Exhibit 10.40


 


THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE
SECURITIES LAWS. NO SALE, OFFER TO SELL, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS
RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED,
(iii) RECEIPT OF APPLICABLE NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL
AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 8
OF THIS WARRANT.


 


RELIANT TECHNOLOGIES, INC.


 


WARRANT
TO PURCHASE PREFERRED STOCK


 


For value received and subject to the provisions set forth in this
warrant (this “Warrant”),
PINNACLE VENTURES I AFFILIATES, L.P.
and its assigns are entitled to purchase from RELIANT
TECHNOLOGIES, INC., a Delaware corporation (the “Company”):


 




	
  Shares of Series B Preferred Stock:

  	
   

  	
  5,200

  
	
   

  	
   

  	
   

  
	
  Exercise Price:

  	
   

  	
  $ 1.50

  
	
   

  	
   

  	
   

  
	
  Term of Warrant:

  	
   

  	
  10 years from the Warrant Date

  
	
   

  	
   

  	
   

  
	
  Warrant Date:

  	
   

  	
  April 2, 2004

  






 


The number of Shares for which this Warrant is exercisable and the
Exercise Price may be adjusted as specified in Section 5.


 


1.             Definitions. As used herein, capitalized terms not otherwise
defined herein shall have the meanings set forth in the introductory paragraph
of this Warrant or the following meanings:


 


(a)     “Applicable Stock”
means (i) the Company’s presently authorized series of preferred stock
specified in the introductory paragraph of this Warrant, (ii) after the
conversion of all of the outstanding shares of such series of preferred stock
into Common Stock, either automatically or by vote of the requisite holders
thereof, the Company’s Common Stock, and (iii) upon any conversion, exchange,
reclassification or change, any security into which the securities described in
clauses (i) or (ii) of this definition may be converted, exchanged,
reclassified or otherwise changed.


 


(b)     “Common Stock” means
the common stock of the Company.


 


(c)     “Exercise Price” means
the exercise price per share of Applicable Stock specified in the introductory
paragraph of this Warrant.


 


(d)     “Holder” means the
initial holder of this Warrant set forth in the first paragraph of this Warrant
and any other person or entity which becomes a holder of this Warrant pursuant
to the terms of this Warrant.


 





















 


(e)     “Other Warrants” means
any other warrants issued by the Company in connection with the transaction
with respect to which this Warrant was issued, and any warrant issued upon transfer
or partial exercise of or in lieu of this Warrant. The term “Warrant” as used
herein shall be deemed to include Other Warrants unless the context clearly
requires otherwise.


 


(f)      “Public Acquisition”
means any consolidation or merger of the Company with another corporation, or
the sale of all or substantially all of its assets to another corporation which
is effected such that (1) the holders of Applicable Stock shall be entitled to
receive cash or shares of stock that are of a publicly traded company listed on
a national market or exchange which may be sold without restrictions after the
close of such event, (2) the Company’s stockholders own less than 50% of the
voting securities of the surviving entity, (3) the surviving entity does not
assume other options or warrants of the Company, and (4) at the time of such
event the effective per share price for the Applicable Stock is at least three
(3) times the exercise price hereof.


 


(g)     “Shares” means the
shares of Applicable Stock of Company issuable upon exercise of this Warrant.


 


(h)     “Warrant Date” means
the date of this Warrant specified in the introductory paragraph of this
Warrant.


 


2.             Term. The right to purchase Applicable Stock upon
exercise hereof is exercisable at any time and from time to time from the
Warrant Date until the earlier to occur of the following: (a) the tenth
anniversary of the Warrant Date, or (b) a Public Acquisition.


