Warrant to Purchase Stock Issued to Horizon Technology



 Exhibit 10.4 
 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO
THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION. 
 WARRANT TO PURCHASE STOCK 
  

			
	Company:	  	SUNESIS PHARMACEUTICALS, INC., a Delaware corporation (the “Company”)
		
	Number of Shares:	  	77,220, subject to adjustment in accordance with Article 2 below
		
	Class of Stock:	  	Common Stock of the Company, par value $0.0001 per share (the “Common Stock”)
		
	Warrant Price:	  	$1.30 per share
		
	Issue Date:	  	October 18, 2011
		
	Expiration Date:	  	The 5th anniversary after the Issue Date
		
	Credit Facility:	  	This Warrant is issued in connection with the Loan and Security Agreement dated as of October 18, 2011 among Oxford Finance LLC, as Lender and Collateral Agent, the Lenders
from time to time party thereto, including Silicon Valley Bank, Horizon Technology Finance Corporation, and the Company (as amended from time to time, the “Loan Agreement”).

 THIS WARRANT CERTIFIES THAT, for good and valuable consideration, including, without limitation, the
mutual promises contained in the Loan Agreement, HORIZON TECHNOLOGY FINANCE CORPORATION (“HRZN;” together with any registered holder from time to time of this Warrant or any holder of the shares issuable or issued upon exercise of this
Warrant, “Holder”) is entitled to purchase the number of fully paid and nonassessable shares of Common Stock (the “Shares”) at 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 in whole or in part 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 Article 1.2, Holder shall also deliver to the Company a check, wire transfer (to an account
designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased. 
 1.2 Conversion Right. In lieu of exercising this Warrant as specified in Article 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 to Article 1.3. 







 1.3 Fair Market Value. The fair market value of each Share shall be the closing price
of a share of Common Stock reported on the NASDAQ Capital Market for the business day immediately before Holder delivers its Notice of Exercise to the Company. 
 1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant Price, 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 exercisable for the number of shares of Common Stock remaining available for purchase
under this Warrant. 
 1.5 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 on surrender and
cancellation of this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor. 

1.6 Treatment of Warrant Upon Acquisition of Company. 
 1.6.1 “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 immediately before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity immediately
after the transaction. 
 1.6.2 Treatment of Warrant at Acquisition. 

A) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that is not an asset sale and in which the consideration
is cash, Marketable Securities, or a combination thereof, either (a) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition
or (b) if Holder elects not to exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The Company shall provide the Holder with written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than ten (10) days prior to the closing of the proposed Acquisition.

 B) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that is an “arms length” sale of all
or substantially all of the Company’s assets (and only its assets) to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset Sale”), either (a) Holder shall exercise its conversion or purchase
right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Date if the
Company continues as a going concern following the closing of any such True Asset Sale. The Company shall provide the Holder with written notice of its request relating to the foregoing (together with such reasonable information as the Holder may
request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than ten (10) days prior to the closing of the proposed Acquisition. 







 C) Upon the closing of any Acquisition other than those particularly described in subsections (A) and
(B) above, the successor entity shall assume this Warrant, and shall succeed to, and be substituted for (so that from and after the date of such Acquisition, the provisions of this Warrant referring to the “Company” shall refer
instead to the successor entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such successor entity had been named as the Company herein.
Upon the closing of the Acquisition, this Warrant shall be exercisable for, in lieu of the Shares, 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 of such Acquisition and subsequent closing. The Warrant Price and/or number and type of securities subject to this Warrant following such Acquisition shall be adjusted accordingly (as determined in
good faith by the Board of Directors of the Company). 
 As used herein (x) “Affiliate” shall mean any person or entity that owns
or controls directly or indirectly ten (10) percent or more of the Common Stock, any person or entity that controls or is controlled by or is under common control with such persons or entities, and each of such person’s or entity’s
officers, directors, joint venturers or partners, as applicable; and (y) “Marketable Securities” shall mean securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting
requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange
Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise or convert this Warrant on or prior to the closing thereof is then traded on a
national securities exchange or over-the-counter market; (iii) Holder would not be restricted by contract or by applicable federal or state securities laws from publicly re-selling, within six (6) months following the closing of such
Acquisition, all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to convert this Warrant pursuant to Section 1.2 above in full on or prior to the closing of such Acquisition;
and (iv) the issuer has a market capitalization, as of the date immediately prior to and on the closing of such Acquisition of at least $200,000,000. 
 ARTICLE 2. ADJUSTMENTS TO THE SHARES. 
 2.1 Stock Dividends, Splits,
Etc. If the Company declares or pays a dividend on its Common Stock payable in shares of Common Stock, or other securities of the Company, 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 occurred. If the Company subdivides the shares of Common Stock by reclassification or otherwise into a
greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of Common Stock are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased. Any adjustment made pursuant to the first sentence of this paragraph
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend, and any adjustment pursuant to the second and third sentences of this paragraph shall become effective immediately
after the effective date of such subdivision or combination. 







