THIS WARRANT
AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”). THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR EVIDENCE
SATISFACTORY TO THE COMPANY OF AN APPLICABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT OR COMPLIANCE WITH RULE 144 UNDER SUCH
ACT. THE TRANSFER OF THIS WARRANT IS FURTHER RESTRICTED AS PROVIDED
HEREIN.
AMENDED AND
RESTATED
COMMON STOCK WARRANT
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Warrant No.
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December 9, 2003
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_______ SHARES OF COMMON
STOCK
This certifies
that as of the date written above (the “Warrant Issue
Date”), for value received,
(“Holder”) is entitled, subject to the terms set forth
below, to purchase from Restore Medical, Inc., a Minnesota
corporation (the “Company”), such number of fully paid
and non-assessable shares of Common Stock, par value $0.01, of the
Company (“Common Stock”), as set forth in
Section 2 hereof, (subject to adjustment as provided in
Section 10 hereof) upon surrender hereof, at the principal
office of the Company referred to below, with the Notice of
Exercise attached hereto duly executed, and simultaneous payment
thereof in lawful money of the United States or otherwise as
hereinafter provided, at the Exercise Price as set forth in
Section 2 below. The number, character and Exercise Price of
such shares of Common Stock are subject to adjustment as provided
below. The term “Warrant” as used herein, shall include
this Warrant and any warrants delivered in substitution or exchange
therefor as provided herein.
This Warrant is
being issued in connection with a bridge financing of the Company
pursuant to a Bridge Loan Agreement, as amended (the “Bridge
Loan Agreement”) and related Promissory Note, as amended (the
“Note”), each dated as of the date hereof (the
“Bridge Financing”). Capitalized terms used herein but
not defined herein shall have the meaning set forth in the Bridge
Loan Agreement.
1. Term of
Warrant . Subject to the terms and conditions set forth herein,
this Warrant shall be exercisable in whole or in part; provided
however that notwithstanding anything to the contrary herein, this
Warrant shall expire upon the earlier of (a) June 16,
2011 and (b) the closing of (i) any consolidation or merger of
the Company with or into another entity (except a
consolidation
or merger in
which the holders of capital stock of the Company immediately prior
to such consolidation or merger continue to hold at least 50% of
the voting power of the capital stock of the Company or the
surviving or acquiring entity) or (ii) the sale, transfer or
other disposition of all or substantially all of the assets of the
Company (any one of which, a “Corporate Transaction”),
and shall be void thereafter. In the event of a Corporate
Transaction, the Company shall mail notice of such Corporate
Transaction to the Holder at least twenty (20) days prior to
the consummation of such Corporate Transaction.
2. Exercise
Price and Number of Shares .
(A) The
Exercise Price at which this Warrant may be exercised shall be
$0.01 per share of Common Stock, as adjusted from time to time
pursuant to Section 10 hereof.
(B) The
number of shares of Common Stock initially issuable upon exercise
of this Warrant shall be 46,412.
(A) Manner
of Exercise . The purchase rights represented by this Warrant
are exercisable by the Holder in whole or in part, at any time, or
from time to time, during the term hereof as described in
Section 1 above, by the surrender of this Warrant and the
Notice of Exercise attached hereto duly completed and executed on
behalf of the Holder, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the
books of the Company), together with payment of an amount equal to
the Exercise Price multiplied by the number of shares then being
purchased, at Holder’s option in cash, by bank
cashier’s check or certified check (or other check acceptable
to the Company) or by wire transfer to a bank account designated by
the Company for that purpose by written notice to
Holder.
Notwithstanding
the provisions of Section 1, if the Holder has not exercised
this Warrant prior to the closing of a Corporate Transaction, this
Warrant shall automatically be deemed to be exercised in full in
the manner set forth in Section 3(C), without any further
action on behalf of the Holder, immediately prior to such
closing.
(B)
Effective Time of Exercise . This Warrant shall be deemed to
have been exercised immediately prior to the close of business on
the date of its surrender for exercise as provided above, and the
Holder entitled to receive the shares of Common Stock issuable upon
such exercise shall be treated for all purposes as the holder of
record of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event
within ten (10) days thereafter, the Company at its expense
shall issue and deliver to the Holder a certificate or certificates
in the name of the Holder or as such Holder may direct (upon
payment by such Holder of any applicable transfer taxes) for the
number of shares issuable upon such exercise. In the event that
this Warrant is exercised in part, the Company at its expense will
execute and deliver a new warrant of like tenor exercisable for the
number of shares then remaining for which this warrant may then be
exercised.
(i) In
lieu of exercising this Warrant in the manner provided above in
Section 3(A), the Holder may elect to receive shares equal to
the value of this Warrant (or portion thereof being exercised) by
surrender of this Warrant at the principal office of the Company
together with notice of such election on the Notice of Exercise
form attached hereto duly executed by such Holder or such
Holder’s duly authorized attorney, in which event the Company
shall issue to such Holder a number of shares computed using the
following formula:
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X=
Y(A-B)
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A
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X =
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The number of
shares to be issued to the Holder
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Y =
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The number of
shares purchasable under this Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant being
cancelled (at the date of such calculation)
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A =
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The fair market
value of one share of Warrant stock (at the date of such
calculation)
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B =
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The Exercise
Price (as adjusted to the date of such calculation)
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(ii) For
purposes of this Section 3(C), the fair market value of one
share of Common Stock on the date of calculation shall
mean:
(A) if
the exercise is in connection with an initial public offering of
the Company’s Common Stock, and if the Company’s
Registration Statement relating to such public offering has been
declared effective by the Securities and Exchange Commission, then
the fair market value of Common Stock shall be the initial
“Price to Public” per share specified in the final
prospectus with respect to the offering;
(B) if
this Warrant is exercised after, and not in connection with, the
Company’s initial public offering, and if the Company’s
Common Stock is traded on a securities exchange or The Nasdaq Stock
Market or actively traded over-the-counter:
(1) if
the Company’s Common Stock is traded on a securities exchange
or The Nasdaq Stock Market, the fair market value shall be deemed
to be the average of the closing prices over a thirty (30) day
period ending three days before date of calculation; or
(2) if
the Company’s Common Stock is actively traded
over-the-counter, the fair market value shall be deemed to be the
average of the closing
bid or sales
price (whichever is applicable) over the thirty (30) day
period ending three days before the date of calculation;
or
(C)
if neither (A) nor (B) is applicable, the fair market
value shall be at the highest price per share which the Company
could obtain on the date of calculation from a willing buyer (not a
current employee or director) for shares of Common Stock sold by
the Company, from authorized but unissued shares, as determined in
good faith by the Board of Directors and agreed to by the
Holder.
4. No
Fractional Shares or Scrip . No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant. In lieu of any fractional share to which the Holder
would otherwise be entitled, the Company shall make a cash payment
equal to the Exercise Price multiplied by such fraction.
5.
Replacement of Warrant . On receipt of evidence reasonably
satisfactory to the Company of loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity bond or other security in
an amount reasonably satisfactory as sufficient security, or in the
case of mutilation, on surrender and cancellation of this
Warrant,
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