Your Internet Defender, Inc. 8-K/A
Exhibit 10.05
THIS WARRANT, AND THE SECURITIES ISSUABLE
UPON THE EXERCISE OF THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT, OR ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT AGREEMENT
To Purchase Shares of Preferred Stock of
CORINDUS, INC.
Dated as of June 11, 2014 (the “Effective
Date”)
WHEREAS, CORINDUS, INC., a Delaware corporation, has entered into
a Loan and Security Agreement of even date herewith (the “Loan Agreement”) with XXXXXXX CAPITAL HOLDINGS, LP,
a Delaware limited partnership (the “Warrantholder”);
WHEREAS, the Company (as defined below) desires to grant to Warrantholder,
in consideration for, among other things, the financial accommodations provided for in the Loan Agreement, the right to purchase
shares of Preferred Stock (as defined below) pursuant to this Warrant Agreement (the “Agreement”);
NOW, THEREFORE, in consideration of the Warrantholder executing
and delivering the Loan Agreement and providing the financial accommodations contemplated therein, and in consideration of the
mutual covenants and agreements contained herein, the Company and Warrantholder agree as follows:
SECTION 1. GRANT
OF THE RIGHT TO PURCHASE PREFERRED STOCK.
For value received, the Company hereby grants to the Warrantholder,
and the Warrantholder is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase,
from the Company, an aggregate number of fully paid and non-assessable shares of the Preferred Stock equal to the quotient derived
by dividing (a) the Warrant Coverage (as defined below) by (b) the Exercise Price (defined below). The Exercise Price of such
shares is subject to adjustment as provided in Section 8. As used herein, the following terms shall have the following meanings:
“Act” means the Securities Act of
1933, as amended.
“Company” means Corindus, Inc., a
Delaware corporation, and any successor or surviving entity that assumes the obligations of the Company under this Agreement pursuant
to Section 8(a).
“Charter” means the Company’s
Articles of Incorporation, Certificate of Incorporation or other constitutional document, as may be amended from time to time.
“Common Stock” means the Company’s
common stock, $0.01 par value per share;
“Exercise Price” means $35.21 per
share, subject to adjustment pursuant to Section 8;
“Initial Public Offering” means the
initial underwritten public offering of the Company’s Common Stock pursuant to a registration statement under the Act, which
public offering has been declared effective by the Securities and Exchange Commission (“SEC”);
“Merger Event” means any sale, lease
or other transfer of all or substantially all assets of the Company or any merger or consolidation involving the Company in which
the Company or an affiliate is not the surviving entity, or in which the outstanding shares of the Company’s capital stock
are otherwise converted into or exchanged for shares of preferred stock, other securities or property of another entity that is
not an affiliate of the Company;
“Preferred Stock” means the Series
E Preferred Stock of the Company, and, to the extent provided in Sections 8(a) and (b), any other stock into or for which such
Preferred Stock may be converted or exchanged; provided that upon and after the occurrence of an event which results in the automatic
or voluntary conversion, redemption or retirement of all (but not less than all) of the outstanding shares of such Preferred Stock,
resulting from the consummation of an Initial Public Offering of the Common Stock in which such a conversion occurs, or a Merger
Event from which the Company emerges as a public company and in which such a conversion occurs, then from and after the date upon
which such outstanding shares are so converted, redeemed or retired, “Preferred Stock” shall mean the Common Stock;
and
“Purchase Price” means, with respect
to any exercise of this Agreement, an amount equal to the Exercise Price as of the relevant time multiplied by the number of shares
of Preferred Stock requested to be exercised under this Agreement pursuant to such exercise.
“Rights Agreements” means collectively,
(i) that certain Third Amended and Restated Investors’ Rights Agreement between the Company and certain of its stockholders,
dated as of October 12, 2012, as amended to date (the “Investors’ Rights Agreement”), (ii) that certain
Third Amended and Restated Voting Agreement between the Company and certain of its stockholders, dated as of October 12, 2012,
as amended to date (the “Voting Agreement”), and (iii) that certain Third Amended and Restated Right of First
Refusal and Co-Sale Agreement between the Company and certain of its stockholders, dated as of October 12, 2012, as amended to
date (the “ROFR Agreement”).
“Warrant Coverage” means either (a)
$250,000 if Company draws only Tranche A under the Loan Agreement, or (b) $500,000 if Company draws both Tranche A and Tranche
B under the Loan Agreement (as “Tranche A” and “Tranche B” are each defined under the Loan Agreement).
..
SECTION 2. TERM
OF THE AGREEMENT.
Except as otherwise provided for herein, the term of this Agreement
and the right to purchase Preferred Stock as granted herein (the “Warrant) shall commence on the Effective Date and shall
be exercisable for a period ending upon the earlier to occur of (i) ten (10) years from the Effective Date; or (ii) five (5) years
after the Initial Public Offering.
SECTION 3. EXERCISE
OF THE PURCHASE RIGHTS.
(a) Exercise.
