Exhibit 3.1

 

TWELFTH AMENDED AND RESTATED 

CERTIFICATE OF INCORPORATION 

OF 

CVRX, INC.

 

(Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware)

 

CVRx, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),

 

DOES HEREBY CERTIFY:

 

That the Corporation was originally incorporated on August 17, 2000, under the name CVRx, Inc. pursuant to the General Corporation Law.

 

That the Board of Directors duly adopted resolutions approving the amendment and restatement of the Eleventh Amended and Restated Certificate of Incorporation of the Corporation declaring such amendment and restatement to be advisable and in the best interests of the Corporation and its stockholders, and authorizing the appropriate officers of this Corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:

 

RESOLVED, that the Eleventh Amended and Restated Certificate of Incorporation of the Corporation be amended and restated in its entirety as follows:

 

ARTICLE 1.

 

The name of this corporation is CVRx, Inc. (the “Corporation”).

 

ARTICLE 2.

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law (“DGCL”).

 

ARTICLE 3.

 

The Corporation shall have perpetual duration.

 

ARTICLE 4.

 

The registered office of this Corporation in Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the name of its registered agent is The Corporation Trust Company.

 

 

ARTICLE 5.

 

A.

Authorized Shares.

 

The total number of shares of stock which this Corporation is authorized to issue is 862,588,440 shares, par value $.01 per share, of which 625,217,795 shares are designated Common Stock, par value $.01 per share (the “Common Stock”), and 237,370,645 shares are designated as Preferred Stock, par value $.01 per share (the “Preferred Stock”). Of the shares of Preferred Stock, 2,454,686 shares are designated Series A-2 Convertible Preferred Stock, par value $.01 per share (the “Series A-2 Preferred Stock”), 2,963,069 shares are designated Series B-2 Convertible Preferred Stock, par value $.01 per share (the “Series B-2 Preferred Stock”), 4,308,394 shares are designated Series C-2 Convertible Preferred Stock, par value $.01 per share (the “Series C-2 Preferred Stock”), 8,631,967 shares are designated Series D-2 Convertible Preferred Stock, par value $.01 per share (the “Series D-2 Preferred Stock”), 12,114,211 shares are designated Series E-2 Convertible Preferred Stock, par value $.01 per share (the “Series E-2 Preferred Stock”), 29,773,318 shares are designated Series F-2 Convertible Preferred Stock, par value $.01 per share (the “Series F-2 Preferred Stock”), and 177,125,000 shares are designated Series G Convertible Preferred Stock, par value $.01 per share (the “Series G Preferred Stock”). The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation (voting together on an as-if-converted basis).

 

B.

Terms of Preferred Stock.

 

(a)            Rank. The Preferred Stock shall rank senior to all of the Common Stock now outstanding or hereafter issued, with respect to all rights, preferences and privileges.

 

(b)            Voting.

 

(i)            General. Each holder of shares of Preferred Stock shall have that number of votes on all matters submitted to the stockholders that is equal to the number of shares of Common Stock into which such holder’s Preferred Stock are then convertible, as hereinafter provided. Holders of shares of Preferred Stock shall not be entitled to cumulate their votes in the election of directors. Except as otherwise provided herein and as required by law, the shares of capital stock of the Corporation shall vote as a single class on all matters submitted to the stockholders.

 

(ii)           Election of Directors. So long as at least a majority of the authorized shares of the Preferred Stock are issued and outstanding:

 

(A)           the Board shall consist of eight members;

 

(B)           the holders of shares of Preferred Stock, voting together as a single class and on an as-converted basis, shall be entitled to elect five of the eight directors of the Corporation and to exercise any right of removal or replacement of such directors (the “Preferred Directors”);

 

 

(C)            the holders of shares of Common Stock, voting as a single class, shall be entitled to elect one of the eight directors of the Corporation and to exercise any right of removal or replacement of such directors (the “Common Director”);

 

(D)            the holders of shares of Preferred Stock and shares of Common Stock, voting together as one class and on an as-converted basis, shall be entitled to elect two of the eight directors of the Corporation and to exercise any right of removal and replacement of such directors (together with the Preferred Directors and the Common Directors, the “Directors”); and

 

(E)            the Directors shall be elected at the annual meeting or at any special meeting of holders of capital stock with the right to elect each such Director called by holders of at least a majority of the outstanding shares of the applicable series or class, as applicable, of capital stock or by the written consent of such holders.

 

(iii)           Separate Class Votes by Preferred Stock. Without the affirmative vote or written consent of the holders of at least fifty-three percent (53%) of the then-outstanding shares of Preferred Stock, voting as a single class and on an as-if-converted basis, the Corporation shall not (directly or indirectly, whether by merger or otherwise):

 

(A)           amend or waive any provision of the Certificate of Incorporation of the Corporation or Bylaws of the Corporation so as to alter or change the rights, preferences or privileges of the Preferred Stock or the holders thereof or amend or waive any provision of the Certificate of Incorporation of the Corporation relating to the Preferred Stock;

 

(B)           increase or decrease the number of authorized shares of Preferred Stock or Common Stock;

 

(C)           authorize, establish or issue any new class or series of shares of preferred stock, or any shares of stock having rights, preferences or privileges senior to or pari passu with Preferred Stock;

 

(D)           enter into any agreement that would restrict the Corporation’s ability to perform its obligations under any existing agreement with the holders of shares of Preferred Stock;

 

(E)            liquidate, dissolve or effect a recapitalization or reorganization in any form of transaction (including, without limitation, any reorganization into a limited liability company, a partnership or any other non-corporate entity which is treated as a partnership for federal income tax purposes);

 

(F)            authorize or permit a subsidiary to sell shares of its stock to a third party (other than directors’ qualifying shares);

 

 

(G)            redeem or repurchase shares of Preferred Stock or Common Stock, provided, however, that such restriction shall not prohibit the redemption or repurchase of shares of Preferred Stock or Common Stock approved by the Board with respect to contractual rights or obligations (i) relating to the termination of employees or consultants or (ii) relating to the exercise of any rights of first refusal in favor of the Corporation;

 

(H)           declare or pay any cash or stock dividend or make any other distribution on any shares of Common Stock;

 

(I)             sell, lease, license, encumber or otherwise dispose of all or substantially all of the assets of the Corporation;

 

(J)            consolidate with or merge into any other corporation or entity, unless the capital stock of the Corporation on an as-converted and as-exercised basis immediately prior to such consolidation or merger represents more than 50% of the capital stock of the surviving corporation on an as-converted and as-exercised basis;

 

(K)         unless pursuant to the unanimous approval of the Board, reserve more than a total of 103,041,059 shares of Common Stock, or securities convertible into, or exercisable for, Common Stock for issuance under any stock option or purchase plan(s) or other equity compensation plan(s) or agreement(s) after the date this Twelfth Amended and Restated Certificate of Incorporation is filed;

 

(L)            other than in connection with (i) capital leases or other financings that have been approved by the affirmative vote or written consent of the holders of at least fifty-three percent (53%) of the then-outstanding shares of Preferred Stock, voting as a single class and on an as-if-converted basis, or (ii) the existing grant of a security interest to Horizon Technology Finance Corporation or its affiliates in all of the assets of the Corporation, (x) pledge any of its assets, including its intellectual property, (y) grant any exclusive rights in its intellectual property or (z) sell or dispose of any of any asset having a value in excess of $100,000; or

 

(M)          enter into an agreement to do any of the foregoing.

 

(iv)          Separate Series Votes by Series A-2 Preferred Stock, Series B-2 Preferred Stock and Series C-2 Preferred Stock. For so long as at least twenty-five percent (25%) of the shares of Series A-2 Preferred Stock, Series B-2 Preferred Stock or Series C-2 Preferred Stock remain outstanding, without the affirmative vote or written consent of the holders of a majority of shares of the applicable series of Preferred Stock, the Corporation shall not, directly or indirectly, by merger or otherwise (other than pursuant to Acquisition or Asset Transfer (as defined below)), amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation that alters or changes the voting or other powers, preferences, or other special rights, privileges or restrictions of such series of Preferred Stock (including pursuant to an Acquisition, Asset Transfer or otherwise) so as to affect the series of Preferred Stock adversely and in a manner disproportionate to any other series of Preferred Stock (for which purpose, a series of Preferred Stock shall not be deemed to be treated disproportionately because of the proportional differences in the amounts of respective Conversion Prices, Liquidation Prices or other differences that arise out of the differences in the original purchase price of a series as compared to other series of Preferred Stock).

 

 

(v)           Separate Series Votes by Series D-2 Preferred Stock. For so long as at least twenty-five percent (25%) of the shares of Series D-2 Preferred Stock remain outstanding, without the affirmative vote or written consent of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the shares of Series D-2 Preferred Stock, the Corporation shall not, directly or indirectly, by merger or otherwise (other than pursuant to Acquisition or Asset Transfer), increase or decrease the aggregate number of authorized shares of Series D-2 Preferred Stock or amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation that alters or changes the powers, preferences or other special rights, privileges or restrictions of the Series D-2 Preferred Stock (including pursuant to an Acquisition, Asset Transfer or otherwise) so as to adversely affect the Series D-2 Preferred Stock in a manner disproportionate to any other series of Preferred Stock (for which purpose, the authorization and issuance of a new series of Preferred Stock pari passu with or senior to the Series D-2 Preferred Stock shall not be considered to be an event that adversely affects the holders of the Series D-2 Preferred Stock, and the Series D-2 Preferred Stock shall not be deemed to be treated disproportionately because of the proportional differences in the amounts of respective Conversion Prices, Liquidation Prices or other differences that arise out of the differences in the original purchase price of the Series D-2 Preferred Stock as compared to other series of Preferred Stock).

 

(vi)           Separate Series Votes by Series E-2 Preferred Stock. For so long as at least twenty-five percent (25%) of the shares of Series E-2 Preferred Stock remain outstanding, without the affirmative vote or written consent of the holders of at least sixty-six percent (66%) of the shares of Series E-2 Preferred Stock, the Corporation shall not, directly or indirectly, by merger or otherwise (other than pursuant to Acquisition or Asset Transfer), increase or decrease the aggregate number of authorized shares of Series E-2 Preferred Stock or amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation that alters or changes the powers, preferences or other special rights, privileges or restrictions of the Series E-2 Preferred Stock (including pursuant to an Acquisition, Asset Transfer or otherwise) so as to adversely affect the Series E-2 Preferred Stock in a manner disproportionate to any other series of Preferred Stock (for which purpose, the authorization and issuance of a new series of Preferred Stock pari passu with or senior to the Series E-2 Preferred Stock shall not be considered to be an event that adversely affects the holders of the Series E-2 Preferred Stock, and the Series E-2 Preferred Stock shall not be deemed to be treated disproportionately because of the proportional differences in the amounts of respective Conversion Prices, Liquidation Prices or other differences that arise out of the differences in the original purchase price of the Series E-2 Preferred Stock as compared to other series of Preferred Stock).

 

 

(vii)         Separate Series Votes by Series F-2 Preferred Stock. For so long as at least twenty-five percent (25%) of the shares of Series F-2 Preferred Stock remain outstanding, without the affirmative vote or written consent of the holders of a majority of the shares of Series F-2 Preferred Stock, the Corporation shall not, directly or indirectly, by merger or otherwise (other than pursuant to Acquisition or Asset Transfer), increase or decrease the aggregate number of authorized shares of Series F-2 Preferred Stock or amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation that alters or changes the powers, preferences or other special rights, privileges or restrictions of the Series F-2 Preferred Stock (including pursuant to an Acquisition, Asset Transfer or otherwise) so as to adversely affect the Series F-2 Preferred Stock in a manner disproportionate to any other series of Preferred Stock (for which purpose, the authorization and issuance of a new series of Preferred Stock pari passu with or senior to the Series F-2 Preferred Stock shall not be considered to be an event that adversely affects the holders of the Series F-2 Preferred Stock, and the Series F-2 Preferred Stock shall not be deemed to be treated disproportionately because of the proportional differences in the amounts of respective Conversion Prices, Liquidation Prices or other differences that arise out of the differences in the original purchase price of the Series F-2 Preferred Stock as compared to other series of Preferred Stock).

 

(viii)        Separate Series Votes by Series G Preferred Stock. For so long as at least twenty-five percent (25%) of the shares of Series G Preferred Stock remain outstanding, without the affirmative vote or written consent of the holders of a majority of the shares of Series G Preferred Stock, the Corporation shall not, directly or indirectly, by merger or otherwise (other than pursuant to Acquisition or Asset Transfer), increase or decrease the aggregate number of authorized shares of Series G Preferred Stock or amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation that alters or changes the powers, preferences or other special rights, privileges or restrictions of the Series G Preferred Stock (including pursuant to an Acquisition, Asset Transfer or otherwise) so as to adversely affect the Series G Preferred Stock in a manner disproportionate to any other series of Preferred Stock (for which purpose, the authorization and issuance of a new series of Preferred Stock pari passu with or senior to the Series G Preferred Stock shall not be considered to be an event that adversely affects the holders of the Series G Preferred Stock, and the Series G Preferred Stock shall not be deemed to be treated disproportionately because of the proportional differences in the amounts of respective Conversion Prices, Liquidation Prices or other differences that arise out of the differences in the original purchase price of the Series G Preferred Stock as compared to other series of Preferred Stock).

 

(c)            Dividends.

