EX-10.31






Exhibit 10.31


THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR
APPLICABLE STATE SECURITIES LAW. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO
TRANSFER OF THE SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF
SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.




	 	 	 
	Date: September 12, 2008	 	Warrant No. W2008-_






WARRANT

TO PURCHASE                     
SHARES OF COMMON STOCK OF
CARDIOVASCULAR SYSTEMS, INC.


     FOR VALUE RECEIVED,                                         or registered assigns (the “Holder”), is entitled to purchase from
Cardiovascular Systems, Inc., a Minnesota corporation (the “Company”),                                         
(                    ) fully paid and
nonassessable shares of the Company’s Common Stock (such shares of Common Stock as may be acquired
upon exercise hereof being hereinafter referred to as the “Warrant Shares”), at an exercise price
of $6.00 per share (the “Warrant Exercise Price”), which Warrant is immediately exercisable. This
Warrant shall expire on September 12, 2013.



     This Warrant is subject to the following provisions, terms, and conditions:



     1. The rights represented by this Warrant may be exercised by the Holder, in whole or in part
(but not as to a fractional share of Common Stock), by written notice of exercise substantially in
the form attached hereto, which notice shall be delivered to the Company accompanied by the
surrender of this Warrant (properly endorsed if required) at the principal office of the Company
and upon payment to the Company, by cash, certified check or bank draft, of the Warrant Exercise
Price for such shares. The Company agrees that the Warrant Shares so purchased shall be and are
deemed to be issued as of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such Warrant Shares as aforesaid. Certificates for the Warrant
Shares so purchased shall be delivered to the Holder within thirty (30) days after the rights
represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a
new Warrant representing the number of Warrant Shares, if any, with respect to which this Warrant
has not been exercised shall also be delivered to the Holder within such time. Notwithstanding the
foregoing, however, the Company shall not be required to deliver any certificates for Warrant
Shares, except in accordance with the provisions and subject to the limitations of Section 4 below.



     2. The Company covenants and agrees that all Warrant Shares that may be issued upon the
exercise of this Warrant will, upon issuance, be duly authorized and issued, fully paid and
nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof.
The Company further covenants and agrees that until expiration of this Warrant, the Company



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will at all times have authorized, and reserved for the purpose of issuance upon exercise of this
Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.




     3. This Warrant shall not entitle the Holder to any voting rights or other rights as a
shareholder of the Company.



     4. The Holder, by acceptance hereof, represents and warrants that (a) it is acquiring this
Warrant for its own account for investment purposes only and not with a view to its resale or
distribution and (b) it has no present intention to resell or otherwise dispose of all or any part
of this Warrant. Other than pursuant to registration under federal and applicable state securities
laws or an exemption from such registration, the availability of which the Company shall determine
in its sole discretion, neither this Warrant nor any Warrant Shares may be sold, pledged, assigned,
or otherwise disposed of (whether voluntarily or involuntarily). The Company may condition such
sale, pledge, assignment, or other disposition on the receipt from the party to whom this Warrant
is to be so transferred or to whom Warrant Shares is to be issued or so transferred of any
representations and agreements requested by the Company in order to permit such issuance or
transfer to be made pursuant to exemptions from registration under federal and applicable state
securities laws. Each certificate representing the Warrant (or any part thereof) and any Warrant
Shares shall bear appropriate legends setting forth these restrictions on transferability. The
Holder, by acceptance hereof, agrees to give written notice to the Company before transferring this
Warrant or any Warrant Shares of the Holder’s intention to do so, describing briefly the manner of
any proposed transfer. Within a reasonable period after receiving such written notice, the Company
shall notify the Holder as to whether such transfer may be effected and of the conditions to any
such transfer.



     5. This Warrant shall be transferable only on the books of the Company by the Holder in
person, or by duly authorized attorney, on surrender of the Warrant, properly assigned.



     6. Neither this Warrant nor any terms hereof may be changed, waived, discharged, or terminated
orally but only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought.



