party has
purchased and paid for the security to be sold, the sale being through
a "broker's transaction" or in a transaction directly with a "market
maker" (as provided by Rule 144(f)) and the number of shares or other
securities being sold during any three-month period not exceeding
specified limitations.
(iv) The Holder further understands that at the time the Holder wishes
to sell the Securities there may be no public market upon which such a
such a sale may be effected, and that even if such a public market
exists, the Company may not be satisfying the current public information
requirements of Rule 144, and that in such event, the Holder may be
precluded from selling the Securities under Rule 144 unless a) a
three-year minimum holding period has been satisfied and b) the Holder
was not at the time of the sale nor at any time during the three-month
period prior to such sale an affiliate of the Company.
(v) The Holder has had an opportunity to discuss the Company's
business, management and financial affairs with its management and an
opportunity to review the Company's facilities. The Holder understands
that such discussions, as well as the written information issued by the
Company, were intended to describe the aspects of the Company's
business and prospects which it believes to be material but were not
necessarily a thorough or exhaustive description.
(b) LEGENDS. Each certificate representing the Securities shall be endorsed
with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH
TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE
SECURITIES AND EXCHANGE COMMISSION, OR (IF REASONABLY REQUIRED BY
THE COMPANY) AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO
THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
The Company need not register a transfer of Securities unless the conditions
specified in the foregoing legend are satisfied. The Company may also
instruct its transfer agent not to register the transfer of any of the Shares
unless the conditions specified in the foregoing legend are satisfied.
(c) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. The legend relating to the
Act endorsed on a certificate pursuant to paragraph 4(b) of this Warrant and
the stop transfer instructions with respect to the Securities represented by
such certificate shall be removed and the Company shall issue a certificate
without such legend to the Holder of the Securities if (i) the Securities are
registered under the Act and a prospectus meeting the requirements of Section
10 of the Act is available or (ii) the Holder provides to the Company an
opinion of counsel for the Holder reasonably satisfactory to the Company, or
a no-action letter or interpretive opinion of the staff of the SEC reasonably
satisfactory to the Company, to the effect that public sale, transfer or
assignment of the Securities may be without registration and without
compliance with any restriction such as Rule 144.
5. CONDITION OF TRANSFER OR EXERCISE OF WARRANT. It shall be a condition to
any transfer or exercise of this Warrant that at the time of such transfer or
exercise, the Holder shall provide
4
Page 5 of 10
the Company with a representation in writing that the Holder or transferee is
acquiring this Warrant and the shares of Common Stock to be issued upon
exercise, for investment purposes only and not with a view to any sale or
distribution, or a statement of pertinent facts covering any proposed
distribution. As a further condition to any transfer of this Warrant or any
or all of the shares of Common Stock issuable upon exercise of this Warrant,
other than a transfer registered under the Act, the Company must have
received a legal opinion, in form and substance satisfactory to the Company
and its counsel, reciting the pertinent circumstances surrounding the
proposed transfer and stating that such transfer is exempt from the
registration and prospectus delivery requirements of the Act. Each
certificate evidencing the shares issued upon exercise of the Warrant or upon
any transfer of the shares (other than a transfer registered under the Act or
any subsequent transfer of shares so registered) shall, at the Company's
option, contain a legend in form and substance satisfactory to the Company
and its counsel, restricting the transfer of the shares to sales or other
dispositions exempt from the requirements of the Act.
As further condition to each transfer, the transferee shall receive and
accept a Warrant, of like tenor and date, executed by the Company.
6. STOCK FULLY PAID; RESERVATION OF SHARES. All Shares which may be issued
upon the exercise of the rights represented by this Warrant will, upon
issuance, be fully paid and nonassessable, and free from all taxes, liens,
and charges with respect to the issue thereof. During the period within
which the rights represented by this Warrant may be exercised, the Company
will at all times have authorized, and reserved for issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of shares
of its Common Stock to provide for the exercise of the rights represented by
this Warrant.