 

(i)            The holders of shares of Preferred Stock shall be entitled to receive prior, and in preference to the holders of shares of Common Stock dividends at a rate of eight percent (8%) of the Series A-2 Liquidation Price (as defined below), Series B-2 Liquidation Price (as defined below), Series C-2 Liquidation Price (as defined below), Series D-2 Liquidation Price (as defined below), Series E-2 Liquidation Price (as defined below), Series F-2 Liquidation Price or Series G Liquidation Price (as defined below), as applicable, out of assets of this Corporation legally available for distribution when, as and if declared by the Board; provided, however, that if the assets of the Corporation are insufficient to pay the full dividends, the assets available for distribution to the holders of shares of Preferred Stock shall be distributed ratably among the holders of shares of Preferred Stock in proportion to the dividend each such holder is otherwise entitled to receive. The right to dividends on shares of Preferred Stock shall be non-cumulative.

 

 

(ii)            No dividends shall be declared or set aside for the shares of Common Stock, unless prior thereto all declared and unpaid dividends on shares of Preferred Stock shall be set aside and paid on all the then-outstanding shares of Preferred Stock. In the event any dividends are declared and paid on the Common Stock, whether cash or non-cash, the holders of shares of Preferred Stock shall be entitled to the greater of: (A) the preferred dividend set forth in subarticle (B)(c)(i) above or (B) such dividends declared and paid on the Common Stock in proportion to the number of shares of Common Stock then held by them or issuable to them upon conversion of the shares of Preferred Stock held by them.

 

(d)            Liquidation.

 

(i)             Liquidation Priorities. Upon the occurrence of any liquidation, dissolution or winding up of the Corporation (or a deemed occurrence of such event pursuant to subarticle (B)(d)(iii)), whether voluntary or involuntary, (each, a “Liquidation Event”):

 

(A)           the holders of shares of Series G Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of shares of the Common Stock, Series A-2 Preferred Stock, Series B-2 Preferred Stock, Series C-2 Preferred Stock, Series D-2 Preferred Stock, Series E-2 Preferred Stock or Series F-2 Preferred Stock, by reason of their ownership thereof, an amount per share equal to $2.80, appropriately adjusted in each case for any recapitalizations, stock combinations, stock dividends, stock splits and the like (the “Series G Liquidation Price”), plus an amount equal to all declared but unpaid dividends on the shares of Series G Preferred Stock held by them (the “Series G Liquidation Amount”). If, upon the occurrence of a liquidation, dissolution or winding up (or deemed occurrence of such event pursuant to subarticle (B)(d)(iii)), the assets and funds of this Corporation legally available for distribution to stockholders by reason of their ownership of the stock of this Corporation shall be insufficient to permit the payment to such holders of shares of Series G Preferred Stock of their full Series G Liquidation Amount, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of shares of Series G Preferred Stock in proportion to the applicable Liquidation Amount each holder is otherwise entitled to receive;

 

 

(B)            after payment or setting aside for payment to the holders of shares of Series G Preferred Stock of the full Series G Liquidation Amount so payable to them, the holders of shares of Series F-2 Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of shares of the Common Stock, Series A-2 Preferred Stock, Series B-2 Preferred Stock, Series C-2 Preferred Stock, Series D-2 Preferred Stock or Series E-2 Preferred Stock, by reason of their ownership thereof, an amount per share equal to $3.53, appropriately adjusted in each case for any recapitalizations, stock combinations, stock dividends, stock splits and the like (the “Series F-2 Liquidation Price”), plus an amount equal to all declared but unpaid dividends on the shares of Series F-2 Preferred Stock held by them (the “Series F-2 Liquidation Amount”). If, upon the occurrence of a liquidation, dissolution or winding up (or deemed occurrence of such event pursuant to subarticle (B)(d)(iii)), the assets and funds of this Corporation legally available for distribution to stockholders by reason of their ownership of the stock of this Corporation shall be insufficient, after payment or setting apart for payment to the holders of Series G Preferred Stock of the full Series G Liquidation Amount so payable to them, to permit the payment to such holders of shares of Series F-2 Preferred Stock of their full Series F-2 Liquidation Amount, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of shares of Series F-2 Preferred Stock in proportion to the applicable Liquidation Amount each holder is otherwise entitled to receive;

 

(C)            after payment or setting apart for payment to the holders of shares of Series G Preferred Stock and Series F-2 Preferred Stock of the full Series G Liquidation Amount and Series F-2 Liquidation Amount, respectively, so payable to them, the holders of shares of Series E-2 Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of shares of the Common Stock, Series A-2 Preferred Stock, Series B-2 Preferred Stock, Series C-2 Preferred Stock or Series D-2 Preferred Stock, by reason of their ownership thereof, an amount per share equal to $7.58, appropriately adjusted in each case for any recapitalizations, stock combinations, stock dividends, stock splits and the like (the “Series E-2 Liquidation Price”), plus an amount equal to all declared but unpaid dividends on the shares of Series E-2 Preferred Stock held by them (the “Series E-2 Liquidation Amount”). If, upon the occurrence of a liquidation, dissolution or winding up (or deemed occurrence of such event pursuant to subarticle (B)(d)(iii)), the assets and funds of this Corporation legally available for distribution to stockholders by reason of their ownership of the stock of this Corporation shall be insufficient, after payment or setting apart for payment to the holders of Series G Preferred Stock of the full Series G Liquidation Amount so payable to them and to the holders of Series F-2 Preferred Stock of the full Series F-2 Liquidation Amount so payable to them, to permit the payment to such holders of shares of Series E-2 Preferred Stock of their full Series E-2 Liquidation Amount, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of shares of Series E-2 Preferred Stock in proportion to the applicable Liquidation Amount each holder is otherwise entitled to receive;

 

 

(D)            after payment or setting apart for payment to the holders of shares of Series G Preferred Stock, Series F-2 Preferred Stock and Series E-2 Preferred Stock of the full Series G Liquidation Amount, Series F-2 Liquidation Amount and Series E-2 Liquidation Amount, respectively, so payable to them, the holders of shares of Series D-2 Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of shares of the Common Stock, Series A-2 Preferred Stock, Series B-2 Preferred Stock or Series C-2 Preferred Stock, by reason of their ownership thereof, an amount per share equal to $6.20, appropriately adjusted in each case for any recapitalizations, stock combinations, stock dividends, stock splits and the like (the “Series D-2 Liquidation Price”), plus an amount equal to all declared but unpaid dividends on the shares of Series D-2 Preferred Stock held by them (the “Series D-2 Liquidation Amount”). If, upon the occurrence of a liquidation, dissolution or winding up (or deemed occurrence of such event pursuant to subarticle (B)(d)(iii)), the assets and funds of this Corporation legally available for distribution to stockholders by reason of their ownership of the stock of this Corporation shall be insufficient, after payment or setting apart for payment to the holders of Series G Preferred Stock of the full Series G Liquidation Amount so payable to them, to the holders of Series F-2 Preferred Stock of the full Series F-2 Liquidation Amount so payable to them and to the holders of Series E-2 Preferred Stock of the full Series E-2 Liquidation Amount so payable to them, to permit the payment to such holders of shares of Series D-2 Preferred Stock of their full Series D-2 Liquidation Amount, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of shares of Series D-2 Preferred Stock in proportion to the applicable Liquidation Amount each holder is otherwise entitled to receive;

 

 

(E)            after payment or setting apart for payment to the holders of shares of Series G Preferred Stock, Series F-2 Preferred Stock, Series E-2 Preferred Stock and Series D-2 Preferred Stock of the full Series G Liquidation Amount, Series F-2 Liquidation Amount, Series E-2 Liquidation Amount and Series D-2 Liquidation Amount, respectively, so payable to them, the holders of shares of Series A-2 Preferred Stock, Series B-2 Preferred Stock and Series C-2 Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of shares of the Common Stock by reason of their ownership thereof, (i) with respect to the holders of shares of Series A-2 Preferred Stock, an amount per share equal to $2.00, appropriately adjusted in each case for any recapitalizations, stock combinations, stock dividends, stock splits and the like (the “Series A-2 Liquidation Price”), plus an amount equal to all declared but unpaid dividends on the shares of Series A-2 Preferred Stock held by them (the “Series A-2 Liquidation Amount”), (ii) with respect to the holders of shares of Series B-2 Preferred Stock, an amount per share equal to $2.54, appropriately adjusted in each case for any recapitalizations, stock combinations, stock dividends, stock splits and the like (the “Series B-2 Liquidation Price”), plus an amount equal to all declared but unpaid dividends on the Series B-2 Preferred Stock held by them (the “Series B-2 Liquidation Amount”), and (iii) with respect to the holders of shares of Series C-2 Preferred Stock, an amount per share equal to $3.05, appropriately adjusted in each case for any recapitalizations, stock combinations, stock dividends, stock splits and the like (the “Series C-2 Liquidation Price” and, each of the Series A-2 Liquidation Price, the Series B-2 Liquidation Price and the Series C-2 Liquidation Price, a “Liquidation Price”), plus an amount equal to all declared but unpaid dividends on the Series C-2 Preferred Stock held by them (the “Series C-2 Liquidation Amount” and, each of the Series A-2 Liquidation Amount, the Series B-2 Liquidation Amount and the Series C-2 Liquidation Amount, a “Liquidation Amount”). If, upon the occurrence of a liquidation, dissolution or winding up (or deemed occurrence of such event pursuant to subarticle (B)(d)(iii)), the assets and funds of this Corporation legally available for distribution to stockholders by reason of their ownership of the stock of this Corporation shall be insufficient, after payment or setting apart for payment to the holders of shares of Series G Preferred Stock of the full Series G Liquidation Amount so payable to them, to the holders of shares of Series F-2 Preferred Stock of the full Series F-2 Liquidation Amount so payable to them, to the holders of shares of Series E-2 Preferred Stock of the full Series E-2 Liquidation Amount so payable to them and to the holders of shares of Series D-2 Preferred Stock of the full Series D-2 Liquidation Amount so payable to them, to permit the payment to such holders of shares of Series A-2 Preferred Stock, Series B-2 Preferred Stock and Series C-2 Preferred Stock of their full Liquidation Amounts, then the entire remaining assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of shares of Series A-2 Preferred Stock, Series B-2 Preferred Stock and Series C-2 Preferred Stock in proportion to the applicable Liquidation Amount each holder is otherwise entitled to receive; and

 

(F)            after the payment or setting apart for payment to the holders of shares of Preferred Stock of the full applicable Liquidation Amount so payable to them, as set forth above, the holders of shares of Common Stock, Series F-2 Preferred Stock and Series G Preferred Stock shall be entitled to receive ratably among the holders of shares of Common Stock, Series F-2 Preferred Stock and Series G Preferred Stock all remaining assets of the Corporation on the basis of the number of shares of Common Stock held by each of them, treating the Series F-2 Preferred Stock and Series G Preferred Stock on an as-if-converted basis.

 

 

(ii)           Additional Liquidation Provisions. Notwithstanding the foregoing, solely for purposes of determining the amount each holder of shares of Preferred Stock is respectively entitled to receive with respect to a Liquidation Event pursuant to subarticle (B)(d)(i), each time a distribution is made to the Corporation’s stockholders, each series of Preferred Stock shall be treated as if all holders of such series had converted such holders’ shares of such series into shares of Common Stock immediately prior to the Liquidation Event if, as a result of an actual conversion of such series of Preferred Stock (including taking into account the operation of this sentence with respect to all series of Preferred Stock, if applicable), holders of the Preferred Stock would receive (with respect to each such series), in the aggregate, an amount greater than the amount that would be distributed to holders of such series if such holders had not converted such respective series of Preferred Stock into shares of Common Stock as a result, for example, of a Liquidation Event involving the escrow of a portion of the proceeds or the payment of an earn out or other deferred payments after the initial distribution of proceeds, or other circumstances. If holders of any series of Preferred Stock are treated as if they had converted shares of Preferred Stock into Common Stock pursuant to this paragraph, then such holders shall not be entitled to receive any distribution pursuant to subarticle (B)(d)(i) above that would otherwise be made to holders of such series of Preferred Stock.

 

(iii)          Certain Events. For purposes of this subarticle B, the following events shall also each be deemed a Liquidation Event unless holders of shares of Preferred Stock representing at least fifty-three percent (53%) of the voting power of outstanding shares of Preferred Stock on an as-if-converted basis and a majority of the outstanding shares of Series G Preferred Stock elect not to treat any such event as a Liquidation Event:

 

(A)            a consolidation or merger, whether direct or indirect, of the Corporation where the stockholders of the Corporation do not continue to hold at least a 50% voting interest in the successor entity in substantially the same proportions;

 

(B)            the acquisition of the Corporation or of a majority of the outstanding capital stock of the Corporation (determined on an as-converted basis) by another person or entity by means of any transaction or series of related transactions to which the Corporation is a party (including, without limitation, any reorganization, merger or consolidation that results in a change of control of the Corporation but excluding any or all such transactions consummated for bona fide equity financing purposes) (together with any consolidation or merger referred to in subarticle (B)(d)(iii)(A), each such transaction, an “Acquisition”); or

 

 

(C)            a sale, lease, transfer or other disposition of all or substantially all of the Corporation’s assets or the exclusive license of any material intellectual property of the Corporation (an “Asset Transfer”).

 

(iv)          Notwithstanding any other provision set forth above, in the event that any consideration payable to the Corporation or its stockholders in connection with any Liquidation Event is contingent upon the occurrence of any event or passage of time (including, without limitation, any deferred purchase price payments, installment payments, payments made in respect of any promissory note issued in such transaction, payments from escrow, purchase price adjustments or payments in respect of earn outs or holdbacks), such consideration shall not be deemed received by the Corporation or its stockholders or available for distribution to such stockholders unless and until such consideration is indefeasibly received by the Corporation or its stockholders in accordance with the terms of such Liquidation Event.