     7. Net Exercise Rights.




     (a) In addition to and without limiting the rights of the Holder of this Warrant with
respect to other terms of this Warrant, the Holder of this Warrant shall have the right (the
“Conversion Right”) to convert this Warrant or any portion thereof into Warrant Shares as
provided in this Section 7 at any time or from time to time prior to its expiration, subject
to the restrictions set forth in paragraph (c) below. Upon exercise of the Conversion Right
with respect to a particular number of shares subject to this Warrant (the “Converted
Warrant Shares”), the Company shall deliver to the Holder of this Warrant, without payment
by the Holder of any exercise price or any cash or other consideration, that number of
Converted Warrant Shares equal to the quotient obtained by dividing the Net Value (as
hereinafter defined) of the Converted Warrant Shares by the fair market value (as defined in
paragraph (d) below) of a single Warrant Share, determined in each case as of the close of
business on the Conversion Date (as hereinafter defined). The “Net Value” of the Converted
Warrant Shares shall be determined by



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subtracting the aggregate warrant purchase price of the Converted Warrant Shares from
the aggregate fair market value of the Converted Warrant Shares. Notwithstanding anything
in this Section 7 to the contrary, the Conversion Right cannot be exercised with respect to
a number of Converted Warrant Shares having a Net Value below $100. No fractional shares
shall be issuable upon exercise of the Conversion Right, and if the number of shares to be
issued in accordance with the foregoing formula is other than a whole number, the Company
shall pay to the Holder of this Warrant an amount in cash equal to the fair market value of
the resulting fractional share.




     (b) The Conversion Right may be exercised by the Holder of this Warrant by the
surrender of this Warrant at the principal office of the Company together with a notice in
the form attached hereto, specifying that the Holder thereby intends to exercise the
Conversion Right and indicating the number of shares subject to this Warrant which are being
surrendered (referred to in paragraph (a) above as the Converted Warrant Shares) in exercise
of the Conversion Right. Such conversion shall be effective upon receipt by the Company of
this Warrant together with the aforesaid written statement, or on such later date as is
specified therein (the “Conversion Date”), but not later than the expiration date of this
Warrant. Certificates for the Converted Warrant Shares issuable upon exercise of the
Conversion Right, together with a check in payment of any fractional share and, in the case
of a partial exercise, a new warrant evidencing the shares remaining subject to this
Warrant, shall be issued as of the Conversion Date and shall be delivered to the Holder of
this Warrant within 15 days following the Conversion Date.




     (c) For purposes of this Section 7, the “fair market value” of a Warrant Share as of a
particular date shall be its “market price”, calculated as of the Conversion Date, as
follows:




     (i) if the capital stock into which the Warrants are exercisable is traded on
an exchange or is quoted on the Nasdaq Global Select Market or Nasdaq Global Market,
then the average closing or last sale prices, respectively, reported for the ten
(10) business days immediately preceding the Conversion Date, or




     (ii) if the capital stock into which the Warrants are exercisable is not traded
on an exchange or on the Nasdaq Global Select Market or Nasdaq Global Market but is
traded on Nasdaq Capital Market or other over-the-counter market, then the average
closing bid and asked prices reported for the ten (10) business days immediately
preceding the Conversion Date, or




     (iii) if the capital stock into which the Warrants are exercisable is not
traded on an exchange or on the Nasdaq Global Select Market, Nasdaq Global Market,
Nasdaq Capital Market or other over-the counter market, then the price per share
established by the Board of Directors of the Company.



     8. Antidilution Provisions. The rights granted hereunder are subject to the
following:



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     (a) Stock Dividends. In case the Company shall declare a dividend or make any
other distribution upon the Common Stock of the Company payable in shares of Common Stock or
other securities, upon exercise of this Warrant, the Holder shall be entitled to receive,
for each share of Common Stock purchased pursuant to this Warrant, the number of shares of
Common Stock or other securities, as the case may be, issued per share of Common Stock in
payment of such dividend or distribution.




