Document:

Exhibit 4.5

 

Exhibit 4.5

CADENCE PHARMACEUTICALS, INC.

REGISTRATION RIGHTS WAIVER AND AMENDMENT

November 29, 2007

     Reference is made to the Amended and Restated Investor Rights Agreement (the “Investor Rights
Agreement”), dated as of February 21, 2006, by and between Cadence Pharmaceuticals, Inc. (the
“Company”) and the investor parties thereto (the “Holders”). All capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the Investor Rights
Agreement.

     Whereas, the Company is proposing to file a Registration Statement on Form S-3 with
the U.S. Securities and Exchange Commission pertaining to the potential offering, issuance and
sale, from time to time, of common stock of the Company in an aggregate amount not to exceed $100
million (the “Registration Statement”);

     Whereas, the Holders are entitled to certain rights related to the registration of
Registrable Securities of the Company, as set forth in the Investor Rights Agreement, including
without limitation, the registration rights set forth in Section 3.2 (Piggyback Registration)
thereof (the “Registration Rights”);

     Whereas, the Company is providing this Registration Rights Waiver and Amendment to
notify the Holders of its intention to file the Registration Statement and to request that the
Holders waive their Registration Rights and related notice rights as provided herein with respect
to the Registration Statement;

     Whereas, in view of the conversion of all of the Convertible Securities into Common
Stock in connection with the Company’s initial public offering, the parties wish to (A) delete
Section 3.7 (Limitation on Registration Rights Granted to Other Securities) of the Investor Rights
Agreement; and (B) amend Section 6.7 (Amendment of Agreement; Waivers) of the Investor Rights
Agreement to clarify that henceforth, a written instrument signed by the holders of at least sixty
percent (60%) of the Registrable Securities (i) issued or issuable upon conversion of the Company’s
Series A-3 Preferred Stock and (ii) then entitled to Registration, shall be required to amend or
waive any provision of the Investor Rights Agreement;

     Whereas, the Company has issued, or proposes to issue, warrants to purchase Common
Stock (“Lender Warrants”) to each of Silicon Valley Bank (“SVB”), Oxford Finance Corporation
(“Oxford”), and Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services
(“ML” and together with SVB and Oxford, the “Lenders”), in connection with a proposed second
amendment to the Company’s loan and security agreement dated February 17, 2006 with SVB and Oxford,
and the Lenders have required that the Company grant piggy-back registration rights to the Lenders
under the Investor Rights Agreement with respect to the shares issuable under such warrants; and

     Whereas, in connection with the issuance of the Lender Warrants and pursuant to
Section 3.7 of the Investor Rights Agreement, the parties desire to add as the Lenders as parties
to the Investor Rights Agreement.

     Now, Therefore, in consideration of the foregoing and in order to enable the Company
to (A) file the Registration Statement, (B) grant piggy-back registration rights to the Lenders
under the Investor Rights Agreement with respect to the shares issuable under the Lender Warrants,
and (C) add the Lenders as parties to the Investor Rights Agreement, the undersigned Holders hereby
agree with the Company as follows:

 

 

1. Amendment to Investor Rights Agreement 

     Section 1(o) of the Investor Rights Agreement is hereby amended and restated to read in its
entirety as follows:

     “(o) “Registrable Securities” shall mean (i) all Common Stock not previously
sold to the public issued or issuable upon conversion of any of the Convertible
Securities purchased by or issued to the Investors, (ii) all shares of Common Stock
owned by the Investors, (iii) for the purposes of Section 3.2, the shares of Common
Stock owned by Theodore R. Schroeder and David A. Socks, (iv) for the purposes of
Section 3.2, the 48,125 shares of Common Stock issuable upon conversion of the
Convertible Securities issuable upon exercise of that certain Warrant to Purchase
Stock dated February 17, 2006 by and between the Corporation and Silicon Valley Bank
(“SVB”), (v) for the purposes of Section 3.2, the 48,125 shares of Common Stock
issuable upon conversion of the Convertible Securities issuable upon exercise of
that certain Warrant to Purchase Stock dated February 17, 2006 by and between the
Corporation and Oxford Finance Corporation (“Oxford”), (vi) for the purposes of
Section 3.2, the shares of Common Stock issuable upon exercise of that certain
Warrant to Purchase Stock dated on or about November 30, 2007 by and between the Corporation and
SVB, (vii) for the purposes of Section 3.2, the shares of Common Stock issuable upon
exercise of that certain Warrant to Purchase Stock dated on or about November 30, 2007 by and
between the Corporation and Oxford, (viii) for the purposes of Section 3.2, the
shares of Common Stock issuable upon exercise of that certain Warrant to Purchase
Stock dated on or about November 30, 2007 by and between the Corporation and Merrill Lynch
Capital, a Division of Merrill Lynch Business Financial Services Inc. (“ML”), and
(ix) any Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security that is issued as) a dividend or
other distribution with respect to, or in exchange for, or in replacement of, the
Common Stock described in clauses (i) through (viii) of this definition.”

     Section 3.7 (Limitations on Registration Rights Granted to Other Securities) of the
Investor Rights Agreement is hereby deleted, in its entirety.

     Section 6.7 (Amendment of Agreement; Waivers) of the Investor Rights Agreement is
hereby amended and restated to read in its entirety as follows:

     “6.7 Amendment of Agreement; Waivers. Subject to Section 3.7 and
Section 4.4, any provision of this Agreement may be amended or waived by a written
instrument signed by the Company and by Persons holding at least sixty percent (60%)
of the Registrable Securities (A) issued or issuable upon conversion of the Series
A-3 Preferred Stock and (B) then entitled to Registration under Sections 3.1 or 3.2;
provided, however, if such amendment would adversely affect the rights of a specific
Investor in a manner different from the other Investors, then such amendment shall
require the consent of such Investor. Any amendment or waiver effected in
accordance with Section 3.7 or this Section 6.7 shall be binding upon the Company
and all Holders and each of their respective successors and assigns. In addition,
the Company may waive performance of any obligation owing to it, as to some or all
of the Investors, or agree to accept alternatives to such performance, without
obtaining the consent of any Investor.”

 

 

2. Waiver of Notice.

     The undersigned Holders hereby waive, for and on behalf of all Holders, the right to any
notice under the Investor Rights Agreement with respect to the Registration Statement, including
without limitation, any amendments and supplements thereto and combined registration statements
therewith.

3. Waiver of Registration Rights.

     The undersigned Holders hereby waive, for and on behalf of all Holders, the Registration
Rights and all other related or similar rights under the Investor Rights Agreement with respect to
(A) the Registration Statement, including without limitation, any amendments and supplements
thereto and combined registration statements therewith, and (B) the grant by the Company of
piggy-back registration rights to the Lenders under the Investor Rights Agreement with respect to
the shares issuable under the Lender Warrants.

4. Additional Parties.

     The undersigned holders hereby consent to the addition of each of SVB, Oxford and ML as
parties to the Investor Rights Agreement with regard to the shares issuable under the Lender
Warrants. Upon execution of a counterpart of the Investor Rights Agreement by such additional
parties and by the Company, each of such additional parties shall be considered an Investor only
for purposes of Section 3.2 of the Investor Rights Agreement. Schedule A of the Investor
Rights Agreement shall be amended to identify each such additional party and the additional
Registrable Securities held by such party.

5. Miscellaneous.

     This Registration Rights Waiver and Amendment may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute the same Registration
Rights Waiver and Amendment. This Registration Rights Waiver and Amendment is being signed by each
undersigned Holder with respect to all Registrable Securities held by the same, as a stockholder of
the Company and for all other purposes. This Registration Rights Waiver and Amendment is
irrevocable and shall be effective with respect to each of the undersigned Holders and all
affiliates, successors, heirs, personal representatives, and assigns of the undersigned Holders.

[Signature Pages Follow]

 

 

     In Witness Whereof, each of the undersigned Holder has executed this Registration
Rights Waiver and Amendment as of the date first written above.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Versant Side Fund II, L.P.	 	 
	 

	 	By:
	 	Versant Ventures II, L.L.C.	 	 
	 

	 	Its:
	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian G. Atwood	 	 
	 

	 	 	 	 	 	 
	 	 	Authorized Signature	 	 
	 
	 	 	 	 	 	 
	 	 	Brian G. Atwood	 	 
	 	 	 	 	 
	 	 	Name and Title of Person Signing, if necessary	 	 
	 
	 	 	 	 	 
	 	 	Versant Venture Capital II, L.P.	 	 
	 

	 	By:
	 	Versant Ventures II, L.L.C.	 	 
	 

	 	Its:
	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian G. Atwood	 	 
	 

	 	 	 	 	 	 
	 	 	Authorized Signature	 	 
	 
	 	 	 	 	 	 
	 	 	Brian G. Atwood	 	 
	 	 	 	 	 
	 	 	Name and Title of Person Signing, if necessary	 	 
	 
	 	 	 	 	 
	 	 	Versant Affiliates Fund II-A, L.P.	 	 
	 

	 	By:
	 	Versant Ventures II, L.L.C.	 	 
	 