The purchase rights set forth in this Agreement are exercisable by the Warrantholder, in whole or in part, at any time, or from
time to time, prior to the expiration of the term set forth in Section 2, by tendering to the Company at its principal office
a notice of exercise in the form attached hereto as Exhibit I (the “Notice of Exercise”), duly completed
and executed. Promptly upon receipt of the Notice of Exercise and the payment of the Purchase Price in accordance with the terms
set forth below, and in no event later than three (3) days thereafter, the Company shall issue to the Warrantholder a certificate
for the number of shares of Preferred Stock purchased and shall execute the acknowledgment of exercise in the form attached hereto
as Exhibit II (the “Acknowledgment of Exercise”) indicating the number of shares which remain subject
to future purchases, if any.
The Purchase Price may be paid at the Warrantholder’s election
either (i) by cash or check, or (ii) by surrender of all or a portion of the Warrant for shares of Preferred Stock to be exercised
under this Agreement and, if applicable, an amended Agreement representing the remaining number of shares purchasable hereunder,
as determined below (“Net Issuance”). If the Warrantholder elects the Net Issuance method, the Company will
issue Preferred Stock in accordance with the following formula:
| | | X = Y(A-B) |
| | | A |
| | | |
| Where: | X = | the number of shares of Preferred Stock to be issued to the Warrantholder. |
| | | |
| Y = | the number of
shares of Preferred Stock requested to be exercised under this Agreement. |
| | | |
| A = | the fair market
value of one (1) share of Preferred Stock at the time of issuance of such shares of Preferred
Stock. |
| | | |
| B = | the Exercise Price. |
For purposes of the above calculation, current fair market value
of Preferred Stock shall mean with respect to each share of Preferred Stock:
(i) if
the exercise is in connection with an Initial Public Offering, and if the Company’s Registration Statement relating to such
Initial Public Offering has been declared effective by the SEC, then the fair market value per share shall be the product of (x)
the initial “Price to Public” of the Common Stock specified in the final prospectus with respect to the offering and
(y) the number of shares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise;
(ii) if
the exercise is after, and not in connection with an Initial Public Offering,or if the Common Stock is otherwise traded on a securities
exchange or over-the-counter and not in connection with an Initial Public Offering, and:
(A) if
the Common Stock is traded on a securities exchange, the fair market value shall be deemed to be the product of (x) the average
of the closing prices over a five (5) day period ending three days before the day the current fair market value of the securities
is being determined and (y) the number of shares of Common Stock into which each share of Preferred Stock is convertible at the
time of such exercise; or
(B) if
the Common Stock is traded over-the-counter, the fair market value shall be deemed to be the product of (x) the average of the
closing bid and asked prices quoted on the NASDAQ system (or similar system) over the five (5) day period ending three days before
the day the current fair market value of the securities is being determined and (y) the number of shares of Common Stock into
which each share of Preferred Stock is convertible at the time of such exercise;
(iii) if
at any time the Common Stock is not listed on any securities exchange or quoted in the NASDAQ National Market or the over-the-counter
market, the current fair market value of Preferred Stock shall be the product of (x) the price per share most recently determined
by the Board of Directors of the Company to represent such fair market value per share, as determined in good faith by its Board
of Directors (provided, that if the Board of Directors has not made such a determination within the six-month period prior to
the date of exercise, then the Board of Directors shall provide, or cause to be provided to, the Warrantholder notice of a determination
of such fair market value per share within 15 days after the date of exercise) and (y) the number of shares of Common Stock into
which each share of Preferred Stock is convertible at the time of such exercise, unless the Company shall become subject to a
Merger Event, in which case the fair market value of Preferred Stock shall be deemed to be the per share value received by the
holders of the Company’s Preferred Stock on a common equivalent basis pursuant to such Merger Event.
Upon partial exercise by either cash or Net Issuance, the Company
shall promptly issue an amended Agreement representing the remaining number of shares purchasable hereunder. All other terms and
conditions of such amended Agreement shall be identical to those contained herein, including, but not limited to the Effective
Date hereof.
(b) Exercise
Prior to Expiration. To the extent this Agreement is not previously exercised as to all Preferred Stock subject hereto, and
if the fair market value of one share of the Preferred Stock is greater than the Exercise Price then in effect, this Agreement
shall be deemed automatically exercised pursuant to Section 3(a) (even if not surrendered) immediately before its expiration,
the consideration for which shall be, at the Warrantholder’s election, upon written notice to the Warrantholder, (i) by
cash or check or (ii) Net Issuance. For purposes of such automatic exercise, the fair market value of one share of the Preferred
Stock upon such expiration shall be determined pursuant to Section 3(a). To the extent this Agreement or any portion thereof is
deemed automatically exercised pursuant to this Section 3(b), the Company agrees to promptly notify the Warrantholder of the number
of shares of Preferred Stock, if any, the Warrantholder is to receive by reason of such automatic exercise.
(c) Exercise
Date. Each exercise of this Agreement shall be deemed to have been effected immediately prior to the close of business on
the day on which this Agreement shall have been surrendered to the Company as provided in subsection (a) above.