 


3.             Payment and Exercise.


 


(a)     Methods of Exercise.
The purchase right represented by this Warrant may be exercised by the Holder,
in whole or in part and from time to time, at the election of the Holder, by
(a) the surrender of this Warrant (with the notice of exercise
substantially in the form attached hereto as Exhibit A duly completed and
executed) at the principal office of the Company and by the payment to the
Company, by check, or by wire transfer to an account designated by the Company
of an amount equal to the then applicable Exercise Price multiplied by the
number of Shares then being purchased (the “Aggregate Purchase Price”); (b) if
in connection with a registered public offering of the Company’s securities,
the surrender of this Warrant (with the notice of exercise form attached hereto
as Exhibit B duly completed and executed) at the principal office of the
Company together with notice of arrangements reasonably satisfactory to the
Company for payment to the Company from the proceeds of the sale of shares to
be sold by the Holder in such public offering of the Aggregate Purchase Price;
or (c) exercise of the “net issuance” right provided for in Section 3(b)
hereof. The person or persons in whose name(s) any certificate(s) representing
Shares of Applicable Stock shall be issuable upon exercise of this Warrant
shall be deemed to have become the holder(s) of record of, and shall be treated
for all purposes as the record holder(s) of, the Shares represented thereby
(and such Shares shall be deemed to have been issued) immediately prior to the
close of business on the date or dates upon which this Warrant is exercised. In
the event of any exercise of the rights represented by this Warrant,
certificates for the Shares so purchased shall be delivered to the Holder
within a reasonable time after such exercise and, unless this Warrant has been
fully exercised or expired, a new Warrant representing the portion of the
Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder within a reasonable time;
provided, however, that at such time as the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, if
requested by the Holder, the Company shall cause its transfer agent to deliver
the certificate representing Shares issued upon exercise of this Warrant to a
broker or other person (as directed by the Holder exercising this Warrant)
within the time period required to settle any trade made by the Holder after
exercise of this Warrant.


 


2

















 


(b)     Right to Convert Warrant
into Stock:  Net Issuance.


 


(i)            Net Issuance Right.
In addition to and without limiting the rights of the Holder under the terms of
this Warrant, the Holder shall have the right to convert this Warrant or any
portion thereof (the “Net
Issuance Right”) into shares of Applicable Stock as provided in
this Section 3(b) at any time or from time to time during the term of this
Warrant. Upon exercise of the Net Issuance Right with respect to a particular
number of shares subject to this Warrant (the “Converted Warrant Shares”), the Company
shall deliver to the Holder (without payment by the Holder of any exercise
price or any cash or other consideration) that number of shares of fully paid
and nonassessable Applicable Stock as is determined according to the following
formula:


 


	
  X =

  	
  A - B

  	
   

  	
   

  
	
   

  	
  Y

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Where:

  	
  X =

  	
   

  	
  the number of shares of Applicable Stock that shall
  be issued to Holder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Y  =

  	
   

  	
  the fair market value of one share of Applicable
  Stock

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A  =

  	
   

  	
  the aggregate fair market value of the specified
  number of Converted Warrant Shares (i.e., the
  number of Converted Warrant Shares multiplied by
  the fair market value of one Converted Warrant Share)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B  =

  	
   

  	
  the aggregate Exercise Price of the specified number
  of Converted Warrant Shares immediately prior to the exercise of the Net
  Issuance Right (i.e., the number of Converted
  Warrant Shares multiplied by the Exercise
  Price)

  



 


No
fractional shares shall be issuable upon exercise of the Net Issuance Right,
and, if the number of shares to be issued determined in accordance with the
foregoing formula is other than a whole number, the Company shall pay to the
Holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 10 of this Warrant, shares issued pursuant to the Net Issuance
Right shall be treated as if they were issued upon the exercise of this
Warrant.