	 	Its:
	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian G. Atwood	 	 
	 

	 	 	 	 	 	 
	 	 	Authorized Signature	 	 
	 
	 	 	 	 	 	 
	 	 	Brian G. Atwood	 	 
	 	 	 	 	 
	 	 	Name and Title of Person Signing, if necessary	 	 

 

 

     In Witness Whereof, each of the undersigned Holder has executed this Registration
Rights Waiver and Amendment as of the date first written above.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	PROQUEST INVESTMENTS III, L.P.	 	 
	 

	 	By:
	 	ProQuest Associates III LLC	 	 
	 

	 	Its:
	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Pasquale DeAngelis	 	 
	 

	 	 	 	 	 	 
	 	 	Authorized Signature	 	 
	 
	 	 	Pasquale DeAngelis, Managing Member	 	 
	 	 	 	 	 
	 	 	Name and Title of Person Signing, if necessary	 	 

 

 

     In Witness Whereof, each of the undersigned Holder has executed this Registration
Rights Waiver and Amendment as of the date first written above.

							
	 
	 	 	 	 	 
	 	 	FRAZIER HEALTHCARE V, L.P.	 	 
	 

	 	By
	 	FHM V, L.P., its general partner	 	 
	 

	 	By
	 	FHM V, L.L.C., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Alan D. Frazier	 	 
	 

	 	 	 	 	 	 
	 	 	Authorized Signature	 	 
	 
	 	 	Managing Partner	 	 
	 	 	 	 	 
	 	 	Name and Title of Person Signing, if necessary

(please print)	 	 

 

 

     In Witness Whereof, each of the undersigned Holder has executed this Registration
Rights Waiver and Amendment as of the date first written above.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	Domain Partners VI, L.P.	 	 
	 

	 	By:
	 	One Palmer Square Associates VI, L.L.C.	 	 
	 

	 	Its:
	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kathleen K. Shoemaker	 	 
	 

	 	 	 	 	 	 
	 	 	Authorized Signature	 	 
	 
	 	 	Managing Member	 	 
	 	 	 	 	 
	 	 	Name and Title of Person Signing, if necessary

(please print)	 	 

 

 

     In Witness Whereof, each of the undersigned Holder has executed this Registration
Rights Waiver and Amendment as of the date first written above.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	Garner Investments, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Cam Garner	 	 
	 

	 	 	 	 	 	 
	 	 	Authorized Signature	 	 
	 
	 	 	 	 	 	 
	 	 	Cam Garner,
President	 	 

 

 

	 	 	 	 	 
	Acknowledged and Agreed:

Cadence Pharmaceuticals, Inc.	 	 
	 
	By:

	 	/s/ Theodore R. Schroeder	 	 
	 

	 	 

	 	 
	Name: Theodore R. Schroeder	 	 
	Title: President & CEOExhibit 4.6

 

Exhibit 4.6

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: CADENCE PHARMACEUTICALS, INC., a Delaware corporation

Number of Shares: as set forth below

Class of Stock: Common Stock

Warrant Price: as set forth below

Issue Date: November 30, 2007

Expiration Date: Subject to Section 1.6 hereof, the 7th anniversary after the Issue Date

     THIS WARRANT CERTIFIES THAT, for good and valuable consideration, including without limitation
the mutual promises contained in that certain Loan and Security Agreement dated as of February 17,
2006, as amended by that certain First Amendment to Loan and Security Agreement dated as of
September 13, 2007, as further amended by that certain Second Amendment to Loan and Security
Agreement of even date herewith (as amended, the “Loan Agreement”) entered into by and among
SILICON VALLEY BANK (“Holder”), Oxford Finance Corporation, Merrill Lynch Capital, a Division of
Merrill Lynch Business Financial Services Inc., and the company named above (the “Company”), Holder
is entitled to purchase the number of fully paid and nonassessable shares of Common Stock (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. This Warrant is issued in connection with the Loan Agreement.

As used herein:

          “Number of Shares” means the cumulative, aggregate number of shares of Common Stock
equal to: (i) 4.25% of each Term Loan (as defined in the Loan Agreement) made by Silicon Valley
Bank to the Company, divided by (ii) the Warrant Price.

          “Warrant Price” means the average of the closing prices of the Common Stock over the
seven (7) trading days immediately prior to the Issue Date.

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

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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,
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. 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 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 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

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giving rise to such notice), which is to be delivered to Holder not less than ten (10) days prior
to the closing of the proposed Acquisition.

