THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Corporation: Cardiopulmonary Corp., a Delaware Corporation
Number of Shares: 4,000
Class of Stock: Common
Initial Exercise Price: Shall equal the dollar amount represented as the low
range in the S-1 Registration Statement provided an
initial public offering is completed prior
to August 31, 1996 or the lesser of (1) $5.00 or
(II) the next financing round if completed by
September 30,1996.
Issue Date: June 5, 1996
Expiration Date: June 5, 2001
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK ("Holdee') is
entitled to purchase the number of fully paid and nonassessable shares of the
class of securities (the "Shares") of the corporation (the "Company") at the
initial exercise price per Share (the'Warrant Price") all as set forth above and
as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and
upon the terms and conditions set forth in this Warrant.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company. Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased.
1.2 Conversion Right In lieu of exercising this Warrant as specified in
Section 1. 1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall be
determined pursuant Section 1.4.
1.3 Intentionally Omitted.
1.4 Fair Market Value. If the Shares are traded in a public market, the
fair market value of the Shares shall be the closing price of the Shares (or the
closing price of the Company's stock into which the Shares are convertible)
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company. If the Shares are not traded in a public market, the
Board of Directors of the Company shall determine fair market value in its
reasonable good faith judgment. The foregoing notwithstanding, if Holder advises
the Board of Directors in writing that Holder disagrees with such determination,
then the Company and Holder shall promptly agree upon a reputable investment
banking firm to undertake such valuation. If the valuation of such investment
banking firm is 10% or more greater than that determined by the Board of
Directors, then all fees and expenses of such investment banking
firm shall be paid by the Company. In all other circumstances, such fees and
expense s shall be paid by Holder.
1.5 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.6 Replacement of Warrants. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, or surrender and cancellation of this Warrant, the Company
at its expense shall execute and deliver, in lieu of this Warrant, a new warrant
of like tenor.
1.7 Repurchase on Sale, Merger, or Consolidation of the Company.
1.7.1. "Acquisition". For the purpose of this Warrant,"Acquisition"means
any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.
1.7.2. Assumption of Warrant. If upon the closing of any Acquisition the
successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
1.7.3. Nonassumption. If upon the closing of any Acquisition the successor
entity does not assume the obligations of this Warrant and Holder has not
otherwise exercised this Warrant in full, then the unexercised portion of this
Warrant shall be deemed to have been automatically converted pursuant to Section
1.2 and thereafter Holder shall participate in the acquisition on the same terms
as other holders of the same class of securities of the Company.
1.7.4. Purchase Right. Notwithstanding the foregoing, at the election of
Holder, the Company shall purchase the unexercised portion of this Warrant for
cash upon the closing of any Acquisition for an amount equal to (a) the fair
market value of any consideration that would have been received by Holder in
consideration of the Shares had Holder exercised the unexercised portion of this
Warrant immediately before the record date for determining the shareholders
entitled to participate in the proceeds of the Acquisition, less (b) the
aggregate Warrant Price of the Shares, but in no event less than zero.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend or subdivision occurred.
2
2.2 Reclassification, Exchange or Substitution. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. Such an
event shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company's Articles of Incorporation upon the
closing of a registered public offering of the Company's common stock. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Warrant Price-and to the number of securities or property issuable upon exercise
of the new Warrant. The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
2.4 Adjustments for Diluting Issuances. The Warrant Price and the number of
Shares issuable upon exercise of this Warrant or, if the Shares are Preferred
Stock, the number of shares of common stock issuable upon conversion of the
Shares, shall be subject to adjustment, from time to time in the manner set
forth on Exhibit A in the event of Diluting Issuances (as defined on Exhibit A).
2.5 No Impairment. The Company shall not, by amendment of its Articles of
Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Article 2 and
in taking all such action as may be necessary or appropriate to protect Holdees
rights under this Article against impairment. If the Company takes any action
affecting the Shares or its common stock other than as described above that
adversely affects Holder's rights under this Warrant, the Warrant Price shall be
adjusted downward and the number of Shares issuable upon exercise of this
Warrant shall be adjusted upward in such a manner that the aggregate Warrant
Price of this Warrant is unchanged.
2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise
or conversion of the Warrant and the number of Shares to be issued shall be
rounded down to the nearest whole Share. If a fractional share interest arises
upon any exercise or conversion of the Warrant, the Company shall eliminate such
fractional share interest by paying Holder amount computed by multiplying the
fractional interest by the fair market value of a full Share.