(d)
Rights Agreements. As a condition precedent to the exercise of this Agreement, the Warrantholder must become a party to
the Voting Agreement as an “Investor” thereunder and become a party to the ROFR Agreement as an “Investor”
and a “Stockholder” thereunder and therefore be bound by and subject to all terms and provisions of the Voting Agreement
applicable to an “Investor” and the ROFR Agreement applicable to an “Investor” and a “Stockholder”;
provided, however that a Warrantholder that is already a party to the Voting Agreement as an “Investor” or the ROFR
Agreement as an “Investor” and a “Stockholder” shall not be required to enter into the Voting Agreement
or the ROFR Agreement, as the case may be, again. Upon the exercise of this Agreement, the Warrantholder may elect, in the Warrantholder’s
sole discretion, to become, and the Company shall use reasonable commercial efforts to cause the Warrantholder to become, party
to the Investors’ Rights Agreement as an “Investor” and a “Holder” and therefore be bound by and
subject and entitled to all terms and provisions of the Investors’ Rights Agreement applicable to an “Investor.”
SECTION 4. RESERVATION
OF SHARES.
During the term of this Agreement the Company will at all times
have authorized and reserved a sufficient number of shares of its Series E Preferred Stock to provide for the exercise of the
rights to purchase Series E Preferred Stock as provided for herein, and shall have authorized and reserved a sufficient number
of shares of its Common Stock to provide for the conversion of the shares of Series E Preferred Stock issuable hereunder.
SECTION 5. NO
FRACTIONAL SHARES OR SCRIP.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Agreement, but in lieu of such fractional shares the Company shall make a cash payment therefor
upon the basis of the then fair market value of one share of Preferred Stock.
SECTION 6. NO
RIGHTS AS STOCKHOLDER.
This Agreement does not entitle the Warrantholder to any voting
rights or other rights as a stockholder of the Company prior to the exercise of this Agreement.
SECTION 7. WARRANTHOLDER
REGISTRY.
The Company shall maintain a registry showing the name and address
of the registered holder of this Agreement. Warrantholder’s initial address, for purposes of such registry, is set forth
below Warrantholder’s signature on this Agreement. Warrantholder may change such address by giving written notice of such
changed address to the Company.
SECTION 8. ADJUSTMENT
RIGHTS.
The Exercise Price and the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment, as follows:
(a) Merger
Event. If at any time there shall be Merger Event, then, as a part of such Merger Event, lawful provision shall be made so
that the Warrantholder shall thereafter be entitled to receive, upon exercise of this Agreement, the number of shares of preferred
stock or other securities or property (collectively, “Reference Property”) that the Warrantholder would have
received in connection with such Merger Event if Warrantholder had exercised this Agreement immediately prior to the Merger Event.
In any such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made
in the application of the provisions of this Agreement with respect to the rights and interests of the Warrantholder after the
Merger Event to the extent that the provisions of this Agreement (including adjustments of the Exercise Price and adjustments
to ensure that the provisions of this Section 8 shall thereafter be applicable, as nearly as possible, to the purchase rights
under this Agreement in relation to any Reference Property thereafter acquirable upon exercise of such purchase rights) shall
continue to be applicable in their entirety, and to the greatest extent possible. Without limiting the foregoing, in connection
with any Merger Event, upon the closing thereof, the successor or surviving entity shall assume the obligations of this Agreement;
provided that the foregoing assumption requirement shall not apply if (i) the consideration to be paid for or in respect of the
outstanding shares of Preferred Stock in such Merger Event consists solely of cash and/or readily marketable securities, and (ii)
the value of such consideration (as determined at closing in accordance with the definitive executed transaction documents) to
be paid for or in respect of each outstanding share of Preferred Stock is at least three (3) times the Exercise Price in effect
as of immediately prior to the closing of such Merger Event. In connection with a Merger Event and upon Warrantholder’s
written election to the Company, the Company shall cause this Warrant Agreement to be exchanged for the consideration that Warrantholder
would have received if Warrantholder had chosen to exercise its right to have shares issued pursuant to the Net Issuance provisions
of this Warrant Agreement without actually exercising such right, acquiring such shares and exchanging such shares for such consideration.
The provisions of this Section 8(a) shall similarly apply to successive Merger Events.
(b) Reclassification
of Shares. Except for Merger Events subject to Section 8(a), and subject to Section 8(f), if the Company at any time shall,
by combination, reclassification, exchange or subdivision of securities or otherwise, change any of the securities as to which
purchase rights under this Agreement exist into the same or a different number of securities of any other class or classes, this
Agreement shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities which were subject to the purchase rights under this Agreement immediately
prior to such combination, reclassification, exchange, subdivision or other change. The provisions of this Section 8(b) shall
similarly apply to successive combination, reclassification, exchange, subdivision or other change.