 

(v)          If any of the assets of the Corporation are to be distributed under this subarticle (B)(d), or for any purpose, in a form other than cash, then the Board shall promptly and reasonably determine in good faith the fair market value of the assets to be distributed to the holders of Preferred Stock or Common Stock. The Corporation shall, upon receipt of such determination, give prompt written notice of the determination to each holder of shares of Preferred Stock or Common Stock. Notwithstanding the foregoing, the fair market value of any securities shall be valued as follows:

 

(A)           Securities not subject to an investment letter or other similar restrictions on free marketability:

 

(1)            If traded on a securities exchange, the value shall be deemed to be the average of the closing sale prices of the securities on such exchange over the thirty (30) calendar day period ending three (3) calendar days prior to the consummation of a liquidation, dissolution or winding up of the Corporation;

 

(2)            If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) calendar day period ending three (3) calendar days prior to the consummation of a liquidation, dissolution or winding up of the Corporation; and

 

(3)            If there is no active public market, the value shall be the fair market value thereof, as determined by a majority of the Board in good faith.

 

(B)            The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (A)(1), (2) or (3) to reflect the approximate fair market value thereof, as determined by a majority of the Board in good faith.

 

 

(e)           Conversion of Preferred Stock.

 

(i)            Mandatory Conversion of Preferred Stock. The shares of Preferred Stock shall automatically be converted into shares of Common Stock of the Corporation, without any act by the Corporation or the holders of shares of Preferred Stock, upon the earlier of (A) the closing of a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933 covering the offer and sale of Common Stock for the account of the Corporation to the public which generates not less than $50,000,000 in cash proceeds to the Corporation, net of underwriting discounts and commissions (a “Qualified Public Offering”), provided that the Common Stock of the Corporation is listed on the Nasdaq Stock Market or the New York Stock Exchange; or (2) the date upon which the holders of at least (x) fifty-three percent (53%) of the outstanding shares of Preferred Stock, voting as a single class and on an as-if-converted basis, and (y) a majority of the outstanding shares of Series G Preferred Stock, shall have agreed to be converted pursuant to this subarticle (B)(e)(i). In addition, all shares of each series of Preferred Stock shall automatically be converted into shares of Common Stock of the Corporation, without any act by the Corporation or the holders of such shares of Preferred Stock, on the date upon which the holders of the requisite percentage of outstanding shares of such series of Preferred Stock shall have agreed to be converted pursuant to this subarticle (B)(e)(i). For purposes of the foregoing sentence, the requisite percentage of outstanding shares for each series of Preferred Stock shall be the same percentage of the outstanding shares of such series of Preferred Stock that would be required to approve any matter required to be approved by that series of Preferred Stock pursuant to subarticle (B)(b)(iv)-(viii).

 

Each holder of a share of Preferred Stock so converted shall be entitled to receive the full number of shares of Common Stock into which such share of Preferred Stock held by such holder could be converted if such holder had exercised its optional conversion right at the time of closing of such public offering or at the time specified by the holders of the requisite percentage of the shares of outstanding Preferred Stock or the applicable series of Preferred Stock set forth above, plus all declared but unpaid dividends thereon. Upon such conversion, each holder of a share of outstanding Preferred Stock shall immediately surrender such share in exchange for appropriate stock certificates representing a share or shares of Common Stock of the Corporation.

 

(ii)            Optional Conversion of Preferred Stock. The shares of Preferred Stock shall be convertible, without the payment of any additional consideration by the holder thereof and at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation (or at such other office or offices, if any, as the Board may designate), into fully paid and nonassessable shares of Common Stock of the Corporation, at the conversion price (as determined in accordance with the provisions of subarticle (B)(e)(iv) below), in effect at the time of conversion. In the event of a conversion of shares of Series D-2 Preferred Stock, Series E-2 Preferred Stock, Series F-2 Preferred Stock or Series G Preferred Stock at the option of the holder thereof, the Corporation may elect to convert all declared but unpaid dividends on such shares of Series D-2 Preferred Stock, Series E-2 Preferred Stock, Series F-2 Preferred Stock or Series G Preferred Stock, as applicable, into shares of Common Stock at the Conversion Price in effect for such Series D-2 Preferred Stock, Series E-2 Preferred Stock, Series F-2 Preferred Stock or Series G Preferred Stock, immediately prior to such optional conversion.

 

 

(iii)          Mechanics of Conversion.

 

(A)           To convert shares of Preferred Stock into shares of Common Stock of the Corporation, the holder thereof shall surrender at the principal office of the Corporation the certificate or certificates therefor, duly endorsed to the Corporation or in blank, and give written notice to the Corporation at such office that such holder elects to convert such shares; provided, however, that if the holder notifies the Corporation that such certificate or certificates have been lost, stolen or destroyed, the holder may execute an agreement reasonably satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates in lieu of surrendering such certificate or certificates. Shares of Preferred Stock shall be deemed to have been converted immediately prior to the close of business on the day of the surrender of such shares for conversion as herein provided, and the person entitled to receive the shares of Common Stock of the Corporation issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock at such time. As promptly as practicable on or after the conversion date, the Corporation shall issue and deliver or cause to be issued and delivered at such office a certificate or certificates for the number of shares of Common Stock of the Corporation issuable upon such conversion.

 

(B)            If the conversion is in connection with a public offering, the conversion may, at the option of any holder tendering shares of Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the shares of Common Stock upon conversion of the shares of Preferred Stock shall not be deemed to have converted such shares of Preferred Stock until immediately prior to the closing of such sale of securities.

 

(iv)          Conversion Price and Adjustments. The number of shares of Common Stock issuable upon conversion of each share of Preferred Stock, whether optional or mandatory conversion, initially shall be equal to (x) in the case of the Series A-2 Preferred Stock, Series B-2 Preferred Stock, Series C-2 Preferred Stock, Series D-2 Preferred Stock, and Series E-2 Preferred Stock, the applicable Liquidation Price, and, in the case of the Series F-2 Preferred Stock, $1.41, and, in the case of Series G Preferred Stock, $.80, divided by (y) the applicable Conversion Price. The Conversion Price per share of Series A-2 Preferred Stock shall initially be $2.00, the Conversion Price per share of Series B-2 Preferred Stock shall initially be $2.54, the Conversion Price per share of Series C-2 Preferred Stock shall initially be $3.05, the Conversion Price per share of Series D-2 Preferred Stock shall initially be $6.20, the Conversion Price per share of Series E-2 Preferred Stock shall initially be $7.58, the Conversion Price per share of Series F-2 Preferred Stock shall initially be $1.41, and the Conversion Price per share of Series G Preferred Stock shall initially be $.80, but each such Conversion Price shall be subject to adjustment from time to time as hereinafter provided:

 

 

(A)           Except for (1) the issuance of options to purchase shares of Common Stock (and the issuance of shares of Common Stock upon exercise thereof) granted to (a) employees, directors or consultants of the Corporation pursuant to a stock option plan approved by the Board (or the Compensation Committee of the Board), or (b) a partnership or corporation with which a director of the Corporation is affiliated if such options (and the issuance of shares of Common Stock upon exercise thereof) have been unanimously approved by the Board (or the Compensation Committee of the Board) and such options shall be in lieu of granting options directly to such director, (2) the issuance of shares of Common Stock upon conversion of shares of Preferred Stock, (3) shares of Common Stock issued pursuant to the exercise of Convertible Securities outstanding as of the date of filing of this Twelfth Amended and Restated Certificate of Incorporation, (4) shares of Common Stock issued or issuable to lending or leasing institutions approved by the Board in connection with the Corporation’s senior, secured debt or equipment leasing provided that such shares of Common Stock issued or issuable do not exceed 5% of the capital stock of the Corporation outstanding (on an as-converted, as-exercised basis) on the date of filing of this Twelfth Amended and Restated Certificate of Incorporation, (5) shares of Common Stock issued or issuable pursuant to the warrants to purchase Series E-2 Preferred Stock and Series G Preferred Stock issued to Biosense Webster, Inc. on September 28, 2018, and (6) such other issuances of shares of Common Stock of the Corporation as to which the provisions of this subsection (e)(iv) may be waived by the affirmative vote of the holders of a majority of the then-outstanding shares of any series of Preferred Stock whose Conversion Price would otherwise be affected by this subsection (e)(iv), voting as a single class, if and whenever the Corporation shall issue or sell any shares of its Common Stock after the date of filing this Twelfth Amended and Restated Certificate of Incorporation for a consideration per share less than the applicable Conversion Price in effect for such series of Preferred Stock immediately prior to the time of such issue or sale, then, forthwith upon such issue or sale, the applicable Conversion Price of such series of Preferred Stock shall be reduced to the price (calculated to the nearest cent) determined by dividing (x) an amount equal to the sum of (1) the number of shares of Common Stock deemed outstanding immediately prior to such issue or sale multiplied by the then existing conversion price and (2) the aggregate consideration, if any, received by the Corporation upon such issue or sale, by (y) an amount equal to the sum of (1) the number of shares of Common Stock deemed outstanding immediately prior to such issue or sale and (2) the number of shares of Common Stock thus issued or sold. For purposes of this subarticle (B)(e)(iv)(A), the term Common Stock shall include shares of Common Stock issuable upon exercise, conversion or exchange of any securities of the Corporation outstanding (including, but not limited to, shares of Preferred Stock). In the case of any conversion of the Series G Preferred Stock in connection with any transaction that results in the Common Stock being registered with the Securities and Exchange Commission, including an initial public offering, a registration of the Common Stock under the Securities Exchange Act of 1934, as amended, or a reverse merger of the Corporation into a shell company that is registered with the Securities and Exchange Commission, the number of shares of Common Stock issuable upon conversion of each share of Series G Preferred Stock shall be 2.5 times the number of shares of Common Stock otherwise determined in accordance with this subarticle (B)(e)(iv). However, if any investor fails to purchase Series G Preferred Stock or Common Stock that the investor committed to purchase pursuant to Section 1.2(c) of the Series G Preferred Stock Purchase Agreement, dated as of May 31, 2016, between the Corporation and the investors named therein, as amended, then the Series G Preferred Stock held by such investor will not be converted at 2.5 times the number of Common Stock otherwise determined in accordance with this subarticle (B)(e)(iv).

 

 

(B)            For the purposes of this subarticle (B)(e)(iv) the following clauses (1) to (4), inclusive, shall also be applicable:

 

(1)            In case at any time the Corporation shall grant (1) any rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or (2) any obligations or any shares of stock of the Corporation which are convertible into, or exchangeable for, Common Stock (any of such obligations or shares of stock being hereinafter referred to as “Convertible Securities”) whether or not such rights or options or the right to convert or exchange any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such rights or options or upon conversion or exchange of such Convertible Securities (determined by dividing (x) the total amount of consideration, if any, received or receivable by the Corporation for the granting of such rights or options, plus the minimum aggregate amount of additional consideration payable to the Corporation upon the exercise of such rights or options, plus, in the case of such rights or options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable upon the issue of such Convertible Securities and upon the conversion or exchange thereof, by (y) the total maximum number of shares of Common Stock issuable upon the exercise of such rights or options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such rights or options) shall be less than the Conversion Price with respect to the applicable series of Preferred Stock in effect immediately prior to the time of the granting of such rights or options, then the total maximum number of shares of Common Stock issuable upon the exercise of such rights or options or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such rights or options shall (as of the date of granting of such rights or options) be deemed to have been issued for such price per share. Except as provided in subarticle (B)(e)(iv)(C) below, no further adjustments of the Conversion Price with respect to the applicable series of Preferred Stock shall be made upon the actual issue of such Common Stock or of such Convertible Securities upon exercise of such rights or options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities.

 

 

(2)            In case the Corporation shall issue or sell (whether directly or by assumption in a merger or otherwise) any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange (determined by dividing (x) the total amount of consideration received or receivable by the Corporation for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange thereof, by (y) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the Conversion Price with respect to the applicable series of Preferred Stock in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall (as of the date of the issue or sale of such Convertible Securities) be deemed to be outstanding and to have been issued for such price per share, provided that (x) except as provided in subarticle (B)(e)(iv)(C) below, no further adjustments of the conversion price shall be made upon the actual issue of such Common Stock upon conversion or exchange of such convertible Securities, and (y) if any such issue or sale of such Convertible Securities is made upon exercise of any rights to subscribe for or to purchase or any option to purchase any such Convertible Securities for which adjustments of the conversion price have been or are to be made pursuant to other provisions of this clause (2), no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

 

 

(3)            In case any shares of Common Stock or Convertible Securities or any rights or options to purchase any such Common Stock or Convertible Securities shall be issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Corporation therefor, without deducting therefrom any expenses incurred or any underwriting commissions, discounts or concessions paid or allowed by the Corporation in connection therewith. In case any shares of Common Stock or Convertible Securities or any rights or options to purchase any such Common Stock or Convertible Securities shall be issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be deemed to be the fair value of such consideration as determined by the Board, without deducting therefrom any expenses incurred or any underwriting commissions, discounts or concessions paid or allowed by the Corporation in connection therewith. In case any shares of Common Stock or Convertible Securities or any rights or options to purchase such Common Stock or Convertible Securities shall be issued in connection with any merger or consolidation in which the Corporation is the surviving Corporation, the amount of consideration therefor shall be determined in the manner set forth in subarticle (B)(d)(ii).

