exv10w7



 






Exhibit 10.7




PROMISSORY NOTE




3187-001



 



			
	$5,000,000.00
	 	September 30, 2003

San Jose, California






     The undersigned (“Borrower”) promises to pay to the order of VENTURE LENDING &
LEASING III, INC., a Maryland corporation (“Lender”), at its office at 2010 North First
Street, Suite 310, San Jose, California 95131, or at such other place as Lender may designate
in writing, in lawful money of the United States of America, the principal sum of Five Million
and 00/100 Dollars ($5,000,000.00), with Basic Interest thereon (except as otherwise provided
herein) from the date hereof until maturity, whether scheduled or accelerated, at a fixed rate
per annum equal to six and 538/1000 percent (6.538%); the “Designated Rate”), and a Terminal
Payment in the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) payable on the
Maturity Date.



     This Note is one of the Notes referred to in, and is entitled to all the benefits of, a
Loan and Security Agreement dated as of September 26, 2003, between Borrower and Lender (the
“Loan Agreement”). Each capitalized term not otherwise defined herein shall have the meaning
set forth in the Loan Agreement. The Loan Agreement contains provisions for the acceleration
of the maturity of this Note upon the happening of certain stated events.



     Principal of and interest on this Note shall be payable as follows:



     On the Borrowing Date, Borrower shall pay (i) interest at a rate of twelve percent
(13.2%) per annum, in advance, on the outstanding principal balance of this Note for the
period from the Borrowing Date through September 30, 2003; and (ii) a first (1st)
amortization installment of principal and Basic Interest at the Designated Rate in the amount
of One Hundred Fifty Two Thousand Five Hundred and 00/100 Dollars ($152,500.00), in advance
for the month of October, 2003 and (iii) a thirty-sixth (36th), amortization
installment of principal and Basic Interest at the Designated Rate in the amount of One
Hundred Fifty Two Thousand Five Hundred and 00/100 Dollars ($152,500.00), in advance for the
month of September, 2006.



     Commencing on the first day of the second full month after the Borrowing Date, and
continuing on the first day of each consecutive month thereafter, principal and Basic Interest
at the Designated Rate shall be payable, in advance, in thirty-three (33) equal consecutive
installments of One Hundred Fifty Two Thousand Five Hundred and 00/100 Dollars ($152,500.00)
each, with a 34th installment equal to the entire unpaid principal balance and accrued Basic
Interest at the Designated Rate on August 1, 2006. The Terminal Payment and unpaid expenses,
fees, interest and principal amount shall be due and payable on September 1, 2006.



     Any unpaid payments of principal or interest on this Note shall bear interest from their
respective maturities, whether scheduled or accelerated, at a rate per annum equal to the
Default Rate. Borrower shall pay such interest on demand.



     Interest, charges and fees shall be calculated for actual days elapsed on the basis of a
360-day year, which results in higher interest, charge or fee payments than if a 365-day year
were used. In no event shall Borrower be obligated to pay interest, charges or fees at a rate
in excess of the highest rate permitted by applicable law from time to time in effect.



 









 





     If Borrower is late in making any payment under this Note by more than five (5) Business
Days, Borrower agrees to pay a “late charge” of five percent (5%) of the installment due, but not
less than fifty dollars ($50.00) for any one such delinquent payment. This late charge may be
charged by Lender for the purpose of defraying the expenses incidental to the handling of such
delinquent amounts. Borrower acknowledges that such late charge represents a reasonable sum
considering all of the circumstances existing on the date of this Note and represents a fair and
reasonable estimate of the costs that will be sustained by Lender due to the failure of Borrower to
make timely payments. Borrower further agrees that proof of actual damages would be costly and
inconvenient. Such late charge shall be paid without prejudice to the right of Lender to collect
any other amounts provided to be paid or to declare a default under this Note or any of the other
Loan Documents or from exercising any other rights and remedies of Lender.



     This Note shall be governed by, and construed in accordance with, the laws of the State
of California.



	 	 	 	 	 	 	 
	 	 	VOLCANO THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Dahldorf	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John Dahldorf	 	 
	 

	 	Its:
	 	CFO