(c) Subdivision
or Combination of Shares. If the Company at any time shall combine or subdivide its Preferred Stock, (i) in the case of a
subdivision, the Exercise Price shall be proportionately decreased and the number of shares of Preferred Stock issuable hereunder
shall be proportionately increased, or (ii) in the case of a combination, the Exercise Price shall be proportionately increased
and the number of shares of Preferred Stock issuable hereunder shall be proportionately decreased.
(d) Stock
Dividends. If the Company at any time while this Agreement is outstanding and unexpired shall:
(i) pay
a dividend with respect to the Preferred Stock payable in Preferred Stock, then the Exercise Price shall be adjusted, from and
after the date of determination of stockholders entitled to receive such dividend or distribution, to that price determined by
multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (A) the numerator of which
shall be the total number of shares of Preferred Stock outstanding immediately prior to such dividend or distribution, and (B)
the denominator of which shall be the total number of shares of Preferred Stock outstanding immediately after such dividend or
distribution; or
(ii) make
any other distribution with respect to Preferred Stock (or stock into which the Preferred Stock is convertible), except any distribution
specifically provided for in any other clause of this Section 8, then, in each such case, provision shall be made by the
Company such that the Warrantholder shall receive upon exercise or conversion of this Warrant a proportionate share of any such
distribution as though it were the holder of the Preferred Stock (or other stock for which the Preferred Stock is convertible)
as of the record date fixed for the determination of the stockholders of the Company entitled to receive such distribution.
(e) Antidilution
Rights. Additional antidilution rights applicable to the Preferred Stock purchasable hereunder are as set forth in the Charter
and shall be applicable with respect to the Preferred Stock issuable hereunder. The Company shall promptly provide the Warrantholder
with any restatement, amendment, modification or waiver of the Charter; provided, that no such amendment, modification
or waiver shall impair or reduce the antidilution rights applicable to the Preferred Stock as of the date hereof unless such amendment,
modification or waiver affects the rights of Warrantholder with respect to the Preferred Stock in the same manner as it affects
all other holders of Preferred Stock. The Company shall provide Warrantholder with prior written notice of any issuance of its
stock or other equity security to occur after the Effective Date of this Agreement, which notice shall include (a) the price at
which such stock or security is to be sold, (b) the number of shares to be issued, and (c) such other information as necessary
for Warrantholder to determine if a dilutive event has occurred. For the avoidance of doubt, there shall be no duplicate anti-dilution
adjustment pursuant to this subsection (e), the forgoing subsection (d) and the Charter.
(f) Notice
of Adjustments. If: (i) the Company shall declare any dividend or distribution upon its stock, whether in stock, cash, property
or other securities; (ii) there shall be any Merger Event; (iii) there shall be an Initial Public Offering; (iv) the Company shall
sell, lease, license or otherwise transfer all or substantially all of its assets; or (v) there shall be any voluntary dissolution,
liquidation or winding up of the Company; then, in connection with each such event, the Company shall send to the Warrantholder:
(A) at least ten (10) days’ prior written notice of the date on which the books of the Company shall close or a record shall
be taken for such dividend, distribution, subscription rights (specifying the date on which the holders of Preferred Stock shall
be entitled thereto) or for determining rights to vote in respect of such Merger Event, dissolution, liquidation or winding up;
(B) in the case of any such Merger Event, sale, lease, license or other transfer of all or substantially all assets, dissolution,
liquidation or winding up, at least ten (10) days’ prior written notice of the date when the same shall take place (and
specifying the date on which the holders of Preferred Stock shall be entitled to exchange their Preferred Stock for securities
or other property deliverable upon such Merger Event, dissolution, liquidation or winding up); and (C) in the case of an Initial
Public Offering, the Company shall give the Warrantholder at least ten (10) days’ written notice prior to the effective
date thereof.
Each such written notice shall set forth, in reasonable detail,
(i) the event requiring the notice, and (ii) if any adjustment is required to be made, (A) the amount of such adjustment, (B)
the method by which such adjustment was calculated, (C) the adjusted Exercise Price (if the Exercise Price has been adjusted),
and (D) the number of shares subject to purchase hereunder after giving effect to such adjustment, and shall be given in accordance
with Section 12(g) below.
(g) Timely
Notice. Failure to timely provide such notice required by subsection (f) above shall entitle Warrantholder to retain the benefit
of the applicable notice period notwithstanding anything to the contrary contained in any insufficient notice received by Warrantholder.
For purposes of this subsection (g), and notwithstanding anything to the contrary in Section 12(g), the notice period
shall begin on the date Warrantholder actually receives a written notice containing all the information required to be provided
in such subsection (g).
SECTION 9. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE COMPANY.
(a) Reservation
of Preferred Stock. The Preferred Stock issuable upon exercise of the Warrantholder’s rights has been duly and validly
reserved and, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and non-assessable,
and will be free of any taxes, liens, charges or encumbrances of any nature whatsoever (other than net income taxes imposed by
law upon the Warrantholder or consensual encumbrances entered into by the Warrantholder); provided, that the Preferred
Stock issuable pursuant to this Agreement may be subject to restrictions on transfer under state and/or federal securities laws.