 

(4)            If (x) the purchase price provided for in any right or option referred to in clause (1) of this subarticle (B)(e)(iv)(B), or (y) the additional consideration, if any, payable upon the conversion or exchange of Convertible Securities referred to in clause (1) or clause (2) of this subarticle (B)(e)(iv)(B), or (z) the rate at which any Convertible Securities referred to in clause (1) or clause (2) of this subarticle (B)(e)(iv)(B) are convertible into or exchangeable for Common Stock shall change at any time (other than under or by reason of provisions designed to protect against dilution), the Conversion Price then in effect hereunder shall forthwith be increased or decreased to such conversion price as would have obtained had the adjustments made upon the issuance of such rights, options or Convertible Securities been made upon the basis of (a) the issuance of the number of shares of Common Stock theretofore actually delivered upon the exercise of such options or rights or upon the conversion or exchange of such Convertible Securities, and the total consideration received therefor, and (b) the issuance at the time of such change of any such options, rights, or Convertible Securities then still outstanding for the consideration, if any, received by the Corporation therefor and to be received on the basis of such changed price; and on the expiration of any such option or right or the termination of any such right to convert or exchange such Convertible Securities, the Conversion Price then in effect hereunder shall forthwith be increased to such conversion price as would have obtained had the adjustments made upon the issuance of such rights or options or Convertible Securities been made upon the basis of the issuance of the shares of Common Stock theretofore actually delivered (and the total consideration received therefor) upon the exercise of such rights or options or upon the conversion or exchange of such Convertible Securities. If the purchase price provided for in any right or option referred to in clause (1) of this subarticle (B)(e)(iv)(B), or the rate at which any Convertible Securities referred to in clause (1) of this subarticle (B)(e)(iv)(B) are convertible into or exchangeable for Common Stock, shall decrease at any time under or by reason of provisions with respect thereto designed to protect against dilution, then in case of the delivery of Common Stock upon the exercise of any such right or option or upon conversion or exchange of any such Convertible Security, the Conversion Price then in effect hereunder shall forthwith be decreased to such Conversion Price as would have obtained had the adjustments made upon the issuance of such right, option or Convertible Security been made upon the basis of the issuance of (and the total consideration received for) the shares of Common Stock delivered as aforesaid.

 

 

(C)            In case the Corporation shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares (without a similar subdivision of the outstanding shares of Preferred Stock), the Conversion Price for the applicable series of Preferred Stock in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding shares of Common Stock of the Corporation shall be combined into a smaller number of shares (without a similar combination of the outstanding shares of Preferred Stock), the Conversion Price in effect immediately prior to such combination shall be proportionately increased.

 

(v)           Dividends or Distributions. In case the Corporation shall (x) declare a dividend upon the Common Stock payable in shares of Common Stock (other than a dividend declared to effect a subdivision of the outstanding shares of Common Stock, as described in subarticle (B)(e)(iv)(C) above) or Convertible Securities, or in any rights or options to purchase Common Stock or Convertible Securities, or (y) declare any other dividend or make any other distribution upon the Common Stock payable otherwise than out of earnings or earned surplus, then thereafter each holder of shares of Preferred Stock upon the conversion thereof will be entitled to receive the number of shares of Common Stock into which such shares of Preferred Stock have been converted, and, in addition and without payment therefor, each dividend described in clause (x) above and each dividend or distribution described in clause (y) above which such holder would have received by way of dividends or distributions. For the purposes of the foregoing a dividend or distribution other than in cash shall be considered payable out of earnings or earned surplus only to the extent that such earnings or earned surplus are charged an amount equal to the fair value of such dividend or distribution as determined by the Board in good faith.

 

 

(vi)          Recapitalizations. If any recapitalization of the capital stock of the Corporation (whether by reclassification, subdivision, combination or merger or sale of assets) shall be effected in such a way that holders of shares of Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for shares of Common Stock, then, as a condition of such recapitalization, lawful and adequate provisions shall be made whereby each holder of a share or shares of Preferred Stock shall thereupon have the right to receive, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore receivable upon the conversion of a share or shares of Preferred Stock, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such Common Stock immediately theretofore receivable upon such conversion had such recapitalization not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of such holder to the end that the provisions hereof (including without limitation provisions for adjustments of the applicable Conversion Price) shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise of such conversion rights.

 

(vii)          Corrective Actions. If any event occurs as to which in the opinion of the Board the other provisions of subarticle (B)(e)(iv) are not strictly applicable or if strictly applicable would not fairly protect the rights of the holders of the shares of Preferred Stock in accordance with the essential intent and principles of such provisions, then the Board shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect such rights as aforesaid.

 

(viii)          Notice of Conversion Price Adjustment. In each case of an adjustment of the Conversion Price with respect to any series of Preferred Stock, the Corporation shall give written notice thereof, by first-class mail, postage prepaid, addressed to the registered holders of shares of the applicable series of Preferred Stock, at the addresses of such holders as shown on the books of the Corporation, which notice shall state the Conversion Price resulting from such adjustment and the increase or decrease, if any, in the number of shares receivable at such price upon the conversion of the applicable shares of such series of Preferred Stock, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

 

 

(ix)          Fractional Shares. All shares of Common Stock (including fractional shares thereof) held by each holder thereof shall be aggregated for purposes of determining whether the conversion of shares of Preferred Stock by such holder would result in the issuance of fractional shares. If, after the aforementioned aggregation, the conversion would result in the issuance of any fractional share, no such fractional shares of Common Stock shall be issued upon conversion, but, instead of any fraction of a share which would otherwise be issuable, the Corporation shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Market Price (as hereinafter defined) per share of Common Stock as of the close of business on the day of conversion. “Market Price” shall mean if the Common Stock is traded on a securities exchange, the closing price of the Common Stock on such exchange, or, if the Common Stock is otherwise traded in the over-the-counter market, the closing bid price, in each case averaged over a period of 20 consecutive business days prior to the date as of which the Market Price is being determined. If at any time the Common Stock is not traded on an exchange, or otherwise traded in the over-the-counter market, the Market Price shall be deemed to be the higher of (x) the book value thereof as determined by any firm of independent public accountants of recognized standing selected by the Board as of the last day of any month ending within 60 days preceding the date as of which the determination is to be made, or (y) the fair value thereof determined in good faith by the Board as of a date which is within 15 days of the date as of which the determination is to be made.

 

(f)           Notices of Record Date. In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each holder of shares of Preferred Stock, at least ten (10) business days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. Any notice required by the provisions of this Article 5 to be given to the holders of shares of Preferred Stock shall be effective on the earliest of (i) five (5) days from the date of mailing, (ii) confirmed facsimile transfer, or (iii) actual receipt by the holder to be notified.

 

(g)           Reservation of Stock Issuable Upon Conversion of Preferred Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of any outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all such Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, using its best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation.

 

(h)           Payment of Taxes. The Corporation shall pay all sales and excise taxes that may be imposed with respect to the issuance or delivery of shares of Common Stock upon conversion of the shares of Preferred Stock.

 

ARTICLE 6.

 

Subject to Article 5, in furtherance, and not in limitation, of the powers conferred by statute, the Board is expressly authorized to make, amend, alter, change, add to or repeal bylaws of this Corporation, without any action on the part of the stockholders. Subject to Article 5, the bylaws made by the directors may be amended, altered, changed, added to or repealed by the stockholders. Any specific provision in the bylaws regarding amendment thereof shall be controlling.

 

 

ARTICLE 7.

 

A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; except to the extent such exemption from liability is not permitted under the DGCL as the same exists or may hereafter be amended. Any repeal or modification of the foregoing provisions of this Article 7 by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.

 

ARTICLE 8.

 

The Corporation shall indemnify to the fullest extent permitted by law any person made or threatened to be made a party to any action or proceeding, whether criminal, civil or administrative or investigative, from and against all expenses, liabilities or damages by reason of the action in his or her official capacities or other action in another capacity taken by reason of the fact that he or she, his or her testator or intestate is or was a director, officer or employee of the Corporation or any predecessor of the Corporation or serves or served any other enterprise as a director, officer or employee at the request of the Corporation or any predecessor of the Corporation. Any repeal or modification of the foregoing provisions of this Article 8 by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.

 

ARTICLE 9.

 

To the maximum extent permitted from time to time under the law of the State of Delaware, the Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, business opportunities that are from time to time being presented to its officers, directors or stockholders, other than (i) those officers, directors or stockholders who are employees of the Corporation and (ii) those opportunities demonstrated by the Corporation to have been presented to such officers, directors or stockholders expressly as a result of their activities as a director, officer or stockholder of the Corporation. No amendment or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any officer, director or stockholder of the Corporation for or with respect to any opportunities which such officer, director or stockholder becomes aware prior to such amendment or repeal. This Article 9 shall terminate and be of no effect after the consummation of the Corporation’s initial public offering of its Common Stock.

 

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate on behalf of the Corporation on this 1^st day of July, 2020.

 

	CVRX, INC.
	By: /s/ Nadim Yared
	Name: Nadim Yared
	Title: President and Chief Executive Officer

 

Signature Page to Twelfth Amended and Restated Certificate of Incorporation

 

 

 

Exhibit 3.3

 

AMENDED AND RESTATED
BYLAWS
OF
CVRX, INC.

 

ARTICLE I.
OFFICES, CORPORATE SEAL

 

Section 1.01.      Registered Office. The registered office of the corporation in Delaware shall be that set forth in the certificate of incorporation or in the most recent amendment to the certificate of incorporation or resolution of the directors filed with the secretary of state of Delaware changing the registered office.

 

Section 1.02.      Other Offices. The corporation may have such other offices, within or without the state of Delaware, as the directors shall, from time to time determine.

 

Section 1.03.      Corporate Seal. The corporation shall have no seal.

 

ARTICLE II.
MEETINGS OF SHAREHOLDERS

 

Section 2.01.      Place and Time of Meetings. Meetings of the stockholders shall be held at such place, either within or without the State of Delaware, as the board of directors shall determine. Rather than holding a meeting at any place, the board of directors may determine that a meeting shall be held solely by means of remote communications, which means shall meet the requirements of the Delaware General Corporation Law.

 

Section 2.02.      Annual Meetings. The annual meeting of the stockholders for the election of the directors and the transaction of such other business as may properly be brought before the meeting shall be held on the date and at the time designated by the board of directors.

 

Section 2.03.      Special Meetings. Special meetings of the stockholders for any purpose or purposes may be called by the board of directors. No other person or persons may call a special meeting. The business to be transacted at any special meeting shall be limited to the purposes stated in the notice.

 

Section 2.04.      Remote Communications. The board of directors may permit the stockholders and their proxy holders to participate in meetings of the stockholders (whether such meetings are held at a designated place or solely by means of remote communication) using one or more methods of remote communication that satisfy the requirements of the Delaware General Corporation Law. The board of directors may adopt such guidelines and procedures applicable to participation in stockholders’ meetings by means of remote communication as it deems appropriate. Participation in a stockholders’ meeting by means of a method of remote communication permitted by the board of directors shall constitute presence in person at the meeting.

 

 

Section 2.05.      Notice of Meetings. Notice of the place, if any, date and hour of any stockholders’ meeting shall be given to each stockholder entitled to vote. The notice shall state the means of remote communications, if any, by which stockholders and proxy holders may be deemed present in person and vote at the meeting. If the voting list for the meeting is to be made available by means of an electronic network or if the meeting is to be held solely by remote communication, the notice shall include the information required to access the reasonably accessible electronic network on which the corporation will make its voting list available either prior to the meeting or, in the case of a meeting held solely by remote communication, during the meeting. Notice of a special meeting shall also state the purpose or purposes for which the meeting has been called. Unless otherwise provided in the Delaware General Corporation Law, notice shall be given at least 10 days but not more than 60 days before the date of the meeting. Without limiting the manner by which notice may otherwise be given, notice may be given by a form of electronic transmission that satisfies the requirements of the Delaware General Corporation Law and has been consented to by the stockholder to whom notice is given. If mailed, notice shall be deemed given when deposited in the U.S. mail, postage prepaid, directed to the stockholder’s address as it appears in the corporation’s records. If given by a form of electronic transmission consented to by the stockholder to whom notice is given, notice shall be deemed given at the times specified with respect to the giving of notice by electronic transmission in the Delaware General Corporation Law. An affidavit of the corporation’s secretary, an assistant secretary or an agent of the corporation that notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated in the affidavit.

 

Section 2.06.      Quorum. The presence, in person or by proxy, of the holders of a majority of the voting power of the stock entitled to vote at a meeting shall constitute a quorum. Where a separate vote by a class or series or classes or series of stock is required at a meeting, the presence, in person or by proxy, of the holders of a majority of the voting power of each such class or series shall also be required to constitute a quorum. In the absence of a quorum, either the chairperson of the meeting or the holders of a majority of the voting power of the stock present, in person or by proxy, and entitled to vote at the meeting may adjourn the meeting in the manner provided in Section 2.07 until a quorum shall be present. A quorum, once established at a meeting, shall not be broken by the withdrawal of the holders of enough voting power to leave less than a quorum. If a quorum is present at an original meeting, a quorum need not be present at an adjourned session of that meeting

 

Section 2.07.      Adjournment of Meetings. Either the chairperson of the meeting or the holders of a majority of the voting power of the stock present, in person or by proxy, and entitled to vote at the meeting may adjourn any meeting of stockholders from time to time. At any adjourned meeting the stockholders may transact any business that they might have transacted at the original meeting. Notice of an adjourned meeting need not be given if the time and place, if any, or the means of remote communications to be used rather than holding the meeting at any place are announced at the meeting so adjourned, except that notice of the adjourned meeting shall be required if the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting.