 


(ii)           Exercise of Net
Issuance Right. The Net Issuance Right may be exercised by the Holder by
the surrender of this Warrant at the principal office of the Company together
with a written statement (substantially in the form attached hereto as
Exhibit A or Exhibit B) specifying that the Holder thereby intends to
exercise the Net Issuance Right and indicating the number of shares subject to
this Warrant which are being surrendered (referred to in Section 3(b)(i)
hereof as the Converted Warrant Shares) in exercise of the Net Issuance 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”), and, at the election of the Holder, may be made
contingent upon the closing of the sale of the Company’s Common Stock to the
public in a public offering (a “Public Offering”) pursuant to a Registration Statement
under the Securities Act of 1933, amended (the “Act”). Certificates for the shares
issuable upon exercise of the Net Issuance Right and, if applicable, a new
warrant evidencing the balance of the shares remaining subject to this Warrant,
shall be issued as of the Conversion Date and shall be delivered to the Holder
within a reasonable time following the Conversion Date.


 


(iii)          Determination of Fair
Market Value. For purposes of this Section 3(b), “fair market value”
of a share of Applicable Stock (which shall be Common Stock if the Applicable
Stock has been converted into Common Stock) as of a particular date (the “Determination Date”)
shall mean:


 


(1)           If the Net Issuance
Right is exercised in connection with and contingent upon a Public Offering,
and if the Company’s Registration Statement relating to such Public Offering (“Registration Statement”)
has been declared effective by the Securities and Exchange Commission, then the
initial “price to the public” specified in the final prospectus with respect to
such offering.


 


3





















 


(2)           If the Net Issuance
Right is not exercised in connection with and contingent upon a Public
Offering, then as follows:


 


(A)          If traded on a
securities exchange, then the fair market value shall be the average of the
closing prices of the Common Stock on such exchange over the five trading days
immediately prior to the Determination Date;


 


(B)           If traded on the Nasdaq
Stock Market or other over-the-counter system, then the fair market value shall
be the average of the closing bid prices of the Common Stock over the five
trading days immediately prior to the Determination Date; and


 


(C)           If there is no public
market, then fair market value shall be determined by the Board of Directors in
good faith.


 


In making a determination under clauses (A) or (B) above, if on the
Determination Date, five trading days have not passed since the Company’s
initial Public Offering then the fair market value of the Common Stock shall be
the average closing prices or closing bid prices, as applicable, for the
shorter period beginning on and including the date of the initial Public
Offering and ending on the trading day prior to the Determination Date (or if
such period includes only one trading day the closing price or closing bid
price, as applicable, for such trading day). If closing prices or closing bid
prices are no longer reported by a securities exchange or other trading system,
the closing price or closing bid price shall be that which is reported by such
securities exchange or other trading system at 4:00 p.m. New York City time on
the applicable trading day.


 


(c)     Exercise Prior to
Expiration. To the extent this Warrant is not previously exercised as to
all of the Shares subject hereto, and if the fair market value of one share of
the Applicable Stock is greater than the Exercise Price then in effect, this
Warrant shall be deemed automatically exercised pursuant to Section 3(b)
(even if not surrendered) immediately before its expiration, including but not
limited to expiration pursuant to clause (b) of Section 2. For purposes of such
automatic exercise, the fair market value of one share of the Applicable Stock
upon such expiration shall be determined pursuant to Section 3(b)(iii). To
the extent this Warrant or any portion thereof is deemed automatically
exercised pursuant to this Section 3(c), the Company agrees to promptly
notify the Holder of the number of Shares, if any, the Holder is to receive by
reason of such automatic exercise.


 


4.             Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance pursuant to the
terms and conditions herein, be fully paid and nonassessable, and free from all
preemptive rights and taxes, liens and charges with respect to the issuance
thereof. During the period within which the rights represented by this Warrant
may be exercised, the Company will at all times have authorized, and reserved
for the purpose of the issue upon exercise of the purchase rights evidenced by
this Warrant, a sufficient number of shares of its Applicable Stock to provide
for the exercise of the rights represented by this Warrant and, while the Applicable
Stock is convertible preferred stock, a sufficient number of shares of its
Common Stock to provide for the conversion of the Applicable Stock into Common
Stock.


 


5.             Adjustment of Exercise Price and Number of Shares. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:


 


(a)     Reclassification or Merger.
In case of any reclassification or change of securities of the class issuable
upon exercise of this Warrant (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or in case of any merger of the Company with or
into another entity (other than a merger with another entity in which the
Company is the acquiring and the surviving entity and which does not result in
any reclassification or change of outstanding securities issuable upon exercise
of this Warrant), or in case of any sale of all or substantially all of the
assets of the Company, the Company, or such successor or purchasing
corporation, as the case may be, shall duly execute and deliver to the Holder a
new Warrant (in form and substance satisfactory to the


 


4





















 


Holder), or the Company
shall make appropriate provision without the issuance of a new Warrant, so that
the Holder shall have the right to receive upon exercise of this Warrant, at a
total purchase price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, and in lieu of the shares of Applicable
Stock theretofore issuable upon exercise of this Warrant, the kind and amount
of shares of stock, other securities, money and property receivable upon such
reclassification, change, merger or sale by a holder of the number of shares of
Applicable Stock then purchasable under this Warrant. The provisions of this
Section 5(a) shall similarly apply to successive reclassifications, changes,
mergers and sales.


 


(b)     Subdivision or Combination
of Shares. If the Company at any time while this Warrant remains
outstanding and unexpired shall subdivide or combine its outstanding shares of
Applicable Stock, the Exercise Price shall be proportionately decreased and the
number of Shares issuable hereunder shall be proportionately increased in the
case of a subdivision and the Exercise Price shall be proportionately increased
and the number of Shares issuable hereunder shall be proportionately decreased
in the case of a combination.


 


(c)     Stock Dividends and Other
Distributions. If the Company at any time while this Warrant is outstanding
and unexpired shall (i) pay a dividend with respect to Applicable Stock
payable in Applicable Stock, then the Exercise Price shall be adjusted, from
and after the date of determination of shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Exercise
Price in effect immediately prior to such date of determination by a fraction
(A) the numerator of which shall be the total number of shares of
Applicable Stock outstanding immediately prior to such dividend or
distribution, and (B) the denominator of which shall be the total number
of shares of Applicable Stock outstanding immediately after such dividend or
distribution; or (ii) make any other distribution with respect to
Applicable Stock (except any distribution specifically provided for in
Sections 5(a) and 5(b)), then, in each such case, provision shall be made
by the Company such that the Holder shall receive upon exercise of this Warrant
a proportionate share of any such dividend or distribution as though it were
the holder of the Applicable Stock as of the record date fixed for the
determination of the shareholders of the Company entitled to receive such
dividend or distribution.


 


(d)     Adjustment of Number of
Shares. Upon each adjustment in the Exercise Price, the number of Shares of
Applicable Stock purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Exercise Price by a fraction, the
numerator of which shall be the Exercise Price immediately prior to such
adjustment and the denominator of which shall be the Exercise Price immediately
thereafter.


 


(e)     Antidilution Rights.
The other antidilution rights applicable to the Shares of Applicable Stock
purchasable hereunder are set forth in the Company’s Certificate of
Incorporation, as amended through the Warrant Date, a true and complete copy of
which is attached hereto as Exhibit B (the “Charter”). The Company shall promptly
provide the Holder with any restatement, amendment, modification or waiver of
the Charter promptly after the same has been made.


 


In each case of adjustment pursuant to this Section 5, such adjustment
shall not be made with respect to the events set forth in Section 2 above.


 


6.             Notice of Adjustments. Whenever the Exercise Price or the number of
Shares purchasable hereunder shall be adjusted pursuant to Section 5
hereof, the Company shall make a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the Exercise Price and the number of Shares purchasable
hereunder after giving effect to such adjustment, and shall cause copies of
such certificate to be delivered to the Holder. In addition, whenever the
conversion price or conversion ratio of the Applicable Stock shall be adjusted,
the Company shall make a certificate signed by its chief financial officer
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the conversion price or ratio of the Applicable Stock after giving effect
to such adjustment, and shall cause copies of such certificate to be delivered
to the Holder.


 


5





















 


7.             Fractional Shares. No fractional shares of Applicable Stock will be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor based on the
fair market value of the Applicable Stock on the date of exercise as reasonably
determined in good faith by the Company’s Board of Directors.


 


8.             Compliance with Act; Disposition of Warrant or
Shares of Applicable Stock.


 


(a)     Compliance with Act.
The Holder, by acceptance hereof, agrees that this Warrant, and the shares of
Applicable Stock to be issued upon exercise hereof and any Common Stock issued
upon conversion thereof are being acquired solely for its own account for
investment and not with a view to or for sale or distribution of this Warrant
or the shares of Applicable Stock to be issued upon exercise hereof or any
Common Stock issued upon conversion thereof. Moreover, the Holder agrees that
it will not offer, sell or otherwise dispose of this Warrant, or any shares of
Applicable Stock to be issued upon exercise hereof or any Common Stock issued
upon conversion thereof except under circumstances which will not result in a
violation of the Act or any applicable state securities laws. Upon exercise of
this Warrant, unless the Shares being acquired are registered under the Act and
any applicable state securities laws or an exemption from such registration is
available, the Holder shall confirm in writing that the shares of Applicable
Stock so purchased (and any shares of Common Stock issued upon conversion
thereof) are being acquired for investment and not with a view toward
distribution or resale in violation of the Act and shall confirm such other
matters related thereto as may be reasonably requested by the Company. This
Warrant and all shares of Applicable Stock issued upon exercise of this Warrant
(unless registered under the Act and any applicable state securities laws)
shall be stamped or imprinted with a legend in substantially the following
form:


 


“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION
STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT
REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS
OF SECTION 8 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED,
DIRECTLY OR INDIRECTLY.”


 


Said legend shall be removed by the Company, upon the request of the
Holder, at such time as the restrictions on the transfer of the applicable
security shall have terminated.


 


(b)     Disposition of Warrant or
Shares. With respect to any offer, sale or other disposition of this
Warrant or any shares of Applicable Stock acquired pursuant to the exercise of
this Warrant prior to registration of such Warrant or shares, the Holder agrees
to give written notice to the Company prior thereto, describing in detail the
manner and circumstances surrounding thereof, together with a written opinion
of counsel, if requested by the Company, or other evidence, if reasonably
satisfactory to the Company, to the effect that such offer, sale or other
disposition may be effected without registration or qualification (under the
Act as then in effect or any federal or state securities law then in effect) of
this Warrant or such shares of Applicable Stock and indicating whether or not
under the Act certificates for this Warrant or such shares of Applicable Stock
to be sold or otherwise disposed of require any restrictive legend as to
applicable restrictions on transferability in order to ensure compliance with
such law. Upon receiving such written notice and reasonably satisfactory
opinion or other evidence, the Company shall, no later than fifteen (15) days  after receipt of the
written notice, notify the Holder that the Holder may sell or otherwise dispose
of this Warrant or such shares of Applicable Stock, all in accordance with the
terms of the notice delivered to the Company. If a determination has been made
pursuant to this Section 8(b) that the opinion of counsel or other
evidence is not reasonably satisfactory to the Company, the Company shall so
notify the Holder promptly with details thereof after such determination has
been made. Notwithstanding the foregoing, this Warrant or such shares of
Applicable Stock may, as to such federal laws, be offered, sold or otherwise
disposed of in accordance with Rule 144 or 144A under the Act, provided
that the Company shall have been furnished with such information as the Company
may reasonably request to provide a reasonable assurance that the provisions of
Rule 144 or 144A have been satisfied. Each certificate representing this
Warrant or the shares of Applicable Stock thus


 


6





















 


transferred (except a
transfer pursuant to Rule 144 or 144A) shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with
such laws, unless in the aforesaid opinion of counsel for the Holder, such
legend is not required in order to ensure compliance with such laws. The
Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions. Additionally, the Holder may dispose of all
or any part of this Warrant or the shares of Applicable Stock acquired pursuant
to the exercise of this Warrant if the Company shall have received a letter
secured by the Holder from the Securities and Exchange Commission (the “Commission”) stating
no action will be recommended to the Commission with respect to the proposed
disposition.