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

C) Notwithstanding the foregoing provisions of this Section 1.6, in the event that the acquirer in
an Acquisition does not agree to assume this Warrant at and as of the closing thereof, this
Warrant, to the extent not exercised or converted on or prior to such closing, shall terminate and
be of no further force or effect as of immediately following such closing if all of the following
conditions are met: (i) the acquirer is subject to the reporting requirements of Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, (ii) the class of stock or other
security of the acquirer that would be received by Holder in connection with such Acquisition were
Holder to exercise or convert this Warrant on or prior to the closing thereof is listed for trading
on a national securities exchange or approved for quotation on an automated inter-dealer quotation
system, (iii) the value (determined as of the closing of such Acquisition in accordance with the
definitive agreements therefor) of the acquirer stock and/or other securities that would be
received by Holder in respect of each Share were Holder to exercise or convert this Warrant on or
prior to the closing of such Acquisition is equal to or greater than three (3) times the
then-effective Warrant Price, and (iv) upon the exercise or conversion of this Warrant on or prior
to the closing of such Acquisition, Holder would be able to publicly resell all of the acquirer
stock and/or other securities that would be received by Holder in such Acquisition within 120 days
following the closing thereof pursuant to an effective registration statement covering such
acquirer stock and/or other securities or pursuant to the provisions of Rule 144 under the Act.

D) Upon the closing of any Acquisition other than those particularly described in subsections (A),
(B) and (C) 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.

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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 increases 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. 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 [Reserved].

          2.4 No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution,
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; provided, however, that notwithstanding the foregoing, nothing in
this Section 2.4 shall restrict or impair the Company’s right to effect changes to the rights,
preferences and privileges associated with the Shares with the requisite consent of the
stockholders as may be required to amend the Certificate of Incorporation from time to time so long
as such amendment affects the rights, preferences and privileges granted to Holder associated with
the Shares in the same manner as the other holders of Common Stock.

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          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, as determined in
accordance with Section 1.3, of a full Share.

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

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

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

               (a) Intentionally omitted.

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

               (c) Intentionally omitted.

          3.2 Notice of Certain Events. The Company shall send concurrently to Holder the same
notice as the Company gives to the holders of registration rights under the Investor Rights
Agreement (defined below) if the Company proposes to offer holders of registration rights the
opportunity to participate in an underwritten public offering of the Company’s securities for cash.

          3.3 Registration Under Securities Act of 1933, as amended. The Company agrees that
the Shares shall have certain incidental, or “Piggyback,” registration rights pursuant to and as
set forth in the Company’s Amended and Restated Investor Rights Agreement dated February 21, 2006
(as amended from time to time, the “Investor Rights Agreement”) or similar agreement. The
provisions set forth in the 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 the Holder.

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

          3.5  Information. If the Company ceases to be a public company, then the Company will
provide information requested by Holder reasonably necessary to enable Holder to comply with
Holder’s accounting or reporting requirements.

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.

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

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

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

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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 by the transferor and the transferee (including,
without limitation, the delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company, as reasonably requested by the Company). The Company shall not
require Holder to provide an opinion of counsel if the transfer is to Holder’s parent company, SVB
Financial Group (formerly Silicon Valley Bancshares), 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 Rule 144, including, without limitation, 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 Holder’s parent company, 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 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

7

 

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:

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 the Holder receives notice of a change in
address:

Cadence Pharmaceuticals, Inc.

12481 High Bluff Drive, Suite 200

San Diego, CA 92130

Attn: General Counsel

Telephone: (858) 436-1400

Facsimile: (858) 436-1401

          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 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 Warrant Price in effect on such
date, then this Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not
previously have been exercised or converted, and the Company shall promptly deliver a certificate
representing the Shares (or such other securities) issued upon such conversion to the Holder.

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

8

 

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

[Remainder of page intentionally left blank; signature page follows]

9

 

	 	 	 	 	 	 	 	 	 
	“COMPANY”	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CADENCE PHARMACEUTICALS, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By: /s/ Theodore R. Schroeder

	 	 	 	By: /s/ William R. LaRue

	
 

	 	 	 	
 

	 
	 	 	 	 	 	 	 	 
	Name:

	 	Theodore R. Schroeder
	 	 	 	Name:
	 	William R. LaRue
	Title:

	 	President and CEO
	 	 	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 	 	 
	“HOLDER”	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By: /s/ R. Michael White
	 	 	 	 	 	 
	
 

	 	 	 	 	 	 
	Name:

	 	R. Michael White	 	 	 	 	 	 
	Title:

	 	Deal Team Leader	 	 	 	 	 	 

10

 

APPENDIX 1

NOTICE OF EXERCISE

     1. Holder
elects to purchase ________
shares of the Common 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:

	 	 	 	 	 
	 

	 	 

     Holder’s 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):	 	 	 	 
	 

	 	 	 

	 	 

11

 

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
	 
	 	 
	Tax ID:

	 	91-1962278

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

	 	 	 	 	 	 	 
	 	 	SILICON VALLEY BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Date:   
              
             
             
              
   

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-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]