Document:

exv4w4

 

Exhibit 4.4

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION THEREOF, AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED DUE TO AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

WARRANT TO PURCHASE

46,667 SHARES OF SERIES B PREFERRED STOCK OF

VOLCANO THERAPEUTICS, INC.

(Void after June 30, 2015)

This certifies that VENTURE LENDING & LEASING IV, LLC, a Delaware limited liability company, or
assigns (the “Holder”), for value received, is entitled to purchase from Volcano Therapeutics,
Inc., a Delaware corporation (the “Company”), 46,667 fully paid and nonassessable shares of the
Company’s Series B Preferred Stock (“Preferred Stock”) for cash at a price of $3.00 per share (the
“Stock Purchase Price”) at any time or from time to time up to and including 5:00 p.m. (Pacific
time) on June 30, 2015 (the “Expiration Date”), upon surrender to the Company at its principal
office at 2870 Kilgore Road, Rancho Cordova, California 95670, (or at such other location as the
Company may advise Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and upon payment in cash or by check of the
aggregate Stock Purchase Price for the number of shares for which this Warrant is being exercised
determined in accordance with the provisions hereof. The Stock Purchase Price and the number of
shares purchasable hereunder are subject to adjustment as provided in Section 4 of this Warrant.

This Warrant is subject to the following terms and conditions:

     1. Exercise; Issuance of Certificates; Payment for Shares.

          (a) Unless an election is made pursuant to clause (b) of this Section 1, this Warrant
shall be exercisable at the option of the Holder, at any time or from time to time, on or before
the Expiration Date for all or any portion of the shares of Preferred Stock (but not for a fraction
of a share) which may be purchased hereunder for the Stock Purchase Price multiplied by the number
of shares to be purchased. In the event, however, that pursuant to the Company’s Certificate of
Incorporation, as amended, an event causing automatic conversion of the Company’s Preferred Stock
shall have occurred prior to the exercise of this Warrant, in whole or in part, then this Warrant
shall be exercisable for the number of shares of Common Stock of the Company into which the
Preferred Stock not purchased upon any prior exercise of this Warrant would have been so converted
(and, where the context requires, reference to “Preferred Stock” shall be deemed to be or include
such Common Stock, as may be appropriate). The Company agrees that the shares of Preferred Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder hereof as the
record owner of such shares as of the close of business on the date on which the form of
subscription shall have been delivered and payment made for such shares. Subject to the provisions
of Section 2, certificates for the shares of Preferred Stock so purchased, together with any other
securities or property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company’s expense within a reasonable time
after the rights represented by this Warrant have been so exercised. Except as provided in clause
(b) of this Section 1, in case of a purchase of less than all the shares which may be purchased
under this Warrant, the Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under this Warrant surrendered
upon such purchase

 

 

to the Holder hereof within a reasonable time. Each stock certificate so delivered shall be
in such denominations of Preferred Stock as may be requested by the Holder hereof and shall be
registered in the name of such Holder or such other name as shall be designated by such Holder,
subject to the limitations contained in Section 2.

          (b) The Holder, in lieu of exercising this Warrant by the cash payment of the Stock
Purchase Price pursuant to clause (a) of this Section 1, may elect, at any time on or before the
Expiration Date, to surrender this Warrant and receive that number of shares of Preferred Stock
equal to the quotient of: (i) the difference between (A) the Per Share Price (as hereinafter
defined) of the Preferred Stock, less (B) the Stock Purchase
Price then in effect, multiplied by the
number of shares of Preferred Stock the Holder would otherwise have
been entitled to purchase
hereunder pursuant to clause (a) of this Section 1 (or such lesser number of shares as the Holder
may designate in the case of a partial exercise of this Warrant); over (ii) the Per Share Price.
Election to exercise under this section (b) may be made by delivering a signed form of subscription
to the Company via facsimile, to be followed by delivery of this Warrant.

          (c) For purposes of clause (b) of this Section 1, “Per Share Price” means the product of:
(i) the greater of (A) the closing price of the securities issuable upon conversion of the Preferred
Stock, as quoted by NASDAQ or listed on any exchange, whichever is applicable, as published in the
Western Edition of The Wall Street Journal for the trading day immediately prior to the date
of the Holder’s election hereunder or, (B) if applicable at the time of or in connection with the
exercise under clause (b) of this Section 1, the gross
sales price of one share of the Company’s
Common Stock pursuant to a registered public offering or that amount
which stockholders of the
Company will receive for each share of Common Stock pursuant to a
merger, reorganization or sale of
assets; and (ii) that number of shares of Common Stock into which each share of Preferred Stock
is convertible. If the securities issuable upon conversion of the Preferred Stock are not quoted by
NASDAQ or listed on an exchange and none of the above clauses apply, the Per Share Price of the
Preferred Stock (or the equivalent number of shares of Common Stock into which such Preferred Stock
is convertible) If the shares are not regularly traded in a public market, the Board of Directors of
the Company shall determine fair market value in its reasonable good faith judgment. The foregoing
notwithstanding, if Holder advises the Board of Directors in writing
that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon
a reputable investment banking
firm to undertake such valuation. If the valuation conclusion of such investment banking firm is
greater than 120% of the valuation determined by the Board of Directors, then all fees and expenses
of such investment banking firm shall be paid by the Company. In all other circumstances, such fees
and expenses shall be paid by Holder.

     2. Limitation on Transfer.

          (a) This Warrant and the Preferred Stock shall not be transferable except upon the
conditions specified in this Section 2, which conditions are intended to insure compliance with the
provisions of the Securities Act. Each holder of this Warrant or the Preferred Stock issuable
hereunder will cause any proposed transferee of the Warrant or Preferred Stock to agree to take and
hold such securities subject to the provisions and upon the conditions specified in this Section 2.
Notwithstanding the foregoing and any other provision of this Section 2, Holder may freely transfer
all or part of this Warrant or the shares issuable upon exercise of this Warrant (or the securities
issuable, directly or indirectly, upon conversion of the shares, if any) at any time to any lender
transferee of a portion of the loan commitment of Venture Lending & Leasing IV, Inc. under the Loan
Agreement, by giving the Company notice of the portion of the Warrant being transferred setting
forth the name, address and taxpayer identification number of the transferee and surrendering this
Warrant to the Company for reissuance to the transferees(s) (and Holder, if applicable).

          (b) Each certificate representing (i) this Warrant, (ii) the Preferred Stock, (iii)
shares of the Company’s Common Stock issued upon conversion of the Preferred Stock and (iv) any
other securities issued in respect to the Preferred Stock or Common Stock issued upon conversion of
the Preferred Stock upon any stock split, stock dividend, recapitalization, merger, consolidation
or similar event, shall (unless otherwise permitted by the provisions of this Section 2 or unless
such securities have been registered under the Securities Act or sold under Rule

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144) be stamped or otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION THERE OF, AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN EXEMPTION THEREFROM
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

          (c) The Holder of this Warrant and each person to whom this Warrant is subsequently
transferred represents and warrants to the Company (by acceptance of such transfer) that it will
not transfer this Warrant (or securities issuable upon exercise hereof unless a registration
statement under the Securities Act was in effect with respect to such securities at the time of
issuance thereof) except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the Securities Act relating to
the disposition of securities), or (iii) an opinion of counsel, reasonably satisfactory to counsel
for the Company, that an exemption from such registration is available.

     3. Shares to be Fully Paid: Reservation of Shares. The Company covenants and agrees
that all shares of Preferred Stock which may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable and free from all preemptive rights of any stockholder and free of all taxes, liens
and charges with respect to the issue thereof. The Company further
covenants and agrees that 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 issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Preferred Stock, or other securities and property, when and as required to provide for the
exercise of the rights represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Preferred Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements
of any domestic securities
exchange upon which the Preferred Stock may be listed. The Company
will not take any action which
would result in any adjustment of the Stock Purchase Price (as defined in Section 4 hereof) (i) if
the total number of shares of Preferred Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Preferred Stock then outstanding and all shares of
Preferred Stock then issuable upon exercise of all options and upon the conversion of all
convertible securities then outstanding, would exceed the total
number of shares of Preferred Stock
then authorized by the Company’s Certificate of Incorporation,
(ii) if the total number of shares of
Common Stock issuable after such action upon the conversion of all such shares of Preferred
Stock together with all shares of Common Stock then outstanding and then issuable upon exercise of
all options and upon the conversion of all convertible securities then outstanding would exceed the
total number of shares of Common Stock then authorized by the Company’s Certificate of Incorporation
or (iii) if the par value per share of the Preferred Stock would exceed the Stock Purchase Price.

