Exhibit 4.3
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
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Company:
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ARCA Discovery,
Inc., a Delaware corporation
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Number of
Shares
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31,790
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Class of
Stock:
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Series B
Preferred
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Warrant
Price:
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$2.43975 per
share
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Issue
Date:
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July 17,
2007
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Expiration
Date:
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The 10th
anniversary after the Issue Date
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Credit
Facility:
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This Warrant is
issued in connection with the Growth Capital facilities referenced
in the Loan and Security Agreement between Company and Silicon
Valley Bank dated July 17, 2007.
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THIS WARRANT CERTIFIES THAT, for
good and valuable consideration, SILICON VALLEY BANK (Silicon
Valley Bank, together with any registered holder from time to time
of this Warrant or any holder of the shares issuable or issued upon
exercise of this Warrant as permitted by Article 5.4 herein,
“Holder”) is entitled to purchase the number of fully
paid and nonassessable shares of the class of securities (the
“Shares”) of the Company at the Warrant Price, all as
set forth above and as adjusted pursuant to Article 2 of this
Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant.
ARTICLE I. EXERCISE
.
1.1 Method of Exercise .
Holder may exercise this Warrant at any time prior to the
Expiration Date (and subject to early termination pursuant to
Article 1.6) by delivering a duly executed Notice of Exercise in
substantially the form attached as Appendix 1 to the principal
office of the Company. Unless Holder is exercising the conversion
right set forth in Article 1.2, Holder shall also deliver to the
Company a check, wire transfer (to an account designated by the
Company), or other form of payment acceptable to the Company for
the aggregate Warrant Price for the Shares being
purchased.
1.2 Conversion Right . In
lieu of exercising this Warrant as specified in Article 1.1, Holder
may from time to time at any time prior to the Expiration Date (and
subject to early termination pursuant to Article 1.6) convert this
Warrant, in whole or in part, into a number of Shares determined by
dividing (a) the aggregate fair market value of the Shares or
other securities otherwise issuable upon exercise of this Warrant
minus the aggregate Warrant Price of such Shares by (b) the
fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Article 1.3.
1.3 Fair Market Value . If
the Company’s common stock is traded in a public market and
the Shares are common stock, the fair market value of each Share
shall be the closing price of a Share reported for the business day
immediately before Holder delivers its Notice of Exercise to the
Company (or in the instance where the Warrant is exercised
immediately prior to the effectiveness of the Company’s
initial public offering, the “price to public” per
share price specified in the final prospectus relating to such
offering). If the Company’s common stock is traded in a
public market and the Shares are preferred stock, the fair market
value of a Share shall be the closing price of a share of the
Company’s common stock reported for the business day
immediately before Holder delivers its Notice of Exercise to the
Company (or, in the instance where the Warrant is exercised
immediately prior to the effectiveness of the Company’s
initial public offering, the initial “price to public”
per share price specified in the final prospectus relating to such
offering), in both cases, multiplied by the number of shares of the
Company’s common stock into which a Share is convertible. If
the Company’s common stock is not traded in a public market,
the Board of Directors of the Company shall determine fair market
value in its reasonable good faith judgment.
1.4 Delivery of Certificate and
New Warrant . Promptly after Holder exercises or converts this
Warrant and, if applicable, the Company receives payment of the
aggregate Warrant Price, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not
been fully exercised or converted and has not expired, a new
Warrant representing the Shares not so acquired.
1.5 Replacement of Warrants .
On receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and, in
the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation on surrender and cancellation of this
Warrant, the Company shall execute and deliver, in lieu of this
Warrant, a new warrant of like tenor.
1.6 Treatment of Warrant Upon
Acquisition of Company .
1.6.1 “ Acquisition
.” For the purpose of this Warrant, “Acquisition”
means any sale, exclusive 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 (i) 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
(ii) if Holder elects not to exercise the Warrant, this
Warrant will expire upon the consummation of such Acquisition. The
Company shall provide Holder with written notice of its request
relating to the foregoing (together with such reasonable
information as Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to
be delivered to Holder not less than ten (10) days prior to
the closing of the proposed Acquisition.
(b) Upon the written request of the
Company, Holder agrees that, in the event of an Acquisition that is
an “arms length” sale of all or substantially all of
the Company’s assets (and only its assets) to a third party
that is not an Affiliate (as defined below) of the Company (a
“True Asset Sale”), either (i) 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 (ii) if Holder elects not
to exercise the Warrant, this Warrant will continue until the
Expiration Date if the Company continues as a going concern
following the closing of any such True Asset Sale. The Company
shall provide Holder with written notice of its request relating to
the foregoing (together with such reasonable information as Holder
may request in connection with such contemplated Acquisition giving
rise to such notice), which is to be delivered to Holder not less
than ten (10) days prior to the closing of the proposed
Acquisition.
(c) Holder agrees that in the event
of an Acquisition of the Company in which the consideration
consists of capital stock of a publicly traded acquirer (or a
combination of cash and capital stock of a publicly traded
acquirer), if, on the record date for the Acquisition, the fair
market value of the Shares (or other securities issuable upon
exercise of this Warrant) is equal to or greater than two
(2) times the Warrant Price, the Company may require the
Warrant to be deemed automatically exercised and Holder shall
participate in the Acquisition as a holder of the Shares (or other
securities issuable upon exercise of this Warrant) on the same
terms as the other holders of the same class of securities of the
Company.
(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.
ARTICLE II. ADJUSTMENTS TO THE
SHARES .
2.1 Stock Dividends, Splits,
Etc . If the Company declares or pays a dividend on the Shares
payable in common stock, or other securities, then upon exercise of
this Warrant, for each Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares
of record as of the date the dividend occurred. If the Company
subdivides the Shares by reclassification or otherwise into a
greater number of shares or takes any other action which increase
the amount of stock into which the Shares are convertible, the
number of shares purchasable hereunder shall be proportionately
increased and the Warrant Price shall be proportionately decreased.
If the
outstanding shares are combined or consolidated,
by reclassification or otherwise, into a lesser number of shares,
the Warrant Price shall be proportionately increased and the number
of Shares shall be proportionately decreased.
2.2 Reclassification, Exchange,
Combinations or Substitution . Upon any reclassification,
exchange, substitution, or other event that results in a change of
the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive,
upon exercise or conversion of this Warrant, the number and kind of
securities and property that Holder would have received for the
Shares if this Warrant had been exercised immediately before such
reclassification, exchange, substitution, or other event. Such an
event shall include any automatic conversion of the outstanding or
issuable securities of the Company of the same class or series as
the Shares to common stock pursuant to the terms of the
Company’s Certificate of Incorporation upon the closing of a
registered public offering of the Company’s common stock. The
Company or its successor shall promptly issue to Holder an
amendment to this Warrant setting forth the number and kind of such
new securities or other property issuable upon exercise or
conversion of this Warrant as a result of such reclassification,
exchange, substitution or other event that results in a change of
the number and/or class of securities issuable upon exercise or
conversion of this Warrant. The amendment to this Warrant shall
provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Article 2
including, without limitation, adjustments to the Warrant Price and
to the number of securities or property issuable upon exercise of
the new Warrant. The provisions of this Article 2.2 shall similarly
apply to successive reclassifications, exchanges, substitutions, or
other events.
2.3 Adjustments for Diluting
Issuances . The Warrant Price and the number of Shares issuable
upon exercise of this Warrant or, if the Shares are preferred
stock, the number of shares of common stock issuable upon
conversion of the Shares, shall be subject to adjustment, from time
to time in the manner set forth in the Company’s Certificate
of Incorporation as if the Shares were issued and outstanding on
and as of the date of any such required adjustment. The provisions
set forth for the Shares in the Company’s Certificate of
Incorporation relating to the above in effect as of the Issue Date
may not be amended, modified or waived, without the prior written
consent of Holder unless such amendment, modification or waiver
affects the rights associated with the Shares in the same manner as
such amendment, modification or waiver affects the rights
associated with all other shares of the same series and class as
the Shares granted to Holder.
2.4 No Impairment . Except
and to the extent waived by Holder, 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.
2.5 Fractional Shares . No
fractional Shares shall be issuable upon exercise or conversion of
this Warrant and the number of Shares to be issued shall be rounded
down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company
shall eliminate such fractional share interest by paying Holder the
amount computed by multiplying the fractional interest by the fair
market value of a full Share.
2.6 Certificate as to
Adjustments . Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the
Company’s expense, promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer
setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request,
furnish Holder a certificate setting forth the Warrant Price in
effect upon the date thereof and the series of adjustments leading
to such Warrant Price.
ARTICLE III. REPRESENTATIONS AND
COVENANTS OF THE COMPANY .
3.1 Representations and
Warranties . The Company represents and warrants to Holder as
follows:
(a) The initial Warrant Price
referenced on the first page of this Warrant is not greater than
(i) the price per share at which the Shares were last issued
in an arms-length transaction in which at least $500,000 of the
Shares were sold and (ii) the fair market value of the Shares
as of the date of this Warrant.
(b) All Shares which may be issued
upon the exercise of the purchase right represented by this
Warrant, and all securities, if any, issuable upon conversion of
the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and
encumbrances except for restrictions on transfer provided for
herein or under applicable federal and state securities
laws.
(c) The Company’s
capitalization table attached hereto as Schedule 1 is
true and complete as of the Issue Date.
3.2 Notice of Certain Events
. If the Company proposes at any time (a) to declare any
divi