EXHIBIT 10.12
WARRANT PURCHASE AGREEMENT
This Warrant Purchase Agreement (the "Agreement") is made and entered
into as of July 1, 1994, by and between CaRDiMa, Inc., a Delaware corporation
(the "Company"), and State of California Public Employees' Retirement System
(the "Purchaser").
The Company desires to sell and the Purchaser desires to purchase a
warrant (the "Warrant") to purchase 10,000 shares of the Company's Common Stock
(the "Warrant Shares") at a purchase price of $.01 per share substantially in
the form attached hereto as Exhibit A on the terms and conditions set forth
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herein.
In consideration of the mutual promises contained herein, the
parties hereto agree as follows:
1. Stock Purchase.
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a. Subject to the terms and conditions of this Agreement,
the Purchaser agrees to purchase a Warrant from the Company and the Company
agrees to sell and issue a Warrant to the Purchaser for an aggregate purchase
price of $100.00.
b. The purchase and sale of the Warrant shall take place
at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx, Two Embarcadero Place, 2200 Geng
Road, Palo Alto, California on the date this Agreement is signed by the parties,
or at such other time and place as to which the Company and Purchaser shall
agree (which time and place are designated as the "Closing"). At the Closing,
the Company shall deliver the Warrant to the Purchaser, against payment of the
Purchase price therefor by either check or wire transfer.
2. Representations and Warranties of Purchaser. The Purchaser
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hereby represents and warrants to the Company that:
a. Purchase Entirely for Own Account. This Warrant is
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issued to the Purchaser in reliance upon Purchaser's representation to the
Company that the Warrant and the Common Stock issuable upon exercise of the
Warrant (collectively, the "Securities") will be acquired for investment for the
Purchaser's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same (other than to partners of the Purchaser). Purchaser
further represents and warrants that it does not have any contract, undertaking,
agreement, or arrangement with any person to sell, transfer, or grant
participations to such person or to any third person, with respect to any of the
Securities (other than to partners of the Purchaser).
b. Access to Information. The Purchaser acknowledges that
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it has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the Warrant.
c. Investment Experience. The Purchaser acknowledges that
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it is able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Securities.
It has not been organized solely for the purpose of acquiring the Securities.
d. Accredited Investor. The Purchaser is an "accredited
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investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
e. Restricted Securities. It understands that the
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Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act only in certain limited circumstances. In this connection, the
Purchaser represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the Act.
f. Legends. It is understood that the certificates
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evidencing the Securities may bear one or all of the following legends:
(1) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO AN EXEMPTION TO SUCH ACT. "
(2) Any legend required by the laws of the State of
California.
3. Representations and Warranties of the Company. The Company
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represents and warrants to the Purchaser as follows:
a. This Agreement and the Warrant have been duly authorized
and executed by the Company and are valid and binding obligations of the
Company, enforceable in accordance with their terms except as to (i) the
effect of applicable bankruptcy and similar laws affecting the rights of
creditors, and (ii) the effect of rules of law governing specific performance,
injunctive relief and other equitable remedies.
b. The Common Stock issuable upon exercise of the Warrant has
been duly authorized and reserved for issuance by the Company and, when issued
in accordance with the terms hereof, will be validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue of such shares.
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c. The rights, preferences, privileges, and restrictions
granted to or imposed upon the Common Stock and the holders thereof are as set
forth in the Articles of Incorporation, a true and complete copy of which has
been delivered to the Purchaser.
d. The execution and delivery of this Agreement and the
Warrant are not, and the issuance of the Common Stock upon exercise of the
Warrant in accordance with the terms thereof, are not inconsistent with the
Company's Articles of Incorporation or Bylaws, do not contravene any law,
governmental rule or regulation, judgment, or order applicable to the Company,
and do not conflict with or contravene any provision of, or constitute a
default under, any indenture, mortgage, contract, or other instrument of which
the Company is a party or by which it is bound or require the consent or
approval of, the giving of notice to, the registration or filing with, or the
taking of any action in respect of or by, any federal, state, or local
government authority or agency or other person, other than state or federal
securities law filings.
e. During the period within which the Warrant may be
exercised, the Company will at all times have authorized and reserved for the
purpose of the issue upon exercise of the Warrant a sufficient number of
shares of its Common Stock to provide for the exercise of the Warrant.