2.7 Certificate as to Adjustments. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
3
(a) The initial Warrant Price referenced on the first page of this Warrant
is not greater than the fair market value of the Shares as of the date of this
Warrant.
(b) All Shares which may be issued upon the exercise of the purchase right
represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 Notice of Certain Events. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the Company's securities
for cash, then, in connection with each such event, the Company shall give
Holder (1) at least 20 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant and/or any
of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of recognized standing and
(c) such other financial statements required under and in accordance with any
loan documents between Holder and the Company (or if there are no such
requirements [or if the subject loan(s) no longer are outstanding), then within
forty-five (45) days after the end of each of the first three quarters of each
fiscal year, the Company's quarterly, unaudited financial statements.
3.4 Registration Under Securities Act of 1933, as amended. The Company
agrees that the Shares shall be subject to the registration rights set forth on
Exhibit B, if attached.
ARTICLE 4. MISCELLANEOUS.
4.1 Term: Notice of Expiration. This Warrant is exercisable, in whole or in
part, at any time and from time to time on or before the Expiration Date set
forth above.
4.2 Legends. This Warrant and the Shares (and the securities s issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
Shares issuable upon the exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company).
4.4 Transfer Procedure. Subject to the provisions of Section 4.3, Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) by giving the Company notice of the portion of
the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the transferee(s) (and Holder if applicable). Unless
the Company is filing financial information with the Securities and Exchange
Commission ('SEC") pursuant to the Securities Exchange Act of 1934, the Company
shall have the right to refuse to transfer any portion of this Warrant to any
person whom it reasonably believes is a competitor with the Company.
4.5 Notices. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 Attorneys' Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to its principles regarding conflicts of law. Borrower accepts for itself
and in connection with its properties, unconditionally, the non-exclusive
jurisdiction of any state or federal court of competent jurisdiction in the
Commonwealth of Massachusetts in any action, suit, or proceeding of any kind
against it which arises out of or by reason of this Warrant to Purchase Stock;
provided, however, that if for any reason Lender cannot avail itself of the
courts of the Commonwealth of Massachusetts, then venue shall lie in Santa Clara
County, California.
CARDIOPULMONARY CORP.
By: /s/ James W. Biondi, M.D.
-----------------------------
Name: James W. Biondi, M.D.
---------------------------
Title: CEO
--------------------------
By: /s/ N. Nicoll Snow
----------------------------
Name: N. Nicoll Snow
--------------------------
Title: VP, CFO
-------------------------
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase_____________________ shares of the
Common/Series Preferred [strike one] Stock
of____________________________________________ pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
9-shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to_____________________________________ of
the Shares covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in the
name of the undersigned or in such other name as is specified below:
- -----------------------------------------------
(Name)
- -----------------------------------------------
(Address)
- -----------------------------------------------
3. The undersigned represents it is acquiring the shares solely for its own
account and not as a nominee for any other party and not with a view toward the
resale or distribution thereof except in compliance with applicable securities
laws.
- -----------------------------------------------
(Signature)
- -----------------------------------------------
(Date)
SILICON VALLEY BANK
ANTIDILUTION AGREEMENT
THIS ANTIDILUTION AGREEMENT is entered into as of June 5,1996, by and
between Silicon Valley Bank ("Purchaser') and the Company whose name appears on
the last page of this ANTIDILUTION Agreement.
RECITALS
A. Concurrently with the execution of this ANTIDILUTION Agreement, the
Purchaser is purchasing from the Company a Warrant to Purchase Stock (the
'Warrant) pursuant to which Purchaser has the right to acquire from the Company
the Shares (as defined herein).
B. By this Antidilution Agreement, the Purchaser and the Company desire to
set forth the adjustment in the number of Shares issuable upon exercise of the
Warrant as a result of a Diluting Issuance (as herein defined).
C. Capitalized terms used herein shall have the same meaning as set forth
in the Warrant.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1 . Definitions. As used in this Antidilution Agreement, the following
terms have the following respective meanings:
(a) "Option" means any right, option, or warrant to subscribe
for, purchase, or otherwise acquire common stock or Convertible
Securities.
(b) "Convertible Securities" means any evidences of indebtedness,
shares of stock, or other securities directly or indirectly
convertible into or exchangeable for common stock.
(c) "Issue" means to grant, issue, sell, assume, or fix a record
date for determining persons entitled to receive, any security
(including Options), whichever of the foregoing is the first to occur.
(d) "Additional Common Shares" means all common stock (including
reissued shares) issued (or deemed to be issued pursuant to Section 2)
after the date of the Warrant. Additional Common Shares does not
include, however, any common stock issued in connection with an
Initial Public offering is such offering is completed prior to
September 15, 1996, or common stock issued in a transaction described
in Sections 2.1 and 2.2 of the Warrant; any common stock Issued upon
conversion of preferred stock outstanding on the date of the Warrant;
the Shares; or common stock Issued as incentive or in a nonfinancing
transaction to employees, officers, directors, or consultants to the
Company.
(e) The shares of common stock ultimately Issuable upon exercise
of an Option (including the shares of common stock ultimately Issuable
upon conversion or exercise of a Convertible Security Issuable
pursuant to an Option) are deemed to be Issued when the Option is
Issued. The shares of common stock ultimately Issuable upon conversion
or exercise of a Convertible Security (other than a Convertible
Security issued pursuant to an Option) shall be deemed Issued upon
Issuance of the Convertible Security.
2. Deemed Issuance of Additional Common Shares. The shares of common
stock ultimately Issuable upon exercise of an Option (including the shares
of common stock ultimately issuable upon conversion or exercise of a
Convertible Security Issuable pursuant to an Option) are deemed to be
Issued when the Option is Issued. The shares of common stock ultimately
issuable upon conversion or exercise of
a Convertible Security (other than a Convertible Security Issued pursuant
to an Option) shall be deemed Issued upon Issuance of the Convertible
Security. The maximum amount of common stock lssuable is determined without
regard to any future adjustments permitted under the instrument creating
the Options or Convertible Securities.
3. Adjustment of Warrant Price for Diluting Issuances.
3.1 If the Company issues Additional Common Shares after the date of
the Warrant and the consideration per Additional Common Share (determined
pursuant to Section 9) is less than the Warrant Price in effect immediately
before such Issue, the Warrant Price shall be reduced, concurrently with
such Issue, to a price (calculated to the nearest hundredth of a cent)
determined by multiplying the Warrant Price by a fraction:
(a) the numerator of which is the amount of such common stock
outstanding immediately before such Issue plus the amount of common
stock that the aggregate consideration received by the Company for the
Additional Common Shares would purchase at the Warrant Price in effect
immediately before such Issue, and
(b) the denominator of which is the amount of common stock
outstanding immediately before such Issue plus the number of such
Additional Common Shares.
3.2 Adjustment of Number of Shares. Upon each adjustment of the
Warrant Price, the number of Shares issuable upon exercise of the Warrant
shall be increased to equal the quotient obtained by dividing (a) the
product resulting from multiplying (i) the number of Shares issuable upon
exercise of the Warrant and (ii) the Warrant Price, in each case as in
effect immediately before such adjustment, by (b) the adjusted Warrant
Price.
3.3 Securities Deemed Outstanding. For the purpose of this Section 3,
all securities issuable upon exercise of any outstanding Convertible
Securities or Options, warrants, or other rights to acquire securities of
the Company shall be deemed to be outstanding.
4. No Adjustment for Issuances Following Deemed Issuances. No
adjustment to the Warrant Price shall be made upon the exercise of Options
or conversion of Convertible Securities.
5. Adjustment Following Changes in Terms of Options or Convertible
Securities. If the consideration payable to, or the amount of common stock
lssuable by, the Company increases or decreases, respectively, pursuant to
the terms of any outstanding Options or Convertible Securities, the Warrant
Price shall be recomputed to reflect such increase or decrease. The
recomputation shall be made as of the time of the Issuance of the Options
or Convertible Securities. Any changes in the Warrant Price that occurred
after such Issuance because other Additional Common Shares were Issued or
deemed Issued shall also be recomputed.
6. Recomputation Upon Expiration of Options or Convertible Securities.
The Warrant Price computed upon the original Issue of any Options or
Convertible Securities, and any subsequent adjustments based thereon, shall
be recomputed when any Options or rights of conversion under Convertible
Securities expire without having been exercised. In the case of Convertible
Securities or Options for common stock, the Warrant Price shall be
recomputed as if the only Additional Common Shares Issued were the shares
of common stock actually Issued upon the exercise of such securities, if
any, and as if the only consideration received therefor was the
consideration actually received upon the Issue, exercise or conversion of
the Options or Convertible Securities. In the case of Options for
Convertible Securities, the Warrant Price shall be recomputed as if the
only Convertible Securities Issued were the Convertible Securities actually
Issued upon the exercise thereof, if any, and as if the only consideration
received therefor was the consideration actually received by the Company
(determined pursuant to Section 9), if any, upon the Issue of the Options
for the Convertible Securities.
2
7. Limit on Readjustments. No readjustment of the Warrant Price
pursuant to Sections 5 or 6 shall increase the Warrant Price more than the
amount of any decrease made in respect of the Issue of any Options or
Convertible Securities.
8. 30 Day Options. In the case of any Options that expire by their
terms not more than 30 days after the date of Issue thereof, no adjustment
of the Warrant Price shall be made until the expiration or exercise of all
such Options. .
9. Computation of Consideration. The consideration received by the
Company for the Issue of any Additional Common Shares shall be computed as
follows:
(a) Cash shall be valued at the amount of cash received by the
Corporation, excluding amounts paid or payable for accrued interest or
accrued dividends.
(b) Property. Property other than cash ' shall be computed at the
fair market value thereof at the time of the Issue as determined in
good faith by the Board of Directors of the Company.
(c) Mixed Consideration. The consideration for Additional common
Shares Issued together with other property of the Company for
consideration that covers both shall be determined in good faith by
the Board of Directors.
(d) Options and Convertible Securities. The consideration per
Additional Common Share for Options and Convertible Securities shall
be determined by dividing:
(i) the total amount, if any, received or receivable by the
Company for the Issue of the Options or Convertible Securities,
plus the minimum amount of additional consideration (as set forth
in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such
consideration) payable to the Company upon exercise of the
Options or conversion of the Convertible Securities, by
(ii) the maximum amount of common stock (as set forth in the
instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number)
ultimately lssuable upon the exercise of such Options or the
conversion of such Convertible Securities.
10. General
10.1 Governing Law. This Antidilution Agreement shall be governed in
all respects by the laws of the Commonwealth of Massachusetts as such laws
are applied to agreements between Massachusetts residents entered into and
to be performed entirely within Massachusetts. If Company or Purchaser
cannot avail itself in the courts of the Commonwealth of Massachusetts,
then the venue shall lie in Santa Clara County, California.
10.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
10.3 Entire Agreement. Except as set forth below, this Antidilution
Agreement and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof.
10.4 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class
mail, postage prepaid, certified or registered mail, return receipt
requested, addressed (a) if to Purchaser at Purchasees address as set forth
below, or at such other address as Purchaser shall have furnished to the
Company in writing, or (b) if to the Company, at the
3
Company's address set forth below, or at such other address as the Company
shall have . furnished to the Purchaser in writing.
10.5 Severability. In case any provision of this Antidilution
Agreement shall be invalid, illegal, or unenforceable, the validity,
legality and enforceability of the remaining provisions of this
Antidilution Agreement shall not in any-way be affected or impaired
thereby.
10.6 Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Antidilution Agreement.
10.7 Counterparts. This Antidilution Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
PURCHASER COMPANY
SILICON VALLEY BANK CARDIOPULMONARY CORP.
By: /s/ Julie Haga By: /s/ James W. Biondi, M.D.
-------------------------- ---------------------------
Name: Julie Haga Name: James W. Biondi, M.D.
------------------------ -------------------------
Title: V.P. Title: CEO
----------------------- ------------------------
By: /s/ N. Nicoll Snow
---------------------------
Name: N. Nicoll Snow
-------------------------
Title: VP, CFO
-----------------------
Address: Address:
3003 Tasman Drive 200 Cascade Blvd.
Santa Clara, CA 95054 Milford, CT 06460
EXHIBIT "B"
SILICON VALLEY BANK
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of June 5,1996, by
and between Silicon Valley Bank ("Purchasee') and the Company whose name
appears on the last page of this Agreement.
RECITALS
A. Concurrently with the execution of this Agreement, the Purchaser is
purchasing from the Company a Warrant to Purchase Stock (the'Warrant') pursuant
to which Purchaser has the right to acquire from the Company the Shares (as
defined in the Warrant).
B. By this Agreement, the Purchaser and the Company desire to set forth the
registration rights of the Shares all as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1 Registration Rights. The Company covenants and agrees as follows:
1.1 . For purposes of this Section 1:
(a) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of
1933, as amended (the "Securities Act'), and the declaration or
ordering of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares (if
Common Stock) or all shares of Common Stock of the Company issuable or
issued upon conversion of the Shares and (ii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in
replacement of, any stock referred to in (i).
(c) The terms "Holdee' or "Holders" means the Purchaser or
qualifying transferees under subsection 1.8 hereof who hold
Registrable Securities.
(d) The term "SEC" means the Securities and Exchange Commission.