7. ANTI-DILUTION PROVISIONS, ADJUSTMENTS ETC.
7.1 ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company, at
any time or from time to time, effects a subdivision of, or combines,
the outstanding shares of Common Stock, by stock split or stock
dividend or by reverse stock split, respectively, then, and in each
such event, the Warrant Price in effect immediately prior thereto shall
immediately be proportionately decreased or increased, as the case may
be, and the number of shares of Common Stock issuable at the time upon
exercise of this warrant shall be proportionately increased or
decreased, as the case may be.
7.2 ADJUSTMENT FOR RECAPITALIZATION, RECLASSIFICATION, OR EXCHANGE.
If, at any time or from time to time, the Common Stock issuable upon
exercise of this Warrant is changed into the same or a different number
of shares of any other class or classes of stock of the Company,
whether by recapitalization, reclassification or other exchange (other
than as provided for elsewhere in this Section 7), then, and in each
such event, the Holder shall have the right thereafter to purchase the
kind and amount of stock and other securities and property receivable
upon such recapitalization, reclassification or other exchange, by
holders of the number of shares of Common Stock with respect to which
this Warrant might have been exercised immediately prior to such
recapitalization, reclassification or other exchange, all subject to
further adjustment as provided herein.
7.3 REORGANIZATION, MERGERS, CONSOLIDATIONS OR TRANSFER OF ASSETS. If,
at any time or from time to time, there is a capital reorganization of
the Common Stock (other that as provided for elsewhere in this Section
7) or a merger or consolidation of the Company with or into another
corporation, or a transfer of all or substantially all of the Company's
assets to any other person, then, and in, and as a part of, each such
event,
5
Page 6 of 10
provision shall be made so that the Holder shall thereafter be entitled
to receive upon exercise of this Warrant the number of shares of stock
or other securities or property of the Company, or, if applicable, of
the resulting successor corporation, to which a holder of the number of
shares of Common Stock issuable upon exercise of this Warrant would
have been entitled on such capital reorganization, merger,
consolidation or transfer, all subject to further adjustment as
provided herein, and in, and as a part of, each such event, in any such
case, appropriate adjustment shall be made in the application of the
provisions of this Section 7 with respect to the rights of the Holder
after the reorganization, merger, consolidation or transfer to the end
that the provisions of this Section 7 (including adjustment of the
Warrant Price then in effect and the number of shares issuable upon
exercise of this Warrant) shall be applicable after that event and
shall be as nearly equivalent to the provisions hereof as may be
practicable.
7.4 ADJUSTMENTS FOR SALES OF SECURITIES BELOW WARRANT PRICE.
7.4.1 If at any time or from time to time after the date hereof,
the Company issues or sells, or is deemed by the provisions of
this Section 7.4 to have issued or sold, Additional Shares of
Common Stock (as hereinafter defined), other than as provided
elsewhere in this Section 7, for an Effective Price (as
hereinafter defined) less than the Warrant Price, then, and in
each such event, the Warrant Price shall be reduced, as of the
opening of business on the date of such issue or sale, to a price
determined by multiplying the Warrant Price by a fraction (i) the
numerator of which shall be (A) the number of shares of Common
Stock outstanding on an as-converted basis assuming the exercise
of all outstanding options, warrants, and convertible securities
at the close of the business on the date next preceding the date
of such issue or sale, plus (B) the number of shares of Common
Stock which the aggregate consideration received (or by express
provision hereof deemed to have been received) by the Company for
the total number of Additional Shares of Common Stock so issued
would purchase at the Warrant Price, and (ii) the denominator of
which shall be the number of shares of Common Stock outstanding on
an as-converted basis assuming the exercise of all outstanding
options, warrants and convertible securities at the close of
business on the date of such issue or sale after giving effect to
such issue or sale of Additional Shares of Common Stock.
7.4.2 For the purposes of making any adjustment required under
this Section 7.4, the consideration received by the Company for
any issue or sale of securities shall (i) to the extent it
consists of cash, be computed at the net amount of cash received
by the Company after deduction of any underwriting or similar
commissions, compensation, or concessions paid or allowed by the
Company in connection with such issue or sale, (ii) to the extent
it consists of property other than cash, be computed at the fair
value of that property as reasonably determined by the Board of
Directors of the Company in good faith as of the date of such
issuance and sale, and (iii) if Additional Shares of Common Stock,
Convertible Securities (as hereinafter defined) or rights or
options to Additional Shares of Common Stock or Convertible
Securities are issued or sold together with other stock or
securities or other assets of the Company for a consideration
which covers both, be computed as the portion of the consideration
so received that may be reasonably determined in good faith by the
Board of Directors of the Company to be allocable to such
Additional Shares of Common Stock, Convertible Securities or
rights or options.