 2.2 Reclassification, Exchange, Combinations or Substitution. Upon any changes in the
Common Stock by reason of recapitalizations, reclassifications, exchanges, substitutions, combinations, reorganizations, liquidations or similar transactions, 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 event. The Company or its successor shall promptly issue to Holder an amendment to this Warrant setting forth the number and kind of such new securities or other property issuable upon exercise or conversion of
this Warrant as a result of such reclassification, exchange, substitution or other event that results in a change of the number and/or class of securities issuable upon exercise or conversion of this Warrant. The amendment to this 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 Article 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events. 
 2.3 Intentionally Omitted. 
 2.4 No Impairment. The Company shall
not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issuance, or sale of its 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 Holder’s rights under this Article against impairment. 
 2.5 Fractional Shares. No
fractional Shares shall be issuable upon exercise or conversion of this 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 the amount computed by multiplying the fractional interest by the fair market value of a full Share. 

2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company shall promptly notify Holder in writing,
and, at the Company’s expense, 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 represents and warrants and covenants to the Holder as follows: All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, 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 any of its
stock, whether in cash, property, stock, or 







 
other securities and whether or not a regular cash dividend; (b) to effect any reclassification or recapitalization of any of its stock; or (c) 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, then, in connection with each such event, the Company shall give Holder: (1) at least 10 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 (a) above; (2) in the case of the matters referred to in (b) and (c) above at least 10 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). Notwithstanding the foregoing, the failure to deliver such notice or any defect therein shall
not affect the validity of the corporate action required to be described in such notice. Company will also provide information requested by Holder reasonably necessary to enable the Holder to comply with the Holder’s accounting or reporting
requirements. 
 3.3 Reserved. 
 3.4 No Shareholder Rights. Except as provided in this Warrant, the Holder will not have any rights as a shareholder of the Company until the exercise of this Warrant. 

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and warrants to the Company as follows: 

4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by the Holder will be
acquired for investment for the Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Securities Act of 1933, as amended (the “Act”). Holder also represents
that the Holder has not been formed for the specific purpose of acquiring this Warrant or the Shares. 
 4.2 Disclosure of
Information. The Holder has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. The
Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Holder or to which the Holder has access. 

4.3 Investment Experience. The Holder understands that the purchase of this Warrant and its underlying securities involves
substantial risk. The Holder has experience as an investor in securities of companies in the development stage and acknowledges that the Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities
and has such knowledge and experience in financial or business matters that the Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables the Holder to be aware of the character, business acumen and financial circumstances of such persons. 







 4.4 Accredited Investor Status. The Holder is an “accredited investor”
within the meaning of Regulation D promulgated under the Act. 
 4.5 The Act. The Holder understands that this Warrant
and the Shares issuable upon exercise or conversion hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment
intent as expressed herein. The Holder understands that this Warrant and the Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities
laws, or unless exemption from such registration and qualification are otherwise available. 
 ARTICLE 5. MISCELLANEOUS. 

5.1 Term. This Warrant is exercisable in whole or in part at any time and from time to time on or before the Expiration Date.

 5.2 Legends. This Warrant and the Shares shall be imprinted with a legend in substantially the following form:

 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION. 

5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant 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). The Company shall not require Holder to provide an opinion of counsel if the transfer is to any “affiliate” (as such term is defined in Regulation D
promulgated under the Act) of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of counsel if there is no
material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule
144(f), and the Company is provided with a copy of Holder’s notice of proposed sale. 
 5.4 Transfer Procedure.
After receipt by Holder of the executed Warrant, HRZN may transfer all or part of this Warrant to one or more of HRZN’s affiliates (each, an “HRZN Affiliate”), by execution of an Assignment substantially in the form of Appendix 2.
Subject to the provisions of Article 5.3 and upon providing the Company with written notice, HRZN, any such HRZN Affiliate and any subsequent Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant to any
transferee, provided, 







 
however, in connection with any such transfer, the HRZN Affiliate(s) or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address
and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable). 
 5.5 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 (or on the first business day after transmission by facsimile) be, in writing by the Company or such Holder from time to time.
Effective upon receipt of the fully executed Warrant and the initial transfer described in Article 5.4 above, all notices to the Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a
transfer or otherwise: 
 Horizon Technology Finance Corporation 