The Company has made available to the Warrantholder true, correct and complete copies of its Charter and current bylaws. The issuance
of certificates for shares of Preferred Stock upon exercise of this Agreement shall be made without charge to the Warrantholder
for any issuance tax in respect thereof, or other cost incurred by the Company in connection with such exercise and the related
issuance of shares of Preferred Stock, except to the extent of net income taxes imposed by law upon the Warrantholder; provided,
that the Company shall not be required to pay any tax which may be payable in respect of any transfer and the issuance and delivery
of any certificate in a name other than that of the Warrantholder.
(b) Due
Authority. The execution and delivery by the Company of this Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the shares of Preferred Stock and the Common Stock
into which it may be converted, have been duly authorized by all necessary corporate action on the part of the Company. This Agreement:
(1) does not violate the Company’s Charter or current bylaws; (2) does not contravene any law or governmental rule, regulation
or order applicable to it; and (3) does not and will not contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which it is a party or by which it is bound. This Agreement constitutes a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms, subject as to enforcement of remedies to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting generally the enforcement of creditors’ rights
and subject to a court’s discretionary authority with respect to the granting of a decree ordering specific performance
or other equitable remedies.
(c) Consents
and Approvals. No consent or approval of, giving of notice to, registration with, or taking of any other action in respect
of any state, federal or other governmental authority or agency is required with respect to the execution, delivery and performance
by the Company of its obligations under this Agreement, except for the filing of notices pursuant to Regulation D under the Act
and any filing required by applicable state securities law (or an exemption therefrom), which filings will be effective by the
time required thereby.
(d) Issued
Securities. All issued and outstanding shares of Common Stock, Preferred Stock or any other securities of the Company have
been duly authorized and validly issued and are fully paid and nonassessable. All outstanding shares of Common Stock, Preferred
Stock and any other securities were issued in full compliance with all federal and state securities laws. In addition, as of the
date immediately preceding the date of this Agreement:
(i) The
authorized capital of the Company consists of (A) 3,548,850 shares of Common Stock, of which 122,669 shares are issued and outstanding,
and (B) 942,174 shares of Preferred Stock, of which 897,185 shares are issued and outstanding and are convertible into 897,185
shares of Common Stock at $31.8413 per share.
(ii) The
Company has reserved 375,734 shares of Common Stock for issuance under its Stock Option Plan(s), under which 354,071 options are
outstanding. Except as set forth on Schedule I attached hereto, there are no other options, warrants, conversion privileges or
other rights presently outstanding to purchase or otherwise acquire any authorized but unissued shares of the Company’s
capital stock or other securities of the Company. Except as set forth on Schedule II attached hereto, the Company has no outstanding
loans to any employee, officer or director of the Company.
(iii) Other
than as set forth in the Investors’ Rights Agreement and in accordance with the Company’s Charter, no stockholder
of the Company has preemptive rights to purchase new issuances of the Company’s capital stock.
(e) Registration
Rights. The Company agrees that the shares of Common Stock issued and issuable upon conversion of the shares of Preferred
Stock issued and issuable upon exercise of this Warrant, and, at all times (if any) when the Preferred Stock shall be Common Stock,
the shares of Preferred Stock issued and issuable upon exercise of this Warrant, shall have the “Piggyback,” and S-3
registration rights pursuant to and as set forth in the Investors’ Rights Agreement on a pari passu basis with the holders
of outstanding shares of Preferred Stock who are parties thereto. The provisions set forth in the Investors’ Rights Agreement
or similar agreement relating to such registration rights in effect as of the Effective Date may not be amended, modified or waived
without the prior written consent of the Warrantholder unless such amendment, modification or waiver affects the rights associated
with the shares of Preferred Stock issued and issuable upon exercise hereof in the same manner as such amendment, modification,
or waiver affects the rights associated with all outstanding shares of Preferred Stock whose holders are parties thereto.
(f) Other
Commitments to Register Securities. Except as set forth in this Agreement or the Investors’ Rights Agreement, the Company
is not, pursuant to the terms of any other agreement currently in existence, under any obligation to register under the Act any
of its presently outstanding securities or any of its securities which may hereafter be issued.
(g) Exempt
Transaction. Subject to the accuracy of the Warrantholder’s representations in Section 10, the issuance of the Preferred
Stock upon exercise of this Agreement, and the issuance of the Common Stock upon conversion of the Preferred Stock, will each
constitute a transaction exempt from (i) the registration requirements of Section 5 of the Act, in reliance upon Section 4(2)
thereof, and (ii) the qualification requirements of the applicable state securities laws.
(h) Compliance
with Rule 144. If the Warrantholder proposes to sell Preferred Stock issuable upon the exercise of this Agreement, or the
Common Stock into which it is convertible, in compliance with Rule 144 promulgated by the SEC, then, upon Warrantholder’s
written request to the Company, the Company shall furnish to the Warrantholder, within ten days after receipt of such request,
a written statement confirming the Company’s compliance with the filing requirements of the SEC as set forth in such Rule,
as such Rule may be amended from time to time.