4. Qualification of Securities. The sale of the Securities has
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not been qualified with the Commissioner of Corporations of the State of
California and the issuance of such securities or the payment or receipt of any
part of the consideration thereof prior to such qualification is unlawful,
unless the sale of securities is exempt from the qualification by Section 25100,
25102 or 25105 of the California Corporations Code. The Company represents and
warrants that the sale of the Securities is exempt from qualification under the
securities laws of the State of California.
5. General Provisions.
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a. This Agreement represents the entire agreement between the
Company and Purchaser regarding the subject matter hereof, supersedes all
prior agreements and understanding, and may only be amended in a writing
signed by the Company and the Purchaser.
b. This Agreement shall bind and benefit the successors,
assigns, heirs, executors and administrators of the parties. The rights of the
Purchaser under this Agreement may not be assigned (except to an Affiliate of
Purchaser, as such term is defined in Rule 405 of the rules and regulations
promulgated under the Securities Act of 1933, as amended) without the written
consent of the Company.
c. This Agreement shall be governed in all respects by the
laws of the State of California.
d. The Agreement may be executed in counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Purchase Agreement as of the day and year first set forth above.
CARDIMA, INC.
a Delaware corporation
/s/ Xxxxxxx X. Xxxx
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By: Xxxxxxx X. Xxxx
Title: President
STATE OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM,
an agency of the State of California
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By: Alex, Xxxxx Kleinwort Xxxxxx Realty
Advisors Corporation
Its: Advisor and Duly Authorized Agent
By: /s/ Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx
Its: Senior Vice President
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Its: Senior Vice President
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EXHIBIT A
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THEY MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE
TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO AN EXEMPTION TO SUCH ACT.
COMMON STOCK WARRANT
OF
CARDIMA, INC.
THIS CERTIFIES THAT State of California Public Employees' Retirement
System (the "Warrantholder" is entitled to subscribe for and purchase from
CaRDiMa, Inc., a Delaware corporation (the "Company") 10,000 fully paid and non-
assessable shares of the Company's Common Stock ("Common Stock"), at a price of
$1.00 per share (the "Exercise Price"); provided, however, that the Exercise
Price and the number of shares purchasable hereunder are subject to adjustment
upon the occurrence of the contingencies set forth in this Warrant. This
Warrant is granted in connection with the execution of that certain Lease
Agreement by and between the Company and State of California Public Employees'
Retirement System, dated April 25, 1994.
Upon delivery of this Warrant, subject to Section 1 hereof, together
with payment of the Exercise Price of the shares of Common Stock thereby
purchased, at the principal office of the Company or at such other office or
agency as the Company may designate by notice in writing to the holder hereof,
the holder of this Warrant shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased. The date at which the
Company receives (i) the Warrant and, subject to Section 1 hereof, (ii) the
payment for the shares of Common Stock, either by payment in cash or by check or
by notice of Warrantholder's intent to use shares of Common Stock as payment as
described in Section 1 below, or such later date as such notice shall specify,
shall be referred to herein as the "Exercise Date." However, other than an
exercise pursuant to a Conversion (as defined below), in no case shall the
issuance of the shares of Common Stock purchasable upon exercise of this Warrant
occur prior to the Company's receipt from the Warrantholder of the payment for
such shares. All shares of Common Stock which may be issued upon the exercise of
this Warrant will, upon issuance, be fully paid, non-assessable and free from
all taxes, liens and charges with respect thereto.
This Warrant is subject to the following terms and conditions:
1. Exercise of Warrant.
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a. This Warrant may be exercised in part or in whole at any
time (1) commencing on the earlier of (i) 36 months after the date of issuance
of the Warrant, or (ii) 20 days prior to the day upon which the Company's Common
Stock commences trading on the National Association of Securities Dealers
Automated Quotations System or on a national securities exchange in connection
with the Company's initial underwritten public offering (the "Initial Public
Offering") of its equity securities pursuant to a registration statement under
the Securities Act of 1933, as amended (the "Act"), or (iii) 20 days prior to
the closing of (x) the sale of all or substantially all of the assets of the
Company or (y) a consolidation, merger or reorganization by the Company pursuant
to which the shareholders of the Company immediately prior to such
consolidation, merger or reorganization do not possess a majority of the voting
power of the acquiring entity immediately following such consolidation, merger
or reorganization (a "Merger/Acquisition"), or (iv) 20 days prior to the record
date for any dividend of cash or other property (other than Common Stock or
convertible securities) declared on any Common Stock or convertible securities
(a "Cash Dividend"), and (2) ending on the earlier of (i) six years from the
date of this Warrant, (ii) seven (7) days following the closing of the Initial
Public Offering, or (iii) the date upon which the Company consummates a
Merger/Acquisition, respectively; provided that the Company shall notify the
Warrantholder as soon as possible, but in no event later than twenty (20) days,
prior to the occurrence of an Expiration Date. This Warrant may be exercised by
surrendering it at the principal office of the Company and by payment to the
Company, in cash or by check or in the manner provided for in the following
paragraph, of the Exercise Price for all of the Common Stock purchased. The
Company shall, within 10 days after such delivery, prepare a certificate for the
shares of Common Stock purchased in the name of the holder of this Warrant, or
as such holder may direct (subject to the restrictions upon transfer contained
herein. Such certificate or certificates shall be deemed to have been issued and
the person so named therein shall be deemed to have become a holder of record of
such shares as of the Exercise Date, irrespective of the date of delivery of
such certificate or certificates for shares of Common Stock.
b. In lieu of exercising this Warrant by the payment of the
Exercise Price in cash or by check, but otherwise in accordance with the
preceding paragraph, the Warrantholder may elect to receive shares (a
"Conversion") equal to the value (as determined below) of this Warrant by
surrender of this Warrant at the principal office of the Company together with
notice of such election (which notice shall include the number of shares being
exercised hereunder), in which event the Company shall issue to the
Warrantholder that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the value of the shares of Common Stock being exercised
(the "Exercised Shares") on the Exercise Date, which value shall be determined
by subtracting (A) the aggregate Exercise Price of the Exercised Shares
immediately prior to the exercise of the Warrant from (B) the aggregate fair
market value of the Exercised Shares on the Exercise Date by (y) the fair market
value of one share of Common
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Stock as of the Exercise Date. No fractional shares shall be issuable upon
exercise of this Warrant, and if the number of shares to be issued determined in
accordance with the foregoing formula is other than a whole number, the Company
shall pay to the Warrantholder an amount in cash equal to the fair market value
of the resulting fractional share on the Exercise Date.
c. For purposes of this Section 1, the fair market value of the
Common Stock issuable upon exercise of this Warrant shall be determined as
follows:
(i) If this Warrant is exercised in connection with and
contingent upon the Initial Public Offering whether pursuant to a Conversion or
by payment of cash, and if the Company's registration statement relating to such
Initial Public Offering has been declared effective by the Securities and
Exchange Commission, then the fair market value shall be the initial "Price to
Public" specified in the final prospectus with respect to such offering.
(ii) If this Warrant is not exercised in connection with
and contingent upon the Initial Public Offering then the fair market value shall
be determined in good faith by mutual agreement between the Warrantholder and
the Company. If the Warrantholder and the Company are unable to so agree on the
fair market value, then the fair market value shall be determined in good faith
by the Board of Directors of the Company, and, as soon thereafter as
practicable, the Company shall give written notice thereof to the Warrantholder
at the address of such holder as shown in the books of the Company, and the
Expiration Date shall be extended until the later of the date determined
pursuant to Section 1(a)(2) above or 20 days after the receipt of such notice of
the Board's determination of fair market value.
d. The Company will pay all documentary stamp taxes and other
governmental charges (excluding all foreign, federal or state income, franchise,
property, estate, inheritance, gift or similar taxes) in connection with the
issuance or delivery of the Warrant hereunder, as well as such taxes
attributable to the initial issuance or delivery of shares of Common Stock upon
the exercise of the Warrant or payment of the Exercise Price.
2. Transfer of Warrant. This Warrant and all rights hereunder are
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not transferable, except to an Affiliate, as such term is used in the Act and in
accordance with Section 3 hereof.
3. Condition of Transfer of Warrant. It shall be a condition to any
--------------------------------
transfer of this Warrant that the Company shall have received, at the time of
such transfer, a statement in writing of the pertinent facts covering any
proposed distribution thereof. It shall be a further condition to any transfer
of this Warrant or of any or all of the shares of Common Stock issued upon
exercise of this Warrant, other than a transfer registered under the Act, that
the Company shall have received (i) if required by counsel to the Company, a
legal opinion, in form and substance reasonably satisfactory to the Company and
its counsel, reciting the pertinent circumstances surrounding the proposed
transfer and stating that such transfer is exempt from the prospectus and the
registration requirements of the Act and (ii) a statement in writing from, and
signed by, any proposed transferees containing the same representations and
warranties as set
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forth in Section 6 hereof. The requirement of a legal opinion shall not apply to
the transfer of this Warrant or any part thereof to a partnership of which the
Warrantholder is a partner or to the beneficial owners or affiliates of such
partnership without further consideration or otherwise to an Affiliate (as such
term is defined in Rule 405 of the rules and regulations promulgated under the
Securities Act of 1933, as amended) of the Warrantholder, so long as such
transfer is in compliance with applicable securities laws. Each certificate
evidencing the shares of Common Stock issued upon exercise of this Warrant, or
upon any transfer of such shares (other than a transfer registered under the Act
or any subsequent transfer of shares so registered) shall, at the option of the
Company, contain a legend, in form and substance satisfactory to the Company and
its counsel, restricting the transfer of such shares to sales or other
dispositions exempt from the requirements of the Act.
It shall be a further condition to each such transfer that the
transferee shall receive and accept a Warrant, of like tenor and date, executed
by the Company.
4. Adjustment of Exercise Price and Number of Shares Purchasable
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Hereunder. The Exercise Price and the number of shares purchasable hereunder
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shall be subject to adjustment from time to time in accordance with the
following provisions:
a. Subdivisions and Combinations. In case the Company shall at
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any time subdivide the outstanding shares of its Common Stock, the Exercise
Price in effect immediately prior to such subdivision shall be proportionately
decreased, and in case the Company shall at any time combine the outstanding
shares of its Common Stock, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased, effective at the close of
business on the date of such subdivision or combination, as the case may be.
b. Stock Dividends. In case the Company shall at any time
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declare a dividend or make a distribution with respect to its Common Stock
payable in Common Stock, then the Exercise Price in effect immediately prior to
the record date for distribution of such dividend or distribution shall be
adjusted to that price determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction (i) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (ii) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution.
c. Common Stock. In case the Company shall at any time issue
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shares of Common Stock for a consideration per share less than the Specified
Value per share on the issue date, then the Exercise Price in effect immediately
prior to the issue date for such shares shall be adjusted to that price
determined by multiplying the Exercise Price in effect immediately prior to such
issue date by a fraction (i) the numerator of which shall be (A) the total
number of Fully Diluted Shares outstanding immediately prior to such issue date,
plus (B) the aggregate consideration, if any, received by the Company upon such
issuance divided by the Specified Value as of such issue date and (ii) the
denominator of which shall be the total number of Fully Diluted Shares
outstanding immediately after such issue date. This subsection (c) does not
apply to:
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(i) the issuance of shares of the Company's Common Stock
upon conversion of shares of Series A or B Preferred Stock;
(ii) the issuance of up to 1,385,000 shares of the
Company's Common Stock to officers, directors or employees of, or consultants
to, the Corporation pursuant to incentive stock option or incentive stock
purchase plans or agreements on terms unanimously approved by the Board of
Directors, subject to adjustment for all subdivisions and combinations; or
(iii) the issuance of shares of the Company's Common Stock
as a dividend or distribution on the Company's capital stock.