 

 

Section 2.08.      Voting List. At least 10 days before every meeting of the stockholders, the secretary of the corporation shall prepare a complete alphabetical list of the stockholders entitled to vote at the meeting showing each stockholder’s address and number of shares. This voting list does not need to include electronic mail addresses or other electronic contact information for any stockholder nor need it contain any information with respect to beneficial owners of the shares of stock owned, although it may do so. For a period of at least 10 days before the meeting, the voting list shall be open to the examination of any stockholder for any purpose germane to the meeting either on a reasonably accessible electronic network (provided that the information required to gain access to the list is provided with the notice of the meeting) or during ordinary business hours at the corporation’s principal place of business. If the list is made available on an electronic network, the corporation may take reasonable steps to ensure that it is available only to stockholders. If the stockholders’ meeting is held at a place, the voting list shall be produced and kept at that place during the whole time of the meeting. If the stockholders’ meeting is held solely by means of remote communications, the voting list shall be made available for inspection on a reasonably accessible electronic network during the whole time of the meeting. In either case, any stockholder may inspect the voting list at any time during the meeting.

 

Section 2.09.      Vote Required. Subject to the provisions of the Delaware General Corporation Law requiring a higher level of votes to take certain specified actions and to the terms of the corporation’s certificate of incorporation that set special voting requirements, the stockholders shall take action on all matters other than the election of directors by a majority of the voting power of the stock present, in person or by proxy, at the meeting and entitled to vote on the matter. The stockholders shall elect directors by a plurality of the voting power of the stock present, in person or by proxy, at the meeting and entitled to vote on the matter.

 

Section 2.10.      Chairperson, Secretary. The following people shall preside over any me^, tints of the stockholders: the chairperson of the board of directors, if any, or, in the chairperson’s absence, the vice chairperson of the board of directors, if any, or in the vice chairperson’s absence, the chief executive officer, or, in the absence of all of the foregoing persons, a chairperson designated by the board of directors, or, in the absence of a chairperson designated by the board of directors, a chairperson chosen by the stockholders at the meeting. In the absence of the secretary and any assistant secretary, the chairperson of the meeting may appoint any person to act as secretary of the meeting.

 

Section 2.11.      Rules of Conduct. The board of directors may adopt such rules, regulations and procedures for the conduct of any meeting of the stockholders as it deems appropriate including rules, regulations and procedures regarding participation in the meeting by means of remote communication. Except to the extent inconsistent with any applicable rules, regulations or procedures adopted by the board of directors, the chairperson of any meeting may adopt such rules, regulations and procedures for the meeting, and take such actions with respect to the conduct of the meeting, as the chairperson of the meeting deems appropriate. The rules, regulations and procedures adopted may include, without limitation, ones that (i) establish an agenda or order of business, (ii) are intended to maintain order and safety at the meeting, (iii) restrict entry to the meeting after the time fixed for its commencement and (iv) limit the time allotted to stockholder questions or comments. Unless otherwise determined by the board of directors or the chairperson of the meeting, meetings of the stockholders need not be held in accordance with the rules of parliamentary procedure.

 

 

Section 2.12.      Inspectors of Elections. The board of directors or the chairperson of a stockholders’ meeting may appoint one or more inspectors of election and any substitute inspectors to act at the meeting or any adjournment thereof. Inspectors may be officers, employees or agents of the corporation. Each inspector, before entering on the discharge of the inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector’s ability. Inspectors shall have the duties prescribed by the Delaware General Corporation Law. At the request of the chairperson of the meeting, the inspector or inspectors shall prepare a written report of the results of the votes taken and of any other question or matter that that inspector or inspectors determined.

 

Section 2.13.      Record Date. If the corporation proposes to take any action for which the Delaware General Corporation Law would permit it to set a record date, the board of directors may set such a record date as provided under the Delaware General Corporation Law.

 

Section 2.14.      Written Consent. Any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting, without prior notice and without a vote by means of a stockholder written consent meeting the requirements of the Delaware General Corporation Law. Prompt notice of the taking of action without a meeting by less than a unanimous written consent shall be given to those stockholders who have not consented as required by the Delaware General Corporation Law.

 

ARTICLE III.
DIRECTORS

 

Section 3.01.      Number and Qualification. The board of directors shall consist of six members. The number of directors may be increased to up to eight by unanimous approval of all directors. Directors need not be stockholders.

 

Section 3.02.      Term of Office. Each director shall hold office until his or her successor is elected or until his or her earlier death, resignation or removal.

 

Section 3.03.      Resignation. A director may resign, as a director or as a committee member or both, at any time by giving notice in writing or by electronic transmission to the corporation addressed to the board of directors, the chairperson of the board of directors, the president or the secretary. A resignation will be effective upon its receipt by the corporation unless the resignation specifies that it is to be effective at some later time or upon the occurrence of some specified later event.

 

Section 3.04.      Vacancies. Any vacancy in the board of directors, including a vacancy resulting from an enlargement of the board of directors, may be filled by a vote of the majority of the remaining directors, although less than a quorum, or by a sole remaining director. If the corporation at the time has outstanding any classes or series or class or series of stock that have or has the right, alone or with one or more other classes or series or class or series, to elect one or more directors, then any vacancy in the board of directors caused by the death, resignation or removal of a director so elected shall be filled only by a vote of the majority of the remaining directors so elected, by a sole remaining director so elected or, if no director so elected remains, by the holders of those classes or series or that class or series. A director appointed by the board of directors shall hold office for the remainder of the term of the director he or she is replacing.

 

 

Section 3.05.      Regular Meetings. The board of directors may hold regular meetings without notice at such times and places as it may from time to time determine, provided that notice of any such determination shall be given to any director who is absent when such a determination is made. A regular meeting of the board of directors may be held without notice immediately after and at the same place as the annual meeting of the stockholders.

 

Section 3.06.      Special Meetings. Special meetings of the board of directors may be called by the chairperson of the board of directors, the chief executive officer or by any director. Notice of any special meeting shall be given to each director and shall state the time and place for the special meeting.

 

Section 3.07.      Notice. Any time it is necessary to give notice of a board of directors’ meeting, notice shall be given (1) in person or by telephone to the director at least 24 hours in advance of the meeting, (ii) by personally delivering written notice to the director’s last known business or home address at least 48 hours in advance of the meeting, (iii) by delivering an electronic transmission (including, without limitation, via telefacsimile or electronic mail) to the director’s last known number or address for receiving electronic transmissions of that type at least 48 hours in advance of the meeting, (iv) by depositing written notice with a reputable delivery service or overnight carrier addressed to the director’s last known business or home address for delivery to that address no later than the business day preceding the date of the meeting or (v) by depositing written notice in the U.S. mail, postage prepaid, addressed to the director’s last known business or home address no later than the third business day preceding the date of the meeting. Notice of a meeting need not be given to any director who attends a meeting without protesting prior to the meeting or at its commencement to the lack of notice to that director. A notice of meeting need not specify the purposes of the meeting.

 

Section 3.08.      Quorum. A majority of the directors in office at the time shall constitute a quorum. Thereafter, a quorum shall be deemed present for purposes of conducting business and determining the vote required to take action for so long as at least a third of the total number of directors are present. In the absence of a quorum, the directors present may adjourn the meeting without notice until a quorum shall be present, at which point the meeting may be held.

 

Section 3.09.      Vote Required. The board of directors shall act by the vote of a majority of the directors present at a meeting at which a quorum is present.

 

Section 3.10.      Chairperson; Secretary. If the chairperson and the vice chairperson are not present at any meeting of the board of directors, or if no such officers have been elected, then the board of directors shall choose a director who is present at the meeting to preside over it. In the absence of the secretary and any assistant secretary, the chairperson may appoint any person to act as secretary of the meeting.

 

Section 3.11.      Use of Communications Equipment. Directors may participate in meetings of the board of ‘directors or any committee of the board of directors by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting in this manner shall constitute presence in person at the meeting.

 

 

Section 3.12.      Action Without a Meeting. Any action required or permitted to be taken at any meeting of the board of directors may be taken without a meeting if all of the directors consent to the action in writing or by electronic transmission. The writing or writings or electronic transmission or transmissions shall be filed with the minutes of the proceedings of the board of directors or of the relevant committee.

 

Section 3.13.      Compensation of Committees. The board of directors shall from time to time determine the amount and type of compensation to be paid to directors for their service on the board of directors and its committees.

 

Section 3.14.      Committees. The board of directors may designate one or more committees, each of which shall consist of one or more directors. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Any committee shall, to the extent provided in a resolution of the board of directors and subject to the limitations contained in the Delaware General Corporation Law, have and-may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation. Each committee shall keep such records and report to the board of directors in such manner as the board of directors may from time to time determine. Except as the board of directors may otherwise determine, any committee may make rules for the conduct of its business. Unless otherwise provided in a resolution of the board of directors or in rules adopted by the committee, each committee shall conduct its business as nearly as possible in the same manner as is provided in these bylaws for the board of directors.

 

Section 3.15.      Chairperson and Vice Chairperson of the Board. The board of directors may elect from its members a chairperson of the board and a vice chairperson. If a chairperson has been elected and is present, the chairperson shall preside at all meetings of the board of directors and the stockholders. The chairperson shall have such other powers and perform such other duties as the board of directors may designate. If the board of directors elects a vice chairperson, the vice chairperson shall, in the absence or disability of the chairperson, perform the duties and exercise the powers of the chairperson and have such other powers and perform such other duties as the board of directors may designate.

 

 

ARTICLE IV.
OFFICERS

 

Section 4.01.      Offices Created; Qualifications; Election. The corporation shall have a chief executive officer, a president, a secretary, a treasurer and such other officers, if any, as the board of directors from time to time may appoint. Any officer may be, but need not be, a director or stockholder. The same person may hold any two or more offices. The board of directors may elect officers at any time.

 

Section 4.02.      Term of Office. Each officer shall hold office until his or her successor has been elected, unless a different term is specified in the resolution electing the officer, or until his or her earlier death, resignation or removal.

 

Section 4.03.      Removal of Officers. Any officer may be removed from office at any time, with or without cause, by the board of directors.

 

Section 4.04.      Resignation. An officer may resign at any time by giving notice in writing or by electronic transmission to the corporation addressed to the board of directors, the chairperson of the board of directors, the president or the secretary. A resignation will be effective upon its receipt by the corporation unless the resignation specifies that it is to be effective at some later time or upon the occurrence of some specified later event.

 

Section 4.05.      Vacancies. A vacancy in any office may be filled by the board of directors.

 

Section 4.06.      Compensation. Officers shall receive such amounts and types of compensation for their services as shall be fixed by the board of directors.

 

Section 4.07.      Powers. Unless otherwise specified by the board of directors, each officer shall have those powers and shall perform those duties that are (i) set forth in these bylaws (if any are so set forth), (ii) set forth in the resolution of the board of directors electing that officer or any subsequent resolution of the board of directors with respect to that officer’s duties or (iii) commonly incident to the office held.

 

Section 4.08.      Chief Executive Officer. The chief executive officer shall, subject to the direction and control of the board of directors, have general control and management of the business, affairs and policies of the corporation and over its officers and shall see that all orders and resolutions of the board of directors are carried into effect. The chief executive officer shall have the power to sign all certificates, contracts and other instruments on behalf of the corporation.

 

Section 4.09.      President. The president shall be subject to the direction and control of the chief executive officer and the board of directors and shall have general active management of the business, affairs and policies of the corporation. The president shall have the power to sign all certificates, contracts and other instruments on behalf of the corporation. If the board of directors has not elected a chief executive officer, the president shall be the chief executive officer. If the board of directors has elected a chief executive officer and that officer is absent, disqualified from acting, unable to act or refuses to act, then the president shall have the powers of, and shall perform the duties of, the chief executive officer.

 

 

Section 4.10.      Vice Presidents. The vice presidents, if any, shall be subject to the direction and control of the board of directors, the chief executive officer and the president and shall have such powers and duties as the board of directors, the chief executive officer or the president may assign to them. If the board of directors elects more than one vice president, then it shall determine their respective titles, seniority and duties. If the president is absent, disqualified from acting, unable to act or refuses to act, the most senior in rank of the vice presidents (as determined by the board of directors) shall have the powers of, and shall perform the duties of, the president.

 

Section 4.11.      Chief Financial Officer. The chief financial officer, if any, shall be subject to the direction and control of the board of directors and the chief executive officer, shall have primary responsibility for the financial affairs of the corporation and shall perform such other duties as the chief executive officer may assign.

 

Section 4.12.      Chief Operating Officer. The chief operating officer, if any, shall be subject to the direction and control of the board of directors and the chief executive officer, shall have primary responsibility for the management and supervision of the day-to-day operations of the corporation and shall perform such other duties as the chief executive officer may assign.

 

Section 4.13.      Treasurer. The treasurer shall have charge and custody of and be responsible for all funds, securities and valuable papers of the corporation. The treasurer shall deposit all funds in the depositories or invest them in the investments designated or approved by the board of directors or any officer or officers authorized by board of directors to make such determinations. The treasurer shall disburse funds under the direction of the board of directors or any officer or officers authorized by the board of directors to make such determinations. The treasurer shall keep full and accurate accounts of all funds received and paid on account of the corporation and shall render a statement of these accounts whenever the board of directors or the chief executive officer shall so request. If the board of directors has not elected a chief financial officer, the treasurer shall be the chief financial officer. If the board of directors has not elected a controller, the treasurer shall be the controller.