(i) Information
Rights. During the term of this Warrant, Warrantholder shall be entitled to the information rights contained in Section 7.1
of the Loan Agreement, and Section 7.1 of the Loan Agreement is hereby incorporated into this Agreement by this reference as though
fully set forth herein, provided, however, that the Company shall not be required to deliver a Compliance Certificate once all
Indebtedness (as defined in the Loan Agreement) owed by the Company to Warrantholder has been repaid.
SECTION 10. REPRESENTATIONS
AND COVENANTS OF THE WARRANTHOLDER.
This Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
(a) Investment
Purpose. The acquisition of this Agreement, the right to acquire Preferred Stock, and the issuance of the Common Stock upon
conversion of the Preferred Stock, is being acquired for investment purposes only, and not with a view to the sale or distribution
of any part thereof, and the Warrantholder has no present intention of selling or engaging in any public distribution of such
rights or the Preferred Stock or the Common Stock upon conversion of the Preferred Stock, except pursuant to an effective registration
statement or an exemption from the registration requirements of the Act.
(b) Private
Issue. The Warrantholder understands (i) that the Agreement, the Preferred Stock issuable upon exercise of this Agreement,
and the issuance of the Common Stock upon conversion of the Preferred Stock, are not registered under the Act or qualified under
applicable state securities laws on the ground that the issuance contemplated by this Agreement will be exempt from the registration
and qualifications requirements thereof, and (ii) that the Company’s reliance on such exemption is predicated on the representations
set forth in this Section 10.
(c) Financial
Risk. The Warrantholder has such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment, and has the ability to bear the economic risks of its investment.
(d) Investigation
and Information. The Warrantholder has been granted the opportunity to make a thorough investigation of the proposed activities
of the Company, has been furnished with all materials relating to the Company and its proposed activities that it has requested
and has been afforded the opportunity to obtain any additional information necessary to verify the accuracy of any representations
made or information conveyed to it. All questions posed and inquiries made by Warrantholder or its representative(s) concerning
the Company and its proposed business activities were answered to its satisfaction. In making its decision to invest in the Company,
Warrantholder has relied upon independent investigations made by Warrantholder and by his, her or its professional advisors. Warrantholder
has also been afforded the opportunity to obtain any additional nonproprietary information, to the extent the Company possesses
that information or can acquire it without unreasonable effort or expense, and has the right to furnish it to Warrantholder, necessary
to verify the accuracy of any representation or information contained in this Agreement.
(e) Risk
of No Registration. The Warrantholder understands that if the Company does not register with the SEC pursuant to Section 12
of the Securities Exchange Act of 1934 (the “1934 Act”), or file reports pursuant to Section 15(d) of the 1934
Act, or if a registration statement covering the securities under the Act is not in effect when it desires to sell (i) the rights
to purchase Preferred Stock, including Common Stock upon conversion of the Preferred Stock, pursuant to this Agreement or (ii)
the Preferred Stock issuable upon exercise of the right to purchase, including Common Stock upon conversion of the Preferred Stock,
it may be required to hold such securities for an indefinite period. The Warrantholder also understands that any sale of (A) its
rights hereunder to purchase Preferred Stock, including Common Stock upon conversion of the Preferred Stock, or (B) Preferred
Stock issued or issuable hereunder, including Common Stock upon conversion of the Preferred Stock, which might be made by it in
reliance upon Rule 144 under the Act may be made only in accordance with the terms and conditions of that Rule.
(f) Accredited
Investor. Warrantholder is an “accredited investor” within the meaning of the Securities and Exchange Rule 501
of Regulation D, as presently in effect.
(g) Compliance
with Securities Act. Warrantholder, by acceptance hereof, agrees that this Agreement, the Preferred Stock and the shares of
Common Stock issuable upon conversion of the Preferred Stock (unless registered under the Act) shall be stamped or imprinted with
a legend in substantially the following form:
“THE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH
MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.”
as well as any legend required by
any Rights Agreement, if applicable.
(h) Agreement
in Connection with Public Offering. The Warrantholder agrees, in connection with the Initial Public Offering, that it shall
be subject to the same “Market Stand-Off” provisions set out in the Rights Agreement (as the same may be amended from
time to time) as are applicable to the “Investors” and “Holders” thereunder.
SECTION 11. TRANSFERS.
Subject to compliance with applicable federal and state securities
laws, this Agreement and all rights hereunder are transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes) upon surrender of this Agreement properly endorsed. Each taker and holder of this Agreement, by taking or
holding the same, consents and agrees that this Agreement, when endorsed in blank, shall be deemed negotiable, and that the holder
hereof, when this Agreement shall have been so endorsed and its transfer recorded on the Company’s books, shall be treated
by the Company and all other persons dealing with this Agreement as the absolute owner hereof for any purpose and as the person
entitled to exercise the rights represented by this Agreement. The transfer of this Agreement shall be recorded on the books of
the Company upon receipt by the Company of a notice of transfer in the form attached hereto as Exhibit III (the “Transfer
Notice”), at its principal offices and the payment to the Company of all transfer taxes and other governmental charges
imposed on such transfer. Until the Company receives such Transfer Notice, the Company may treat the registered owner hereof as
the owner for all purposes.