d. Convertible Securities. In case the Company shall at any
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time issue any options, warrants, rights or other securities convertible into or
exchangeable or exercisable for Common Stock for a consideration per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the Specified Value per share on the issue date, then the
Exercise Price in effect immediately prior to the issue date of such securities
shall be adjusted to that price determined by multiplying the Exercise Price in
effect immediately prior to such issue date by a fraction (i) the numerator of
which shall be (A) the total number of Fully Diluted Shares outstanding
immediately prior to such issue date, plus (B) the aggregate consideration, if
any, received or to be received by the Company upon such issuance and such later
conversion, exchange or exercise divided by the Specified Value as of such issue
date and (ii) the denominator of which shall be the total number of Fully
Diluted Shares outstanding immediately after such issue date.
This subsection (d) does not apply to the issuance of up to 1,385,000
shares of the Company's Common Stock to officers, directors or employees of, or
consultants to, the Corporation pursuant to incentive stock option or incentive
stock purchase plans or agreements on terms unanimously approved by the Board of
Directors, subject to adjustment for all subdivisions and combinations.
e. Specified Value. "Specified Value" per share of Common
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Stock shall be the greater of (i) $2.00, provided, however, that such amount
shall be proportionately adjusted for future stock splits, dividends,
combinations or other similar corporate events and (ii) the per share fair
market value of the Common Stock on the date of determination.
f. Consideration Received. For purposes of any computation
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respecting consideration received pursuant to subsections (c) and (d) of this
Section 4, the following shall apply:
(i) in the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, provided that in
no case shall
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any deduction be made for any commissions, discounts or other expenses incurred
by the Company for any underwriting of the issue or otherwise in connection
therewith;
(ii) in the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof (irrespective of
the accounting treatment thereof) as determined in good faith by the Board of
Directors; and
(iii) in the case of the issuance of options, warrants
or other securities convertible into or exchangeable or exercisable for shares
of Common Stock, the aggregate consideration received therefor shall be deemed
to be the consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any, to be received by
the Company upon the conversion, exchange or exercise thereof (the consideration
in each case to be determined in the same manner as provided in clauses (1) and
(2) of this subsection).
g. Number of Shares. Upon each adjustment pursuant to
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subdivisions (a), (b), (c) or (d) of this Section 4, the registered holder of
this Warrant shall thereafter (until another such adjustment) be entitled to
purchase in accordance with Section 1 hereof, at the adjusted Exercise Price,
the number of shares of Common Stock, calculated to the nearest full share,
obtained by multiplying the number of shares of Common Stock purchasable
hereunder immediately prior to such adjustment by the Exercise Price in effect
prior to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.
h. Reclassification or Merger. In case of any
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reclassification, change, or conversion of securities of the class or series
issuable upon exercise of this Warrant (other than as a result of a subdivision
or combination described above), or in case of a Merger/Acquisition where this
Warrant has not been exercised in accordance with Section 1 hereof, the Company,
or such successor or purchasing corporation, as the case may be, shall duly
execute and deliver to the Warrantholder a new warrant so that the Warrantholder
shall have the right to receive, at a total purchase price not to exceed that
payable upon the exercise of the unexercised portion of this Warrant, and in
lieu of the shares of Common Stock theretofore issuable upon exercise of this
Warrant, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, change, or Merger/Acquisition by
a holder of the number of shares of Common Stock then purchasable under this
Warrant. Such new warrant shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
4. The provisions of this subparagraph (h) shall similarly apply to successive
reclassification, changes, and Mergers/Acquisitions.
i. Adjustments in Other Securities. If as a result of any
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event or for any other reason, any adjustment is made which increases the number
of shares of Common Stock issuable upon conversion, exercise or exchange of, or
in the conversion or exercise price or exchange ratio applicable to, securities
of the Company issued on or prior to the last issuance date of the Series C
Preferred Stock of the Company that are convertible into, or exercisable or
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exchangeable for, Common Stock of the Company, then a corresponding adjustment
shall be made hereunder to increase the number of shares of Common Stock
issuable upon exercise of the Warrant, but only to the extent that no such
adjustment has been made pursuant to Sections 4(a), (b), (c) or (d) hereof with
respect to such event or for such other reason.
j. Miscellaneous. For purposes of this Section 4 the term
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"shares of Common Stock" shall mean (i) shares of the class of stock designated
as the Common Stock of the Company at the date of this Agreement, and (ii)
shares of any other class of stock resulting from successive changes or
reclassification of such shares consisting solely of changes in par value, or
from par value to no par value, or from no par value to par value. For purposes
of this Section 4, the term "Fully Diluted Shares" shall mean (i) shares of
Common Stock outstanding as of a specified date and (ii) shares of Common Stock
into or for which rights, options, warrants or other securities outstanding as
of such date are exercisable or convertible.
5. Notices.
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a. Upon any adjustment of the Exercise Price and any increase
or decrease in the number of shares of Common Stock purchasable upon the
exercise of this Warrant, then, and in each such case, the Company, as soon as
practicable, but in no event later than thirty (30) days thereafter, shall give
written notice thereof to the registered holder of this Warrant at the address
of such holder as shown on the books of the Company which notice shall state the
Exercise Price as adjusted and the increased or decreased number of shares
purchasable upon the exercise of this Warrant, setting forth in reasonable
detail the method of calculation of each.
b. In the event that the Company shall propose at any time to
effect the Initial Public Offering, a Merger/Acquisition or a Cash Dividend and
in addition to the notice referred to in Section 1(a)(2) above, the Company
shall send to the Warrantholder at least twenty (20) days prior written notice
of the date when the same is anticipated to take place; provided, however, that
the failure to give such notice shall not give the Warrantholder the right to
delay or otherwise restrain or affect the Initial Public Offering, the
Merger/Acquisition or a Cash Dividend, but failure to give such notice will
extend the Expiration Date to the later of the date determined pursuant to
Section 1(a)(2) above or 20 days after the receipt of such notice, in addition
to all other rights and remedies the Warrantholder has under applicable law.
Such written notice shall be given by first class mail, postage prepaid,
addressed to the Warrantholder at the address as shown on the books of the
Company for the Warrantholder.
6. Representations and Warranties of Warrantholder. Without
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limiting or modifying the representations and warranties of the Company in
Section 7 of this Warrant or the right of the Warrantholder to rely thereon, the
Warrantholder hereby represents and warrants that:
a. Purchase Entirely for Own Account. This Warrant is issued
---------------------------------
to the Warrantholder in reliance upon Warrantholder's representation to the
Company, which by its acknowledgement of this Warrant Warrantholder hereby
confirms, that the Warrant and the
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Common Stock issuable upon exercise of the Warrant (collectively, the
"Securities") will be acquired for investment for the Warrantholder's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Warrantholder has no present
intention of selling, granting any participation in, or otherwise distributing
the same (other than to partners of the Warrantholder). By acknowledging this
Warrant, it does not have any contract, undertaking, agreement, or arrangement
with any person to sell, transfer, or grant participations to such person or to
any third person, with respect to any of the Securities (other than to partners
of the Warrantholder). It has full power and authority to acknowledge this
Warrant.
b. Disclosure of Information. It has had an opportunity to ask
-------------------------
questions and receive answers from the Company regarding the terms and
conditions of the offering of the Warrant.
c. Investment Experience. The Warrantholder acknowledges that
---------------------
it is able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Warrant. It
has not been organized solely for the purpose of acquiring the Warrant.
d. Accredited Investor. The Warrantholder is an "accredited
-------------------
investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
e. Restricted Securities. It understands that the Securities
---------------------
it is purchasing are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act only in certain limited circumstances. In this connection, the
Warrantholder represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the Act.
f. Legends. It is understood that the certificates evidencing
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the Securities may bear one or all of the following legends:
(i) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR
UNLESS SOLD PURSUANT TO AN EXEMPTION TO SUCH ACT."
(ii) Any legend required by the laws of the State of
California.