     4. Adjustment of Stock Purchase Price and Number of Shares. The Stock Purchase Price
and the number of shares purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in this Section 4. Upon
each adjustment of the Stock Purchase Price, the Holder of this Warrant shall thereafter be entitled
to purchase, at the Stock Purchase Price resulting from such adjustment, the number of shares
obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to
such adjustment, and dividing
the product thereof by the Stock Purchase Price resulting from such adjustment.

          4.1
Subdivision or Combination of Stock. In case the Company shall at any time
subdivide its outstanding shares of Preferred Stock into a greater number of shares, the Stock
Purchase Price in effect immediately prior to such subdivision shall be proportionately reduced,
and conversely, in case the outstanding shares of Preferred Stock of the Company shall be combined
into a smaller number of shares, the Stock Purchase Price in effect immediately prior to such
combination shall be proportionately increased.

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          4.2
Dividends in Preferred Stock, Other Stock, Property,
Reclassification. If
at any time or from time to time the holders of Preferred Stock (or any shares of stock or other
securities at the time receivable upon the exercise of this Warrant) shall have received or become
entitled to receive, without payment therefor,

               (a) Preferred Stock, or any shares of stock or other securities whether or
not such securities are at any time directly or indirectly convertible into or exchangeable for Preferred
Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the
foregoing by way of dividend or other distribution, or

               (b) any cash paid or payable otherwise than as a cash dividend, or

               (c) Preferred
Stock or other or additional stock or other securities or property (including
cash) by way of spin off, split-up, reclassification, combination of shares or similar
corporate rearrangement, (other than shares of Preferred Stock issued as a stock split, adjustments
in respect of which shall be covered by the terms of Section 4.1 above),

Then and in each such case, the Holder hereof shall, upon the exercise of this Warrant, be entitled
to receive, in addition to the number of shares of Preferred Stock receivable thereupon, and
without payment of any additional consideration therefore, the amount of stock and other securities
and property (including cash in the cases referred to in clauses (b) and (c) above) which such
Holder would hold on the date of such exercise had he been the holder of record of such Preferred
Stock as of the date on which holders of Preferred Stock received or became entitled to receive
such shares and/or all other additional stock and other securities and property.

          4.3
Reorganization, Reclassification, Consolidation, Merger or Sale. If any
capital reorganization of the capital stock of the Company, or any consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Preferred Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Preferred Stock (“Corporate
Event”), then, as a condition of such Corporate Event, lawful and adequate provisions shall be made
whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the
shares of the Preferred Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of outstanding shares of such
Preferred Stock equal to the number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby; provided, however, in the
event that (1) the per share consideration receivable for each outstanding share of Preferred Stock
in such Corporate Event is at least three (3) times the Stock Purchase Price in effect immediately
prior to such Corporate Event, (2) any shares of stock received as part of the consideration in
such Corporate Event are of a publicly traded company listed on a national market or exchange which
may be sold without restrictions after the close of such Corporate Event, (3) the Company’s
stockholders will own less than 50% of the voting securities of the surviving entity and (4) the
surviving entity does not assume other warrants of the Company, then this Warrant shall
automatically be deemed exercised in accordance with the provisions
of section 1(b) immediately
prior to the closing of the Corporate Event. In any such case where the Warrant is not deemed
exercised pursuant to the previous sentence, appropriate provision shall be made with respect to
the rights and interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock Purchase Price and of the
number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be possible, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof. The Company will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation
(if other than the Company) resulting from such consolidation or the corporation purchasing such
assets shall assume by written instrument, executed and mailed or delivered to the registered
Holder hereof at the last address of such Holder appearing on the books of the Company, the
obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such Holder may be entitled to purchase.

          4.4
Sale or Issuance Below Purchase Price. The other antidilution rights applicable to
the shares of series Preferred Stock purchasable hereunder are set forth in the Company’s
Certificate of Incorporation, as

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amended through the date hereof (the “Charter”). Such antidilution rights shall not be
restated, amended, modified or waived in any manner without the Holder’s prior written consent if
the effect of such restatement, amendment, modification or waiver on the Holder hereof would be
more adverse to the Holder hereof than, and substantially dissimilar to, its effect on the other
holders of the same series of the Company’s Preferred Stock. The Company shall promptly provide the
Holder hereof with any restatement, amendment, modification or waiver of the Charter promptly after
the same has been made.

          4.5
Notice of Adjustment. Upon any adjustment of the Stock
Purchase Price, and/or any increase
or decrease in the number of shares purchasable upon the exercise of this Warrant the Company shall
give written notice thereof, by first class mail, postage prepaid, addressed to the registered
holder of this Warrant at the address of such holder as shown on the books of the Company. The
notice, which may be substantially in the form of Exhibit “A” attached hereto, shall be signed by
the Company’s chief financial officer and shall state the Stock Purchase Price resulting from such
adjustment and the increase or decrease, if any, in the number of
shares purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail
the method of calculation and
the facts upon which such calculation is based.

          4.6
Other Notices. If at any time:

               (a) the Company shall declare any cash dividend upon its Preferred Stock;

               (b) the
Company shall declare any dividend upon its Preferred Stock payable in stock or
make any special dividend or other distribution to the holders of its Preferred Stock;

               (c) the Company shall offer for subscription pro rata to the holders of its
Preferred Stock any additional shares of stock in connection with a Down Round or additional shares of stock
of any class or other rights;

               (d) there
shall be any capital reorganization or reclassification of the capital stock of the
Company, or consolidation or merger of the Company with, or sale of all or substantially all of its
assets to,another entity;

               (e) there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of the
Company; or

               (f) the
Company shall take or propose to take any other action, notice of which is actually
provided to holders of the Preferred Stock;

then, in any one or more of said cases, the Company shall give, by first class mail, postage
prepaid, addressed to the Holder of this Warrant at the address of such Holder as shown on the
books of the Company, (i) at least 20 day’s prior written notice of the date on which the books of
the Company shall close or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, or other action and (ii) in
the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, or other action, at least 20 day’s written notice of the date when the
same shall take place. Any notice given in accordance with the foregoing clause (i) shall also
specify, in the case of any such dividend, distribution or subscription rights, the date on which
the holders of Preferred Stock shall be entitled thereto. Any notice given in accordance with the
foregoing clause (ii) shall also specify the date on which the holders of Preferred Stock shall be
entitled to exchange their Preferred Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action as the case may be.

          4.7
Certain Events. If any change in the outstanding Preferred Stock of the Company or
any other event occurs as to which the other provisions of this Section 4 are not strictly
applicable or if strictly applicable would not fairly effect the adjustments to this Warrant in
accordance with the essential intent and principles of such provisions, then the Board of Directors
of the Company shall make in good faith an adjustment in the number and

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class of shares issuable under this Warrant, the Stock Purchase Price and/or the application of
such provisions, in accordance with such essential intent and principles, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the Holder of this Warrant
upon exercise for the same aggregate Stock Purchase Price the total number, class and kind of
shares as the Holder would have owned had this Warrant been exercised prior to the event and had
the Holder continued to hold such shares until after the event
requiring adjustment.

     5. Issue
Tax. The issuance of certificates for shares of Preferred Stock upon the
exercise of this Warrant shall be made without charge to the Holder of this Warrant for any issue
tax in respect thereof; provided, however, that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Holder of this
Warrant being exercised.

     6. Closing of Books. The Company will at no time close its transfer books against the
transfer of this Warrant or of any shares of Preferred Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this Warrant.

     7. No
Voting or Dividend Rights; Limitation of Liability. Nothing contained in this
Warrant shall be construed as conferring upon the Holder hereof the right to vote or to consent as a
stockholder in respect of meetings of stockholders for the election of directors of the Company or
any other matters or any rights whatsoever as a stockholder of the Company. No dividends or interest
shall be payable or accrued in respect of this Warrant or the interest represented hereby or the
shares purchasable hereunder until, and only to the extent that, this
Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the Holder to purchase
shares of Preferred Stock, and no mere enumeration herein of the rights or privileges of the Holder
hereof, shall give rise to any liability of such Holder for the Stock Purchase Price or as a
stockholder of the Company, whether such liability is asserted by the Company or by its creditors.

     8. Registration
Rights. The Holder hereof shall be entitled, with respect to the
shares of Preferred Stock issued upon exercise hereof or the shares of Common Stock or other
securities issued upon conversion of such Preferred Stock as the case may be, to all of the
registration rights set forth in the Third Amended and Restated Investors Rights Agreement dated as
of December 9, 2003 (the “Rights Agreements”), to the
same extent and on the same terms and
conditions as possessed by the investors thereunder with the following exceptions and
clarifications: (i) the Holder will have no demand registration rights; (ii) the Holder will be
subject to the same provisions regarding indemnification as contained in the Rights Agreements; and
(iii) the registration rights are freely assignable by the Holder of this Warrant in connection with
a permitted transfer of this Warrant or the shares issuable upon exercise hereof. The Company shall
take such action as may be reasonably necessary to assure that the
granting of such registration
rights to the Holder does not violate the provisions of the Rights Agreements or any of
the Company’s charter documents or rights of prior grantees of registration rights.

     9. Rights
and Obligations Survive Exercise of Warrant. The rights and obligations of
the Company, of the Holder of this Warrant and of the holder of shares of Preferred Stock issued
upon exercise of this Warrant,contained in Sections 6 and 8 shall survive the exercise of this
Warrant.

     11. 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.

     12. Notices. Any notice, request or other document required or permitted to be
given or delivered to the Holder hereof or the Company shall be deemed to have been given (i) upon
receipt if delivered personally or by courier (ii) upon confirmation of receipt if by telecopy or
(iii) three business days after deposit in the US mail, with postage prepaid and certified or
registered, to each such Holder at its address as shown on the books of the Company or to the
Company at the address indicated therefor in the first paragraph of this Warrant.

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     13. 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. All of the obligations of the Company relating to the Preferred Stock issuable
upon the exercise of this Warrant shall survive the exercise and termination of this Warrant. All of
the covenants and agreements of the Company shall inure to the benefit of the successors and assign
of the holder hereof. The Company will, at the time of the exercise
of this Warrant, in whole or in
part, upon request of the Holder hereof but at the Company’s expense, acknowledge in
writing its continuing obligation to the Holder hereof in respect of any rights (including,
without limitation, any right to registration of the shares of Common Stock) to which the holder
hereof shall continue to be entitled after such exercise in accordance with this Warrant; provided,
that the failure of the holder hereof to make any such request shall not affect the continuing
obligation of the Company to the Holder hereof in respect of such, rights.

     14. Descriptive
Headings and Governing Law. The descriptive headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a
part of this Warrant. 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.

     15. Lost
Warrants or Stock Certificates. The Company represents and warrants to the
Holder hereof that upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Warrant or stock certificate and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or
in the case of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company at its expense 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.

     16. Fractional
Shares. No fractional shares shall be issued upon exercise of this
Warrant. The Company shall, in lieu of issuing any fractional share, pay the holder entitled to such
fraction a sum in cash equal to such fraction multiplied by the then effective Stock Purchase Price.

     17. Representations
of Holder. With respect to this Warrant, Holder represents and
warrants to the Company as follows:

          17.1
Experience. It is experienced in evaluating and investing in companies
engaged in businesses similar to that of the Company; it understands that investment in this Warrant involves
substantial risks; it has made detailed inquiries concerning the Company, its business and
services, its officers and its personnel; the officers of the Company have made available to Holder
any and all written information it has requested; the officers of the Company have answered to
Holder’s satisfaction all inquiries made by it; in making this investment it has relied upon
information made available to it by the Company; and it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of investment
in the Company and it is able to bear the economic risk of that investment.

          17.2
Investment. It is acquiring this Warrant for investment for its own account and
not with a view to, or for resale in connection with, any distribution thereof. It understands that
this Warrant, the shares of Preferred Stock issuable upon exercise thereof and the shares of Common
Stock issuable upon conversion of the Preferred Stock, have not been registered under the Securities
Act, nor qualified under applicable state securities laws.

          17.3
Rule 144 It acknowledges that this Warrant, the Preferred Stock and the Common
Stock must be held indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. It has been advised or is aware of the provisions
of Rule 144 promulgated under the Securities Act.

          17.4
Access to Data. It has had an opportunity to discuss the Company’s
business, management and financial affairs with the Company’s management and has had the
opportunity to inspect the Company’s facilities.

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          17.5
Accredited Investor. It is an “accredited investor” within the meaning
of Regulation D promulgated under the Securities Act.

     18. Additional
Representations and Covenants of the Company. The Company
hereby represents, warrants and agrees as follows:

          18.1
Corporate Power. The Company has all requisite corporate power and
corporate authority to issue this Warrant and to carry out and perform its obligations
hereunder.

          18.2 Authorization. All corporate action on the part of the Company, its directors
and stockholders necessary for the authorization, execution, delivery and performance by the Company
of this has been taken. This Warrant is a valid and binding obligation of the Company, enforceable
in accordance with its terms.

          18.3
Offering. Subject in part to the truth and accuracy of Holder’s representations
set forth in Section 17 hereof, the offer, issuance and sale of this Warrant is, and the issuance of
Preferred Stock upon exercise of this Warrant and the issuance of Common Stock upon conversion of
the Preferred Stock will be exempt from the registration requirements of the Securities Act, and are
exempt from the qualification requirements of any applicable state securities laws; and neither the
Company nor anyone acting on its behalf will take any action
hereafter that would cause the loss of
such exemptions.

          18.4
Stock Issuance. Upon exercise of this Warrant, the Company will use its best
efforts to cause stock certificates representing the shares of Preferred Stock purchased pursuant to
the exercise to be issued in the names of Holder, its nominees or assignees, as appropriate at the
time of such exercise. Upon conversion of the shares of Preferred Stock into shares of Common Stock,
the Company will issue the Common Stock in the names of Holder, its nominees or assignees, as
appropriate.

          18.5
Certificates and By-Laws. The Company has provided Holder with
true and complete copies of
the Company’s Certificate of Incorporation, By-Laws, and each Certificate of Designation or other
charter document setting, forth any rights, preferences and privileges of Company’s capital stock,
each as amended and in effect on the date of issuance of this Warrant.

          18.6
Conversion of Preferred Stock. As of the date hereof, each share of the Preferred
Stock is convertible into one share of the Common Stock.

          18.7
Financial and Other Reports. From time to time up to the earlier of the
Expiration Date or the complete exercise of this Warrant, the Company shall furnish to Holder (i)
within 90 days after the close of each fiscal year of the Company an audited balance sheet and
statement of changes in financial position at and as of the end of such fiscal year, together with
an audited statement of income for such fiscal year; (ii) within
45 days after the close of each
fiscal quarter of the Company, an unaudited balance sheet and statement of cash flows at and as of
the end of such quarter, together with an unaudited statement of income for such quarter; and (iii)
promptly after sending, making available, or filing, copies of all reports, proxy statements, and
financial statements that the Company sends or makes available to its stockholders and all
registration statements and reports that the Company files with the SEC or any other governmental or
regulatory authority.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its officers,
thereunto duly authorized this 30th day of September, 2004.

	 	 	 	 	 
	 

	 	 	 	 
	VOLCANO THERAPEUTICS, INC.	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	By:

	 	/s/ John Dahldorf	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	CFO	 	 
	 

	 	 	 	 

8

 

FORM OF SUBSCRIPTION

(To be signed only upon exercise of Warrant)

To:                VOLCANO THERAPEUTICS, INC.

			
	o	 	The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right
represented by such Warrant for, and to purchase thereunder, (1) See Below                                          (____)shares
(the “Shares”) of Stock of                      and herewith makes payment of                      Dollars ($                     )
therefor, and requests that the certificates for such shares be issued in the name of, and delivered to,                     ,
whose address is                     .

			
	o	 	The undersigned hereby elects to convert _____ percent (___ %) of the value of the Warrant pursuant to the
provisions of Section l(b) of the Warrant.

The undersigned acknowledges that it has reviewed the representations and warranties contained in
Section 17 of this Warrant and by its signature below hereby makes such representations and
warranties to the Company.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Dated	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Holder:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(Address)	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

	(1)	 	Insert here the number of shares called for on the face of the Warrant (or, in the
case of a partial exercise, the portion thereof as to which the Warrant is being exercised),
in either case without making any adjustment for additional Preferred Stock or any other stock
or other securities or property or cash which, pursuant to the adjustment provisions of the
Warrant, may be issuable upon exercise.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant, hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Preferred Stock covered
thereby set forth herein below, unto:

	 	 	 	 	 
	Name of Assignee

	 	Address
	 	No. of Shares

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Dated	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Holder:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT “A”

[On letterhead of the Company]

          Reference is hereby made to that certain Warrant dated September 30, 2004 issued by
VOLCANO THERAPEUTICS, INC., a California corporation (the “Company”), to VENTURE LENDING &
LEASING IV, INC., a Maryland corporation (the “Holder”).

     [IF APPLICABLE] The Warrant provides that the actual number of shares of the
Company’s capital stock issuable upon exercise of the Warrant and the initial exercise
price per share are to be determined by reference to one or more events or conditions
subsequent to the issuance of the Warrant. Such events or conditions have now occurred or
lapsed, and the Company wishes to confirm the actual number of shares issuable and the
initial exercise price. The provisions of this Supplement to Warrant are incorporated into
the Warrant by this reference, and shall control the interpretation and exercise of the
Warrant.

     [IF APPLICABLE] Notice is hereby given pursuant to Section 4.5 of the Warrant
that the following adjustment(s) have been made to the Warrant: [describe adjustments,
setting forth details regarding method of calculation and facts upon which calculation
is based].

     This certifies that the Holder is entitled to purchase from the Company                                         
(                    ) fully paid and nonassessable shares of the Company’s                      Stock at a price of                                         
Dollars ($                    ) per share (the “Stock Purchase Price”). The Stock Purchase
Price and the number of shares purchasable under the Warrant remain subject to adjustment
as provided in Section 4 of the Warrant.

     Executed
this                     
day of                                         , 200                     .

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	VOLCANO THERAPEUTICS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:exv4w5

 

Exhibit 4.5

EXECUTION COPY

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, OR AN EXEMPTION FROM REGISTRATION, UNDER SAID ACT AND LAWS.

SUCH SECURITIES ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A SECOND AMENDED AND
RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT, A THIRD AMENDED AND RESTATED
VOTING AGREEMENT AND A THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT, EACH
DATED AS OF DECEMBER 9, 2003, AND EACH AMONG THE ISSUER AND VARIOUS OF ITS
STOCKHOLDERS ARE ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER. THE SALE, TRANSFER,
ASSIGNMENT OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO THE TERMS OF EACH
SUCH AGREEMENT.

WARRANT TO PURCHASE

SHARES OF COMMON STOCK

OF

VOLCANO THERAPEUTICS, INC.

Expires December 9, 2013

No. W-1

December 9,
2003

          FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Volcano Therapeutics, Inc., a Delaware corporation (together with its
successors and assigns, the “Issuer”), hereby certifies that

FFC PARTNERS II, L.P.

or its registered assigns is entitled to subscribe for and purchase at an initial
exercise price of $.01 per share, during the period specified in this Warrant, 3,352,070
shares (subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non-assessable Common Stock all subject to adjustment and upon the
terms and conditions as hereinafter provided. Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in Section 7
hereof.

 

 

          1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and shall
expire at 5:00 P.M., Eastern Time, on December 9, 2013 (such
period being the “Term”).

          2.
Method of Exercise; Payment; Issuance of New Warrant; Transfer and
Exchange.

               (a) Time of Exercise. The purchase rights represented by this Warrant
may be exercised in whole or in part at any time and from time to time during the
Term.

               (b) Method
of Exercise. The Holder hereof may exercise this Warrant, in whole or in
part, by the surrender of this Warrant (with the exercise form attached hereto duly
executed) at the principal office of the Issuer, and by the payment to the Issuer of an
amount of consideration therefore equal to the Warrant Price in effect on the date of
such exercise multiplied by the number of shares of Warrant Stock with respect to which
this Warrant is then being exercised, payable at such Holder’s election (i) by certified
or official bank check or wire transfer of immediately available funds or (ii) by
surrender to the Issuer for cancellation of a portion of this Warrant representing that
number of unissued shares of Warrant Stock which is equal to the quotient obtained by
dividing (A) the product obtained by multiplying the Warrant Price by the number of
shares of Warrant Stock being purchased upon such exercise by (B) the difference obtained
by subtracting the Warrant Price from the Current Market Price per share of Warrant Stock
as of the date of such exercise, or (iii) by a combination of the foregoing methods of
payment selected by the Holder of this Warrant. In any case where the consideration
payable upon such exercise is being paid in whole or in part pursuant to the provisions
of clause (ii) of this Section 2(b), such exercise shall be accompanied by written notice
from the Holder of this Warrant specifying the manner of payment thereof, and in the case
of application of clause (ii), containing a calculation showing the number of shares of
Warrant Stock with respect to which rights are being surrendered thereunder and the net
number of shares to be issued after giving effect to such surrender.

               (c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms and
conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be
dated the date of such exercise and delivered to the Holder hereof within a reasonable
time, not exceeding five Business Days after such exercise, and the Holder hereof shall
be deemed for all purposes to be the Holder of the shares of Warrant Stock so purchased
as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant
representing the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall have been
cancelled in payment or partial payment of the Warrant Price as hereinabove provided)
shall also be issued to the Holder hereof within such time.

               (d) Transferability
of Warrant. Subject to the provisions of Section 2(e)
hereof, this Warrant may be transferred on the books of the Issuer by the Holder hereof
in person or by duly authorized attorney, upon surrender of this Warrant at the
principal office of the Issuer, properly endorsed (by the Holder executing an assignment
in the form attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at the
principal office of the Issuer for

2

 

Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each
new Warrant to represent the right to purchase such number of shares of Warrant Stock as
the Holder hereof shall designate at the time of such exchange. All Warrants issued on
transfers or exchanges shall be dated the Closing Date and shall be identical to this
Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto.

               (e) Compliance with Securities Laws.

                    (i) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder’s own account and not as a nominee for
any other party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon
exercise hereof except pursuant to an effective registration statement, or an exemption
from registration, under the Securities Act and any applicable state securities laws.

                    (ii) Except as provided in paragraph (iii) below, this Warrant
and all certificates representing shares of Warrant Stock issued upon exercise hereof
shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM
REGISTRATION, UNDER SAID ACT AND LAWS.

SUCH SECURITIES ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A RIGHT OF
FIRST REFUSAL AND CO-SALE AGREEMENT, A THIRD AMENDED AND RESTATED VOTING
AGREEMENT AND A THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT, EACH
DATED AS OF DECEMBER 9, 2003, AND EACH AMONG THE ISSUER AND VARIOUS OF ITS
STOCKHOLDERS ARE ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER. THE SALE,
TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO
THE TERMS OF SUCH AGREEMENT.”

                    (iii) The restrictions imposed by this Section 2(e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise
hereof shall terminate (A) when such securities shall have been effectively registered
under the Securities Act, or (B) upon the Issuer’s receipt of an opinion of counsel, in
form and substance reasonably satisfactory to the Issuer (it being understood that
in-house counsel to the Holder shall be deemed to be acceptable counsel), addressed to
the Issuer to the effect that such restrictions are no longer required to ensure
compliance with the Securities Act. Whenever such restrictions shall cease and terminate
as to any such securities, the Holder thereof shall be entitled to receive from the
Issuer (or its transfer agent and registrar), without expense (other than applicable
transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock,

3

 

new stock certificates) of like tenor not bearing the applicable legends required by
paragraph (ii) above relating to the Securities Act and state securities laws.

               (f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof or of any
shares of Warrant Stock issued upon such exercise, acknowledge in writing the extent, if
any, of its continuing obligation to afford to such Holder all rights to which such
Holder shall continue to be entitled after such exercise in accordance with the terms of
this Warrant, provided that if any such Holder shall fail to make any such
request, the failure shall not affect the continuing obligation of the Issuer to afford
such rights to such Holder.

               (g) Qualified Public Offering. The Issuer will give the Holder notice of an
anticipated Qualified Public Offering no less than 10 Business Days prior to the
Qualified Public Offering. At any time after receiving such a notice and prior to the
Qualified Public Offering the Holder may exercise this Warrant pursuant to Section 2(b)
and state in the election notice that such exercise shall be subject to and conditioned
upon the occurrence of the Qualified Public Offering. Any such exercise by the Holder
shall be deemed to occur at the same time as the Qualified Public Offering. If the Holder
does not exercise this Warrant pursuant to this Section 2(g), any unexercised portion of
this Warrant shall be deemed to have been exercised in full pursuant to clause (ii) of
Section 2(b) of this Warrant at the same time as the Qualified Public Offering without
any action on the part of the Holder.

               (h) Recapitalization,
Reorganization, Reclassification, Consolidation,
Merger or Sale.

               (i) Without limiting any other provision hereof, in case the Issuer after the
Closing Date shall do any of the following (each a
“Triggering Event”) (a) consolidate
with or merge into any other Person and the Issuer shall not be the continuing or
surviving corporation of such consolidation or merger, or (b) permit any other Person to
consolidate with or merge into the Issuer and the Issuer shall be the continuing or
surviving Person but, in connection with such consolidation or merger, any Capital Stock
of the Issuer shall be changed into or exchanged for securities of any other Person or
cash or any other property, or (c) transfer all or substantially all of its properties or
assets to any other Person, or (d) effect a capital reorganization or reclassification of
its Capital Stock, or (e) enter into any other transaction similar to any of the
foregoing, then, and in the case of each such Triggering Event, the Issuer shall give the
Holder at least twenty (20) days prior notice of such Triggering Event. At any time after
receiving such a notice and prior to the Triggering Event the Holder may exercise this
Warrant pursuant to Section 2(b) and state in the election notice that such exercise
shall be subject to and conditioned upon the occurrence of the Triggering Event. Any such
exercise by the Holder shall be deemed to occur at the same time as the Triggering Event.
If the Holder does not exercise this Warrant pursuant to this Section 2(h), any
unexercised portion of this Warrant shall be deemed to have been exercised in full
pursuant to clause (ii) of Section 2(b) of this Warrant at the same time as the
Triggering Event without any action on the part of the Holder.

4

 

          3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.

               (a) The Issuer represents, warrants, covenants and agrees that all shares of Warrant
Stock which may be issued upon the exercise of this Warrant, will, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable and free from all taxes, liens
and charges created by or through the Issuer with respect to issuance (other than
restrictions under federal and state securities laws). The Issuer further covenants and
agrees that during the period within which this Warrant may be exercised, the Issuer will
at all times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of this Warrant.

               (b) If any shares of the Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder require
registration or qualification with any governmental authority under any federal or state
law before such shares may be so issued, the Issuer will in good faith use its best
efforts as expeditiously as possible at its expense to cause such shares to be duly
registered or qualified.

               (c) The Issuer shall not by any action including, without limitation, amending the
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other 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 actions as may be necessary or appropriate to protect the rights of
the Holder hereof against impairment. Without limiting the generality of the foregoing,
without the consent of the Requisite Holders, the Issuer will (i) not permit the par
value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) take
all such action as may be reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock, free and clear of any
liens, claims, encumbrances and restrictions (other than as provided herein and
restrictions under federal and state securities laws) created by or through Issuer with
respect to such issuance upon the exercise of this Warrant, and (iii) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the Issuer to
perform its obligations under this Warrant.

               (d) The Issuer agrees that neither it nor its Affiliates will in the future issue
any press releases or other public disclosure, including any prospectus, proxy statement
or other materials filed with any governmental authority relating to a public offering of
the stock of the Issuer or any of its Subsidiaries, using the name of the Holder or its
Affiliates or referring to this Warrant without at least two (2) Business Days prior
notice to the Holder and without the prior written consent of the Holder unless (and only
to the extent that) the Issuer or its Affiliate is required to do so under law and then,
in any event, the Issuer or such Affiliate will consult with the Holder before issuing
such press release or other public disclosure.

          4. Adjustment of Warrant Price and Warrant Share Number. The Warrant
Share Number and the Warrant Price shall be subject to adjustment from time to time
upon the happening of certain events, and the Holder hereof shall have additional
rights, as follows:

               (a) Reserved.

5

 

               (b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i)
in case of subdivision of shares, the Warrant Share Number shall be proportionately
increased (as at the effective date of such subdivision or, if the Issuer shall take a
record of holders of its Common Stock for the purpose of so subdividing, as at the
applicable record date, whichever is earlier) to reflect the increase in the total number
of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the
case of a combination of shares, the Warrant Share Number shall be proportionately
reduced (as at the effective date of such combination or, if the Issuer shall take a
record of holders of its Common Stock for the purpose of so combining, as at the
applicable record date, whichever is earlier) to reflect the reduction in the total
number of shares of Common Stock outstanding as a result of such combination.

               (c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:

                    (i) Stock Dividends. Pay a dividend in, or make any other
distribution to its stockholders (without consideration therefor) of, shares of Common
Stock or any Common Stock Equivalent, the Warrant Share Number shall be adjusted, as at
the date the Issuer shall take a record of the holders of the Issuer’s Capital Stock for
the purpose of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that number determined
by multiplying the Warrant Share Number in effect immediately prior to such record date
(or if no such record is taken, then immediately prior to such payment or other
distribution), by a fraction (1) the numerator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or distribution (plus
in the event that the Issuer paid cash for fractional shares, the number of additional
shares which would have been outstanding had the Issuer issued fractional shares in
connection with said dividends), and (2) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately prior to such dividend or
distribution; or

                    (ii) Liquidating Dividends, etc. Make a distribution of its
property to the holders of its Common Stock as a dividend in liquidation or partial
liquidation or by way of return of capital other than as a dividend payable out of funds
legally available for dividends under the laws of the State of Delaware, the Holder of
this Warrant shall, upon exercise (including without limitation payment of the Warrant
Price), be entitled to receive, in addition to the number of shares of Warrant Stock
receivable thereupon, and without payment of any additional consideration therefor, an
amount payable in cash equal to the fair market value of such property as would have been
payable to such Holder had such Holder been the Holder of record of such Warrant Stock on
the record date for such distribution or if no such record is taken, on the date of such
distribution; and appropriate provision therefor shall be made a part of any such
distribution; or

                    (iii) Cash and Other Dividends. Declare, make or pay any
dividend or other distribution, whether in cash, securities or other property (other than
dividends and distributions subject to subparagraphs (i) and (ii) of this Section 4(c)),
with respect to its Common Stock or any Common Stock Equivalent, the Holder of this
Warrant shall, upon exercise (including, without limitation, payment of the Warrant
Price), be entitled to receive, in addition to the number of shares of Warrant Stock
receivable thereupon, and without payment of

6

 

any additional consideration therefor, the amount and type of such cash, securities or property as
would have been payable to such Holder had such Holder been the Holder of record of such Warrant
Stock on the record date for such dividend or distribution or if no such record is taken, on the
date of such dividend or distribution; and appropriate provision therefor shall be made a part of
any such dividend or distribution.