7.4.3 For the purpose of the adjustment required under this
Section 7.4, if, at any time or from time to time after the date
hereof, the Company issues or sells any rights or options for the
purchase of, or stock or other securities convertible into,
Additional Shares of Common Stock (such convertible stock of
securities being
6
Page 7 of 10
hereinafter referred to as "Convertible Securities"), then, and in each such
event, the Company shall be deemed to have issued at the time of the issuance
of sale of such rights or options or Convertible Securities the maximum
number of Additional Shares of Common Stock issuable upon exercise or
conversion thereof and to have received as consideration for the ISSUANCE OF
SUCH SHARES AN AMOUNT EQUAL TO (i) THE TOTAL AMOUNT OF THE CONSIDERATION, if
any, received by the Company for the issuance of such rights or options or
Convertible Securities, plus (ii) in the case of such options or rights, the
minimum amounts of consideration, if any, payable to the Company upon the
exercise or such options or rights, and, in the case Convertible Securities,
the minimum amounts of consideration, if any, payable to the Company (other
than by cancellation of liabilities or obligations evidenced by such
Convertible Securities) upon the conversion of such Convertible Securities.
No further adjustment of the Warrant Price adjusted upon the issuance of such
rights, options or Convertible Securities shall be made as a result of the
actual issuance of Additional Shares of Common Stock upon the exercise of any
such rights or options or the conversion of any such Convertible Securities.
If any such rights or options or the conversion privilege represented by any
such Convertible Securities shall expire without having been exercised in
full, the Warrant Price adjusted upon the issuance of such rights or options
or Convertible Securities shall be readjusted to the Warrant Price or Prices
which would have been in effect had an adjustment been required under this
Section 7.4 and made on the basis that only the Additional Shares of Common
Stock, if any, actually issued or sold upon the exercise of such rights or
options or conversion of such Convertible Securities were issued or sold, and
such Additonal Shares of Common Stock, if any, were issued or sold for (i) in
the case of rights or options, the consideration actually received by the
Company upon such exercise plus the consideration, if any, actually received
by the Company for the granting of all such rights or options, whether or not
exercised, and (ii) in the case of Convertible Securities, the consideration
received for issuing or selling all such Covertible Securities plus the
considration, if any, actually received by the Company (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion of such Convertible Securities.
7.4.4 For the purpose of the adjustment required under this Section 7.4, if,
at any time or from time to time after the date hereof, the Company issues or
sells any rights or options for the purchase of, or convertible securities
convertible into, Convertible Securities, then, and in each such event, the
Company shall be deemed to have issued, at the time of the issuance or sale
of such rights or options or such covertible securities, the maximum number
of Additional Shares of Common Stock issuable upon conversion of all of the
Convertible Securities covered by such rights or options or such convertible
securities and to have received as Consideration for the issuance of such
Additional Shares of Common Stock an amount equal to (i) the amount of
consideration, if any, received by the Company for the issuance of such
rights or options or such convertible securities, plus (ii) the minimum
amount of consideration, if any, payable to the Company upon the exercise of
such rights or options (other than by cancellation of liabilities or
obligations evidenced by such convertible securities), and plus (iii) the
minimum amount of consideration, if any, payable to the Company (other than
by cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion of such Convertible Securities. No further
adjustment of the Warrant Price adjusted upon the issuance of such rights or
options or such convertible securities shall be made as a result of the
actual issuance of the Convertible Securities upon the exercise of such
rights or options or conversion of such convertible securities or upon the
actual issuance of additional shares of Common Stock upon the conversion of
such Convertible Securities. The provisions of
7
Page 8 of 10
paragraph 7.3 above with respect to the readjustment of the Warrant Price
upon the expiration of rights or options or the rights of conversion of
Convertible Securities shall apply MUTATIS MUTANDIS to the rights or options,
convertible securities and Convertible Securities referred to in this
paragraph 7.4.
7.4.5 "ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares of Common
Stock issued by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than (1) shares of
Common Stock issued upon conversion of the Series A Preferred Stock, Series B
Preferred Stock, and Series C Preferred Stock; (2) shares of Common Stock
and/or options, warrants, or other Common Stock purchase rights (as adjusted
for any stock dividends, combinations, splits, recapitalizations and the
like) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary pursuant to stock
purchase or stock option plans or other arrangements that are approved by the
Board; (3) shares of Common Stock issued pursuant to the exercise options,
warrants or convertible securities outstanding as of the date hereof. The
"Effective Price" of Additional Shares of Common Stock shall mean the
quotient determined by dividing the total number of Additional Shares of
Common Stock issued or sold, or deemed to have been issued or sold by the
Company under this Section 7.4, into the aggregate consideration received, or
deemed to have been received by the Company for such issue or sale under this
Section 7.4, for such Additional Shares of Common Stock."
7.5 NOTICES OF RECORD DATE. In the event of (a) any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (b) any capital reorganization of the Company, any
reclassification, recapitalization or exchange of the capital stock of the
Company, or any merger or consolidation of the Company with or into another
corporation, or any transfer of all or substantially all of the assets of the
Company to any other person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Company, the Company shall mail to the
Holder, at least 10 days prior to the record date specified therein, a notice
specifying (x) the date on which any such record is to be taken for the
purpose of such dividend or distribution, (y) the date on which any such
reorganization, recapitalization, reclassification, exchange, consolidation,
merger, transfer, dissolution, liquidation or winding up is expected to
become effective, and (z) the time, if any, that is to be fixed, as to when
the holders of record of Common Stock (or other securities) shall be entitled
to exchange their shares of Common Stock (or other securities) for securities
or other property deliverable upon such reorganization, recapitalization,
reclassification, exchange, consolidation, merger, transfer, dissolution,
liquidation or winding up.
7.6 RESERVATION OF STOCK ISSUABLE UPON EXERCISE. The Company at all times
reserve and keep available out of its authorized but unissued shares of
Common Stock such number of its shares of Common Stock as shall from time to
time be sufficient to effect the exercise of this Warrant and all other
rights or options to purchase Common Stock, and to permit the conversion of
all stock or other securities convertible into Common Stock, as may be
outstanding from time to time. If at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient for such purposes,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purposes.
8. NOTICE OF ADJUSTMENTS. Whenever any Warrant Price shall be adjusted
pursuant to Section 7 hereof, the Company shall prepare a certificate signed
by its chief financial officer
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Page 9 of 10
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the Warrant Price and number of shares issuable upon exercise of the
Warrant after giving effect to such adjustment, and shall cause copies of
such certificate to be mailed (by certified or registered mail, return
receipt required, postage prepaid) within thirty (30) days of such adjustment
to the Holder of this warrant as set forth in Section 18 hereof.
9. "MARKET STAND-OFF" AGREEMENT. Holder hereby agrees that for a period of
up to 180 days following the effective date of the first registration
statement of the Company covering common stock (or other securities) to be
sold on its behalf in an underwritten public offering, it will not, to the
extent requested by the Company and any underwriter, sell or otherwise
transfer or dispose of (other than to donees or transferees who agree to be
similarly bound) any of the Shares at any time during such period except
common stock included in such registration; provided, however, that all
officers and directors of the Company who hold securities of the Company or
options to acquire securities of the Company and all other persons with
registration rights enter into similar agreements.
10. TRANSFERABILITY OF WARRANT. This Warrant is transferable on the books
of the Company at its principal office by the registered Holder hereof upon
surrender of this Warrant properly endorsed, subject to compliance with
applicable federal and state securities laws. The Company shall issue and
deliver to the transferee a new Warrant representing the Warrant so
transferred. Upon any partial transfer, the Company will issue and deliver
to Holder a new Warrant with respect to the Warrant not so transferred.