1.2 Company Registration.
(a) Registration. If at any time or from time to time, following
its Initial Public Offering of its Common Stock, the Company shall
determine to register any of its securities, for its own account or
the account of any of its shareholders, other than a registration on
Form S-1 or S-8 relating solely to employee stock option or purchase
plans, or a registration on Form S-4 relating solely to an SEC Rule
145 transaction, or a registration on any other form (other than Form
S-1, S-2, S-3 or S-1 8, or their successor forms) or any successor to
such forms, which does not include substantially the same information
as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(ii) include in such registration (and compliance), and in
any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within 30 days
after receipt of such written notice from the Company, by any
Holder or Holders, except as set forth in subsection 1.2(b)
below; provided, however, that, notwithstanding the foregoing, if
the offering is underwritten and the underwriter managing the
offering reasonably believes in good faith that the inclusion of
any or, all of the Registrable Securities so requested by the
Holders to be included in such offering would materially and
adversely affect such offering then the Holders and holders of
securities entitled to include them in such registration (other
than the Company) shall participate in the registration pro rata
based upon their total ownership of shares of Common Stock except
that holders of registration rights pursuant to the Registration
Rights Agreement dated as of May 20, 1996 shall have the priority
set forth therein. Notwithstanding any other provision of this
Agreement, the Company shall have the right at any time after its
shall have given notice pursuant to Section 1.@(a)(I) (whether or
not a written request for inclusion of any Registrable Securities
shall have been made) to elect not to file any such proposed
registration statement or to withdraw the same after the filing
but prior to the effective date thereof.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting,
the Company shall so advise the Holders as a part of the written
notice given pursuant to subsection 1.2(a)(I). In such event the right
of any Holder to registration pursuant to this subsection 1.2 shall be
conditioned upon such Holdees participation in such underwriting and
the inclusion of such Holdees Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together
with the Company and the other shareholders distributing their
securities through such underwriting) enter into an underwriting
agreement in the same terms as that executed by the Company with the
underwriter or underwriters selected for such underwriting by the
Company.
1.3 Expenses of Registration. All expenses incurred in connection with
any registration, qualification or compliance pursuant to this Section 1
including without limitation, all registration, filing and qualification
fees, printing expenses, fees and disbursements of counsel for the Company
and expenses of any special audits incidental to or required by such
registration, shall be borne by the Company except the Company shall not be
required to pay underwriters fees, discounts or commissions relating to
Registrable Securities. All expenses of any registered offering not
otherwise borne by the Company shall be borne pro rata among the Holders
participating in the offering and the Company.
1.4 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder
participating therein advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion
thereof. Except as otherwise provided in subsection 1.3, at its expense the
Company will:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use commercially reasonable
efforts to cause such registration statement to become effective, and,
upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement
effective for up to 120 days.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.
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(d) Use commercially reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in same
terms as that executed by the Company, with the managing underwriter
of such offering. Each Holder participating in such underwriting shall
also enter into and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act or the happening
of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing.
1.5 Indemnification.
(a) The Company will indemnify each Holder of Registrable
Securities and each of its officers, directors and partners, and each
person controlling such Holder, with respect to which such
registration, qualification or compliance has been effected pursuant
to this Rights Agreement, and each underwriter, if any, and each
person who controls any underwriter of the Registrable Securities held
by or issuable to such Holder, against all claims, losses, expenses,
damages and liabilities (or actions in respect thereto) arising out of
or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification
or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to
make the statement therein not misleading, or any violation or alleged
violation by the Company of the Securities Act, the Securities
Exchange Act of 1934, as amended, ("Exchange Act') or any state
securities law applicable to the Company or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any such
state law and relating to action or inaction required of the Company
in connection with any such registration, qualification of compliance,
and will reimburse each such Holder, each of its officers, directors
and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, within
a reasonable amount of time after incurred for any reasonable legal
and any other expenses incurred in connection with investigating,
defending or settling any such claim, loss, damage, liability or
action; provided, however, that the indemnity agreement contained in
this subsection 1.5(a) shall not apply to amounts paid in settlement
of any such claim, loss, damage, liability, or action if such
settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld); and provided further,
that the Company will not be liable in any such case to the extent
that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by
such Holder or underwriter specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which
such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company within
the meaning of the Securities Act, and each other such Holder, each of
its officers, directors and partners and each person controlling such
Holder, against all claims, losses, expenses, damages and liabilities
(or actions in respect thereof arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein
a material fact required to be stated
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therein or necessary to make the statements therein not misleading,
and will reimburse the Company, such Holders, such directors,
officers, partners, persons or underwriters for any reasonable legal
or any other expenses incurred in connection with investigating,
defending or settling any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circulator other document in reliance upon and in conformity with
written information furnished to the Company by an instrument duly
executed by such Holder specifically for use therein; provided,
however, that the indemnity agreement contained in this subsection
1.5(b) shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if such settlement is
effected without the consent of the Holder, (which consent shall not
be unreasonably withheld); and provided further, that the total amount
for which any Holder shall be liable under this subsection 1.5(b)
shall not in any event exceed the aggregate proceeds received by such
Holder from the sale of Registrable Securities held by such Holder in
such registration.