     (b) Stock Splits and Reverse Splits. In case at any time the Company shall
subdivide its outstanding shares of Common Stock into a greater number of shares, the
Warrant Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced and the number of Warrant Shares purchasable pursuant to this
Warrant immediately prior to such subdivision shall be proportionately increased, and
conversely, in case at any time the Company shall combine its outstanding shares of Common
Stock into a smaller number of shares, the Warrant Exercise Price in effect immediately
prior to such combination shall be proportionately increased and the number of Warrant
Shares purchasable upon the exercise of this Warrant immediately prior to such combination
shall be proportionately reduced. Except as provided in this paragraph (b), no adjustment
in the Warrant Exercise Price and no change in the number of Warrant Shares so purchasable
shall be made pursuant to this Section 8 as a result of or by reason of any such subdivision
or combination.




     (c) Other Events. If any event occurs as to which, in the sole opinion of the
Board of Directors of the Company, the other provisions of this Warrant are not strictly
applicable or if strictly applicable would not fairly protect the rights of the holder of
this Warrant in accordance with the essential intent and principles of such provisions, then
the Board of Directors of the Company shall make such adjustment in the application of such
provisions as may be necessary, in the sole judgment of the Board, in accordance with such
essential intent and principles, to protect such rights as aforesaid.



     9. Governing Law. This Warrant shall be construed and interpreted in accordance with
the laws of the State of Minnesota without regard to its choice of law provisions.



     10. Expense Reimbursement. This Warrant is being issued to the Holder in connection
with that certain Loan and Security Agreement between the Company and Silicon Valley Bank dated
September 12, 2008 (the “Loan Agreement”). The Company hereby agrees to reimburse the Holder for
the reasonable fees of outside counsel incurred by the Holder in connection with the negotiation
and documentation of the
         under the Loan Agreement.



[Remainder of page intentionally left blank; signature page follows]




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     IN WITNESS WHEREOF, the undersigned has executed this Warrant effective as of the date first
written above.



	 	 	 	 	 
	 	CARDIOVASCULAR SYSTEMS, INC.

 	 
	 	By:  	     /s/ Laurence L. Betterley
 	 
	 	 	     Laurence L. Betterley 	 
	 	 	     Chief Financial Officer 	 
	 




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To:      CARDIOVASCULAR SYSTEMS, INC.


NOTICE OF EXERCISE OF WARRANT —

To Be Executed by the Registered Holder
in Order to Exercise the Warrant


Subscriber hereby irrevocably elects to exercise the attached Warrant to purchase for cash,                                                             of the
shares issuable upon the exercise of such Warrant, and requests that certificates for such shares
(together with a new Warrant to purchase the number of shares, if any, with respect to which this
Warrant is not exercised) shall be issued in the name of:




	 	 	 	 	 	 	 
	 

	 	 	 	 

(Print Name)
	 	 
	 
	 	 	 	 	 	 
	Please insert social security	 	 	 	 
	or other identifying number	 	 	 	 
	of registered holder of	 	 	 	 
	certificate (                                                            )	 	Address:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	(Signature)*	 	 








 




			
	*	 	The signature on the Notice of Exercise of Warrant must correspond to the name as written upon the
face of the Warrant in every particular without alteration or enlargement or any change whatsoever.
When signing on behalf of a corporation, partnership, trust or other entity, PLEASE indicate your
position(s) and title(s) with such entity.




 








 










ASSIGNMENT FORM



To be signed only upon authorized transfer of Warrants.




     FOR VALUE RECEIVED, Subscriber hereby sells, assigns, and transfers unto
                                                             the right to purchase the securities of Cardiovascular Systems, Inc.,
to which the within Warrant relates and appoints                                                             , attorney, to transfer said
right on the books of Cardiovascular Systems, Inc., with full power of substitution in the
premises.



	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 

	 	 

(Signature)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address: