Document:

Modification No. 2 to Loan and Security Agreement

 Exhibit 10.4 
 MODIFICATION NO. 2 TO LOAN AND SECURITY AGREEMENT 
 This Modification
No. 2 to Loan and Security Agreement (“Modification”) is entered into as of December 27, 2011 (the “Effective Date”), by and between Partners for Growth III, L.P., a Delaware limited partnership with its
principal place of business at 150 Pacific Avenue, San Francisco, California 94111 (“PFG”) and Cardiovascular Systems, Inc., Inc., a Delaware corporation with its principal place of business at 651 Campus Drive, St. Paul, MN 55112
(“Borrower”). 
 WHEREAS, PFG and Borrower entered into that certain Loan and Security Agreement dated as of
April 14, 2010 (the “Loan Agreement”) and certain other Security Documents (as defined below), pursuant to which Borrower has borrowed and PFG has loaned pursuant to Convertible Promissory Notes up to $4,000,000 at any one time
outstanding; 
 WHEREAS, the parties entered into that certain Modification No. 1 to Loan and Security Agreement dated as
of August 23, 2011 (the “Prior Modification”); 
 WHEREAS, Borrower and the Senior Lender are amending the
Senior Loan Documents and such amendment requires a facilitating amendment of the Loan Agreement; 
 NOW THEREFORE, the parties
hereby agree as follows: 
 1. DESCRIPTION OF EXISTING INDEBTEDNESS: Borrower is indebted to PFG for Obligations pursuant to the Loan
Documents. The Loan Agreement provides for the issuance of up to $5,000,000 in Notes to PFG from time to time, of which an aggregate principal amount of $5,000,000 in Notes are issued and outstanding on the date of this Modification. Defined terms
used but not otherwise defined herein shall have the same meanings set forth in the Loan Agreement. 
 2. DESCRIPTION OF COLLATERAL.
Repayment of the Obligations is secured by the Collateral, as described in the Loan Agreement and an Intellectual Property Security Agreement of even date therewith. The above-described security documents, together with all other documents securing
repayment of the Obligations, shall be referred to herein as the “Security Documents”. Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations are referred to as the
“Existing Loan Documents”. 
 3. MODIFICATION OF LOAN AGREEMENT. 

(a) Senior Debt. Section 8(a)(2) of the Schedule to the Loan Agreement which prior to the Effective Date read (italicized for
ease of reference): 
 “Senior Debt Limit. Borrower shall not permit the total Indebtedness of Borrower to Senior
Lender (including, but not limited to, monies borrowed by Borrower, interest on loans due from Borrower, fees and expenses for which Borrower is obligated, sums due from Borrower in connection with issuance of commercial letters of credit, issuance
of forward contracts for foreign exchange 

  
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reserve, and any other direct or indirect financial accommodation Senior Lender may provide to Borrower) to exceed: (i) with respect to Borrower’s term facility with the Senior
Lender (the “SVB Term Loan’) the lesser of $10,000,000 and the principal amount at any time outstanding under the SVB Term Loan, plus (ii) with respect to Borrower’s revolving line of credit facility with the Senior Lender
(the “SVB LOC”) the lesser of $15,000,000 and the aggregate of (A) outstanding borrowings under the SVB LOC, plus (B) such amount as Borrower is able to borrow under the SVB LOC at such time based on the borrowing base
then in effect (collectively, the “Senior Debt Limit’), plus (iii) the amount of all unpaid interest, fees and other charges under the Senior Loan Documents.” 
 shall be replaced in its entirety with and read prospectively from the Effective Date as follows: 
 “Senior Debt Limit. Borrower shall not permit the total Indebtedness of Borrower to Senior Lender (including, but not limited to, monies borrowed by Borrower, interest on loans due from
Borrower, fees and expenses for which Borrower is obligated, sums due from Borrower in connection with issuance of commercial letters of credit, issuance of forward contracts for foreign exchange reserve, and any other direct or indirect financial
accommodation Senior Lender may provide to Borrower) to exceed: (i) with respect to Borrower’s term facility with the Senior Lender (the “SVB Term Loan”) the lesser of $12,000,000 and the principal amount at any time outstanding
under the SVB Term Loan, plus (ii) with respect to Borrower’s revolving line of credit facility with the Senior Lender (the “SVB LOC”) the lesser of $15,000,000 and the aggregate of (A) outstanding borrowings under
the SVB LOC, plus (B) such amount as Borrower is able to borrow under the SVB LOC at such time based on the borrowing base then in effect (collectively, the “Senior Debt Limit”), plus (C) interest and all collection
costs (including attorneys’ fees), plus (D) all interest accruing after any bankruptcy, reorganization or similar proceeding, plus (E) the amount of all (i) overdrafts of up to $100,000 in the aggregate at any given time;
(ii) business credit cards in a maximum aggregate amount at any time of up to $300,000, and (iii) letters of credit related to the Pearland, Texas facility of Borrower in a maximum aggregate amount of up to $400,000 at any given time, and
(iv) without duplication for any of the above, the amount of all unpaid interest, fees and other charges under the Senior Loan Documents.” 
 (b) Financial Covenants. Section 5 of the Schedule which prior to the Effective Date read as follows (italicized for ease of reference): 

“5. Financial Covenants 

        (Section 4.1): 
 Borrower shall maintain at all times, to be tested as of the last day of each month, unless otherwise noted, on a consolidated basis: 

  
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	 	(a) EBITDA:    	Maintain EBITDA as of the last day of each month, for the three month period ending as of last day of such month, of at least the following for each such period
ending during the following intervals: 

  

					
	 Interval
	  	Minimum EBITDA
(parentheses denotes a
negative number)	 
	 Effective Date through March 31, 2010
	  	 	($7,800,000)	  
	 April 1, 2010 through June 30, 2010
	  	 	($6,500,000)	  
	 July 1, 2010 through September 30, 2010
	  	 	($5,700,000)	  
	 October 1, 2010 through December 31, 2010
	  	 	($4,300,000)	  
	 January 1, 2011 through March 31, 2011
	  	 	($3,400,000)	  
	 April 1, 2011 and thereafter
	  	 	($2,000,000)	  

 “EBITDA” shall mean (a) Net Income, minus any non-cash income,
plus (b) interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax expense, plus (e) stock-based compensation expense (to the extent not
payable in cash), plus (0 non-cash expenses incurred from applying GAAP to the terms of this Agreement and related Warrant and to the Senior Debt and related warrant issued under the Senior Loan Documents, plus (g) any other non-cash charges.

 (b) Fixed Charge Coverage Ratio  
 A Fixed Charge Coverage Ratio of greater than 1.25 to 1.00, to be tested as of the last day of each month, provided that Borrower shall not be required to maintain the foregoing Fixed Charge Coverage
Ratio until on and after the date that it is required to be measured under the Senior Loan Documents (as in effect on the date hereof and without regard to any waiver of the same by the Senior Lender). If at any time the Senior Lender ceases to
determine whether the Fixed Charge Coverage Ratio is in effect and subject to testing, PFG shall make a good faith determination as to whether the Fixed Charge Coverage Ratio would be in effect based upon the Senior Loan Documents (in their form on
the date hereof).” 
 shall be replaced in its entirety with and read prospectively from the Effective Date as follows:

 “5. Financial Covenants 

            (Section 4.1): 

Borrower shall maintain at all times, to be tested as of the last day of each month, unless otherwise noted, on a consolidated basis:

  

	 	(a) Liquidity  Ratio:    	Borrower shall maintain at all times a Liquidity Ratio of greater than 1.5 to 1.0. 

  
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 “Liquidity Ratio” is the ratio of (a) Borrower’s unrestricted Cash and
Cash Equivalents held with the Senior Lender plus Borrower’s Eligible Accounts permitted as such under the Senior Loan Documents, divided by (b) the sum of the outstanding principal amount of all monetary obligations owed to the Senior
Lender, plus all other indebtedness for borrowed money (other than the Subordinated Debt to PFG), plus all sums owed under Bank Services Agreements, plus the deferred price of property or services (other than unsecured indebtedness to trade
creditors incurred in the ordinary course of business). Capitalized terms used in the definition of Liquidity Ratio and not defined in this Agreement have their meanings as set forth in the Senior Loan Documents. 

 

	 	(b) EBITDA:    	EBITDA, as of the last day of each month, for the three month period ending as of last day of such month, of not less than Negative Two Million, Five Hundred Thousand
Dollars (-$2,500,000); provided that, from and after the date Borrower has maintained a Fixed Charge Coverage Ratio in excess of 1.5 to 1.00 for two consecutive fiscal quarters, thereafter Borrower shall not be required to meet the foregoing EBITDA
covenant and, thereafter, Borrower shall, instead, be required to maintain a Fixed Charge Coverage Ratio in excess of 1.25 to 1.00 at all times. 

 “EBITDA” shall mean (a) Net Income, minus any non-cash income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation
expense and amortization expense, plus (d) income tax expense, plus (e) stock-based compensation expense (to the extent not payable in cash), plus (f) non-cash expenses incurred from applying GAAP to the terms of this Agreement and
related Warrant and to the Senior Debt and related warrant issued under the Senior Loan Documents, plus (g) any other non-cash charges. 
 (c) Negative Covenants. A new clause (xiii) shall be added to Section 4.6, with the existing clause (xiii) that prior to the Effective Date read as follows (italicized for ease of
reference): 
 “or 
 (xiii) the Board of directors shall resolve to or approve, or Borrower shall otherwise take any steps to effect, any of the foregoing actions in clauses (i) through (xviii), inclusive.”

  
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 replaced in its entirety and read as from the Effective Date as follows: 

“(xiii) contract for, purchase or make any expenditure or commitments for financed Capital Expenditures in any fiscal year in an
aggregate amount in excess of $2,000,000; or 
 (xiv) the Board of directors shall resolve to or approve, or Borrower shall
otherwise take any steps to effect, any of the foregoing actions in clauses (i) through (xviii), inclusive.” 
 4. CONSISTENT
CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above. 
 5. PAYMENT OF LOAN
FEE AND EXPENSES. Borrower shall pay to PFG all of PFG’s reasonable and documented out-of-pocket costs and expenses in connection with this Modification. 
 6. BORROWERS’ REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that: 
 (a) immediately upon giving effect to this Modification (i) except for the matters set forth on Exhibit A hereto and the Capitalization Table attached as Exhibit B hereto, the representations and
warranties contained in the Loan Agreement are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as
of such date), and (ii) no Event of Default has occurred and is continuing; 
 (b) Borrower has the corporate power and
authority to execute and deliver this Amendment and to perform its obligations under the Existing Loan. Documents, as amended by this Modification; 
 (c) the certificate of incorporation, bylaws and other organizational documents of Borrower delivered to PFG remain true, accurate and complete and have not been amended, supplemented or restated and are
and continue to be in full force and effect; 
 (d) the execution and delivery by Borrower of this Modification and the
performance by Borrower of its obligations under the Existing Loan Documents, as amended by this Modification, have been duly authorized by all necessary corporate action on the part of Borrower; 

(e) this Modification has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it
in accordance with the terms of this Modification, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or
affecting creditors’ rights; 
 (f) as of the date hereof, Borrower has no defenses against its obligation to repay the
Obligations and it has no claims of any kind against PFG. Borrower acknowledges that PFG has acted in good faith and has conducted in a commercially reasonable manner its relationship with such Borrower in connection with this Modification and in
connection with the Existing Loan Documents; 

  
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 (g) the Security Documents relating to Intellectual Property either disclose an accurate,
complete and current listing of all Collateral that consists of Intellectual Property or Borrower has included revised and updated Intellectual Property schedules as part of an update to the Representations required in Section 8 of this
Modification; and 
 (h) as of the date hereof, except for the matters set forth on Exhibit A hereto and the Capitalization
Table attached as Exhibit B hereto, Borrower ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in the Representations dated as of August 8, 2011, and as of the date Borrower makes a request to issue a Note
on or after the date hereof, Borrower shall ratify, confirm and reaffirm, all and singular, the terms and disclosures contained in the Representations dated as of August 8, 2011 as modified by Exhibits A and B hereto, and shall acknowledge,
confirm and agree that the disclosures and information Borrower provided to PFG in Part A — Sections 1-6 (except as further noted in this sentence) and Part B — Sections 11, 12 and 13 of the Representations shall not have changed as of the
date of such borrowing request, and all other Sections of the Representations, including Part A Section 3(d),(e) (g) and (i) shall have not changed as of such borrowing request in any material respect or, if the Representations
require additional disclosure in order to be true, accurate and complete as of the date hereof, Borrower shall have provided the update to the Representations required in Section 8 hereof. 

Borrower understands and acknowledges that PFG is entering into this Modification in reliance upon, and in partial consideration for, the
above representations and warranties, and agrees that such reliance is reasonable and appropriate. 
 7. CONTINUING VALIDITY. Borrower
understands and agrees that in modifying the existing Obligations, PFG is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this
Modification, the terms of the Existing Loan Documents remain unchanged and in full force and effect. PFG’s agreement to modifications to the existing Obligations in no way shall obligate PFG to make any future consents, waivers or
modifications to the Obligations. Nothing in this Modification shall constitute a satisfaction of the Obligations or a waiver of any default under the Existing Loan Documents. It is the intention of PFG and Borrower to retain as liable parties all
makers and endorsers of Existing Loan Documents, unless the party is expressly released by PFG in writing. Unless expressly released herein, no maker, endorser, or guarantor will be released by virtue of this Modification. The terms of this
paragraph apply not only to this Modification, but also to all subsequent loan modification agreements. 
 8. CONDITIONS. The
effectiveness of this Modification is conditioned upon each of: 
 (a) Execution and Delivery. Borrower shall have duly
executed and delivered to PFG a counterpart of this Modification and a true and correct copy of the Senior Loan Documents, as amended to the Effective Date. 
 (b) Payment of PFG Expenses. Borrower shall have paid upon demand all PFG expenses (including all reasonable attorneys’ fees and expenses) incurred in connection with this Modification in
accordance with Section 5 hereof. 

  
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 (c) Updates to Borrower Information. On or prior to the date of any request for
borrowing on or after the date hereof, Borrower shall have certified its compliance with Section 6(h), or, if required to render Part A — Sections 1-6 (except Section 3(d),(e) (g) and (i)) and Part B - Section 11 of the
Representations identified in Section 7(i) hereof true, correct, accurate and complete as of the date hereof, and all other Sections of the Representations, including Part A Section 3(d),(e) (g) and (i) true, correct, accurate
and complete in all material respects as of the date of such borrowing request, shall have delivered to PFG true and current information and versions of such documents. 
 (d) Modification Fee. In consideration of the increased risk associated with the additional credit permitted by PFG to be made available under the Senior Loan Documents, as amended, Borrower shall
pay PFG a fee equal to $25,000. 
 (e) No Default under Senior Debt Documents. There shall be no default under the Senior
Debt Documents that has not been cured or waived. 
 (f) SVB Subordination. PFG and the Senior Lender shall have entered
into an amendment to their existing Subordination Agreement reflecting the amendment to the Senor Loan Documents. 
 (g)
Warrant. Borrower shall have issued PFG the Warrant, the form of which is appended hereto as Exhibit C. 
 9. FURTHER
ASSURANCES. Borrower agrees to execute such further documents and instruments and to take such further actions as PFG may request in its good faith business judgment to carry out the purposes and intent of this Modification. 

10. INTEGRATION; CONSTRUCTION. This Modification and any documents executed in connection herewith or pursuant hereto contain the entire agreement
between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial
or arbitration proceeding, if any, involving this Modification; provided, however, that any financing statements or other agreements or instruments filed by PFG with respect to Borrower shall remain in full force and effect. The quotation marks
around modified clauses set forth herein and any differing font styles in which such clauses are presented herein are for ease of reading only and shall be ignored for purposes of construing and interpreting this Modification. This Modification is
subject to the General Provisions of Section 8 of the Loan Agreement. 
 11. GOVERNING LAW; VENUE. THIS MODIFICATION SHALL BE
GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrower and PFG submit to the exclusive jurisdiction of the State and Federal courts in San Francisco County, California, in connection with any
proceeding or dispute arising in connection herewith. 
 This Modification is executed as of the date first written above.

 [Signature Page Follows] 

  
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	Borrower:	 		 	PFG:
			
	Cardiovascular Systems, Inc.	 		 	PARTNERS FOR GROWTH III, L.P.
					
	By	 	/s/ Larry Betterley	 		 	By:	 	/s/ Lorraine Nield
		 	Chief Financial Officer	 		 	Name:	 	Lorraine Nield
					
	By:	 	 	 		 	Title:	 	Manager, Partners for Growth III,
		 	Secretary or Ass’t Secretary	 		 		 	 LLC
 Its General
Partner

  
 - 8 -Warrant

 Exhibit 10.5 
 WARRANT 
 THIS WARRANT (“WARRANT”) WAS SOLD IN A PRIVATE TRANSACTION, WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES ACT AND SUCH LAWS OR IF AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT AND SUCH LAWS IS AVAILABLE. 
  

			
	Company:	  	Cardiovascular Systems, Inc., a Delaware corporation
	Number of Shares:	  	3,396
	Class of Shares:	  	Common Stock, $0.001 par value per share
	Exchange Price:	  	$9.33 per share
	Issue Date:	  	December 27, 2011
	Expiration Date:	  	December 27, 2016

 The term “Holder” shall initially refer to PFG Equity Investors, LLC, a Delaware limited
liability company, which is the initial holder of this Warrant and shall further refer to any subsequent permitted holder of this Warrant from time to time. 
 The Company does hereby certify and agree that, for the sum of $186 paid by Holder on the date hereof, which the parties agree is fair consideration for this Warrant, Holder, or its permitted successors
and assigns, hereby is, entitled to Exercise or Exchange (each as defined below) this Warrant in Cardiovascular Systems, Inc. (the “Company”) for Three Thousand Three Hundred Ninety-Six (3,396) duly authorized, validly issued, fully
paid and non-assessable shares of its Common Stock, $0.001 par value each, upon the terms and subject to the provisions of this Warrant. The shares of Common Stock issuable upon Exercise or Exchange of this Warrant are referred to herein as the
“Warrant Stock”. Capitalized terms used but not defined in this Warrant have their meanings as set forth in that certain Loan and Security Agreement between the Company and Partners for Growth III, L.P. dated as of April. 14, 2010, as
amended (the “Loan Agreement”). 
 Section 1 Term, Price and Exercise or Exchange of Warrant. 

1.1 Term of Warrant. This Warrant shall be exercisable and exchangeable for a period of five (5) years from the Issue Date
(hereinafter referred to as the “Expiration Date”). 
 1.2 Exchange Price. The price per share at which the
Warrant Stock is issuable upon Exercise or Exchange of this Warrant shall be $9.33, subject to Section 1.3 (a) hereof and subject to adjustment from time to time as set forth herein (the “Exchange Price”). 

  
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 1.3 Exercise of Warrant; Exchange of Warrant. 

(a) This Warrant may be Exercised or Exchanged, in whole or in part, upon delivery to the Company of the form of election to Exchange or
Exercise attached hereto as Exhibit A (the “Election”) duly completed and executed subject to payment to the Company of the Exchange Price for the number of shares of Warrant Stock in respect of which this Warrant is then being exercised
(an “Exercise”). In whole or in part in lieu of an Exercise, Holder may exchange this Warrant as set forth in Section 1.3(b) (an “Exchange”). In each case, Holder shall promptly surrender this Warrant to the Company or
provide a customary affidavit of lost or stolen warrant. 
 (b) Upon an Exchange, the Holder shall receive Warrant Stock such
that, without the payment of any funds, the Holder shall surrender this Warrant in exchange for the number of shares of Warrant. Stock equal to “X” (as defined below), computed using the following formula: 

 

					
		 	 Y * (A-B)

        A
	  	
	                            
          X=	 	  	
		 	  	

 Where 
 X = the number of shares of Warrant Stock to be issued to Holder 
 Y = the number
of shares of Warrant Stock to be Exchanged under this Warrant 
 A = the Fair Market Value of one share of Warrant Stock

 B = the Exchange Price (as adjusted to the date of such calculations) 

* = multiplied by 
 (c) For purposes of this Warrant, the “Fair Market Value” of one share of Warrant Stock shall be (i) if the Company’s common stock (the “Common Stock”) is or becomes listed
on a national stock exchange or is quoted on the Nasdaq Global Select Market or Nasdaq Global Market, the highest closing sale price reported on such exchange or market during the trading day on which Holder delivers its Election to the Company, or
(ii) if the Common Stock is traded over-the-counter, the highest closing bid price reported for the Common Stock during the trading day on which Holder delivers its Election to the Company, and if there has been no such reported bid price for
such day, the next prior day(s) until the first such reported bid price. If the Common Stock is not traded as contemplated in clauses (i) or (ii), above, the Fair Market Value of the Company’s Warrant Stock shall be the price per share
which the Company could obtain from a willing buyer for shares of Common Stock sold by the Company from its authorized but unissued shares, as the Board of Directors of the Company (“Board”) shall determine in its reasonable good faith
judgment, but in no event less than the price at which qualified employee stock options issued at such time are exercisable. In the event that Holder elects to Exercise or Exchange in connection with a transaction in which the Warrant Stock is
converted into or exchanged for another security, Holder may effect an Exercise or Exchange directly into such other security. 

(d) Upon delivery of the Election, but subject to payment of the Exchange price in the case of an Exercise and surrender of this Warrant
(or delivery of an affidavit of lost or stolen warrant), the Company shall promptly issue and deliver a certificate or certificates for the number of shares of Warrant Stock so deliverable upon Exchange or Exercise of this Warrant. Such certificate
or certificates shall be deemed to have been issued and any person so 

  
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designated to be named therein shall be deemed to have become a holder of record of such Warrant Stock as of the date the Election is delivered (but subject, as a condition precedent to payment
of the Exchange Price in the case of an Exercise and in each case surrender of this Warrant or delivery of an affidavit of lost or stolen warrant (the “Exchange Conditions”)); provided, that if the date of such Election is not a business
day, the certificates for the Warrant Stock shall be deemed to have been issued as of the next business day (whether before or after the Expiration Date). If this Warrant is Exercised or Exchanged in part, a new warrant of the same tenor and for the
number of shares of Warrant Stock not Exchanged or Exercised shall be executed by the Company. 
 1.4 Fractional
Interests. The Company shall not be required to issue fractions of shares of Warrant Stock upon the Exercise or Exchange of this Warrant. If any fraction of a share of Common Stock would be issuable upon Exercise or Exchange of this Warrant (or
any portion thereof), the Company shall purchase such fraction for an amount in cash equal to the same fraction of the last reported sale price of the Common Stock on the NASDAQ Global Select Market or Nasdaq Global Market or any other national
securities exchange or market on which the Common Stock is then listed or traded. 
 1.5 Automatic Conversion upon
Expiration. In the event that, upon the Expiration Date, the Fair Market Value of one share of Common Stock (or other security issuable upon the Exercise or Exchange hereof) as determined in accordance with Section 1.3(c) is greater than
the Exchange 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 1.3 as to all Warrant Stock (or such other securities) for which it shall not previously have
been Exercised or Exchanged, and the Company shall promptly deliver a certificate representing the Warrant Stock (or such other securities) issued upon such Exercise or Exchange to Holder. 

1.6 Treatment of Warrant Upon Acquisition of Company. 
 (a) “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale or other disposition of all or substantially all of the assets of the Company in whatever form,
or any reorganization, consolidation, or merger of the Company (whether in a single transaction or multiple related transactions) 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(s). 
 (b) Treatment of Warrant at
Acquisition. Upon the closing of any Acquisition, the successor entity (if applicable in such Acquisition) shall, as condition to such Acquisition, either: (i) assume the obligations of this Warrant, and this Warrant shall be exchangeable
for the same securities as would be payable for the Warrant Stock issuable upon Exercise or Exchange of the unexchanged portion of this Warrant as if such Warrant Stock were outstanding on the record date for the Acquisition (and the Warrant Price
and/or number of shares of Warrant Stock shall be adjusted accordingly) or (ii) purchase this Warrant at its “Fair Value” (as such term is defined herein). 

  
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 (c) Purchase at Fair Value. 

For purposes of this Warrant, “Fair Value” shall mean that value determined by the parties using a Black-Scholes Option-Pricing
Model (the “BlackScholes Calculation”) with the following assumptions: (A) a risk-free interest rate equal to the risk-free interest rate at the time of the closing of the Acquisition (or as close thereto as practicable), (B) a
contractual life of the Warrant equal to the remaining term of this Warrant as of the date of the announcement of the Acquisition, (C) an annual dividend yield equal to dividends declared on the underlying Warrant Stock (including securities
into which the Warrant Stock may be convertible) during the term of this Warrant (calculated on an annual basis), and (D) a volatility factor of the expected market price of the Company’s Common Stock comprised of: (1) if the Company
is publicly traded on a national securities exchange or is quoted on the Nasdaq Global Select Market or Nasdaq Global Market, its volatility over the one year period ending on the day prior to the announcement of the Acquisition, (2) if the
Common Stock is traded over-the-counter, its volatility over the one year period ending on the day prior to the announcement of the Acquisition, or (3) if the Company is a non-public company, the volatility, over the one year period prior to
the Acquisition, of an average of publicly-traded companies in the same or similar industry to the Company with such companies having similar revenues. The Purchase Price determined in accordance with the above shall be paid upon the initial closing
of the Acquisition and shall not be subject to any post-Acquisition closing contingencies or adjustments; provided, however, the parties may take such post-Acquisition closing contingencies or adjustments into account in determining the Purchase
Price, and if the parties take any post-Acquisition closing contingencies or adjustments into account, then upon the partial or complete removal of those post-Acquisition closing contingencies or adjustments, a new Black-Scholes Calculation would be
made using all of the same inputs except for the value of the Company’s Common Stock (as determined under subclause (D)), and any increase in Fair Value (and, correspondingly, Purchase Price), including, without limitation, as a result of any
earn-out or escrowed consideration, would be paid in full to Holder immediately after those post-Acquisition closing contingencies or adjustments can be determined or achieved. 
 Section 2. Exchange and Transfer of Warrant. 
 (a) This Warrant may be
transferred, in whole or in part, without restriction, subject to (i) Holder’s compliance with applicable securities laws and delivery of an opinion of competent counsel as to the same, if so requested by the Company, and (ii) the
transferee holder of the new Warrant assuming in writing the obligations of the Holder set forth in this Warrant and the Agreement. Any other transfer may be registered with the Company by submission to it of this Warrant, together with the annexed
Assignment Form attached hereto as Exhibit B duly completed and executed. After the Company’s receipt of this Warrant and the Assignment Form so completed and executed, the Company will issue and deliver to the transferee a new warrant
(representing the portion of this Warrant so transferred) at the same Exchange Price per share and otherwise having the same terms and provisions as this Warrant, which the Company will register in the new holder’s name. In the event of a
partial transfer of this Warrant, the Company shall concurrently issue and deliver to the transferring holder a new warrant that entitles the transferring holder to purchase the balance of this Warrant not so transferred and that otherwise is upon
the same terms and conditions as this Warrant. Upon the due delivery of this Warrant for 

  
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transfer, the transferee holder shall be deemed for all purposes to have become the holder of the new warrant issued for the portion of this Warrant so transferred, effective immediately prior to
the close of business on the date of such delivery, irrespective of the date of actual delivery of the new warrant representing the portion of this Warrant so transferred. 
 (b) In the event of the loss, theft or destruction of this Warrant, the Company shall execute and deliver an identical new warrant to the Holder in substitution therefor upon the Company’s receipt of
(i) evidence reasonably satisfactory to the Company of such event and (ii) if requested by the Company, an indemnity agreement reasonably satisfactory in form and substance to the Company. In the event of the mutilation of or other damage
to the Warrant, the Company shall execute and deliver an identical new warrant to the Holder in substitution therefor upon the Company’s receipt of the mutilated or damaged warrant. 

(c) The Company shall pay all reasonable costs and expenses incurred in connection with the Exchange, Exercise, transfer, amendment or
replacement of this Warrant, including, without limitation, the costs of preparation, execution and delivery of a new warrant and of share certificates representing all Warrant Stock. 
 Section 3. Certain Covenants. 
 (a) The Company shall at all times
reserve for issuance and keep available out of its authorized and unissued Common Stock, solely for the purpose of providing for the Exercise or Exchange of this Warrant, such number of shares of Common Stock as shall from time to time be sufficient
therefor. 
 (b) The Company will not, by amendment or restatement of its Certificate of Incorporation or Bylaws or through
reorganization, consolidation, merger, amalgamation, sale of assets or otherwise, avoid or seek to avoid the observance or performance of any of the terms of this Warrant. Without limiting the foregoing, the Company (i) will not increase the
par value of any Warrant Stock receivable upon the Exercise or Exchange of this Warrant above the amount payable therefor upon such Exercise or Exchange and (ii) will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares upon the Exercise or Exchange of this Warrant. 
 (c)
So long as Holder holds this Warrant, the Company shall deliver to Holder such reports as it provides to its stockholders generally, as and when delivered to such stockholders. Notwithstanding the foregoing, the Company shall provide Holder
quarterly and annual financial statements upon request, if such statements are not publicly available. The parties shall not treat the Warrant or the Warrant Stock as being granted or issued as property transferred in connection with the performance
of services or otherwise as compensation for services rendered. 

  
 - 5 -

 Section 4. Adjustments to Exchange Price and Number of Shares of Warrant Stock. 

4.1 Adjustments. The Exchange Price shall be subject to adjustment from time to time in accordance with this Section 4. Upon
each adjustment of the Exchange Price pursuant to this Section 4, the Holder shall thereafter be entitled to acquire upon Exercise or Exchange, at the Exchange Price resulting from such adjustment, the number of shares of Common Stock of the
Company obtainable by multiplying the Exchange Price in effect immediately prior to such adjustment by the number of shares of Common Stock acquirable immediately prior to such adjustment and dividing the product thereof by the new Exchange Price
resulting from such adjustment. 
 4.2 Subdivisions, Combinations and Stock Dividends. If the Company shall at any time
subdivide by split-up or otherwise, its outstanding Common Stock into a greater number of shares, or issue additional Common Stock as a dividend, bonus issue or otherwise with respect to any Common Stock, the Exchange Price in effect immediately
prior to such subdivision or share dividend or bonus issue shall be proportionately reduced and the number of shares acquirable upon Exercise or Exchange hereunder shall be proportionately increased. Conversely, in case the outstanding Common Stock
of the Company shall be combined into a smaller number of shares, the Exchange Price in effect immediately prior to such combination shall be proportionately increased. 
 4.3 Reclassification, Exchange, Substitutions, Etc. 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 Exchange of this Warrant, Holder shall be entitled to receive an amended warrant for the number and kind of securities and property that Holder would have received for the Warrant Stock if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other 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 Exchange 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 Exchange of this Warrant. The amendment to
this Warrant shall provide for adjustments (as determined in good faith by the Company’s Board of Directors) which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 4 including, without
limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon Exercise or Exchange of the new Warrant. The provisions of this Section 4.3 shall similarly apply to successive reclassifications, exchanges,
substitutions, or other similar events. 
 4.4. Notices of Record Date, Etc. In the event that the Company shall:

 (1) declare or propose to declare any dividend upon its Common Stock, whether payable in cash, property, stock or other
securities and whether or not a regular cash dividend, or 
 (2) offer for sale any additional shares of any class or series of
the Company’s stock or securities exchangeable for or convertible into such stock in any transaction that would give rise (regardless of waivers thereof) to pre-emptive rights of any class or series of stockholders, or 

(3) effect or approve any reclassification, exchange, substitution or recapitalization of the capital stock of the Company, including any
subdivision or combination of its outstanding capital stock, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation, or to liquidate, dissolve or wind up (including an assignment for
the benefit of creditors), or 

  
 - 6 -

 (4) offer holders of registration rights the opportunity to participate in any public
offering of the Company’s securities, 
 then, in connection with such event, the Company shall give to Holder: 

(i) at least ten (10) days prior written notice of the date on which the books of the Company shall close or a record shall be taken
for such a dividend or offer in respect of the matters referred to in (1) or (2) above, or for determining rights to vote in respect of the matters referred to in (3) above; and 

(ii) in the case of the matters referred to in (3) above, at least ten (10) days prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (1) shall also specify, in the case of any such dividend, the date on which the holders of capital stock shall be entitled thereto and the terms of such dividend, and such
notice in accordance with clause (2) shall also specify the date on which the holders of capital stock shall be entitled to exchange their capital stock for securities or other property deliverable upon such reorganization, reclassification,
exchange, substitution, consolidation, merger or sale, as the case may be, and the terms of such exchange. Each such written notice shall be given by first class mail, postage prepaid, addressed to the holder of this Warrant at the address of
Holder; and 
 (iii) in the case of the matter referred to in (4) above, the same notice as is given or required to be
given to the holders of such registration rights. 
 4.5 Adjustment by Board of Directors. If any event occurs as to
which, in the opinion of the Board of Directors of the Company, the provisions of this Section 4 are not strictly applicable or if strictly applicable would not fairly protect the rights of the Holder in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect such rights, but in no event shall any adjustment
have the effect of increasing the Exchange Price as otherwise determined pursuant to any of the provisions of this Section 4, except in the case of a combination of shares of a type contemplated in Section 4.2 and then in no event to an
amount larger than the Exchange Price as adjusted pursuant to Section 4.2. 
 4.6 Officers’ Statement as to
Adjustments. Whenever the Exchange Price and/or number of shares of Warrant Stock subject to the Warrant is required to be adjusted as provided in Section 4, the Company shall forthwith file at its principal office with a copy to the Holder
notice parties set forth in Section 7 hereof a statement, signed by the Chief Executive Officer or Chief Financial Officer of the Company, showing in reasonable detail the facts requiring such adjustment, the Exchange Price and number of
issuable shares that will be effective after such adjustment; provided, however, such statement shall not be required to the extent the information requested in this Section 4.6 is available through the Company’s current reports filed with
the Securities and Exchange Commission. If at any time the information described in this Section 4.6 is readily available through the Company’s reports filed with the Securities and Exchange

  
 - 7 -

 
Commission, the Company shall not be required to provide a separate notice of adjustment to the Holder; provided, however, if such information is not readily available through the Company’s
current reports filed with the Securities Exchange Commission and made public, the Company shall cause a notice setting forth any such adjustments to be sent by mail, first class, postage prepaid, to the record Holder of this Warrant at its notice
address(es) appearing in Section 7. 
 4.7 Issue of Securities other than Common Stock. In the event that at any
time, as a result of any adjustment made pursuant to Section 4, the Holder thereafter shall become entitled to receive any securities of the Company, other than Common Stock, thereafter the number of such other shares so receivable upon
Exercise or Exchange of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in Section 4. 

Section 5. Rights and Obligations of the Warrant Holder. 
 Except as otherwise specified in this Warrant, this Warrant shall not entitle the Holder to any rights of a holder of Common Stock in the Company until such time as this Warrant is Exercise or Exchanged.
Subject to the Company’s ability to secure the requisite consents specified in Section 6.13, the Company hereby grants the following registration rights to Holder. If during the term of this Warrant the Company proposes to file a
registration statement under the Securities Act with respect to an offering for its own account of any class of its equity securities (other than a registration statement on Form S-8 (or any successor forin) or any other registration statement
relating solely to employee benefit plans or filed in connection with an exchange offer, a transaction to which Rule 145 (or any successor provision) under the Securities Act applies or an offering of securities solely to the Company’s existing
shareholders), then the Company shall in each case give written notice of such proposed filing to Holder as soon as practicable (but no later than 20 business days) before the anticipated filing date, and such notice shall offer Holder the
opportunity to register such number of shares of Warrant Stock as Holder may request. Holder shall advise the Company in writing within 10 business days after the date on which the Company’s notice is so given, setting forth the number of
shares of Warrant Stock for which registration is requested. If the Company’s offering is to be an underwritten offering, the Company shall, subject to the further provisions of this Agreement, use its reasonable best efforts to cause the
managing underwriter or underwriters to permit the Holders of the Warrant Stock requested to be included in the registration for such offering to include such Warrant Stock in such offering on the same terms and conditions as any similar securities
of the Company included therein, subject to Holder’s execution of an underwriting agreement with the managing underwriter or underwriters selected by the Company in the same manner as other holders participating in the registration. In
connection with any such offering, the Company will (i) include only such information relating to the Holder and the sale of Holder’s securities as Holder shall specifically permit and (ii) indemnify the Holder against liabilities,
losses and damages that Holder may incur in connection with the offering, including those relating to the applicable securities laws, and any breach by the Company of this Warrant. 

  
 - 8 -

 Section 6. Representations, Warranties and Covenants of the Company. The Company represents and
warrants to, and covenants with, Holder that: 
 6.1 Corporate Power; Authorization. The Company has all requisite
corporate power and has taken all requisite corporate action to execute and deliver this Warrant, to sell and issue the Warrant and Warrant Stock and to carry out and perform all of its obligations hereunder. This Warrant has been duly authorized,
executed and delivered on behalf of the Company and constitutes the valid and binding agreement of the Company, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization or similar laws
relating to or affecting the enforcement of creditors’ rights generally and (ii) as limited by equitable principles generally. The person executing this Warrant is a duly authorized officer of the Company with all necessary legal authority
to bind the Company generally and with the specific legal authority to cause the Company to execute and deliver this Warrant. 

6.2 Validity of Securities. This Warrant, when sold against the consideration therefor as provided therein, will be validly
authorized, issued and fully paid. The issuance and delivery of the Warrant is not subject to preemptive or any similar rights of the stockholders of the Company (which have not been duly waived) or any liens or encumbrances except for restrictions
on transfer provided for herein or under applicable federal and state securities laws; and when the Warrant Stock is issued upon exercise and in accordance with the terms hereof, and this Warrant is converted into Warrant Stock, such securities will
be, at each such issuance, validly issued and outstanding, fully paid and nonassessable, in compliance with all applicable securities laws and free of any liens or encumbrances except for restrictions on transfer provided for herein or under
applicable federal and state securities laws. 
 6.3 Capitalization. The authorized capital stock of the Company consists
of 100,000,000 shares of common stock, of which 17,798,246 were issued and outstanding on November 30, 2011. All such issued and outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable. As of
November 30, 2011, the Company has reserved a total of 2,374,577 shares of its common stock for issuance under outstanding warrants to purchase common stock. As of November 30, 2011, the Company has reserved (i) 31,451 shares of its
common stock for issuance under outstanding options under its 1991 Stock Option Plan; (ii) 1,417,968 shares of its common stock for issuance under outstanding options under its 2003 Stock Option Plan; (iii) 70,000 shares of its common
stock for issuance under outstanding options under the 2006 Equity Incentive Plan relating to Replidyne activity prior to the merger in February 2009; (iv) 1,338,664 shares of its common stock for issuance under outstanding options under its
2007 Equity Incentive Plan (all of the plans referred to in items (i), (ii), (iii) and (iv) are referred to collectively as the “Company Stock Option Plans”) and (v) 45,290 shares of its common stock for issuance under
outstanding options not granted under any plan. Except for 482,777 shares of the Company’s common stock remaining available for issuance under options to be granted under the Company’s 2007 Equity Incentive Plan, no shares of the
Company’s common stock remain available for issuance under additional options to be granted under the Company Stock Option Plans. Except as specified in this Warrant (including as set forth in Schedule 1), there are no other options, warrants,
conversion privileges or other contractual rights presently outstanding to purchase or otherwise acquire any authorized but unissued shares of the Company’s capital stock or other securities. Schedule 1 hereto sets forth a capitalization table
which is true, correct, accurate and complete as of November 30, 2011. 

  
 - 9 -

 6.4 No Conflict. The execution and delivery of this Warrant do not, and the
consummation of the transactions contemplated hereby and thereby will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit, under, any provision of the Restated Certificate of Incorporation or Bylaws, as amended, or any mortgage, indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company, its properties or assets, the effect of which would have a material adverse effect on the Company or materially impair or restrict
its power to perform its obligations as contemplated hereby. 
 6.5 Governmental and other Consents. No consent,
approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority or other person or entity is required on the part of the Company in connection with the issuance, sale and
delivery of the Warrant and the Warrant Stock, except such filings as shall have been made prior to and shall be effective on and as of the date hereof. All stockholder consents required in connection with issuance of the Warrant and Warrant Stock
have either been obtained by Borrower or no such consents are required. 
 6.6 Authorized and Unissued Shares of Common
Stock. During the period within which this Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issue or transfer upon exercise of this Warrant, a sufficient number of authorized but unissued
shares of Common Stock when and as required to provide for the exercise of the rights represented hereby. 
 6.7 Exempt from
Registration. Assuming the accuracy of the representations and warranties of Holder in Section 7 hereof, the offer, sale and issuance of the Warrant and the Warrant Stock will be exempt from the registration requirements of the Securities
Act pursuant to Rule 506 of Regulation D under the Securities Act and from the registration and qualification requirements of applicable state securities laws. Neither the Company nor any agent on its behalf has solicited or will solicit any offers
to sell or has offered to sell or will offer to sell all or any part of Securities to any person or persons so as to bring the sale of such Shares by the Company within the registration provisions of the Securities Act. 

6.8 Reporting Obligations. Borrower is and will remain subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act and (i) has filed and will file all required reports under Section 13 or 15(d) of the Exchange Act, as applicable, during the 12 months preceding the initial issuance of any Notes, other than Form 8-K reports; and
(ii) has submitted and will submit electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T, during the 12 months preceding such sale (a
“Reporting Issuer”). Without limiting the foregoing, if the Company ceases to timely file periodic reports under the Exchange Act, the Company shall from time to time promptly provide a copy of its most recent annual, quarterly and other
interim reports to Holder. 
 6.9 Quotation on NASDAQ. The Warrant Stock issuable upon Exercise or Exchange of this
Warrant has been authorized for quotation on the Nasdaq Global Market. Any filings required by such market, including, without limitation, the Financial Industry Regulatory Authority (“FINRA”) shall be timely made and any required
authorizations or approvals for the consummation of the transactions contemplated herein, including, without limitation, the issuance of the Warrant Stock, have been obtained. 

  
 - 10 -

 6.10 Non-Public Information. The Company shall not at any time provide PFG any material
nonpublic information, unless pursuant to Special Request (as defined in the Loan and Security Agreement of even date herewith) and will publicly disclose the terms of this Agreement on Form 8-K under the Exchange Act (including it as an exhibit
thereto if it deems it required under applicable law) promptly following the date hereof. 
 6.11 Delivery of Information;
Accuracy. The Company acknowledges its delivery of certain Representations and Warranties dated as of August 8, 2011 (the “Representation Letter”), to Holder, which Representations and Warranties form the basis for Holder
purchasing the Warrant. The information contained in Part B of the Representation Letter and all documents, instruments and other information delivered to Holder in connection therewith are true, correct, accurate and complete in all material
respects. 
 6.12 Legends. The Company shall remove any restrictive securities legends on Warrant Stock resulting from
exchange of the Warrant six (6) months following the issuance of the Warrant. 
 6.13 Piggyback Registration Rights.
Holder acknowledges that the Company is party to that certain Registration Rights Agreement dated as of March 16, 2009 among the Company and certain holders of its Common Stock and that such Registration Rights Agreement prohibits the Company
from granting additional registration rights without the consent of the stockholders who are parties to such Registration Rights Agreement. The Company shall use its best efforts to procure for the benefit of Holder the registration rights set forth
in Section 5 hereof. 
 Section 7. Representations and Warranties of Holder. Holder hereby represents and warrants to the
Company as of the Closing Date as follows: 
 7.1 Investment Experience. Holder is an “accredited investor”
within the meaning of Rule 501 under the Securities Act, and was not organized for the specific purpose of acquiring the Securities. Holder is aware of the Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Holder has such business and financial experience as is required to give it the capacity to protect its own interests in connection with the
purchase of the Securities. 
 7.2 Investment Intent. Holder is purchasing the Warrant for investment for its own account
only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act. Holder understands that the Warrant has not been registered under the Securities Act or registered or
qualified under any state securities law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of Holder’s investment intent as expressed herein. 

  
 - 11 -

 7.3 Authorization. Holder has all requisite power and has taken all requisite action
required of it to carry out and perform all of its obligations hereunder. The execution and delivery of this Warrant has been duly authorized, executed and delivered on behalf of Holder and constitutes the valid and binding agreement of Holder,
enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally and (ii) as limited by
equitable principles generally. The consummation of the transactions contemplated herein and the fulfillment of the terms herein will not result in a breach of any of the terms or provisions of Holder’s constitutional documents or instruments.

 Section 8. Restrictive Stock Legend. 
 This Warrant and the Warrant Stock have not been registered under any securities laws. Accordingly, any share certificates issued pursuant to the Exercise or Exchange of this Warrant shall (until receipt
of an opinion of counsel in customary form that such legend is no longer necessary) bear the following legend: 
 THIS WARRANT
AND THE WARRANT STOCK ISSUABLE UPON EXCHANGE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OF DISTRIBUTION
THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN CUSTOMARY FORM THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT. 

Section 9. Notices. 

Any notice or other communication required or permitted to be given here shall be in writing and shall be effective (a) upon hand
delivery or delivery by e-mail or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received) or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is to be received), or (b) on the third business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such communication shall be: 
 if to Holder, at

 PFG Equity Investors, LLC 
 150 Pacific Avenue 
 San Francisco, California 94111 

Attention: Chief Financial Officer 
 Fax: (415) 781-0510 
 Email: notices@pfgrowth.com 

  
 - 12 -

 with a copy (not constituting notice) to 

Greenspan Law Office 
 Attn: Benjamin Greenspan, Esq. 
 620 Laguna Road 

Mill Valley, CA 94941 Fax: (415) 738-5371 
 Email: ben@greenspan-law.com 
 or 

if to the Company, at 
 Cardiovascular Systems, Inc. 
 651 Campus Drive 

St. Paul, MN 55112 
 Attn: Larry Betterley 
 Fax: (651) 259-1696 

Email: lbetterley@csi360.com 
 with a copy (not constituting notice) to: 
 Fredrikson & Byron 

200 6th Street South 
 Minneapolis, MN 55402 
 Attn: Bert Ranum 

Fax: (612) 492-7077 
 Email: rranum@fredlaw.com 
 Each party hereto may from time to time change its address for notices
under this Section 7 by giving at least 10 calendar days’ notice of such changes address to the other party hereto. 

Section 10. Amendments and Waivers. 
 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. This Warrant may only be amended by an instrument in writing signed by both parties. 
 Section. 11. Applicable Law;
Severability. 
 This Warrant shall be governed by and construed and enforced in accordance with the laws of the State of
Delaware. If any one or more of the provisions contained in this Warrant, or any application of any provision thereof, shall be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
contained herein and all other applications of any provision thereof shall not in any way be affected or impaired thereby. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
 - 13 -

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed on the day and
year first above written. 
  

									
	COMPANY:	 		 	ACKNOWLEDGED AND AGREED:
			
	CARDIOVASCULAR SYSTEMS, INC.	 		 	HOLDER:
			
		 		 	PFG EQUITY INVESTORS, LLC
					
	By:	 	/s/ Laurence L. Betterley	 		 	By:	 	/s/ Lorraine Nield
	Name:	 	Laurence L. Betterley	 		 		 	Lorraine Nield, Manager
	Title: 	 	CFO	 		 		 	

 Warrant Signature Page 

  
 - 14 -

 Exhibit A 
 To: 
 ELECTION TO EXCHANGE OR EXERCISE 

1. The undersigned hereby exercises its right to Exchange its Warrant for             fully
paid, validly issued and nonassessable Shares covered by the attached Warrant in accordance with the terms thereof. 
 1. The undersigned hereby
elects to Exercise the attached Warrant by paying the Exchange Price of $            therefor, as specified in the Warrant. This right is exercised with respect to
            of shares. 
 [Strike the paragraph above that does not
apply.] 
 The undersigned requests that certificates for such shares be issued in the name of, and delivered to: 

 
  

 
  

 
  
 2. By its execution below and for the benefit of the Company, the undersigned hereby restates each of the representations and warranties in Section 7 of the Warrant as of the date hereof. 

 

							
	Date:                             
       	 		 	[Holder]
				
		 		 	By	 	 
		 		 		 	Name:
		 		 		 	Title:

  
 - 15 -

 Exhibit B 
 ASSIGNMENT FORM 
 To: 
 The undersigned hereby assigns and transfers this Warrant to 
  
                                  
                                         
                                         
                                         
                                         
                                         
                    
 (Insert assignee’s
social security or tax identification number) 
  

                         
                                         
                                         
                                         
                                         
                                         
                            
 (Print or type assignee’s name, address and postal code) 
  
                                  
                                         
                                         
                                         
                                         
                                         
                    
  
                                  
                                         
                                         
                                         
                                         
                                         
                    
 and irrevocably
appoints             to transfer this Warrant on the books of the Company. 
  

							
	Date:                             
       	 		 	PFG EQUITY INVESTORS, LLC
				
		 		 	By	 	 
		 		 		 	Name:                      ,  Manager

  
 - 16 -

 Schedule 1 
 Capitalization Table 
 11/30/11 

 

									
	  	  	Total
Shares	 	  	%	 
	 Common Stock
	  	 	17,798,246	  	  	 	77.1	% 
	 Options Outstanding
	  	 	2,903,373	  	  	 	12.6	% 
	 Warrants Outstanding
	  	 	2,374,577	  	  	 	10.3	% 
	 Total Options and Warrants
	  	 	5,277,950	  	  	 	22.9	% 
		  	  
	  
	 	  	  
	  
	 
	 Total All Securities
	  	 	23,076,196	  	  	 	100.0	% 

 There are 482,777 remaining shares available for grant under the 2007 Equity Plan. 

There are 170,709 available shares for purchase through the Employer Stock purchase plan. 
 The Company has $5.0MM in outstanding loans under a convertible debt facility with Partners for Growth III, LP. (PFG). At any time prior to the maturity date, PFG may at its option convert any of the
outstanding loans into shares of the Company’s common stock at the applicable conversion price. In aggregate, the outstanding loans can be converted into 363,794 shares of the Company’s common stock. 

  
 - 17 -

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