Holder shall not have any right to transfer any portion of this Warrant to
any direct competitor of the Company.
11. NO FRACTIONAL SHARES. No fractional share of Common Stock will be
issued in connection with any exercise hereunder, but in lieu of such
fractional share the Company shall make a cash payment therefor upon the
basis of the Warrant Price then in effect.
12. CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge
to the Holder for any United States or state of the United States documentary
stamp tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the Holder.
13. NO STOCKHOLDER RIGHTS UNTIL EXERCISE. This Warrant does not entitle the
Holder hereof to any voting rights or other rights as a stockholder of the
Company prior to the exercise hereof.
14. REGISTRY OF WARRANT. The Company shall maintain a registry showing the
name and address of the registered Holder of this Warrant. This Warrant may
be surrendered for exchange or exercise, in accordance with its terms, at
such office or agency of the Company, and the Company and Holder shall be
entitled to rely in all respects, prior to written notice to the contrary,
upon such registry.
15. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and, in this case of loss, theft,
or destruction, of indemnity reasonably satisfactory to it, and, if
mutilated, upon surrender and cancellation of this Warrant, the Company will
execute and deliver a new Warrant, having terms and conditions substantially
identical to this Warrant, in lieu hereof.
16. MISCELLANEOUS.
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Page 10 of 10
(a) ISSUE DATE. The provisions of this Warrant shall be construed and
shall be given effect in all respect as if it had been issued and
delivered by the Company on the date hereof.
(b) SUCCESSORS. This Warrant shall be binding upon any successors or
assigns of the Company.
(c) GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of California.
(d) HEADINGS. The headings used in this Warrant are used for
convenience only and are not to be considered in construing or
interpreting this Warrant.
(e) SATURDAYS, SUNDAYS, HOLIDAYS. If the last or appointed day for
the taking of any action or the expiration of any right required
or granted herein shall be a Saturday or a Sunday or shall be a
legal holiday in the State of California, then such action may be
taken or such right may be exercised on the next succeeding day
not a legal holiday.
17. NO IMPAIRMENT. The Company will not, by amendment of its Articles of
Incorporation or any other voluntary 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 action as may be necessary or appropriate in order to
protect the rights of the Holder hereof against impairment.
18. ADDRESSES. Any notice required or permitted hereunder shall be in
writing and shall be mailed by overnight courier, registered or certified
mail, return receipt required, and postage pre-paid, or otherwise delivered
by hand or by messenger, addressed as set forth below, or at such other
address as the Company or the Holder hereof shall have furnished to the other
party.
If to the Company: Intuitive Surgical, Inc.
0000 X. Xxxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
If to the Holder: Lease Management Services, Inc.
0000 Xxxx Xxxx Xxxx, Xxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, EVP/GM
IN WITNESS WHEREOF, Intuitive Surgical has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated as of April 15th, 1997.
/s/ Xxxxxx X. Xxxxx
-------------------------------
BY:
---------------------------
TITLE: CEO
------------------------
10
NOTICE OF EXERCISE
TO:
1. The undersigned Warrantholder ("Holder") elects to acquire shares of the
Common Stock of __________________________ (the "Company"), pursuant to
the terms of the Stock Purchase Warrant dated ____________, 199_ (the
"Warrant").
2. The Holder exercises its rights under the Warrant as set forth below:
( ) The Holder elects to purchase _________ shares of Common
Stock as provided in Section 3(a), (c) and tenders
herewith a check in the amount of $________ as payment
of the purchase price.
( ) The Holder elects to convert the purchase rights into
shares of Common Stock as provided in Section 3(b), (c)
of the Warrant.
3. The Holder surrenders the Warrant with this Notice of Exercise.
4. The Holder represents that it is acquiring the aforesaid shares of
Common Stock for investment and not with a view to, or for resale in
connection with, distribution and that the Holder has no present
intention of distributing or reselling the shares.
5. Please issue a certificate representing the shares of Common Stock in
the name of the Holder or in such other name as is specified below:
Name:
Address:
Taxpayer I.D.:
-------------------------------
(Holder)
By:
---------------------------
Title:
------------------------
Date:
-------------------------