 

Section 4.14.      Assistant Treasurers. The assistant treasurers, if any, shall have such powers and duties as the board of directors, the chief executive officer, the president or the treasurer may assign to them. If the board of directors elects more than one assistant treasurers, then it shall determine their respective titles, seniority and duties. If the treasurer is absent, disqualified from acting, unable to act or refuses to act, the most senior in rank of the assistant treasurers (as determined by the board of directors) shall have the powers of, and shall perform the duties of, the treasurer.

 

Section 4.15.      Controller. The controller, if any, shall be the chief accounting officer of the corporation and shall be in charge of its books of account, accounting records and accounting procedures.

 

Section 4.16.      Secretary. The secretary shall, to the extent practicable, attend all meetings of the stockholders and the board of directors. The secretary shall record the proceedings of the stockholders and the board of directors, including all actions by written consent, in a book or series of books to be kept for that purpose. The secretary shall perform like duties for any committee of the board of directors if the committee so requests. The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors. Unless the corporation has appointed a transfer agent, the secretary shall keep or cause to be kept the stock and transfer records of the corporation. The secretary shall have such other powers and duties as the board of directors, the chief executive officer or the president may determine.

 

 

Section 4.17.     Assistant Secretaries. The assistant secretaries, if any, shall have such powers and duties as the board of directors, the chief executive officer, the president or the secretary may assign to them. If the board of directors elects more than one assistant secretary, then it shall determine their respective titles, seniority and duties. If the secretary is absent, disqualified from acting, unable to act or refuses to act, the most senior in rank of the assistant secretaries (as determined by the board of directors) shall have the powers of, and shall perform the duties of, the secretary.

 

ARTICLE V.
CAPITAL STOCK

 

Section 5.01.     Stock Certificates. The corporation’s shares of stock shall be represented by certificates, provided that the board of directors may, subject to the limits imposed by law, provide by resolution or resolutions that some or all of any or all classes or series shall be uncertificated shares. Notwithstanding the adoption of such a resolution, every holder of shares of stock represented by certificates and every holder of uncertificated shares, upon request, shall be entitled to have a certificate representing such shares in such form as shall be approved by the board of directors. Stock certificates shall be numbered in the order of their issue and shall be signed by or in the name of the corporation by (i) the chairperson or vice chairperson, if any, of the board of directors, the president or a vice president and (ii) the treasurer, an assistant treasurer, the secretary or an assistant secretary. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who signed or whose facsimile signature has been placed upon a certificate shall have ceased to be an officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. Each certificate that is subject to any restriction on transfer shall have conspicuously noted on its face or back either the full text of the restriction or a statement of the existence of the restriction. Each certificate shall have on its face or back a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

 

Section 5.02.     Registration; Registered Owners. The name of each person owning a share of the corporation’s capital stock shall be entered on the books of the corporation together with the number of shares owned, the number or numbers of the certificate or certificates covering such shares and the dates of issue of each certificate. The corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes regardless of any transfer, pledge or other disposition of such stock until the shares have been properly transferred on the books of the corporation.

 

Section 5.03.     Stockholder Addresses. It shall be the duty of each stockholder to notify the corporation of the stockholder’s address.

 

 

Section 5.04.     Transfer of Shares. Registration of transfer of shares of the corporation’s stock shall be made only on the books of the corporation at the request of the registered holder or of the registered holder’s duly authorized attorney (as evidenced by a duly executed power of attorney provided to the corporation) and upon surrender of the certificate or certificates representing those shares properly endorsed or accompanied by a duly executed stock power. The board of directors may make further rules and regulations concerning the transfer and registration of shares of stock and the certificates representing them and may appoint a transfer agent or registrar or both and may require all stock certificates to bear the signature of either or both.

 

Section 5.05.     Lost, Stolen, Mutilated or Destroyed Certificates. The corporation may issue a new stock certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost, stolen, destroyed or mutilated. The board of directors may require the owner of the allegedly lost, stolen or destroyed certificate, or the owner’s legal representatives, to give the corporation such bond or such surety or sureties as the board of directors, in its sole discretion, deems sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft or destruction or the issuance of such new certificate and, in the case of a certificate alleged to have been mutilated, to surrender the mutilated certificate.

 

ARTICLE VI.
GENERAL PROVISIONS

 

Section 6.01.     Waiver of Notice. Any stockholder or director, may execute a written waiver or give a waiver by electronic transmission of notice of the meeting, either before or after such meeting. Any such waiver shall be filed with the records of the corporation. If any stockholder or director shall be present at any meeting it shall constitute a waiver of notice of the meeting, except when that stockholder or director attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. A waiver of notice of meeting need not specify the purposes of the meeting.

 

Section 6.02.     Electronic Transmissions. For purposes of these bylaws, “electronic transmission” shall mean a form of communication not directly involving the physical transmission of paper that satisfies the requirements with respect to such communications contained in the Delaware General Corporation Law.

 

Section 6.03.     Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

 

Section 6.04.     Voting Stock of Other Organizations. Except as the board of directors may otherwise designate, each of the chief executive officer and the treasurer may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for the corporation (with power of substitution) at any meeting of the stockholders, members or other owners of any other corporation or organization the securities or ownership interests of which are owned by the corporation.

 

 

Section 6.05.     Amendment of Bylaws. These bylaws, including bylaws adopted or amended by the stockholders, may be amended or repealed by the board of directors.

 

ARTICLE VII.
INDEMNIFICATION

 

Section 7.01.     Indemnification. The corporation shall, to the fullest extent permitted by law, indemnify every person who is or was a party or is or was threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (an “Action”), by reason of the fact that such person is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, trustee, plan administrator or plan fiduciary of another corporation, partnership, limited liability company, trust, employee benefit plan or other enterprise (an “Indemnified Person”), against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement or other disposition that the Indemnified Person actually and reasonably incurs in connection with the Action.

 

Section 7.02.     Advancement of Expenses. Upon written request from an Indemnified Person, the corporation shall pay the expenses (including attorneys’ fees) incurred by such Indemnified Person in connection with any Action in advance of the final disposition of such Action. The corporation’s obligation to pay expenses pursuant to this Section shall be contingent upon the Indemnified Person providing the undertaking required by the Delaware General Corporation Law.

 

Section 7.03.     Non-Exclusivity. The rights of indemnification and advancement of expenses contained in this Article shall not be exclusive of any other rights to indemnification or similar protection to which any Indemnified Person may be entitled under any agreement, vote of stockholders or disinterested directors, insurance policy or otherwise.

 

Section 7.04.     Heirs and Beneficiaries. The rights created by this Article shall inure to the benefit of each Indemnified Person and each heir, executor and administrator of such Indemnified Person.

 

Section 7.05.     Effect of Amendment. Neither the amendment, modification or repeal of this Article nor the adoption of any provision in these bylaws inconsistent with this Article shall adversely affect any right or protection of an Indemnified Person with respect to any act or omission that occurred prior to the time of such amendment, modification, repeal or adoption.

 

 

AMENDMENT

 

TO THE
CVRx, INC.
AMENDED AND RESTATED BYLAWS

 

WHEREAS, CVRx, Inc., a corporation organized under the laws of the State of Delaware (the “Company”) established the Company’s Bylaws (the “Bylaws”) by an original instrument adopted by the Company on November 9, 2000, as amended and restated on June 26, 2001 (as amended, the “Restated Bylaws”); and

 

WHEREAS, the Company now wishes to amend the Restated Bylaws to provide for a right of first refusal on transfers of the Company’s capital stock in favor of the Company and its assignee(s).

 

NOW THEREFORE, effective immediately, the Restated Bylaws are hereby amended as follows:

 

I.

A new Section 5.06 shall be added to Article V of the Restated Bylaws as follows:

 

“Section 5.06 Right of First Refusal. No stockholder shall sell, assign, pledge, or in any manner transfer any of the shares of capital stock of the corporation or any right or interest therein, whether voluntarily or by operation of law, or by gift or otherwise, except by a transfer which meets the requirements hereinafter set forth in this Section 5.06:

 

(a)            If the stockholder desires to sell or otherwise transfer any of his shares of stock, then the stockholder shall first give written notice thereof to the corporation. The notice shall name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other material terms and conditions of the proposed transfer.

 

(b)            For fifteen (15) days following receipt of such notice, the corporation shall have the option to purchase all or a portion of the shares specified in the notice at the price and upon the terms set forth in such notice. In the event of a gift, property settlement or other transfer in which the proposed transferee is not paying the full price for the shares and that is not otherwise exempted from the provisions of this Section 5.06, the price shall be deemed to be the fair market value of the stock at such time as determined in good faith by the Board of Directors. In the event the corporation elects to purchase all or any portion of the shares, it shall give written notice to the transferring stockholder of its election and settlement for said shares shall be made as provided below in paragraph (d).

 

(c)            The corporation may assign its rights hereunder.

 

(d)            In the event the corporation and/or its assignee(s) elect to acquire any of the shares of the transferring stockholder as specified in said transferring stockholder’s notice, the Secretary of the corporation shall so notify the transferring stockholder and settlement thereof shall be made in cash within thirty (30) days after the Secretary of the corporation receives said transferring stockholder’s notice; provided that if the terms of payment set forth in said transferring stockholder’s notice were other than cash against delivery, the corporation and/or its assignee(s) shall pay for said shares on the same terms and conditions set forth in said transferring stockholder’s notice.

 

 

(e)            In the event the corporation and/or its assignees(s) do not elect to acquire any or all of the shares specified in the transferring stockholder’s notice, said transferring stockholder may, within 90 days following the expiration of the option rights granted to the corporation and/or its assignees(s) herein, and subject to any other contractual restrictions among any stockholders of the corporation, transfer the shares specified in said transferring stockholder’s notice which were not acquired by the corporation and/or its assignees(s) as specified in said transferring stockholder’s notice. All shares so sold by said transferring stockholder shall continue to be subject to the provisions of this bylaw in the same manner as before said transfer.

 

(f)            Anything to the contrary contained herein notwithstanding, the following transactions shall be exempt from the provisions of this bylaw:

 

(1)            A stockholder’s transfer of any or all shares held either during such stockholder’s lifetime or on death by will or intestacy to such stockholder’s immediate family or to any custodian or trustee for the account of such stockholder or such stockholder’s immediate family or to any limited partnership of which the stockholder, members of such stockholder’s immediate family or any trust for the account of such stockholder or such stockholder’s immediate family will be the general of limited partner(s) of such partnership. “Immediate family” as used herein shall mean spouse, lineal descendant, father, mother, brother or sister of the stockholder making such transfer.

 

(2)            A stockholder’s bona fide pledge or mortgage of any shares with a commercial lending institution, provided that any subsequent transfer of said shares by said institution shall be conducted in the manner set forth in this bylaw.

 

(3)            A stockholder’s transfer of any or all of such stockholder’s shares to the corporation.

 

(4)            A stockholder’s transfer of any or all of such stockholder’s shares to a person who, at the time of such transfer, is an officer or director of the corporation.

 

(5)            A corporate stockholder’s transfer of any or all of its shares pursuant to and in accordance with the terms of any merger, consolidation, reclassification of shares or capital reorganization of the corporate stockholder, or pursuant to a sale of all or substantially all of the stock or assets of a corporate stockholder.

 

 

(6)            A transfer by a stockholder which is a limited liability company to any or all of its members or former members.

 

(7)            A transfer by a stockholder which is a limited or general partnership to any or all of its partners or former partners.

 

In any such case, the transferee, assignee, or other recipient shall receive and hold such stock subject to the provisions of this Section 5.06, and there shall be no further transfer of such stock except in accord with this Section 5.06.

 

(g)            The provisions of this Section 5.06 may be waived, amended or repealed with respect to any transfer by the corporation upon duly authorized action of its Board of Directors.

 

(h)            Any sale or transfer, or purported sale or transfer, of securities of the corporation shall be null and void unless the terms, conditions, and provisions of this bylaw are strictly observed and followed.

 

(i)            The foregoing right of first refusal shall terminate upon the date securities of the corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.

 

(j)            After the date of adoption of this Section 5.06 by the corporation, all certificates issued by the corporation representing shares of stock of the corporation shall bear on their face the following legend so long as the foregoing right of first refusal remains in effect:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE CORPORATION.”

 

II.

In all other respects the Restated Bylaws remain the same.

 

IN WITNESS WHEREOF, the Company has caused this Second Amendment to the Restated Bylaws to be executed this 9th day of May, 2003.

 

	CVRx, INC.
	By:	/s/ Robert Kieval
	Name:	Robert Kieval
	Title:	Chief Executive Officer

 

 

Second Amendment

 

to the

CVRx, Inc.

Amended and Restated Bylaws

 

Whereas, CVRx, Inc., a corporation organized under the laws of the State of Delaware (the “Company”) established the Company’s Bylaws (the “Bylaws”) by an original instrument adopted by the Company on November 9, 2000, as amended and restated on June 26, 2001 and further amended on May 9, 2003 (as amended, the “Restated Bylaws”); and

 

Whereas, Section 3.01 of the Restated Bylaws specifies the size of the Company’s board of directors; and

 

Whereas, Section 5.06 of the Restated Bylaws provides for a right of first refusal in favor of the Company on any sale, assignment, pledge or other transfer of shares of capital stock of the Company by any stockholder.

 

Now therefore, effective immediately, the Restated Bylaws are hereby amended as follows:

 

I.              Section 3.01 shall be amended and restated to read in its entirety as follows:

 

“Section 3.01. Number and Qualification. The number of directors to constitute the board of directors shall be determined from time to time by approval of the board of directors, subject to any provision of the corporation’s certificate of incorporation that prescribes the number of directors. Directors need not be stockholders.”

 

II.            A new clause (8) shall be added to Section 5.06(f) of Article V of the Restated Bylaws as follows:

 

“(8)     A transfer by a stockholder that is a corporation to an affiliated entity of such corporation.”

 

III.           In all other respects, the Restated Bylaws remain the same.

 

In Witness Whereof, the Company has caused this Second Amendment to the Restated Bylaws to be executed this 27th day of April, 2007.

 

	CVRx, Inc.
	By:	/s/ Nadim Yared
	Name:	Nadim Yared
	Title:	Chief Executive Officer

 

 

 

Exhibit 4.11

 

THE SECURITIES EVIDENCED HEREBY and the SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE BLUE SKY LAWS AND MAY BE OFFERED, SOLD AND TRANSFERRED ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE ACT AND RELEVANT STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER THE ACT AND STATE SECURITIES LAWS IS NOT REQUIRED

 

Issue Date:

September 28, 2018

  

CVRx, inc.
Warrant to Purchase Series E-2 Convertible Preferred Stock

 

This warrant (“Warrant”) certifies that, for value received, Biosense Webster, Inc., or its successors or assigns (the “Holder”), is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase from CVRx, Inc., a Delaware corporation (the “Company”), shares of the Company’s Series E-2 Convertible Preferred Stock (the “Warrant Shares”).

 

1.       Termination Letter Agreement. This Warrant is being issued pursuant to the terms of that certain Structured Rights Termination Letter Agreement between the Holder and the Company dated as of the Issue Date above (the “Termination Letter Agreement”). By acceptance of this Warrant, the Holder expressly agrees, for the benefit of the present and future holders of this Warrant or the securities issuable upon exercise of this Warrant, to be bound by the provisions of this Warrant and the Termination Letter Agreement. All capitalized terms not otherwise defined herein having the meaning set forth in the Termination Letter Agreement.

 

2.       Number of Shares. The number of Warrant Shares that the Holder may purchase by exercising this Warrant is equal to 1,978,891 shares. Upon the automatic conversion of all outstanding shares of the Company’s Series E-2 Convertible Preferred Stock into common stock, this Warrant shall become exercisable into that number of shares of the Company’s common stock into which the Warrant Shares would then be convertible (but may be exercised only in accordance with Section 4 below).

 

3.       Exercise Price. The purchase price for the Warrant Shares shall be $0.01 per share, subject to adjustment as set forth below.

 

4.       Exercise of Warrant. This Warrant shall be exercisable if and only if an Acquisition or Asset Transfer (each as defined in the Company’s Ninth Amended and Restated Certificate of Incorporation) is consummated, in which case this Warrant shall automatically be deemed on and as of such date to be exchanged for Warrant Shares as set forth below and the Company shall promptly deliver a certificate representing the Warrant Shares issued upon such conversion to the Holder; provided, that the Holder shall execute and deliver upon request an election of exchange and any such documents as may be required to be executed and delivered by other stockholders of the Company in connection with such Acquisition or Asset Transfer. The Company shall notify the Holder at least fifteen business days prior to the consummation of an Acquisition or Asset Transfer.

 

 

The exercise of this Warrant as set forth above shall be effected by issuance to the Holder of a number of Warrant Shares computed using the following formula:

 

	X =	Y (A–B)     A
where:	X =	The number of Warrant Shares to be issued to the Holder;
	Y =	The total number of Warrant Shares;
	A =	The fair market value of one Warrant Share at the time of exercise; and
	B =	The Exercise Price (as adjusted to the date of the net issuance).

 

For purposes of this Warrant, the fair market value of one Warrant Share as of a particular date shall be determined in good faith by the Company’s board of directors.

 

5.       Expiration of Warrant. This Warrant and all rights hereunder shall expire on the earlier of (i) the date the warrant contemplated by paragraph 2 of the Termination Letter Agreement (the “Series G Warrant”) becomes exercisable or converts into shares of the Company and (ii) 180 days after receipt by the Holder of the PMA-2 Data. For the sake of clarify, in the event of a Public Company Transaction (as defined in the Series G Warrant), including a reverse merger contemplated thereby, resulting in the Series G Warrant becoming exercisable or converted into shares of the Company, this Warrant shall expire and no shares shall be issued hereunder.

 

6.       Issuance of Shares. The Company covenants that the Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, when issued pursuant to the terms of this Warrant, be duly and validly issued, fully paid and nonassessable, and free from all taxes, liens, and charges with respect to the issuance thereof other than those imposed by the Holder. The Company further covenants and agrees that the Company will at all times during the Exercise Period authorize and reserve, free from preemptive rights, a sufficient number of Warrant Shares to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized by unissued Warrant Shares shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may be necessary to increase its authorized but unissued Warrant Shares to such number as shall be sufficient for such purposes.

 

7.       Adjustments in Warrant Shares and Exercise Price. The Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant will be proportionately adjusted to reflect any stock split, stock dividend, merger, reorganization, consolidation, combination or similar event, including an Acquisition or Asset Transfer, affecting the outstanding series of capital stock that constitutes the Warrant Shares, and adequate provision will be made to assure that upon exercise of this Warrant the Holder receives consideration that is the same, or as nearly similar as is reasonably practicable, as the Holder would have received if the Holder had exercised this Warrant immediately prior to such event. The form of this Warrant need not be changed because of any adjustment in the number of Warrant Shares subject to this Warrant.

 

8.       No Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

 

9.       No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote the Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights, or be notified of stockholder meetings, and the Holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.

 

 

10.       Transferability. The Holder may only sell, assign, dispose of otherwise transfer this Warrant to an Affiliate of Johnson & Johnson or with the prior written consent of the Company. Prior to any transaction that would result in a change of control of the Holder or would result in the Holder no longer being an Affiliate of Johnson & Johnson, the Holder shall assign this Warrant to Johnson & Johnson or an Affiliate of Johnson & Johnson. For purposes of this Warrant, an “Affiliate” of Johnson & Johnson means any person or legal entity directly or indirectly controlled by, controlling or under common control with Johnson & Johnson. For the purposes of this definition, “control” means the possession, direct or indirect, or the power to direct or cause the direction of the management and policies of an individual, corporation or other legal entity, whether through the ownership of voting securities, by contract, or otherwise.

 

11.       Notices. All notices required under this Warrant shall be deemed to have been given or made for all purposes if done in compliance with the Structured Rights Letter Agreement. In addition to and not in lieu of the notice requirements set forth in the Structured Rights Letter Agreement, another copy of the notice shall be sent via email to Kevin Norman, Senior Counsel Equity Transactions at knorman6@its.jnj.com.

 

12.       Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.

 

13.       Governing Law. This Warrant shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

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

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer and to be dated as of the date first written above.

 

	CVRx, Inc.
	a Delaware corporation
	By:	/s/ Nadim Yared
		Nadim Yared
		Chief Executive Officer
	CVRx, Inc.
	Attn: Chief Financial Officer
	9201 West Broadway Avenue, Suite 650
	Minneapolis, MN 55445

 

 

 

 

 

  

Exhibit 4.12

 

THE SECURITIES EVIDENCED HEREBY and the SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE BLUE SKY LAWS AND MAY BE OFFERED, SOLD AND TRANSFERRED ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE ACT AND RELEVANT STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER THE ACT AND STATE SECURITIES LAWS IS NOT REQUIRED

 

Issue Date:

September 28, 2018

  

CVRx, inc.
Warrant to Purchase Series G Convertible Preferred Stock

 

This warrant (“Warrant”) certifies that, for value received, Biosense Webster, Inc., or its successors or assigns (the “Holder”), is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase from CVRx, Inc., a Delaware corporation (the “Company”), shares of the Company’s Series G Convertible Preferred Stock (the “Warrant Shares”).

 

1.       Termination Letter Agreement. This Warrant is being issued pursuant to the terms of that certain Structured Rights Termination Letter Agreement between the Holder and the Company dated as of the Issue Date above (the “Termination Letter Agreement”). By acceptance of this Warrant, the Holder expressly agrees, for the benefit of the present and future holders of this Warrant or the securities issuable upon exercise of this Warrant, to be bound by the provisions of this Warrant and the Termination Letter Agreement. All capitalized terms not otherwise defined herein having the meaning set forth in the Termination Letter Agreement.

 

2.       Number of Shares. The number of Warrant Shares that the Holder may purchase by exercising this Warrant is equal to 20% of the sum of (i) the number of shares of Series G Convertible Preferred Stock that Johnson & Johnson Innovation – JJDC, Inc. has purchased under the Series G Preferred Stock Purchase Agreement dated as of May 31, 2016 by and between the Company and the investors named on Schedule A thereto (the “Series G Purchase Agreement”) and (ii) the number of shares of common stock of the Company that JJDC has purchased from the Company contemporaneous with a Public Company Transaction, provided that the total number of Warrant Shares shall not exceed 10,000,000. Upon the automatic conversion of all outstanding shares of the Company’s Series G Convertible Preferred Stock into common stock, this Warrant shall become exercisable into that number of shares of the Company’s common stock into which the Warrant Shares would then be convertible (but may be exercised only in accordance with Section 4 below).

 

3.       Exercise Price. The purchase price for the Warrant Shares shall be $0.01 per share, subject to adjustment as set forth below (the “Exercise Price”).

 

4.       Exercise of Warrant. This Warrant shall be exercisable if and only if a Public Company Transaction is consummated. A “Public Company Transaction” includes any transaction that results in the Company’s common stock being registered with the Securities and Exchange Commission or any equivalent public offering in any other jurisdiction, including any initial public offering, a registration of the Company’s common stock under the Securities Exchange Act of 1934, as amended, or a reverse merger of the Company into a shell company that is registered with the Securities and Exchange Commission. The Company shall notify the Holder at least 15 business days prior to the consummation of a Public Company Transaction, which notice shall also reference this Warrant and provide the timeline in which to respond to exercise this Warrant.

 

 

5.       Mechanics of Exercise. While this Warrant remains outstanding and exercisable, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. The exercise shall be effected by: (a) the surrender of a completed Notice of Election, in the form attached hereto as Exhibit A, and this Warrant (the “Subscription Documents”) to the Company at the address set forth on the signature page hereto; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of shares being purchased. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Warrant Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends), and in any event within 30 days of the delivery of the subscription notice. In the event this Warrant is exercised for less than all of the then-current number of shares purchasable hereunder, the Company shall, concurrently with the issuance of the certificates referenced in the prior sentence, issue a new warrant exercisable for the remaining number of shares purchasable under this Warrant.

 

6.       Net Exercise. In lieu of exercising this Warrant pursuant to Section 5, the Holder may elect to receive, without the payment by the Holder of any additional consideration, Warrant Shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant to the Company at the address set forth on the signature page hereto together with notice of such election, in which event the Company shall issue to the holder hereof a number of Warrant Shares computed using the following formula:

 

	X	=        Y (A–B)
		A

 

where:	X =	The number of Warrant Shares to be issued to the Holder pursuant to this net exercise;
	Y =	The number of Warrant Shares in respect of which the net issue election is made;
	A =	The fair market value of one Warrant Share at the time the net issue election is made; and
	B =	The Exercise Price (as adjusted to the date of the net issuance).

 

For purposes of this Warrant, the fair market value of one Warrant Share as of a particular date shall be determined as follows: (i) if traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period ending three days prior to the net exercise election; (ii) if traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three days prior to the net exercise; and (iii) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s board of directors; provided, that, if the Warrant is being exercised upon the consummation of a public offering of the Company’s common stock and the Warrant Shares are shares of the Company’s common stock, the fair market value will be the product of (x) the “price to public” of one share of the Company’s common stock in the public offering multiplied by (y) the number of shares of common stock into which each Warrant Share is convertible at the time of the public offering.

 

7.       Expiration of Warrant. This Warrant and all rights hereunder shall expire on the earlier of (i) the date the warrant contemplated by paragraph 1 of the Termination Letter Agreement becomes exercisable or converts into shares of the Company and (ii) 180 days after receipt by the Holder of the PMA-2 Data.

 

 

8.       Issuance of Shares. The Company covenants that the Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, when issued pursuant to the terms of this Warrant, be duly and validly issued, fully paid and nonassessable, and free from all taxes, liens, and charges with respect to the issuance thereof other than those imposed by the Holder. The Company further covenants and agrees that the Company will at all times during the Exercise Period authorize and reserve, free from preemptive rights, a sufficient number of Warrant Shares to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized by unissued Warrant Shares shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may be necessary to increase its authorized but unissued Warrant Shares to such number as shall be sufficient for such purposes.

 

9.       Adjustments in Warrant Shares and Exercise Price. The Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant will be proportionately adjusted to reflect any stock split, stock dividend, merger, reorganization, consolidation, combination or similar event, including an Acquisition or Asset Transfer, affecting the outstanding series of capital stock that constitutes the Warrant Shares, and adequate provision will be made to assure that upon exercise of this Warrant the Holder receives consideration that is the same, or as nearly similar as is reasonably practicable, as the Holder would have received if the Holder had exercised this Warrant immediately prior to such event. The form of this Warrant need not be changed because of any adjustment in the number of Warrant Shares subject to this Warrant.