               (d) Issuance of Additional Shares of Common Stock. Unless the
holders of Series B Preferred Stock elect to waive the application of Article IV, Section 4(e) of
the Certificate of Incorporation, if the Issuer, at any time while this Warrant is outstanding,
shall issue any Additional Shares of Common Stock (otherwise than as provided in the foregoing
subsections (a) through (c) of this Section 4), at a price per share less than $3.00 or without
consideration, then the Warrant Share Number upon each such issuance shall be adjusted to that
number (rounded to the nearest one-tenth of a share) determined by multiplying the Warrant Share
Number then in effect by a fraction:

                    (i) the numerator of which shall be equal to the number of
shares of Common Stock outstanding immediately after the issuance of such Additional Shares of
Common Stock; and

                    (ii) the denominator of which shall be equal to the sum of (A)
the number of shares of Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus (B) the number of shares of Common Stock (rounded to
the nearest whole share) which the aggregate consideration for the total number of such Additional
Shares of Common Stock so issued would purchase at $3.00 per share.

The provisions of this Section 4(d) shall not apply under any of the circumstances for which an
adjustment is provided in Sections 4(a), 4(b) or 4(c). No adjustment of the Warrant Share Number
shall be made under this Section 4(d) upon the issuance of any Additional Shares of Common Stock
which are issued pursuant to any Common Stock Equivalent if any required adjustments shall have
been made pursuant to Section 4(e) or Section 4(f).

               (e) Issuance of Common Stock Equivalents. The following provisions shall be applicable
to the issuance of Common Stock Equivalents:

                    (i) Except as provided in clause (ii) of this Section 4(e), if
the Issuer, at any time while this Warrant is outstanding, shall issue any Common Stock Equivalent and
the price per share for which Additional Shares of Common Stock may be issuable thereafter pursuant
to such Common Stock Equivalent (determined by dividing (x) the price received upon issuance of
such Common Stock Equivalent plus the aggregate exercise price payable pursuant to the terms of
such Common Stock Equivalent by (y) the maximum number of Additional Shares of Common Stock
issuable pursuant to such Common Stock Equivalent, whether or not such Common Stock Equivalent is
actually then exercisable, convertible or exchangeable in whole or in part, as of the date of such
issuance) shall be less than $3.00, then the Warrant Share Number upon each such issuance shall be
adjusted as provided in the first sentence of Section 4(d) on the basis that (1) the maximum number
of Additional Shares of Common Stock issuable pursuant to all such Common Stock Equivalents shall
be deemed to have been issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable

7

 

in whole or in part) as of the date of such issuance, and (2) the aggregate consideration for
such maximum number of Additional Shares of Common Stock shall be deemed to be the
consideration received upon issuance of such Common Stock Equivalent plus the aggregate
exercise price payable pursuant to the terms of such Common Stock Equivalent.

                    (ii) If the Issuer, no later than 30 days after the Closing Date,
shall issue shares of its Series B Preferred Stock, the Warrant Share Number upon each such
issuance shall be increased by 12% of the number of shares of Series B Preferred Stock so
issued.

                    (iii) No adjustment of the Warrant Share Number shall be made
under this Section 4(e) upon the issuance of any Convertible Security which is issued pursuant
to the exercise of any warrants or other subscription or purchase rights therefor, if any
adjustment shall previously have been made in the Warrant Share Number then in effect upon the
issuance of such warrants or other rights pursuant to this Section 4(e).

               (f) Adjustments of Exercise Price and Conversion Rights of Common Stock
Equivalents. If the Issuer, at any time while this Warrant is outstanding, shall, after
any issuance of any Common Stock Equivalent, amend or adjust the price per share for which
Additional Shares of Common Stock may be issuable thereafter pursuant to such Common Stock
Equivalent, and the price per share, after giving effect to such amendment or adjustment, for
which Additional Shares of Common Stock may be issuable thereafter pursuant to such Common
Stock Equivalent (determined by dividing (x) the price received upon original issuance of such
Common Stock Equivalent plus the aggregate price, as so amended or adjusted, payable pursuant
to the terms of such Common Stock Equivalent by (y) the maximum number of Additional Shares of
Common Stock issuable pursuant to such Common Stock Equivalent, as so amended or adjusted,
whether or not such Common Stock Equivalent is actually then exercisable, convertible or
exchangeable in whole or in part, as of the date of such amendment or adjustment) shall be
less than $3.00, then the Warrant Share Number upon each such amendment or adjustment shall be
adjusted as provided in the first sentence of Section 4(d) on the basis that (1) the maximum
number of Additional Shares of Common Stock issuable pursuant to such Common Stock Equivalent
shall be deemed to have been issued (whether or not such Common Stock Equivalent is actually
then exercisable, convertible or exchangeable in whole or in part) as of the date of such
amendment or adjustment and after giving effect thereto, and (2) the aggregate consideration
for such maximum number of Additional Shares of Common Stock shall be deemed to be the minimum
consideration receivable by the Issuer for the original issuance of such Additional Shares of
Common Stock pursuant to such Common Stock Equivalent, as so amended or adjusted, plus the
aggregate exercise price payable pursuant to the terms of such Common Stock Equivalent, as so
amended or adjusted. If at any time while this Warrant is outstanding, after issuance of any
Common Stock Equivalent, the number of Additional Shares of Common Stock into which such
Common Stock Equivalent is convertible or exchangeable increases, by adjustment of the
conversion or exchange ratio or price or otherwise (each, an
“Adjustment Event”), then the
Warrant Share Number upon each such Adjustment Event shall be adjusted as provided in the
first sentence of Section 4(d) on the basis that (1) the maximum number of Additional Shares
of Common Stock issuable pursuant to such Common Stock Equivalent as a result of such
Adjustment Event shall be deemed to have been issued (whether or not such Common Stock
Equivalent is actually then exercisable, convertible or exchangeable in

8

 

whole or in part) as of the date of such Adjustment Event and after giving effect thereto, and (2)
the aggregate consideration for such maximum number of Additional Shares of Common Stock shall be
deemed to be the consideration, if any, paid to the Issuer to effect such Adjustment Event.

               (g) Reserved.

               (h) Other
Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the determination of the price per share and the making
of adjustments in the Warrant Share Number provided in, and to the other provisions of, this
Section 4:

                    (i) Computation
of Consideration. The consideration received by the Issuer
shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or
any Common Stock Equivalent shall be issued for a cash consideration, the consideration received by
the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are
offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of
Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering
without a subscription offering, the public offering price, in any such case excluding any amounts
paid or receivable for accrued interest or accrued dividends and without deduction of any
compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with the issue thereof; to the
extent that such issuance shall be for a consideration other than cash, then, except as herein
otherwise expressly provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for any Additional Shares of
Common Stock issuable pursuant to any Common Stock Equivalent shall be the consideration received
by the Issuer for issuing such Common Stock Equivalent, plus the additional consideration payable
to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalent. In case of
the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in
payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common
Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or
satisfied. In case of the issuance at any time of any Additional Shares of Common Stock or Common
Stock Equivalents as a unit with any note or other security, the Issuer shall be deemed to have
received no consideration for such Additional Shares of Common Stock or Common Stick Equivalents;
provided that, with respect to any Common Stock Equivalent which provides for payment of an
exercise price as a condition to the issuance of Additional Shares of Common Stock pursuant
thereto, the Issuer shall be deemed to have received consideration for such Common Stock Equivalent
equal to such exercise price. In any case in which the property, securities or other consideration
to be received or paid shall be other than cash, the Board shall promptly notify the Holder of this
Warrant of its good faith determination of the fair market value of such consideration.

                    (ii) Readjustment
of Warrant Share Number. Upon the
expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Share Number, if such

9

 

Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the
number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that
they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall
no longer be computed as set forth above, and the Warrant Share Number shall forthwith be
readjusted and thereafter be the number which it would have been (but reflecting any other
adjustments in the Warrant Share Number made pursuant to the provisions of this Section 4 after the
issuance of such Common Stock Equivalent) had the adjustment of the Warrant Share Number been made
in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually
issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the
number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued
and only the consideration actually received by the Issuer (computed as in clause (i) of this
Section 4(h)) shall be deemed to have been received by the Issuer.

                    (iii) Outstanding
Common Stock. The number of shares of
Common Stock at any time outstanding shall (a) not include any Warrant Stock or any shares of
Common Stock then directly or indirectly owned or held by or for the account of the Issuer or any
of its Subsidiaries, and (b) shall be deemed to include the maximum number of shares of Common
Stock issuable upon conversion, exercise or exchange of any then outstanding Common Stock
Equivalents (whether or not such Common Stock Equivalents are actually then exercisable,
convertible or exchangeable in whole or in part), other than the Warrants.

                    (iv) When
Adjustment Not Required. If the Issuer shall
take a record of the holders of its Common Stock for the purpose of a subdivision or combination of its
Common Stock or for the purpose of entitling them to receive a dividend or distribution and shall,
thereafter and before the distribution to stockholders thereof, legally abandon its plan to effect
such subdivision or combination or pay or deliver such dividend or
distribution, then thereafter no
adjustment shall be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.

               (i) Other
Action Affecting Common Stock. In case after the Closing Date hereof,
the Issuer shall take any action affecting its Common Stock, other than an action described in any
of the foregoing Sections 4(a) through 4(h), inclusive, and the failure to make any adjustment
would not fairly protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Share Number shall be adjusted
in such manner and at such time as the Board may in good faith determine to be equitable in the
circumstances.

               (j) Adjustment
of Warrant Price. Upon each adjustment in the
Warrant Share Number pursuant to any of the foregoing provisions of this Section 4, the Warrant
Price shall be adjusted, to the nearest ten thousandth of one cent, to the product obtained by
multiplying the Warrant Price immediately prior to such adjustment in the Warrant Share Number by a
fraction, the numerator of which shall be the Warrant Share Number immediately before giving effect
to such adjustment and the denominator of which shall be the Warrant Share Number immediately after
giving effect to such adjustment; provided, however, that if at any time, as a result of
any adjustments hereunder, the Warrant Price shall be less than the par value per share of Warrant
Stock, then the price payable per share of Warrant Stock by the Holder

10

 

hereunder in the event of an exercise of this Warrant at such time in whole or in part shall be an
amount equal to the par value per share of such Warrant Stock.

          5.
Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be
adjusted pursuant to Section 4 hereof (for purposes of this Section 5, an “adjustment”), the Issuer
shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated (including a description of the basis on which the Board made
any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to
such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this
Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this
Warrant with respect to the matters set forth in such certificate may at the option of the
Requisite Holders of this Warrant be submitted to an independent accounting firm not then regularly
engaged by the Issuer chosen by the Issuer and reasonably acceptable to the Requisite Holders,
which firm shall deliver a written opinion as to such matters to the Issuer and the Holders within
thirty days after submission to it of such dispute. Such opinion shall be final and binding on the
parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer.

          6.
Fractional Shares. No fractional shares of Warrant Stock will be issued in
connection with any exercise hereof, but in lieu of such fractional shares, the Issuer shall make a
cash payment therefor equal in amount to the fair market value of such fractional shares.

          7.
Definitions. For the purposes of this Warrant, the following terms have the
following meanings:

          “Additional
Shares of Common Stock” means all shares of Common Stock issued by the
Issuer after the Closing Date, and all shares of Other Common, if any, issued by the Issuer after
the Closing Date, except (i) the Warrant Stock, (ii) shares of Common Stock issued or issuable upon
conversion of shares of Series A Preferred Stock or Series B Preferred Stock outstanding on the
Closing Date, (iii) shares of Common Stock issued or issuable upon exercise of employee stock
options outstanding on the Closing Date, (iv) shares of Common Stock issued or issuable upon
exercise of options and warrants to purchase Common Stock which are outstanding on the Closing
Date, (v) shares of Common Stock issued or deemed issued after the Closing Date to officers,
directors, consultants, advisors or employees of the Issuer, pursuant to a stock grant, option or
purchase plan or other employee stock incentive program or arrangement approved by a two-thirds
majority of the Board, plus any shares repurchased by the Issuer from such persons, (vi) all shares
of Common Stock issued or deemed issued after the Closing Date in connection with research and
development partnerships, licensing or collaborative arrangements, borrowings from financial
institutions, equipment financing and similar transactions approved by a two-thirds majority of the
Board, and (vii) all shares of Common Stock issuable upon exercise of other options or warrants
issued and outstanding on the Closing Date.

          “Affiliate” means, with respect to any Person, (a) each Person that, directly or indirectly,
owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, 5% or more of
the Voting Stock of such Person, (b) each Person that controls, is controlled by or is under common
control with such Person, (c) each of such Person’s officers, directors, joint

11

 

venturers and partners and (d) in the case of the Issuer, the immediate family members, spouses and
lineal descendants of individuals who are Affiliates of the Issuer. For the purposes of this
definition, “control” of a Person shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise.

          “Board” shall mean the Board of Directors of the Issuer.

          “Business
Day” means any day except a Saturday, a Sunday or a legal holiday in New York City.

          “Capital
Stock” means and includes (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including, without limitation,
shares of preferred or preference stock, (ii) all partnership interests (whether general or
limited) in any Person which is a partnership, (iii) all membership interests or limited liability
company interests in any limited liability company, and (iv) all equity or ownership interests in
any Person of any other type.

          “Certificate
of Incorporation” means the Certificate of Incorporation of the Issuer as
in effect on the Closing Date, and as hereafter from time to time amended, modified, supplemented
or restated in accordance with its terms and pursuant to applicable law.

          “Closing
Date” means December 9, 2003.

          “Common
Stock” means the Common Stock and any other Capital Stock into which such stock may
hereafter be changed.

          “Common
Stock Equivalent” means any Convertible Security or warrant, option or other
right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible
Security or any stock appreciation right or other right to receive any payment based upon the value
of the Common Stock or Other Common Stock.

          “Convertible
Securities” means evidences of indebtedness, shares of Capital Stock or
other Securities (including the Series A Preferred Stock and Series B Preferred Stock) which are or
may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term
“Convertible Security” means one of the Convertible Securities.

          “Current
Market Price” as in effect on any day means the average of the daily market
prices of the Common Stock for the period of 30 consecutive trading days ending three trading days
preceding such date. The market price for each such day shall be the last sale price on such day as
reported on the New York Stock Exchange Consolidated Tape, or, if the Common Stock is not listed on
the New York Stock Exchange, Inc. or reported on such Consolidated Tape, then the last sale price
on such day on the principal domestic stock exchange on which such Common Stock is then listed or
admitted to trading, or, if no sale takes place on such day on such exchange, the average of the
closing bid and asked prices on such day as officially quoted on such exchange, or, if the Common
Stock is not then listed or admitted to trading on any domestic stock exchange but is quoted in the
Nasdaq Stock Markets National Market System (“NMS/NASDAQ”) of the National Association of
Securities Dealers, Inc. Automated Quotation

12

 

System (“NASDAQ”), then the Current Market Price for each such trading day shall be the last sale
price on such day as quoted by NMS/NASDAQ, or, if no sale takes place on such day or if the Common
Stock is neither listed or admitted to trading on any domestic stock exchange nor quoted on such
NMS/NASDAQ, then the Current Market Price for each such trading day shall be the average of the
reported closing bid and asked price quotations on such day in the over-the-counter market, as
reported by NASDAQ, or, if not so reported, as furnished by the National Quotation Bureau, Inc., or
if such firm at the time is not engaged in the business of reporting such prices, as furnished by
any similar firm then engaged in such business as selected by the Issuer, or if there is no such
firm, as furnished by any member of the National Association of Securities Dealers, Inc. selected
by the Issuer with the written approval of the Requisite Holders (which approval shall not be
unreasonably withheld). If at any time such Common Stock is not listed on any domestic exchange or
quoted in the domestic over-the-counter market, the Current Market Price shall be deemed to be the
fair market value per share of such Common Stock as determined in good faith by the Board by notice
to the Requisite Holders, provided that if the determination of “Current Market Price” is being
made immediately prior to the effectiveness of the Company’s initial public offering of Common
Stock, the “Current Market Price” shall mean the “price to public” per share specified in the final
prospectus relating to that offering. In determining the fair market value of any shares of Common
Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed
by agreement or by federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights, or to minority or non-control
ownership positions. In the event that
the Requisite Holders challenge the determination of Current Market Price by the Board with another
proposed market price for each share of Common Stock, and independent appraiser selected by the
board of directors of the Issuer shall determine the Current Market Price, and the Issuer shall
bear the cost of such appraisal only if the difference between its challenged Current Market Price
and the one determined by the independent appraiser is greater than that between the market price
proposed by the Requisite Holders and the one determined by the independent appraiser; otherwise,
the Requisite Holders shall bear the cost of such appraisal.

          “Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any similar federal
statute at the time in effect.

          “Holders” mean the Persons who shall from time to time own any Warrant. The term “Holder”
means one of the Holders.

          “Independent
Appraiser” means a nationally recognized investment banking firm or other
nationally recognized firm, in each case, that is regularly engaged in the business of appraising
the Capital Stock or assets of corporations or other entities as going concerns, and which is not
affiliated with either the Issuer or the Holder of any Warrant.

          “Issuer” has the meaning specified in the first paragraph hereof.

          “Other
Common” means any Capital Stock of the Issuer of any class which shall be authorized at
any time after the date of this Warrant (other than Common Stock) and which shall have the right to
participate in the distribution of earnings and assets of the Issuer without limitation as to
amount.

13

 

          “Person” means an individual, a corporation, a partnership, a trust, a limited
liability company, an unincorporated organization or a government organization or an
agency or political subdivision thereof.

          “Qualified
Public Offering” means the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement under the
Securities Act, covering the offer and sale of Common Stock in which (1) the public
offering price equals or exceeds $10.00 per share (adjusted to reflect subsequent
stock dividends, stock splits or recapitalization) and (2) the aggregate gross
offering proceeds (before underwriters discounts and commissions and before expenses)
equals or exceeds $50 million.

          “Requisite
Holders” means at any time the Holders of Warrants (other than
the Issuer or any Subsidiary thereof) exercisable for a majority of the shares of
Warrant Stock issuable under the Warrants at the time outstanding.

          “Securities” means any debt or equity securities of the Issuer, whether now or
hereafter authorized, any instrument convertible into or exchangeable for Securities
or a Security, and any option, warrant or other right to purchase or acquire any
Security. “Security” means one of the Securities.

          “Series B
Preferred Stock” means the Issuer’s Series B Preferred Stock
having the terms provided in the Certificate of Incorporation as of the Closing Date.

          “Securities
Act” means the Securities Act of 1933, as amended, or any similar
federal statute then in effect.

          “Subsidiary” means any corporation at least 50% of whose outstanding Voting Stock
shall at the time be owned directly or indirectly by the Issuer or by one or more of
its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

          “Voting
Stock”, any class or classes (however designated) of capital stock having
ordinary voting power for the election of a majority of the members of the Board (or
other governing body) of the corporation, other than Capital Stock having such power
only by reason of the happening of a contingency.

          “Warrants” means this Warrant and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions of Section 2(c) or
2(d) hereof or of any of such other Warrants.

          “Warrant
Price” means the exercise price per share of Common Stock specified in
the first paragraph of this Warrant and such other exercise prices as shall result
from the adjustments specified in Section 4 hereof.

          “Warrant
Share Number” means at any time the aggregate number of shares
of Warrant Stock which may at such time be purchased upon exercise of this Warrant,
after giving effect to all prior adjustments to such number made or required to be
made under the terms hereof.

14

 

          “Warrant
Stock” means Common Stock issuable upon exercise of any Warrant or Warrants or
otherwise issuable pursuant to any Warrant or Warrants.

          8.
Information. The Issuer shall deliver to the Holder hereof and to each holder of shares of
Warrant Stock the documents and other information required under
Article 6 of the Note and Warrant
Purchase Agreement, dated as of the Closing Date, among the Issuer, the guarantors signatory
thereto, FFC Partners II, L.P. and FFC Executive Partners II, L.P. within the applicable time
period specified therein and regardless of whether or not that Agreement is then in effect.

          9.
Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant
may be amended, or compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), by a written instrument or written instruments executed
by the Issuer and the Requisite Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during
which this Warrant may be exercised, change the manner of payment of the Warrant Price or modify
any provision of this Section 9 without the consent of the Holder of this Warrant.

          10.
Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF.

          11.
Notices. All notices and other communications provided for hereunder shall be in
writing and delivered by hand or sent by first class registered mail, return receipt requested, or
sent by telecopy (with such telecopy to be confirmed promptly in writing sent by first class
registered mail, return receipt requested), and if to the Holder of this Warrant or of Warrant
Stock issued pursuant hereto, addressed to such Holder at its last known address or telecopy number
appearing on the books of the Issuer maintained for such purposes, and if to the Issuer, addressed
to:

Volcano Therapeutics, Inc.

2870 Kilgore Road

Rancho Cordova, CA 95670

Attention: Scott Huennekens

Facsimile: 916-638-7976

or to such other address or addresses or telecopy number or numbers as any such party may most
recently have designated in writing to the other parties hereto by such notice. All such
communications shall be deemed to have been given or made when so delivered by hand, upon actual
receipt if sent by telecopy, or three business days after being so mailed.

          12.
Remedies. The Issuer stipulates that the remedies at law of the Holder of this
Warrant in the event of any default or threatened default by the Issuer in the performance of or
compliance with any of the terms of this Warrant are not and will not be adequate and that, to the
fullest extent permitted by law, such terms may be specifically enforced by a decree for the

15

 

specific performance of any agreement contained herein or by an injunction against a violation of
any of the terms hereof or otherwise. Time is of the essence in this Warrant.

          13.
Successors and Assigns. This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof
and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall
be enforceable by any such Holder or Holder of Warrant Stock.

          14.
Modification and Severability. If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision hereof is found to be
unenforceable, then such provision shall be deemed modified to the extent necessary to make it
enforceable by such court or agency. If any such provision is not enforceable as set forth in the
preceding sentence, the unenforceability of such provision shall not affect the other provisions of
this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been
contained herein.

          15.
Integration. This Warrant replaces all prior agreements, supersedes all prior
negotiations and constitutes the entire agreement of the parties with respect to the transactions
contemplated herein.

          16.
Headings. The headings of the Sections of this Warrant are for convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

16

 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	VOLCANO THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Scott Huennekens	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Scott Huennekens	 	 
	 

	 	 	 	Title:
	 	President & CEO	 	 

 

 

EXERCISE FORM

[                    ]

          The undersigned hereby irrevocably elects to exercise the right to purchase
represented by the attached Warrant for, and to purchase thereunder,
                     shares of
Common Stock, par value $.01 per share (the “Common
Stock”), of Volcano Therapeutics, Inc. (the
“Issuer”), as provided for therein, and tenders herewith payment of the Warrant Price in full in
accordance with the terms of the attached Warrant.

          Please issue a certificate or certificates for such shares of Common Stock in the following
name or names and denominations:

          If said number of shares of Common Stock shall not be all the shares of Common Stock issuable
upon exercise of the attached Warrant, a new Warrant is to be issued in the name of the undersigned
for the balance remaining of such shares of Common Stock less any fraction of a share of Common
Stock paid in cash.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated: 

	 	 	 	Signature	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	Address	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

17

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells,
assigns and transfers unto                                          the within Warrant and all rights evidenced
thereby and does irrevocably constitute and appoint                                         , attorney, to transfer the
said Warrant on the books of the within named corporation.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signature	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	Address	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells,
assigns and transfers unto
                                         the right to purchase                      shares of the
Common Stock issuable upon exercise of the attached Warrant, and does irrevocably constitute
and appoint                                         , attorney, to transfer that part of the said Warrant on the
books of the within named corporation.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signature	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	Address	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

FOR USE BY THE ISSUER ONLY:

This
Warrant No. W-___ cancelled (or transferred or
exchanged) this ___ day of                     , 20_,
shares of Common Stock issued therefor in the name of                                         , Warrant No.
W- ___ issued for ___ shares of Common Stock in the name of                                         

18

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