(c) Each party entitled to indemnification under this subsection
1.5 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense
at such party's expense; and provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations hereunder, unless such
failure resulted in prejudice to the Indemnifying Party; and provided
further, that an Indemnified Party (together with all other
Indemnified Parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the
fees and expenses to be paid by the Indemnifying Party, if
representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate due to actual or
potential differing interests between such Indemnified Party and any
other party represented by such counsel in such proceeding. No
Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation.
1.6 Information -by Holder. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the
Company such information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to herein.
1.7 Rule 144 Reporting. With a view to making available to Holders the
benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees at all times to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, after 90 days after the
effective date of the first registration filed by the Company for an
offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such
reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of
said Rule 144 (at any time after 90 days after the effective date of
the first registration statement filed by the Company for an offering
of its securities to the general public), and of the Securities
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Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents
so filed by the Company as the Holder may reasonably request in
complying with any rule or regulation of the SEC allowing the Holder
to sell any such securities without registration.
1.8 Transfer of Registration Rights. Holders' rights to cause the
Company to register their securities and keep information available,
granted to them by the Company under subsections 1.2 and 1.7 may be
assigned to a transferee or assignee of a Holdees Registrable Securities
not sold to the public, provided, that the Company is given written notice
by such Holder at the time of or within a reasonable time after said
transfer, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights
are being assigned. The Company may prohibit the transfer of any Holders'
rights under this subsection 1.8 to any proposed transferee or assignee who
the Company reasonably believes is a competitor of the Company.
2. General.
2.1 Waivers and Amendments. With the written consent of the record or
beneficial holders of at least a majority of the Registrable Securities,
the obligations of the Company and the rights of the Holders of the
Registrable Securities under this agreement may be waived (either generally
or in a particular instance, either retroactively or prospectively, and
either for a specified period of time or indefinitely), and with the same
consent the Company, when authorized by resolution of its Board of
Directors, may enter into a supplementary agreement for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement; provided, however, that no such
modification, amendment or waiver shall reduce the aforesaid percentage of
Registrable Securities without the consent of all of the Holders of the
Registrable Securities. Upon the effectuation of each such waiver, consent,
agreement of amendment or modification, the Company shall promptly give
written notice thereof to the record holders of the Registrable Securities
who have not previously consented thereto in writing. This Agreement or any
provision hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this subsection 2.l.
2.2 Governing Law. This Agreement shall be governed in all respects by
the laws of the Commonwealth of Massachusetts as such laws are applied to
agreements between Massachusetts residents entered into and to be performed
entirely within Massachusetts. If Company or Purchaser cannot avail itself
in the courts of the Commonwealth of Massachusetts, then the venue shall
lie in Santa Clara County, California.
2.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.4 Entire Agreement. Except as set forth below, this Agreement and
the other documents delivered pursuant hereto constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
2.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class
mail, postage prepaid, certified or registered mail, return receipt
requested, addressed (a) if to Holder, at such Holders address as set forth
below, or at such other address as such Holder shall have furnished to the
Company in writing, or (b) if to the Company, at the Company's address set
forth below, or at such other address as the Company shall have furnished
to the Holder in writing.
2.6 In case any provision of this Agreement shall be invalid, illegal,
or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement or any provision of the other
Agreement s shall not in any way be affected or impaired thereby.
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2.7 Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
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2.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
PURCHASER COMPANY
SILICON VALLEY BANK CARDIOPULMONARY CORP.
By: /s/ Julie Haga By: /s/ James W. Biondi, M.D.
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Name: Julie Haga Name: James W. Biondi, M.D.
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Title: V.P. Title: CEO
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By: /s/ N. Nicoll Snow
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Name: N. Nicoll Snow
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Title: VP, CFO
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Address: Address:
3003 Tasman Drive 200 Cascade Blvd.
Santa Clara, CA 95054 Milford, CT 06460