SECTION 12. MISCELLANEOUS.
(a) Effective
Date. The provisions of this Agreement shall be construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Agreement shall be binding upon any successors or assigns of the Company.
(b) Remedies.
In the event of any default hereunder, the non-defaulting party may proceed to protect and enforce its rights either by suit in
equity and/or by action at law, including but not limited to an action for damages as a result of any such default, and/or an
action for specific performance for any default where Warrantholder will not have an adequate remedy at law and where damages
will not be readily ascertainable. The Company expressly agrees that it shall not oppose an application by the Warrantholder or
any other person entitled to the benefit of this Agreement requiring specific performance of any or all provisions hereof or enjoining
the Company from continuing to commit any such breach of this Agreement.
(c) No
Impairment of Rights. The Company will not, by amendment of its Charter or through any other means, avoid or seek to avoid
the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights
of the Warrantholder against impairment.
(d) Additional
Documents. The Company, upon execution of this Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in Sections 9(a) through 9(d), 9(f) and 9(g). The Company shall
also supply documentation reasonably necessary to evaluate whether to exercise (in cash or a net issuance basis) this Warrant,
including without limitation, (i) any merger/purchase/asset sale agreement and related documents and estimated payout allocations
to each of the respective stockholders, warrant and option holders in connection with a Merger Event, (ii) the most recent capitalization
tables, 409A valuations (if any), and board determination of share value (including any waterfall or per share allocations provided
to the share/unitholders), and (iii) most recent articles of incorporation or organization (as applicable).
(e) Attorney’s
Fees. In any litigation, arbitration or court proceeding between the Company and the Warrantholder relating hereto, the prevailing
party shall be entitled to reasonable attorneys’ fees and expenses and all costs of proceedings incurred in enforcing this
Agreement. For the purposes of this Section 12(e), attorneys’ fees shall include without limitation fees reasonably incurred
in connection with the following: (i) contempt proceedings; (ii) discovery; (iii) any motion, proceeding or other activity of
any kind in connection with an insolvency proceeding; (iv) garnishment, levy, and debtor and third party examinations; and (v)
post-judgment motions and proceedings of any kind, including without limitation any activity taken to collect or enforce any judgment.
(f) Severability.
In the event any one or more of the provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable,
the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced
by a mutually acceptable valid, legal and enforceable provision, which comes closest to the intention of the parties underlying
the invalid, illegal or unenforceable provision.
(g) Notices.
Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service of process or other
communication that is required, contemplated, or permitted under this Agreement or with respect to the subject matter hereof shall
be in writing, and shall be deemed to have been validly served, given, delivered, and received upon the earlier of: (i) the
day of transmission by facsimile or hand delivery if transmission or delivery occurs on a business day at or before 5:00 pm in
the time zone of the recipient, or, if transmission or delivery occurs on a non-business day or after such time, the first business
day thereafter, or the first business day after deposit with an overnight express service or overnight mail delivery service;
or (ii) the third calendar day after deposit in the United States mails, with proper first class postage prepaid, and shall
be addressed to the party to be notified as follows:
If to Warrantholder:
XXXXXXX CAPITAL
HOLDINGS, LP
Attention: Xxxxxx X. Xxxxx, CFO
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
If to the Company:
CORINDUS, INC.
Attention: Xxxxx Xxxx, Chief Financial Officer
000 Xxxxxxx Xxxx Xx., Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000, ext 228
or to such other address as each party may designate for itself
by like notice.
(h) Entire
Agreement; Amendments. This Agreement constitute the entire agreement and understanding of the parties hereto in respect of
the subject matter hereof, and supersede and replace in their entirety any prior proposals, term sheets, letters, negotiations
or other documents or agreements, whether written or oral, with respect to the subject matter hereof . None of the terms of this
Agreement may be amended except by an instrument executed by each of the parties hereto.
(i) Headings.
The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of
this Agreement or any provisions hereof.
(j) No
Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by
the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
(k) No
Waiver. No omission or delay by Warrantholder at any time to enforce any right or remedy reserved to it, or to require performance
of any of the terms, covenants or provisions hereof by the Company at any time designated, shall be a waiver of any such right
or remedy to which Warrantholder is entitled, nor shall it in any way affect the right of Warrantholder to enforce such provisions
thereafter.
(l) Survival.
All agreements, representations and warranties contained in this Agreement or in any document delivered pursuant hereto shall
be for the benefit of Warrantholder and shall survive the execution and delivery of this Agreement and the expiration or other
termination of this Agreement.