312 Farmington Avenue 
 Farmington, Connecticut 06032 
 Attn: Legal Department 

Telephone: (860) 676-8657 
 Facsimile: (860) 676-8655 
 Notice to the Company shall be addressed as follows until the
Holder receives notice of a change in address: 
 SUNESIS PHARMACEUTICALS, INC. 

395 Oyster Point Boulevard, Suite 400 
 South San Francisco, California 94080 
 Attn: Chief Financial Officer 

Telephone: (650) 266-3717 
 Facsimile: (650) 266-3505 
 5.6 Waiver. This Warrant and any term
hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. 
 5.7 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. 

5.8 Automatic Conversion upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or
other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be
converted pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised or converted, and the Company shall promptly deliver a certificate representing the Shares (or such other
securities) issued upon such conversion to the Holder. 







 5.9 Counterparts. This Warrant may be executed in counterparts, all of which together
shall constitute one and the same agreement. 
 5.10 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law. 

[Balance of Page Intentionally Left Blank] 







 Dated as of the Issue Date indicated above. 

 

									
	“COMPANY”	 		 	
			
	SUNESIS PHARMACEUTICALS, INC.	 		 	
					
	By:	 	 /s/ Daniel N. Swisher, Jr.
	 		 	By:	 	 /s/ Eric H. Bjerkholt

					
	Name:	 	Daniel N. Swisher, Jr.	 		 	Name:	 	Eric H. Bjerkholt
					
	Title:	 	President and Chief Executive Officer	 		 	Title:	 	Senior Vice President, Corporate Development and Finance, Chief Financial Officer and Corporate Secretary
				
	“HOLDER”	 		 		 	
				
	HORIZON TECHNOLOGY FINANCE CORPORATION	 		 		 	
					
	By:	 	 /s/ Gerald A. Michaud
	 		 		 	
					
	Name:	 	 Gerald A. Michaud
	 		 		 	
		 	(Print)	 		 		 	
	 Title:
	 	 President
	 		 		 	








 APPENDIX 1 
 NOTICE OF EXERCISE 
 1. Holder elects to purchase
            shares of the common stock of SUNESIS PHARMACEUTICALS, INC., par value $0.0001 per share (the “Common Stock”), pursuant to the terms of the attached Warrant, and
tenders payment of the purchase price of the shares in full. 
 [or] 
 2. Holder elects to convert the attached Warrant into shares of Common Stock in the manner specified in the Warrant. This conversion is exercised for
            of the Shares covered by the Warrant. 
 [Strike paragraph that does not
apply.] 
 3. Please issue a certificate or certificates representing the shares of Common Stock in the name specified below:


					
			
		  	  
	  	
		  	Holders Name	  	
			
		  	  
	  	
			
		  	  
	  	
		  	(Address)	  	

 4. By its execution below and for the benefit of the Company, Holder hereby restates each of the
representations and warranties in Article 4 of the Warrant as the date hereof. 
 HOLDER: 

			
	  

		
	By:	 	 
		
	Name:	 	  

		
	Title:	 	  

		
	(Date):	 	  










 APPENDIX 2 
 ASSIGNMENT 
 For value received, Horizon Technology Finance
Corporation hereby sells, assigns and transfers unto 
  

			
	Name:	 	[HRZN TRANSFEREE]
		
	Address:	 	  

		
	Tax ID:	 	  



 that certain Warrant to Purchase Stock issued by SUNESIS PHARMACEUTICALS, INC. (the
“Company”), on October 18, 2011 (the “Warrant”) together with all rights, title and interest therein. 
  

			
	HORIZON TECHNOLOGY FINANCE CORPORATION
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  



  

			
		
	Date:	 	  


 By its execution below, and for the benefit of the Company, [HRZN TRANSFEREE] makes each of the representations and
warranties set forth in Article 4 of the Warrant and agrees to all other provisions of the Warrant as of the date hereof. 
  

			
	[HRZN TRANSFEREE]
		
	By:	 	  

		
	Name:	 	  

		
	Title: