Document:

Exhibit 4.3

 

WARRANT
TO PURCHASE STOCK

 

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

 

WARRANT
TO PURCHASE STOCK

 

	
  Company:

  	
   

  	
  Data
  Sciences International, Inc., a Minnesota corporation

  
	
  Number
  of Shares:

  	
   

  	
  33,750

  
	
  Class
  of Stock:

  	
   

  	
  Series
  A Convertible Preferred

  
	
  Warrant
  Price:

  	
   

  	
  $1.0039
  per share

  
	
  Issue
  Date:

  	
   

  	
  December
  19, 2002

  
	
  Expiration
  Date:

  	
   

  	
  December
  19, 2009

  

 

THIS WARRANT CERTIFIES THAT, for the agreed upon value of
$1.00 and for other good and valuable consideration, SILICON VALLEY BANK (“Holder”)
is entitled to purchase the number of fully paid and nonassessable shares of
the class of securities (the “Shares”) of the company (the “Company”) at the
Warrant Price, all as set forth above and as adjusted pursuant to Article 2 of
this Warrant, subject to the provisions and upon the terms and conditions set
forth in this Warrant.

 

ARTICLE
1.                                EXERCISE.

 

1.1                                 Method of Exercise. Holder may exercise
this Warrant by delivering a duly executed Notice of Exercise in substantially
the form attached as Appendix 1 to the principal office of the Company. Unless
Holder is exercising the conversion right set forth in Article 1.2, Holder
shall also deliver to the Company a check, wire transfer (to an account
designated by the Company), or other form of payment acceptable to the Company
for the aggregate Warrant Price for the Shares being purchased.

 

1.2                                 Conversion Right. In lieu of exercising
this Warrant as specified in Article 1.1, Holder may from time to time convert
this Warrant, in whole or in part, into a number of Shares determined by
dividing (a) the aggregate fair market value of the Shares or other securities
otherwise issuable upon exercise of this Warrant minus the aggregate Warrant
Price of such Shares by (b) the fair market value of one Share. The fair market
value of the Shares shall be determined pursuant to Article 1.3.

 

1.3                                 Fair Market Value. If the Company’s
common stock is traded in a public market and the shares are common stock, the
fair market value of each Share shall be the closing price of a Share reported
for the business day immediately before Holder delivers its Notice of Exercise
to the 

 

 

Company
(or in the instance where the Warrant is exercised immediately prior to the
effectiveness of the Company’s initial public offering, the “price to public”
per share price specified in the final prospectus relating to such offering).
If the Company’s common stock is traded in a public market and the Shares are
preferred stock, the fair market value of a Share shall be the closing price of
a share of the Company’s common stock reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company (or, in the
instance where the Warrant is exercised immediately prior to the effectiveness
of the Company’s initial public offering, the initial “price to public” per
share price specified in the final prospectus relating to such offering), in
both cases, multiplied by the number of shares of the Company’s common stock
into which a Share is convertible. If the Company’s common stock is not traded
in a public market, the Board of Directors of the Company shall determine fair
market value in its reasonable good faith judgment.

 

1.4                                 Delivery of Certificate
and New Warrant. Promptly after Holder exercises or converts this Warrant and, if
applicable, the Company receives payment of the aggregate Warrant Price, the
Company shall deliver to Holder certificates for the Shares acquired and, if
this Warrant has not been fully exercised or converted and has not expired, a
new Warrant representing the Shares not so acquired.

 

1.5                                 Replacement of Warrants. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of mutilation, on surrender and cancellation of
this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.

 

1.6                                 Treatment of Warrant
Upon Acquisition of Company.

 

1.6.1                        “Acquisition”.
For the purpose of this Warrant, “Acquisition” means any sale, license, or
other disposition of all or substantially all of the assets of the Company, or
any reorganization, consolidation, or merger of the Company where the holders
of the Company’s securities before the transaction beneficially own less than
50% of the outstanding voting securities of the surviving entity after the
transaction.

 

1.6.2                        Treatment of Warrant at
Acquisition.

 

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

 

B)                                    Upon the written request
of the Company, Holder agrees that, in the event of an Acquisition that is an “arms
length” sale of all or substantially all of the Company’s assets (and only its
assets) to a third party that is not an Affiliate (as defined below) of the
Company (a “True Asset Sale”), either (a) Holder shall exercise its conversion
or purchase right under this Warrant and such exercise will be deemed effective
immediately prior to the consummation of such Acquisition or (b) if Holder 

 

2

 

elects
not to exercise the Warrant, this Warrant will continue until the Expiration
Date if the Company continues as a going concern following the closing of any
such True Asset Sale. The Company shall provide the Holder with written notice
of its request relating to the foregoing (together with such reasonable
information as the Holder may request in connection with such contemplated
Acquisition giving rise to such notice), which is to be delivered to Holder not
less than ten (10) days prior to the closing of the proposed Acquisition.

 

C)                                    Upon the closing of any
Acquisition other than those particularly described in subsections (A) and (B)
above, the successor entity shall assume the obligations of this Warrant, and
this Warrant shall be exercisable for the same securities, cash, and property
as would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing. The Warrant Price and/or number of
Shares shall be adjusted accordingly.

 

As used
herein “Affiliate” shall mean any person or entity that owns or controls
directly or indirectly ten (10) percent or more of the stock of Company, any
person or entity that controls or is controlled by or is under common control
with such persons or entities, and each of such person’s or entity’s officers,
directors, joint venturers or partners, as applicable.

 

ARTICLE
2.                                ADJUSTMENTS TO THE
SHARES.

 

2.1                                 Stock Dividends, Splits,
Etc. If
the Company declares or pays a dividend on the Shares payable in common stock,
or other securities, then upon exercise of this Warrant, for each Share acquired,
Holder shall receive, without additional cost to Holder, the total number and
kind of securities to which Holder would have been entitled had Holder owned
the Shares of record as of the date the dividend occurred. If the Company
subdivides the Shares by reclassification or otherwise into a greater number of
shares or takes any other action which increase the amount of stock into which
the Shares are convertible, the number of shares purchasable hereunder shall be
proportionately increased and the Warrant Price shall be proportionately
decreased. If the outstanding shares are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Warrant
Price shall be proportionately increased and the number of Shares shall be proportionately
decreased.

 

2.2                                 Reclassification,
Exchange, Combinations or Substitution. Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or
class of the securities issuable upon exercise or conversion of this Warrant,
Holder shall be entitled to receive, upon exercise or conversion of this
Warrant, the number and kind of securities and property that Holder would have
received for the Shares if this Warrant had been exercised immediately before
such reclassification, exchange, substitution, or other event. Such an event
shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company’s Articles or Certificate (as
applicable) of Incorporation upon the closing of a registered public offering
of the Company’s common stock. The Company or its successor shall promptly
issue to Holder an amendment to this Warrant setting forth the number and kind
of such new securities or other property issuable upon exercise or conversion
of this Warrant as a result of such reclassification, exchange, substitution or
other event that results in a change of the number and/or class of securities
issuable upon exercise or conversion of this Warrant. The amendment to this
Warrant shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article 2 including,
without limitation, adjustments to the Warrant Price and to the number of
securities or 

 

3

 

property
issuable upon exercise of the new Warrant. The provisions of this Article 2.2
shall similarly apply to successive reclassifications, exchanges,
substitutions, or other events.

 

2.3                                 Adjustments for Diluting
Issuances. The Warrant Price and the number of Shares issuable upon exercise of this
Warrant or, if the Shares are Preferred Stock, the number of shares of common
stock issuable upon conversion of the Shares, shall be subject to adjustment,
from time to time in the manner, if any, set forth in the Company’s Articles or
Certificate of Incorporation as if the Shares were issued and outstanding on
and as of the date of any such required adjustment. The provisions set forth
for the Shares in the Company’s Articles or Certificate (as applicable) of
Incorporation relating to the above in effect as of the Issue Date may not be
amended, modified or waived, without the prior written consent of Holder unless
such amendment, modification or waiver affects the rights associated with the
Shares in the same manner as such amendment, modification or waiver affects the
rights associated with all other shares of the same series and class as the
Shares granted to the Holder.

 

2.4                                 No Impairment. The Company shall not,
by amendment of its Articles or Certificate (as applicable) of Incorporation or
through a reorganization, transfer of assets, consolidation, merger,
dissolution, issue, or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Article 2
and in taking all such action as may be necessary or appropriate to protect
Holder’s rights under this Article against impairment.

 

2.5                                 Fractional Shares. No fractional Shares
shall be issuable upon exercise or conversion of the Warrant and the number of
Shares to be issued shall be rounded down to the nearest whole Share. If a
fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by paying
Holder the amount computed by multiplying the fractional interest by the fair
market value of a full Share.

 

2.6                                 Certificate as to Adjustments. Upon each adjustment
of the Warrant Price, the Company shall promptly notify Holder in writing, and,
at the Company’s expense, promptly compute such adjustment, and furnish Holder
with a certificate of its Chief Financial Officer setting forth such adjustment
and the facts upon which such adjustment is based. The Company shall, upon
written request, furnish Holder a certificate setting forth the Warrant Price
in effect upon the date thereof and the series of adjustments leading to such
Warrant Price.

 

ARTICLE
3.                                REPRESENTATIONS AND
COVENANTS OF THE COMPANY.

 

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

 

(a)                                  The initial Warrant
Price referenced on the first page of this Warrant is not greater than (i) the
price per share at which the Shares were last issued in an arms-length
transaction in which at least $500,000 of the Shares were sold and (ii) the
fair market value of the Shares as of the date of this Warrant.

 

(b)                                 All Shares which may be
issued upon the exercise of the purchase right represented by this Warrant, and
all securities, if any, issuable upon conversion of the Shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and
free of any

 

4

 

 liens and encumbrances except for restrictions
on transfer provided for herein or under applicable federal and state securities
laws.

 

(c)                                  The Capitalization Table
previously provided to Holder remains true and complete as of the Issue Date.

 

3.2                                 Notice of Certain Events. If the Company
proposes at any time (a) to declare any dividend or distribution upon any of its
stock, whether in cash, property, stock, or other securities and whether or not
a regular cash dividend; (b) to offer for sale additional shares of any class
or series of the Company’s stock (other than offers and sales pursuant to (i)
options or warrants outstanding as of the date hereof, (ii) options or warrants
granted as compensation to directors, officers or employees of Borrower after
the date hereof, and (iii) options or warrants offered to any lender to
Borrower after the Loan and Security Agreement that has been entered into
between Silicon Valley Bank and the Company has terminated in accordance with
its terms); (c) to effect any reclassification or recapitalization of any
of its stock; or (d) to merge or consolidate with or into any other corporation,
or sell, lease, license, or convey all or substantially all of its assets, or
to liquidate, dissolve or wind up, then, in connection with each such event,
the Company shall give Holder: (1) at least 10 days prior written notice of the
date on which a record will be taken for such dividend, distribution, or
subscription rights (and specifying the date on which the holders of common
stock will be entitled thereto) or for determining rights to vote, if any, in
respect of the matters referred to in c and d above; and (2) in the case of the
matters referred to in (c) and (d) above at east 10 days prior written notice
of the date when the same will take place (and specifying the date on which the
holders of common stock will be entitled to exchange their common stock for
securities or other property deliverable upon the occurrence of such event).

 

3.3                                 [Reserved]

 

3.4                                 No Shareholder Rights. Except as provided in
this Warrant, the Holder will not have any rights as a shareholder of the
Company until the exercise of this Warrant.

 

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

 

4.1                                 Purchase for Own Account. This Warrant and the
securities to be acquired upon exercise of this Warrant by the Holder will be
acquired for investment for the Holder’s account, not as a nominee or agent,
and not with a view to the public resale or distribution within the meaning of
the Act. Holder also represents that the Holder has not been formed for the
specific purpose of acquiring this Warrant or the Shares.

 

4.2                                 Disclosure of
Information. The Holder has received or has had full access to all the information it
considers necessary or appropriate to make an informed investment decision with
respect to the acquisition of this Warrant and its underlying securities. The
Holder further has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the offering of this Warrant
and its underlying securities and to obtain additional information (to the
extent the Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to the Holder
or to which the Holder has access.

 

5

 

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

 

4.4                                 Accredited Investor
Status.
The Holder is an “accredited investor” within the meaning of Regulation D
promulgated under the Act.

 

4.5                                 The Act. The Holder understands
that the issuance and sale of this Warrant and the Shares issuable upon
exercise or conversion hereof have not been registered under the Act in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of the Holder’s investment intent as
expressed herein. The Holder understands that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held indefinitely unless
their transfer or sale is subsequently registered under the 1933 Act and
qualified under applicable state securities laws, or unless exemption from such
registration and qualification are otherwise available.

 

ARTICLE
5.                                MISCELLANEOUS.

 

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

 

5.2                                 Legends. This Warrant and the
Shares (and the securities issuable, directly or indirectly, upon conversion of
the Shares, if any) shall be imprinted with a legend in substantially the following
form:

 

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

 

5.3                                 Compliance with
Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of
this Warrant (and the securities issuable, directly or indirectly, upon conversion
of the Shares, if any) may not be transferred or assigned in whole or in part
without compliance with applicable federal and state securities laws by the
transferor and the transferee (including, without limitation, the delivery of
investment representation letters and legal opinions reasonably satisfactory 

 

6

 

to the
Company, as reasonably requested by the Company). The Company shall not require
Holder to provide an opinion of counsel if the transfer is to Silicon Valley
Bancshares (Holder’s parent company) or any other affiliate of Holder.
Additionally, the Company shall also not require an opinion of counsel if there
is no material question as to the availability of current information as
referenced in Rule 144(c), Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holder’s notice
of proposed sale.

 

5.4                                 Transfer Procedure. Upon receipt by Holder
of the executed Warrant, Holder will transfer all of this Warrant to Silicon
Valley Bancshares, Holder’s parent company, by execution of an Assignment
substantially in the form of Appendix 2. Subject to the provisions of Article
5.3 and upon providing Company with written notice, Silicon Valley Bancshares
and any subsequent Holder may 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) to any
transferee, provided, however, in connection with any such transfer, Silicon
Valley Bancshares or any subsequent Holder will give the Company notice of the
portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).
The Company may refuse to transfer this Warrant or the Shares to any person who
directly competes with the Company, unless, in either case, the stock of the
Company is publicly traded.

 

5.5                                 Notices. All notices and other
communications from the Company to the Holder, or vice versa, shall be deemed
delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid, at such address as may have been
furnished to the Company or the Holder, as the case may (or on the first
business day after transmission by facsimile) be, in writing by the Company or
such holder from time to time. Effective upon receipt of the fully executed
Warrant and the initial transfer described in Article 5.4 above, all notices to
the Holder shall be addressed as follows until the Company receives notice of a
change of address in connection with a transfer or otherwise:

 

Silicon
Valley Bancshares

Attn:
Treasury Department

3003
Tasman Drive, HA 200

Santa
Clara, CA 95054

Facsimile:
408-496-2405

 

Notice to the Company shall be addressed as follows until
the Holder receives notice of a change in address:

 

Data
Sciences International, Inc.

Attn:
Charles Coggin

4211
Lexington Avenue North, Suite 2244

Saint
Paul, MN 55126

Facsimile:
651-481-7487

 

5.6                                 Waiver. This Warrant and any
term hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.

 

7

 

5.7                                 Attorney’s Fees. In the event of any
dispute between the parties concerning the terms and provisions of this
Warrant, the party prevailing in such dispute shall be entitled to collect from
the other party all costs incurred in such dispute, including reasonable
attorney’s fees.

 

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

 

5.9                                 Counterparts. This Warrant may be
executed in counterparts, all of which together shall constitute one and the same
agreement.

 

5.10                           Governing Law. This Warrant shall be
governed by and construed in accordance with the laws of the State of
Minnesota, without giving effect to its principles regarding conflicts of law.

 

 

“COMPANY”

 

	
  DATA
  SCIENCES INTERNATIONAL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Brian P. Brockway

  	
   

  	
   

  	
  By:

  	
  /s/
  Charles T. Coggin

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  Brian P. Brockway

  	
   

  	
  Name:
  Charles T. Coggin

  
	
   

  	
   

  	
   

  
	
  Title:
  Chairman of the Board, President

  	
   

  	
  Title:
  Chief Financial Officer, Secretary

  
							

 

 

“HOLDER”

 

	
  SILICAN
  VALLEY BANK

  
	
   

  
	
  By:

  	
  /s/
  Jay McNeil

  	
   

  
	
   

  
	
  Name:
  Jay McNeil

  
	
   

  
	
  Title:
  Vice President

  

 

8

 

APPENDIX
1

 

NOTICE
OF EXERCISE

 

1.                                       Holder elects to
purchase                     
shares of the Common/Series           
Preferred [strike one] Stock of                                 
pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.

 

[or]

 

1.                                       Holder elects to convert
the attached Warrant into Shares in the manner specified in the Warrant. This conversion
is exercised for                                 of
the Shares covered by the Warrant.

 

[Strike paragraph that does not apply.]

 

2.                                       Please issue a
certificate or certificates representing the shares in the name specified below:

 

	
   

  	
   

  	
   

  
	
   

  	
  Holders
  Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  

 

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

 

	
   

  	
  HOLDER:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Date):

  	
   

  	
   

  
	
   

  	
   

  
								

 

9

 

APPENDIX
2

 

ASSIGNMENT

 

For
value received, Silicon Valley Bank hereby sells, assigns and transfers unto

 

	
  Name:

  	
   

  	
  Silicon
  Valley Bancshares

  
	
  Address:

  	
   

  	
  3003
  Tasman Drive (HA-200)

  
	
   

  	
   

  	
  Santa
  Clara, CA 95054

  

 

that
certain Warrant to Purchase Stock issued by Data Sciences International, Inc. (the
“Company”), on December       , 2002 (the “Warrant”)
together with all rights, title and interest therein.

 

	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

Date:  December         ,
2002

 

By its
execution below, and for the benefit of the Company, Silicon Valley Bancshares
makes each of the representations and warranties set forth in Article 4 of the
Warrant as of the date hereof.

 

	
   

  	
  SILICON
  VALLEY BANCSHARES

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

10Exhibit 4.4

 

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

 

WARRANT TO PURCHASE STOCK

 

	
  Company:

  	
   

  	
  Transoma
  Medical, Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  Class of
  Stock:

  	
   

  	
  (1) Series
  C Preferred, (2) provided that if the Company does not close a Series C
  Preferred round with gross proceeds to Company of at least $7,500,000 on or
  before June 30, 2007 (the “Series C Round”), then the class of stock shall be
  Series B Preferred.

  
	
   

  	
   

  	
   

  
	
  Warrant Price:

  	
   

  	
  (1) If the class of stock
  is Series C Preferred pursuant to “Class of Stock” above, the warrant price
  shall be the price per share at which the Company’s Series C Preferred Stock
  is sold in the Series C Round, but (2) if the class of stock is Series B
  Preferred pursuant to “Class of Stock” above, the warrant price shall be
  $1.877 per share.

  
	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
   

  	
  (1) If the class of stock
  is Series C Preferred pursuant to “Class of Stock” above, the number of
  shares shall be equal to the result of dividing $34,500 by the warrant price,
  but (2) if the class of stock is Series B Preferred pursuant to “Class of
  Stock” above, the number of shares shall be 18,380.

  
	
   

  	
   

  	
   

  
	
  Issue Date:

  	
   

  	
  January 4,
  2007

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  The 7th
  anniversary after the Issue Date

  
	
   

  	
   

  	
   

  
	
  Credit Facility:

  	
   

  	
  This Warrant is issued in
  connection with the Committed Equipment III Line referenced in the Amended
  and Restated Loan and Security Agreement between Company and Silicon Valley
  Bank dated June 21, 2005.

  

 

THIS WARRANT
CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK
(Silicon Valley Bank, together with any registered holder from time to time of
this Warrant or any holder of the shares issuable or issued upon exercise of
this Warrant, “Holder”) is entitled to purchase the number of fully paid and
nonassessable shares of the class of securities (the “Shares”) of the Company
at the Warrant Price, all as set forth above and as adjusted pursuant to
Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant.

 

 

ARTICLE 1. EXERCISE.

 

1.1                                 Method of Exercise.  Holder may exercise this Warrant by delivering
a duly executed Notice of Exercise in substantially the form attached as
Appendix 1 to the principal office of the Company. Unless Holder is exercising
the conversion right set forth in Article 1.2, Holder shall also deliver to the
Company a check, wire transfer (to an account designated by the Company), or
other form of payment acceptable to the Company for the aggregate Warrant Price
for the Shares being purchased.

 

1.2                                 Conversion Right.  In lieu of exercising this Warrant as
specified in Article 1.1, Holder may from time to time convert this Warrant, in
whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise
issuable upon exercise of this Warrant minus the aggregate Warrant Price of
such Shares by (b) the fair market value of one Share. The fair market value of
the Shares shall be determined pursuant to Article 1.3.

 

1.3                                 Fair Market Value.  If the Company’s common stock is traded in a
public market and the Shares are common stock, the fair market value of each
Share shall be the closing price of a Share reported for the business day
immediately before Holder delivers its Notice of Exercise to the Company (or in
the instance where the Warrant is exercised immediately prior to the
effectiveness of the Company’s initial public offering, the “price to public”
per share price specified in the final prospectus relating to such offering). If
the Company’s common stock is traded in a public market and the Shares are
preferred stock, the fair market value of a Share shall be the closing price of
a share of the Company’s common stock reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company (or, in the
instance where the Warrant is exercised immediately prior to the effectiveness
of the Company’s initial public offering, the initial “price to public” per
share price specified in the final prospectus relating to such offering), in
both cases, multiplied  by the number of
shares of the Company’s common stock into which a Share is convertible. If the
Company’s common stock is not traded in a public market, the Board of Directors
of the Company shall determine fair market value in its reasonable good faith
judgment.

 

1.4                                 Delivery of Certificate and New Warrant.  Promptly after Holder
exercises or converts this Warrant and, if applicable, the Company receives
payment of the aggregate Warrant Price, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.

 

1.5                                 Replacement of Warrants.  On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of mutilation on surrender and cancellation of this Warrant, the Company
shall execute and deliver, in lieu of this Warrant, a new warrant of like
tenor.

 

2

 

1.6                                 Treatment of Warrant Upon Acquisition of Company.

 

1.6.1                        “Acquisition”.  For
the purpose of this Warrant, “Acquisition” means any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of
the Company’s securities before the transaction beneficially own less than 50%
of the outstanding voting securities of the surviving entity after the
transaction.

 

1.6.2                        Treatment of Warrant at Acquisition.

 

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

 

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

 

C)                                    Upon
the closing of any Acquisition other than those particularly described in
subsections (A) and (B) above, the successor entity shall assume the
obligations of this Warrant, and this Warrant shall be exercisable for the same
securities, cash, and property as would be payable for the Shares issuable upon
exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The
Warrant Price and/or number of Shares shall be adjusted accordingly.

 

As used
herein “Affiliate” shall mean any person or entity that owns or controls
directly or indirectly ten (10) percent or more of the stock of Company, any
person or entity that controls or is controlled by or is under common control
with such persons or entities, and each of such person’s or entity’s officers,
directors, joint venturers or partners, as applicable.

 

3

 

ARTICLE 2. ADJUSTMENTS
TO THE SHARES.

 

2.1                                 Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend on
the Shares payable in common stock, or other securities, then upon exercise of
this Warrant, for each Share acquired, Holder shall receive, without cost to
Holder, the total number and kind of securities to which Holder would have been
entitled had Holder owned the Shares of record as of the date the dividend
occurred. If the Company subdivides the Shares by reclassification or otherwise
into a greater number of shares or takes any other action which increase the
amount of stock into which the Shares are convertible, the number of shares
purchasable hereunder shall be proportionately increased and the Warrant Price
shall be proportionately decreased. If the outstanding shares are combined or
consolidated, by reclassification or otherwise, into a lesser number of shares,
the Warrant Price shall be proportionately increased and the number of Shares
shall be proportionately decreased.

 

2.2                                 Reclassification, Exchange, Combinations or Substitution.  Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. Such an event
shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company’s Articles or Certificate (as
applicable) of Incorporation upon the closing of a registered public offering
of the Company’s common stock. The Company or its successor shall promptly
issue to Holder an amendment to this Warrant setting forth the number and kind
of such new securities or other property issuable upon exercise or conversion
of this Warrant as a result of such reclassification, exchange, substitution or
other event that results in a change of the number and/or class of securities
issuable upon exercise or conversion of this Warrant. The amendment to this
Warrant shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article 2 including,
without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new Warrant. The
provisions of this Article 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.

 

2.3                                 Adjustments
for Diluting Issuances.  The Warrant Price and the number of Shares
issuable upon exercise of this Warrant or, if the Shares are preferred stock,
the number of shares of common stock issuable upon conversion of the Shares,
shall be subject to adjustment, from time to time in the manner set forth in
the Company’s Articles or Certificate of Incorporation as if the Shares were
issued and outstanding on and as of the date of any such required adjustment. The
provisions set forth for the Shares in the Company’s Articles or Certificate
(as applicable) of Incorporation relating to the above in effect as of the
Issue Date may not be amended, modified or waived, without the prior written
consent of Holder unless such amendment, modification or waiver affects the
rights associated with the Shares in the same manner as such amendment,
modification or waiver affects the rights associated with all other shares of
the same series and class as the Shares granted to Holder.

 

4

 

2.4                                 No Impairment.  The Company shall not, by amendment of its
Articles or Certificate (as applicable) of Incorporation or through a
reorganization, transfer of assets, consolidation, merger, dissolution, issue,
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Warrant by the Company, but shall at all times in good faith assist in
carrying out of all the provisions of this Article 2 and in taking all such
action as may be necessary or appropriate to protect Holder’s rights under this
Article against impairment.

 

2.5                                 Fractional Shares.  No fractional Shares shall be issuable upon
exercise or conversion of this Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share
interest arises upon any exercise or conversion of the Warrant, the Company
shall eliminate such fractional share interest by paying Holder the amount
computed by multiplying the fractional interest by the fair market value of a
full Share.

 

2.6                                 Certificate as to Adjustments.  Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the Company’s expense,
promptly compute such adjustment, and furnish Holder with a certificate of its
Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based. The Company shall, upon written request, furnish
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.

 

ARTICLE 3. REPRESENTATIONS
AND COVENANTS OF THE COMPANY.

 

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

 

(a)                                  If the initial Class of Stock that constitutes the Shares is Series
B Preferred (as determined pursuant to the first page of this Warrant), then
the initial Warrant Price referenced on the first page of this Warrant is not
greater than (i) the price per share at which such Shares were last issued in
an arms-length transaction in which at least $500,000 of the Shares were sold
and (ii) the fair market value of such Shares as of the date of this
Warrant.

 

(b)                                 All Shares
which may be issued upon the exercise of the purchase right represented by this
Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, and free of any liens and encumbrances except for restrictions
on transfer provided for herein or under applicable federal and state
securities laws.

 

(c)                                  The Company’s capitalization table attached hereto as Schedule 1
is true and complete as of the Issue Date.

 

3.2                                 Notice of Certain Events.  If the Company proposes at any time (a) to
declare any dividend or distribution upon any of its stock, whether in cash,
property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for sale any shares of the Company’s capital stock (or
other securities convertible into such capital stock), other than (i) pursuant
to the Company’s stock option or other compensatory plans, (ii) in connection
with commercial credit arrangements or

 

5

 

equipment financings, (iii) in connection with
strategic transactions for purposes other than capital raising, (iv) pursuant
to any warrants outstanding as of the date hereof, or (v) pursuant to the
Company’s Series C Round; (c) to effect any reclassification or
recapitalization of any of its stock; (d) to merge or consolidate with or into
any other corporation, or sell, lease, license, or convey all or substantially
all of its assets, or to liquidate, dissolve or wind up; or (e) offer holders
of registration rights the opportunity to participate in an underwritten public
offering of the Company’s securities for cash, then, in connection with each
such event, the Company shall give Holder: (1) at least 10 days prior written
notice of the date on which a record will be taken for such dividend,
distribution, or subscription rights (and specifying the date on which the
holders of common stock will be entitled thereto) or for determining rights to
vote, if any, in respect of the matters referred to in (a) and (b) above; (2)
in the case of the matters referred to in (c) and (d) above at least 10 days
prior written notice of the date when the same will take place (and specifying
the date on which the holders of common stock will be entitled to exchange
their common stock for securities or other property deliverable upon the occurrence
of such event); and (3) in the case of the matter referred to in (e) above, the
same notice as is given to the holders of such registration rights. Company
will also provide information requested by Holder reasonably necessary to
enable Holder to comply with Holder’s accounting or reporting requirements.

 

3.3                                 Registration Under Securities Act of 1933, as amended.  The Company agrees that
the Shares or, if the Shares are convertible into common stock of the Company,
such common stock, shall have certain “piggyback,” registration rights pursuant
to and as set forth in the Company’s Investor Rights Agreement or similar
agreement. The provisions set forth in the Company’s Investor Rights Agreement
or similar agreement relating to the above in effect as of the Issue Date may
not be amended, modified or waived without the prior written consent of Holder
unless such amendment, modification or waiver affects the rights associated
with the Shares in the same manner as such amendment, modification, or waiver
affects the rights associated with all other shares of the same series and
class as the Shares granted to Holder.

 

3.4                                 No Shareholder Rights.  Except as provided in this Warrant, Holder
will not have any rights as a shareholder of the Company until the exercise of
this Warrant.

 

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

 

4.1                                 Purchase for Own Account.  This Warrant and the securities to be acquired
upon exercise of this Warrant by Holder will be acquired for investment for
Holder’s account, not as a nominee or agent, and not with a view to the public
resale or distribution within the meaning of the Act. Holder also represents
that Holder has not been formed for the specific purpose of acquiring this
Warrant or the Shares.

 

4.2                                 Disclosure of Information.  Holder has received or has had full access to
all the information it considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this Warrant and its
underlying securities. Holder further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of this Warrant and its underlying securities and to obtain additional
information (to the extent the Company

 

6

 

possessed
such information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to Holder or to which Holder has
access.

 

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

 

4.4                                       Accredited Investor Status.  Holder is an “accredited investor” within the
meaning of Regulation D promulgated under the Act.

 

4.5                                       The Act.  Holder understands that this Warrant and the
Shares issuable upon exercise or conversion hereof have not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Holder’s investment
intent as expressed herein. Holder understands that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held indefinitely unless
subsequently registered under the Act and qualified under applicable state
securities laws, or unless exemption from such registration and qualification
are otherwise available.

 

ARTICLE 5. MISCELLANEOUS.

 

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

 

5.2                                 Legends.                                               This Warrant and the Shares (and the securities issuable, directly
or indirectly, upon conversion of the Shares, if any) shall be imprinted with a
legend in substantially the following form:

 

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

 

5.3                                 Compliance with Securities Laws on Transfer.  This Warrant and the
Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws

 

7

 

by the
transferor and the transferee (including, without limitation, the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, as reasonably requested by the Company). The Company shall not
require Silicon Valley Bank (“Bank”) to provide an opinion of counsel if the
transfer is to Bank’s parent company, SVB Financial Group (formerly Silicon
Valley Bancshares), or any other affiliate of Bank. Additionally, the Company
shall also not require an opinion of counsel if there is no material question
as to the availability of current information as referenced in Rule 144(c),
Holder represents that it has complied with Rule 144(d) and (e) in reasonable
detail, the selling broker represents that it has complied with Rule 144(f),
and the Company is provided with a copy of Holder’s notice of proposed sale.