-8-
7. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to the Warrantholder as follows:
a. This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company, enforceable in
accordance with its terms except as to (i) the effect of applicable bankruptcy
and similar laws affecting the rights of creditors, and (ii) the effect of rules
of law governing specific performance, injunctive relief and other equitable
remedies.
b. The Common Stock issuable upon exercise of this Warrant has
been duly authorized and reserved for issuance by the Company and, when issued
in accordance with the terms hereof, will be validly issued, fully paid and non-
assessable, and free from all taxes, liens and charges with respect to the
issuance of such shares. Before taking any action which would cause an
adjustment pursuant to Section 4 hereof to reduce the Exercise Price below the
then par value (if any) of the Common stock, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock at the Exercise Price so adjusted.
c. The rights, preferences, privileges, and restrictions
granted to or imposed upon the Common Stock and the holders thereof are as set
forth in the Articles of Incorporation, a true and complete copy of which has
been delivered to the Warrantholder.
d. The execution and delivery of this Warrant is not, and the
issuance of the Common Stock upon exercise of this Warrant in accordance with
the terms hereof, is not inconsistent with the Company's Articles of
Incorporation or Bylaws, does not contravene any law, governmental rule or
regulation, judgment, or order applicable to the Company, and does not conflict
with or contravene any provision of, or constitute a default under, any
indenture, mortgage, contract, or other instrument of which the Company is a
party or by which it is bound or require the consent or approval of, the giving
of notice to, the registration or filing with, or the taking of any action in
respect of or by, any federal, state, or local government authority or agency or
other person, other than state or federal securities law filings.
e. During the period within which this Warrant may be
exercised, the Company will at all times have authorized and reserved for the
purpose of the issue upon exercise of this Warrant a sufficient number of shares
of its Common Stock to provide for the exercise of this Warrant. The Company
shall from time to time take all action which may be necessary or appropriate so
that the shares of Common stock issuable upon exercise of the Warrant,
immediately upon their issuance following the exercise of the Warrant, will be
listed on the principal securities exchanges and markets within the United
States of America, if any, on which the other shares of Common Stock are then
listed; provided, however, that this section shall not be construed to provide
the Holder with the right to have such shares registered in any manner other
than as set forth in Section 8.f. hereof
-9-
f. The authorized capital of the Company consists, or will
consist immediately prior to the Closing, of:
(i) Preferred Stock. Eight Million Seven Hundred Sixty-Six
---------------
Thousand Six Hundred Sixty-Six (8,766,666) shares of Preferred Stock (the
"Preferred Stock"), Three Million One Hundred Thousand (3,100,000) of which have
been designated Series A Preferred Stock (the "Series A Preferred Stock"), Three
Million (3,000,000) shares of which are outstanding, Two Million Three Hundred
Thirty-Three Thousand Three Hundred Thirty-Three (2,333,333) of which have been
designated Series B Preferred Stock (the "Series B Preferred Stock"), all of
which are outstanding and Three Million Three Hundred Thirty-Three Thousand
Three Hundred Thirty-Three (3,333,333) of which have been designated Series C
Preferred Stock (the "Series C. Preferred Stock"), none of which are
outstanding.
(ii) Common Stock. Ten Million Six Hundred Eighteen
------------
Thousand Three Hundred Thirty Three (10,618,333) shares of common stock ("Common
Stock"), of which Four Hundred Sixty-Six Thousand Six Hundred Sixty-Seven
(466,667) shares are issued and outstanding, Three Million One Hundred Thousand
(3,100,000) have been reserved for issuance upon the conversion of the Series A
Preferred Stock, Two Million Three Hundred Thirty-Three Thousand Three Hundred
Thirty-Three (2,333,333) have been reserved for issuance upon conversion of the
Series B Preferred Stock and Three Million Three Hundred Thirty-Three Thousand
Three Hundred Thirty-Three (3,333,333) have been reserved for issuance upon
conversion of the Series C Preferred Stock.
(a) All Four Hundred Sixty-Six Thousand Six Hundred
Sixty-Seven (466,667) shares of outstanding Common Stock are owned by Xxxxxxx
Xxxx, a founder of the Company, pursuant to an Employee Stock Purchase Agreement
with the Company.
(b) The outstanding shares of Common Stock are all
duly and validly authorized and issued, fully paid and nonassessable, and were
issued in accordance with the registration or qualification provisions of the
Securities Act of 1933, as amended (the "Act") and any relevant state securities
laws or pursuant to valid exemptions therefrom.
(iii) Except for (A) the conversion privileges of the Series
A Preferred Stock, the Series B Preferred Stock and the Series C Preferred
Stock, (B) the rights provided in Section 2.4 of the Amended and Restated
Stockholders' Rights Agreement effective June 30, 1993, as amended (the
"Stockholder Rights Agreement"), (C) 866,666 shares reserved for issuance
pursuant to the Company's 1993 Stock Option Plan, of which no shares have been
issued, 281,500 shares are subject to outstanding options, and 585,166 shares
remain available for issuance, and (D) a warrant to purchase 76,600 shares of
the Company's Series A Preferred Stock issued to Target Therapeutics, Inc. in
connection with an equipment lease financing transaction, there are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the Company of any
-10-
shares of its capital stock. The Company is not a party or subject to any
agreement or understanding, and, to the Company's knowledge, there is no
agreement or understanding between any persons and/or entities, which affects or
relates to the voting or giving of written consents with respect to any security
or by a director of the Company.
8. Miscellaneous.
-------------
a. The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors and assigns of the Company and of the
holder or holders hereof and of the Common Stock issued or issuable upon the
exercise hereof and all of the obligations of the Company relating to the Common
Stock issuable upon exercise of this Warrant shall survive the exercise of this
Warrant.
b. No holder of this Warrant, as such, shall be entitled to
vote or receive dividends or be deemed to be a shareholder of the Company for
any purpose, nor shall anything contained in this Warrant be construed to confer
upon the holder of this Warrant, as such, any rights of a shareholder of the
Company or any right to vote, give or withhold consent to any corporate action,
receive notice of meetings, receive dividends or subscription rights, or
otherwise.
c. Receipt of this Warrant by the holder hereof shall
constitute acceptance of and agreement to the foregoing terms and conditions.
d. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company, or in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like date and tenor.
e. This Warrant shall be governed by the internal laws of the
State of California.
f. The holder of this Warrant shall be entitled to the piggy-
back registration rights in substantially the form set forth in a Stockholders'
Rights Agreement, a copy of which is annexed hereto and incorporated herein by
reference.
-11-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
Date: July 1, 1994
CaRDiMa, Inc.
/s/ Xxxxxxx X. Xxxx
--------------------------
By: Xxxxxxx X. Xxxx
Title: President
Acknowledged and Accepted By:
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
an agency of the State of California
By:
-----------------------------------
Alex, Xxxxx Kleinwort Xxxxxx Realty
Advisors Corporation
Its: Advisor and Duly Authorized Agent
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxxxxx
Its: Senior Vice President
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Xxxxxx X. Xxxx
Its: Senior Vice President
-12-
SUBSCRIPTION
------------
CaRDiMa, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned, ________________________________, hereby elects to
purchase, pursuant to the provisions of the Warrant Purchase Agreement and the
Warrant dated ____________________, 1994 held by the undersigned, ____________
shares of the Common Stock of CaRDiMa, Inc., a Delaware corporation, and tenders
herewith payment of the exercise price of such shares in full.
The undersigned hereby represents and warrants that the undersigned is
acquiring such stock for its own account and not for resale or with a view to,
or for resale in connection with, the distribution of any part thereof or of any
of the Common Stock issuable upon conversion thereof, and accepts such shares
subject to the restrictions of the Warrant Purchase Agreement (the "Agreement"),
all dated as of ____________________, 1994. The undersigned hereby remakes all
representations set forth in Section 2 of the Agreement.
Dated:__________________, 199_ By: ____________________________________
Address: _______________________________
_______________________________
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
an agency of the State of California
By: Alex. Broan Kleinwort Xxxxxx Realty Advisors Corporation
Its: Advisor and Duly Authorized Agent
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxx
------------------------- ------------------
Xxxxxxx X. Xxxxxxxxxx Xxxxxx X. Xxxx
Its: Senior Vice President Its: Senior Vice President
-13-