(m) Governing
Law. This Agreement has been negotiated and delivered to Warrantholder in the State of Missouri, and shall have been accepted
by Warrantholder in the State of Missouri. Delivery of Preferred Stock to Warrantholder by the Company under this Agreement is
due in the State of Missouri. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of
the State of Missouri, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.
(n) Consent
to Jurisdiction and Venue. All judicial proceedings arising in or under or related to this Agreement may be brought in any
state or federal court of competent jurisdiction located in the State of Missouri. By execution and delivery of this Agreement,
each party hereto generally and unconditionally: (a) consents to personal jurisdiction in the State of Delaware; (b) waives any
objection as to jurisdiction or venue in the State of Delaware; (c) agrees not to assert any defense based on lack of jurisdiction
or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this
Agreement. Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective
if given in accordance with the requirements for notice set forth in Section 12(g), and shall be deemed effective and received
as set forth in Section 12(g). Nothing herein shall affect the right to serve process in any other manner permitted by law or
shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.
(o) Mutual
Waiver of Jury Trial. Because disputes arising in connection with complex financial transactions are most quickly and economically
resolved by an experienced and expert person and the parties wish applicable state and federal laws to apply (rather than arbitration
rules), the parties desire that their disputes be resolved by a judge applying such applicable laws. EACH OF THE COMPANY AND WARRANTHOLDER
SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY
CLAIM OR ANY OTHER CLAIM WITH RESPECT TO THIS AGREEMENT (COLLECTIVELY, “CLAIMS”) ASSERTED BY THE COMPANY AGAINST WARRANTHOLDER
OR ITS ASSIGNEE OR BY WARRANTHOLDER OR ITS ASSIGNEE AGAINST THE COMPANY. This waiver extends to all such Claims, including Claims
that involve Persons other than Company and Warrantholder; Claims that arise out of or are in any way connected to the relationship
between the Company and Warrantholder; and any Claims for damages, breach of contract, specific performance, or any equitable
or legal relief of any kind, arising out of this Agreement.
(p) Prejudgment
Relief. In the event Claims are to be resolved by arbitration, either party may seek from a court of competent jurisdiction
identified in Section 12(n), any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief
enforced to the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by judicial
reference.
(q) Counterparts.
This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and
by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of
which counterparts shall constitute but one and the same instrument.
(r) Loan
Agreement. This Agreement is the “Warrant” issued pursuant to the Loan Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by its officers thereunto duly authorized as of the Effective Date.
| COMPANY: | CORINDUS, INC. |
| | | |
| By: | |
| Name: | |
| Title: | |
| | | |
| WARRANTHOLDER: | XXXXXXX CAPITAL HOLDINGS, LP |
| | | |
| By: | |
| Name: | Xxxxxx X. Xxxxx |
| Title: | Vice President/CFO |
EXHIBIT I
NOTICE OF EXERCISE
| (1) | The undersigned Warrantholder hereby elects to purchase [_______]
shares of the Series [__] Preferred Stock of Corindus, Inc., pursuant to the terms of
the Agreement dated the [___] day of June, 2014 (the “Agreement”) between
Corindus, Inc. and the Warrantholder, and [CASH PAYMENT: tenders herewith payment of
the Purchase Price in full, together with all applicable transfer taxes, if any.] [NET
ISSUANCE: elects pursuant to Section 3(a) of the Agreement to effect a Net Issuance.] |
| (2) | Please issue a certificate or certificates representing said shares
of Series [__] Preferred Stock in the name of the undersigned or in such other name as
is specified below. |
| (3) | The undersigned Warrantholder hereby represents that it is acquiring
such shares for its own account, for investment purposes only, and not with a view to,
or for sale in connection with, any distribution of any part thereof. The undersigned
further represents and confirms that the representations and warranties of the Warrantholder
set forth in Section 10 of the attached Agreement are true and correct as of the
date hereof. |
WARRANTHOLDER:
EXHIBIT II
ACKNOWLEDGMENT OF EXERCISE
The undersigned officer of Corindus, Inc., hereby acknowledges
receipt of the “Notice of Exercise” from [Warrantholder] to purchase [____] shares of the Series [__] Preferred Stock
of Corindus, Inc., pursuant to the terms of the Agreement, and further acknowledges that [______] shares remain subject to purchase
under the terms of the Agreement.
| COMPANY: | CORINDUS, INC. |
| | | |
| | By: | |
| | Title: | |
| | Date: | |
EXHIBIT III
TRANSFER NOTICE
(To transfer or assign the foregoing Agreement execute this form
and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Agreement and all rights evidenced
thereby are hereby transferred and assigned to
(Please Print)
| Dated: | |
| | | |
|
|
| | Holder’s Signature: |
|
| | | |
|
|
| | Holder’s Address: |
|
| | |
|
| | |
|
NOTE: The signature to this Transfer Notice must correspond
with the name as it appears on the face of the Agreement, without alteration or enlargement or any change whatever. Officers of
corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign
the foregoing Agreement.
SCHEDULE I
OPTIONS AND WARRANTS
SCHEDULE II
LOANS
19