 

5.4                                 Transfer Procedure.  After receipt by Bank of the executed Warrant,
Bank will transfer all of this Warrant to SVB Financial Group by execution of
an Assignment substantially in the form of Appendix 2. Subject to the
provisions of Article 5.3 and upon providing the Company with written notice,
SVB Financial Group and any subsequent Holder may transfer all or part of this
Warrant or the Shares issuable upon exercise of this Warrant (or the Shares
issuable directly or indirectly, upon conversion of the Shares, if any) to any
transferee, provided, however, in connection with any such transfer, SVB
Financial Group or any subsequent Holder will give the Company notice of the
portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable). The
Company may refuse to transfer this Warrant or the Shares to any person who
directly competes with the Company, unless, in either case, the stock of the
Company is publicly traded.

 

5.5                                 Notices.  All notices and other communications from the
Company to Holder, or vice versa, shall be deemed delivered and effective when
given personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or Holder,
as the case may (or on the first business day after transmission by facsimile)
be, in writing by the Company or such Holder from time to time. Effective upon
receipt of the fully executed Warrant and the initial transfer described in
Article 5.4 above, all notices to Holder shall be addressed as follows until
the Company receives notice of a change of address in connection with a
transfer or otherwise:

 

SVB
Financial Group

Attn:
Treasury Department

3003
Tasman Drive, HA 200

Santa
Clara, CA 95054

Telephone:
408-654-7400

Facsimile:
408-496-2405

 

Notice to the Company shall be addressed as
follows until Holder receives notice of a change in address:

 

Transoma Medical, Inc.

Attn: Charles Coggin

4211 Lexington Avenue North, Suite 2244

St. Paul, Minnesota 55126

Telephone:
651-481-7422

Facsimile:
651-481-7487

 

8

 

5.6                                 Waiver.  This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.

 

5.7                                 Attorneys’ Fees.  In the event of any dispute between the
parties concerning the terms and provisions of this Warrant, the party prevailing
in such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys’ fees.

 

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

 

5.9                                 Counterparts.  This Warrant may be executed in counterparts,
all of which together shall constitute one and the same agreement.

 

5.10                           Governing Law.  This Warrant shall be governed by and
construed in accordance with the laws of the State of Minnesota, without giving
effect to its principles regarding conflicts of law.

 

[Signature page follows.]

 

9

 

	
  “COMPANY”

  	
  Date:

  	
  January 4, 2007

  	
   

  
	
   

  	
   

  	
   

  
	
  TRANSOMA
  MEDICAL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brian
  P. Brockway

  	
   

  	
   

  	
  By:

  	
  /s/ Charles
  T. Coggin

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Brian P.
  Brockway

  	
   

  	
   

  	
  Name:

  	
  Charles
  T. Coggin

  	
   

  
	
   

  	
  (Print)

  	
   

  	
   

  	
  (Print)

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  Chief
  Financial Officer, Secretary

  
									

 

 

	
  “HOLDER”

  
	
   

  
	
  SILICON
  VALLEY BANK

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Jay
  McNeil

  	
   

  
	
   

  
	
  Name:

  	
  Jay McNeil

  	
   

  
	
   

  	
  (Print)

  
	
  Title:

  	
  SRM

  	
   

  
				

 

10

 

SCHEDULE
1

 

 

CAPITALIZATION
TABLE

 

[Omitted.]

 

11

 

APPENDIX
1

 

NOTICE
OF EXERCISE

 

1.                                       Holder elects to purchase                       
shares of the Common/Series             
Preferred [strike one] Stock of                                     
pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.

 

[or]

 

1.                                       Holder elects to convert the attached Warrant into Shares/cash
[strike one] in the manner specified in the Warrant. This conversion is
exercised for                                           
of the Shares covered by the Warrant.

 

[Strike
paragraph that does not apply.]

 

2.                                       Please issue a certificate or certificates representing the shares
in the name specified below:

 

                                                                                 

Holders Name

 

                                                                                 

 

                                                                                 

(Address)

 

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

 

	
   

  	
  HOLDER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:                                                     

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:                                                       

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Date):                                                    

  	
   

  
					

 

12

 

APPENDIX
2

 

ASSIGNMENT

 

For value received, Silicon
Valley Bank hereby sells, assigns and transfers unto

 

	
  Name:

  	
   

  	
  SVB
  Financial Group

  
	
  Address:

  	
   

  	
  3003
  Tasman Drive (HA-200)

  
	
   

  	
   

  	
  Santa
  Clara, CA 95054

  

 

 

that certain Warrant to
Purchase Stock issued by Transoma Medical, Inc. (the “Company”), on January
4, 2007  (the “Warrant”) together
with all rights, title and interest therein.

 

 

	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay McNeil

  	
   

  
	
   

  	
  Name:

  	
   Jay McNeil

  	
   

  
	
   

  	
  Title:

  	
      SRM

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  January 10, 2007

  	
   

  
							

 

 

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

 

	
   

  	
  SVB FINANCIAL GROUP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]