 


(c)     Applicability of
Restrictions. Neither any restrictions of any legend described in this
Warrant nor the requirements of Section 8(b) above shall apply to any
transfer of, or grant of a security interest in, this Warrant (or the
Applicable Stock or Common Stock obtainable upon exercise thereof) or any part
hereof (i) to a partner of the Holder if the Holder is a partnership or to
a member of or other holder of an interest in the Holder if the Holder is a
limited liability company, (ii) to a partnership of which the Holder is a
partner or to a limited liability company of which the Holder is a member or
other holder of an interest, or (iii) to any affiliate of the Holder if
the Holder is a corporation; provided, however, in any such
transfer, if applicable, the transferee shall on the Company’s request agree in
writing to be bound by the terms of this Warrant as if an original holder
hereof.


 


9.             Absence of Rights as Shareholders; Information. No Holder, as a holder of this Warrant, shall be
entitled to vote or receive dividends or be deemed the holder of Applicable
Stock or any other securities of the Company which may at any time be issuable
upon the exercise hereof for any purpose, nor shall anything contained herein
be construed to confer upon the Holder, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to
receive dividends or subscription rights or otherwise until this Warrant shall
have been exercised and the Shares purchasable upon the exercise hereof shall
have become deliverable, as provided herein. Notwithstanding the foregoing, the
Company will transmit to the Holder such information, documents and reports as
are generally distributed to the holders of any class or series of the
securities of the Company concurrently with the distribution thereof to the
shareholders.


 


10.           Market Stand-Off Agreement. So long as and during such time as all officers,
directors and greater than one percent (1%) stockholders and all holders of
other warrants of the Company are bound by similar agreements, Holder shall not
sell, dispose of, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with the same
economic effect as a sale, any Common Stock (or other securities) of the
Company held by Holder, for a period of time specified by the managing
underwriter(s) (not to exceed one hundred eighty (180) days) following the
effective date of a registration statement of the Company filed under the Act.
Holder agrees to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the managing underwriter(s) which are
consistent with the foregoing or which are necessary to give further effect
thereto. In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to such Common Stock (or other
securities) until the end of such period. The underwriters of the Company’s
stock are intended third party beneficiaries of this Section 10 and shall have
the right, power and authority to enforce the provisions hereof as though they
were a party hereto.


 


11.           Registration Rights. (a) The Company grants registration rights to
the Holder for any Applicable Stock of the Company (after its conversion to
Common Stock) obtained upon exercise of this Warrant, comparable to the
registration rights granted to the investors in that certain Amended and
Restated Investor Rights Agreement dated as of February 2, 2004 (the “Investor Rights Agreement”),
with the following exceptions and clarifications:


 


(1)           The Holder will have
not have the right to demand registration (other than a registration on Form
S-3 or any successor form), but can otherwise participate in any registration
demanded by others.


 


7





















 


(2)           The Holder will be
subject to the same provisions regarding indemnification as contained in the
Investor Rights Agreement.


 


(3)           The registration rights
are freely assignable by the Holder in connection with a transfer of this
Warrant or the Shares which is permitted under the terms of this Warrant, the
Investor Rights Agreement, the Company’s charter documents and any other
governing document.


 


(b) In the event the Company amends the Investor Rights Agreement
solely to add additional parties (and not to change the terms thereof in any
material respect), at the Company’s request, Holder shall take all steps
necessary to become a party to and to bound by the terms of the Investor Rights
Agreement. Holder’s Warrants and Shares shall then be subject to the provisions
set forth in the Investor Rights Agreement and the provisions of Section 11(a)
of this Warrant shall no longer apply.


 


12.           Notice Rights.


 


(a)     Acquisition Transactions.
The Company shall provide the Holder with at least twenty (20) days’ written
notice prior to closing thereof of the terms and conditions of any of the
following transactions (to the extent the Company has notice thereof):
(i) the sale, lease, exchange, conveyance or other disposition of all or
substantially all of the Company’s property or business, or (ii) its
merger into or consolidation with any other corporation (other than a
wholly-owned subsidiary of the Company), or any transaction (including a merger
or other reorganization) or series of related transactions, in which more than
50% of the voting power of the Company is disposed of.


 


(b)     Notices of Record Date.
In the event of any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend which is the same
as cash dividends paid in previous quarters) or other distribution, the Company
shall mail to the Holder, at least ten (10) days prior to the date specified
herein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend or distribution.


 


(c)     Liquidation. The
Company shall provide the Holder with at least ten (10) days notice prior to
any voluntary or involuntary dissolutions, liquidation or winding-up of the
Company.


 


13.           Representations and Warranties. The Company represents and warrants to the
Holder as follows:


 


(a)     This Warrant has been duly
authorized and executed by the Company and is a valid and binding obligation of
the Company enforceable in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of
debtors and the rules of law or principles at equity governing specific
performance, injunctive relief and other equitable remedies.


 


(b)     The Shares have been duly
authorized and reserved for issuance by the Company and, when issued in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and free from preemptive rights.


 


(c)     The rights, preferences,
privileges and restrictions granted to or imposed upon the Applicable Stock and
the holders thereof are as set forth in the Charter, and on the Warrant Date,
each share of the Applicable Stock represented by this Warrant is convertible
into one share of Common Stock.


 


(d)     The shares of Common Stock
issuable upon conversion of the Shares have been duly authorized and reserved
for issuance by the Company and, when issued in accordance with the terms of
the Charter will be validly issued, fully paid and nonassessable.


 


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(e)     The execution and delivery of
this Warrant are not, and the issuance of the Shares upon exercise of this
Warrant in accordance with the terms hereof will not be, inconsistent with the
Company’s Charter or by-laws, do not and will not contravene any law,
governmental rule or regulation, judgment or order applicable to the Company,
and do not and will not conflict with or contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the registration or filing
with or the taking of any action in respect of or by, any Federal, state or
local government authority or agency or other person, except for the filing of
notices pursuant to federal and state securities laws, which filings will be
effected by the time required thereby.


 


(f)      There are no actions, suits,
audits, investigations or proceedings pending or, to the knowledge of the Company,
threatened against the Company in any court or before any governmental
commission, board or authority which, if adversely determined, could have a
material adverse effect on the ability of the Company to perform its
obligations under this Warrant.


 


(g)     The number of shares of
Common Stock of the Company outstanding on the date hereof, on a fully diluted
basis (assuming the conversion of all outstanding convertible securities and
the exercise of all outstanding options and warrants), does not exceed 25,000,000
shares.


 


14.           Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.


 


15.           Notices. Any notice, request, communication or other document required or
permitted to be given or delivered to the Holder or the Company shall be
delivered, or shall be sent by certified or registered mail, postage prepaid,
or overnight courier or delivered personally to the Holder at its address as
shown on the books of the Company or to the Company at the address indicated
therefor on the signature page of this Warrant.


 


16.           Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company’s assets, and all of the obligations of
the Company relating to the Applicable Stock issuable upon the exercise or
conversion of this Warrant shall survive the exercise, conversion and
termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the Holder.


 


17.           Lost Warrants or Stock Certificates. The Company covenants to the Holder that, upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate the Company
will, on such terms as to indemnity or otherwise as it may reasonably impose,
the Company will make and deliver a new Warrant or stock certificate, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.


 


18.           Descriptive Headings. The descriptive headings of the various Sections
of this Warrant are inserted for convenience only and do not constitute a part
of this Warrant. The language in this Warrant shall be construed as to its fair
meaning without regard to which party drafted this Warrant.


 


19.           Governing Law. This Warrant shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of
California.


 


20.           Survival of Representations, Warranties and
Agreements. All representations
and warranties of the Company and the Holder contained herein shall survive the
Warrant Date, the exercise or conversion of this Warrant (or any part hereof)
or the termination or expiration of rights hereunder. All agreements of the
Company and the Holder contained herein shall survive indefinitely until, by
their respective terms, they are no longer operative.


 


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21.           Remedies. In case any one or more of the covenants and agreements contained in
this Warrant shall have been breached, the Holder (in the case of a breach by
the Company), or the Company (in the case of a breach by the Holder), may
proceed to protect and enforce their or its rights either by suit in equity
and/or by action at law, including, but not limited to, an action for damages
as a result of any such breach and/or an action for specific performance of any
such covenant or agreement contained in this Warrant.


 


22.           No Impairment of Rights. Except to the extent as waived or consented to
by Holder, the Company will not, by amendment of its Charter or through any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Holder
against impairment.


 


23.           Severability. The invalidity or unenforceability of any provision of this Warrant in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction, or affect any other provision of this
Warrant, which shall remain in full force and effect.


 


24.           Entire Agreement; Modification. This Warrant constitutes the entire agreement
between the parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, representations, and
undertakings of the parties, whether oral or written, with respect to such
subject matter.


 


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The Company has caused this Warrant to be duly executed and delivered
as of the Warrant Date specified above.


 


	
   

  	
  Reliant Technologies, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Roger Howe

  	
   

  
	
   

  	
    Name: 

  	
  Roger Howe

  
	
   

  	
    Title: 

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  5375 Mira Sorrento Place, Suite 100

  
	
   

  	
   

  	
  San Diego, CA 92121

  
						



 


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WARRANT
NO. PBBW-20


 


EXHIBIT A


 


NOTICE OF EXERCISE


 


To:          Reliant
Technologies, Inc. (the “Company”)


 


1.             The undersigned
hereby:


 


o                                    elects
to purchase            
shares of [Applicable Stock] [Common Stock] of the Company pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full, or


 


o                                    elects
to exercise its net issuance rights pursuant to Section 3(b) of the attached
Warrant with respect to            Shares
of [Applicable Stock] [Common Stock].


 


2.             Please
issue a certificate or certificates representing             
shares in the name of the undersigned or in such other name or names as are
specified below:


 


(Name)


 


 


 


(Address)


 


3.             The
undersigned represents that the aforesaid shares are being acquired for the
account of the undersigned for investment and not with a view to, or for resale
in connection with, the distribution thereof and that the undersigned has no
present intention of distributing or reselling such shares, all except as in
compliance with applicable securities laws.


 


	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT B


 


NOTICE OF EXERCISE


 


To:          Reliant
Technologies, Inc. (the “Company”)


 


1.             Contingent
upon and effective immediately prior to the closing (the “Closing”) of the
Company’s public offering contemplated by the Registration Statement on
Form S    , filed            ,
200   , the undersigned hereby:


 


o            elects to purchase            shares
of [Applicable Stock] [Common Stock] of the Company (or such lesser number of
shares as may be sold on behalf of the undersigned at the Closing) pursuant to
the terms of the attached Warrant, or


 


o            elects to exercise its
net issuance rights pursuant to Section 3(b) of the attached Warrant with
respect to            Shares
of [Applicable Stock] [Common Stock].


 


2.             Please
deliver to the custodian for the selling shareholders a stock certificate
representing such            shares.


 


3.             The
undersigned has instructed the custodian for the selling shareholders to
deliver to the Company $            or,
if less, the net proceeds due the undersigned from the sale of shares in the
aforesaid public offering. If such net proceeds are less than the purchase
price for such shares, the undersigned agrees to deliver the difference to the
Company prior to the Closing.


 


	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT C


 


CHARTER