 

10.       No Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

 

11.       No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote the Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights, or be notified of stockholder meetings, and the Holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.

 

12.       Market Stand-Off. The Holder agrees that the Warrant Shares and any shares of the Company’s common stock issuable upon conversion thereof shall be subject to the Market Stand-Off provisions in Section 2.10 of the Company’s Seventh Amended and Restated Investors’ Rights Agreement dated as of August 5, 2016, as amended and in effect from time to time, and that the Holder shall comply with the restrictions on a “Holder” in such Section 2.10.

 

12.       Transferability. The Holder may only sell, assign, dispose of otherwise transfer this Warrant to an Affiliate of Johnson & Johnson or with the prior written consent of the Company. Prior to any transaction that would result in a change of control of the Holder or would result in the Holder no longer being an Affiliate of Johnson & Johnson, the Holder shall assign this Warrant to Johnson & Johnson or an Affiliate of Johnson & Johnson. For purposes of this Warrant, an “Affiliate” of Johnson & Johnson means any person or legal entity directly or indirectly controlled by, controlling or under common control with Johnson & Johnson. For the purposes of this definition, “control” means the possession, direct or indirect, or the power to direct or cause the direction of the management and policies of an individual, corporation or other legal entity, whether through the ownership of voting securities, by contract, or otherwise.

 

13.       Notices. All notices required under this Warrant shall be deemed to have been given or made for all purposes if done in compliance with the Structured Rights Letter Agreement. In addition to and not in lieu of the notice requirements set forth in the Structured Rights Letter Agreement, another copy of the notice shall be sent via email to Kevin Norman, Senior Counsel Equity Transactions at knorman6@its.jnj.com.

 

14.       Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.

 

15.       Governing Law. This Warrant shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

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

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer and to be dated as of the date first written above.

 

	CVRx, Inc.
	a Delaware corporation
	By:	/s/ Nadim Yared
		Nadim Yared
		Chief Executive Officer
	CVRx, Inc.
	Attn: Chief Financial Officer
	9201 West Broadway Avenue, Suite 650
	Minneapolis, MN 55445

 

  

Exhibit A

Notice of Election

 

To:	CVRx, Inc.
	9201 West Broadway Avenue, Suite 650
	Minneapolis, MN 55445

 

The undersigned hereby elects to [check applicable subsection]:

 

_________	(a)	purchase [all of the shares] [____________ of the shares] [cross out inapplicable phrase] purchasable under the Warrant pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under this Warrant accompanies this notice;
OR
_________	(b)	Exercise the attached Warrant for [all of the shares] [____________ of the shares] [cross out inapplicable phrase] purchasable under the Warrant pursuant to the net exercise provisions of this Warrant.

 

The undersigned hereby represents and warrants that the undersigned is acquiring the shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof. The undersigned acknowledges and agrees it is bound by the obligations and covenants set forth in this Warrant.

 

HOLDER:

 

   

	Address:

  

Date:
Name in which shares should be registered:

 

  

 

Exhibit 4.13

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THIS WARRANT.

 

CVRx, INC.

 

WARRANT TO PURCHASE SHARES

OF SERIES G PREFERRED STOCK

 

(Loan A)

 

THIS CERTIFIES THAT, for value received, HORIZON TECHNOLOGY FINANCE CORPORATION and its assignees are entitled to subscribe for and purchase 187,500 fully paid and nonassessable shares of Series G Preferred (subject to adjustment pursuant to Section 4 hereof) of CVRx, INC., a Delaware corporation (the “Company”), at the price of $0.80 per share (such price and such other price as shall result, from time to time, from the adjustments specified in Section 4 hereof is herein referred to as the “Warrant Price”), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, (a) the term “Series G Preferred” shall mean the Company’s presently authorized shares of Series G Convertible Preferred Stock, (b) “Shares” shall mean the Series G Preferred and any stock into or for which such Series G Preferred may hereafter be converted or exchanged, and after the conversion of the Series G Preferred to shares of the Company’s common stock (the “Common Stock”), shall mean the Company’s Common Stock; and (c) the term “Date of Grant” shall mean September 30, 2019, and (c) the term “Other Warrants” shall mean any other warrants issued by the Company in connection with the transaction with respect to which this Warrant was issued, and any warrant issued upon transfer or partial exercise of or in lieu of this Warrant. The term “Warrant” as used herein shall be deemed to include Other Warrants unless the context clearly requires otherwise.

 

1.                  Term. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through the date that is ten (10) years after the Date of Grant.

 

 

2.                  Method of Exercise; Payment; Issuance of New Warrant. Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit A-1 duly completed and executed) at the principal office of the Company and by the payment to the Company, by certified or bank check, or by wire transfer to an account designated by the Company (a “Wire Transfer”) of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased; (b) if in connection with a registered public offering of the Company’s securities, the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A-2 duly completed and executed) at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company either by certified or bank check or by Wire Transfer from the proceeds of the sale of shares to be sold by the holder in such public offering of an amount equal to the then applicable Warrant Price per share multiplied by the number of Shares then being purchased; or (c) exercise of the “net issuance” right provided for in Section 9.2 hereof. The person or persons in whose name(s) any certificate(s) representing Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. In the event of any exercise of the rights represented by this Warrant, certificates for the Shares so purchased shall be delivered to the holder hereof as soon as possible and in any event within thirty (30) days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such thirty-day period; provided, however, at such time as the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), if requested by the holder of this Warrant, the Company shall cause its transfer agent to deliver the certificate representing Shares issued upon exercise of this Warrant to a broker or other person (as directed by the holder exercising this Warrant) within the time period required to settle any trade made by the holder after exercise of this Warrant.

 

3.                  Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be duly authorized, validly issued, fully paid and nonassessable, and free from all preemptive rights and taxes, liens and charges with respect to the issue thereof, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of Shares to provide for the exercise of the rights represented by this Warrant and a sufficient number of shares of its Common Stock to provide for the conversion of the Series Preferred into Common Stock.

 

4.                  Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

 

(a)               Reclassification or Merger. In case of any reclassification or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another entity (other than a merger with another entity in which the Company is the acquiring and the surviving entity and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing entity, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), so that the holder of this Warrant shall have the right to receive upon exercise of such new Warrant, 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 theretofore issuable upon exercise of this Warrant, (i) the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, merger or sale by a holder of the number of Shares then purchasable under this Warrant, or (ii) in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or purchasing entity, at the option of the holder of this Warrant, the securities of the successor or purchasing entity having a value at the time of the transaction equivalent to the value of the Series G Preferred purchasable upon exercise of this Warrant at the time of the transaction. Any 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 Section 4(a) shall similarly apply to successive reclassifications, changes, mergers and sales.

 

 

(b)               Subdivision or Combination of Shares. Except as set forth in Section 4(d), if the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its outstanding Shares, the Warrant Price shall be proportionately decreased and the number of Shares issuable hereunder shall be proportionately increased in the case of a subdivision and the Warrant Price shall be proportionately increased and the number of Shares issuable hereunder shall be proportionately decreased in the case of a combination.

 

(c)               Stock Dividends and Other Distributions. Except as set forth in Section 4(d), if the Company at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Shares payable in Shares, then the Warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant 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 outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of Shares outstanding immediately after such dividend or distribution; or (ii) make any other distribution with respect to Shares (except any distribution specifically provided for in Sections 4(a) and 4(b)), then, in each such case, provision shall be made by the Company such that the holder of this Warrant shall receive upon exercise of this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Shares (or Common Stock issuable upon conversion thereof) as of the record date fixed for the determination of the shareholders of the Company entitled to receive such dividend or distribution.

 

(d)               Adjustment of Number of Shares. Notwithstanding the foregoing, no adjustment shall be made to the shares of Series G Preferred purchasable upon exercise of this Warrant or the Warrant Price if an event described above in this Section 4 results in an adjustment to the Conversion Price (as defined in the Charter (as defined below)) of the Series G Preferred under the Charter. Upon each adjustment in the Warrant Price, the number of Shares purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter.

 

 

(e)               Antidilution Rights. The other antidilution rights applicable to the Shares purchasable hereunder are set forth in the Company’s Certificate of Incorporation, as amended through the Date of Grant (the “Charter”). Such antidilution rights shall not be restated, amended, modified or waived in any manner that impacts the holder hereof in a materially different and more adverse manner than other holders of similar shares of preferred stock of the Company without such holder’s prior written consent. The Company shall promptly provide the holder hereof with any restatement, amendment, modification or waiver (to the extent such waiver applies to the rights of the Series G Preferred) of the Charter promptly after the same has been made.

 

5.                   Notice of Adjustments. Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant. In addition, whenever the conversion price or conversion ratio of the Shares shall be adjusted, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Shares after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant.

 

6.                  Fractional Shares. No fractional Shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value of a Share on the date of exercise as reasonably determined in good faith by the Company’s Board of Directors.

 

7.                  Compliance with Act; Disposition of Warrant or Shares of Series G Preferred; Market Stand-Off.

 

(a)               Compliance with Act. The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the Shares to be issued upon exercise hereof and any Common Stock issued upon conversion thereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant, or any Shares to be issued upon exercise hereof or any Common Stock issued upon conversion thereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the “Act”) or any applicable state securities laws. Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing that the Shares so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Company. This Warrant and all Shares issued upon exercise of this Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

 

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY.”

 

 

Said legend shall be removed by the Company, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated. In addition, in connection with the issuance of this Warrant, the holder specifically represents to the Company by acceptance of this Warrant as follows:

 

(1)               The holder is aware of the Company’s business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and knowledgeable decision to acquire this Warrant. The holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any “distribution” thereof in violation of the Act.

 

(2)               The holder understands that this Warrant has not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the holder’s investment intent as expressed herein.

 

(3)               The holder further understands that this Warrant must be held indefinitely unless subsequently registered under the Act and qualified under any applicable state securities laws, or unless exemptions from registration and qualification are otherwise available. The holder is aware of the provisions of Rule 144, promulgated under the Act.

 

(4)               The holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act.

 

(b)               Disposition of Warrant or Shares. With respect to any offer, sale or other disposition of this Warrant or any Shares acquired pursuant to the exercise of this Warrant prior to registration of such Warrant or shares, the holder hereof agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Warrant or such Shares or Common Stock and indicating whether or not under the Act certificates for this Warrant or such Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory opinion or other evidence, the Company, as promptly as practicable but no later than fifteen (15) days after receipt of the written notice, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such Shares or Common Stock, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 7(b) that the opinion of counsel for the holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the holder promptly with details thereof after such determination has been made. Notwithstanding the foregoing, this Warrant or such Shares or Common Stock may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 or 144A under the Act (respectively, “Rule 144” and “Rule 144A”), provided that the Company shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 or 144A have been satisfied. Each certificate representing this Warrant or the Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

 

(c)               Applicability of Restrictions. Neither any restrictions of any legend described in this Warrant nor the requirements of Section 7(b) above shall apply to any transfer of, or grant of a security interest in, this Warrant (or the Shares or Common Stock obtainable upon exercise thereof) or any part hereof (i) to a partner of the holder if the holder is a partnership or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of which the holder is a partner or to a limited liability company of which the holder is a member, (iii) to any affiliate of the holder, (iv) notwithstanding the foregoing, to any corporation, company, limited liability company, limited partnership, partnership, or other person managed or sponsored by Horizon Technology Finance Corporation ("HRZN") or in which HRZN has an interest, (v) or to a lender to the holder or any of the foregoing; provided, however, in any such transfer, if applicable, the transferee shall on the Company’s request agree in writing to be bound by the terms of this Warrant as if an original holder hereof.

 

(d)       Market Stand-Off Agreement. The holder of this Warrant agrees that the Shares shall be subject to the Market Stand-Off provisions in Section 2.10 of the Company’s Seventh Amended and Restated Investors’ Rights Agreement dated as of August 5, 2016, as amended and in effect from time to time, and that the holder of this Warrant shall comply with the restrictions on a “Holder” in such Section 2.10.

 

8.                  Rights as Shareholders; Information. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Shares or any other securities of the Company which may at any time be issuable upon the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. Notwithstanding the foregoing, the Company will transmit to the holder of this Warrant (a) such information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Company concurrently with the distribution thereof to the shareholders, (b) any stock purchase (or similar) agreement to which the Company is a party entered into on or after the Date of Grant, (c) each amendment to, or amended and restated, Charter filed by the Company with the Secretary of State of any jurisdiction, and (d) on the first day of each calendar quarter, the Company’s then current capitalization table, showing all issued and outstanding equity securities of the Company, together with all options or warrants to purchase such equity securities issued by the Company.

 

 

9.         Additional Rights.

 

9.1       Acquisition Transactions. The Company shall provide the holder of this Warrant with at least twenty (20) days’ written notice prior to closing thereof of the terms and conditions of any of the following transactions (to the extent the Company has notice thereof): (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Company’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of.

 

9.2       Right to Convert Warrant into Stock: Net Issuance.

 

(a)               Right to Convert. In addition to and without limiting the rights of the holder under the terms of this Warrant, the holder shall have the right to convert this Warrant or any portion thereof (the “Conversion Right”) into Shares as provided in this Section 9.2 at any time or from time to time during the term of this Warrant. Upon exercise of the Conversion Right with respect to a particular number of Shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver to the holder (without payment by the holder of any exercise price or any cash or other consideration) that number of fully paid and nonassessable Shares as is determined according to the following formula:

 

X = B - A

  Y

 

Where:

X =

the number of Shares that shall be issued to holder

 

Y =

the fair market value of one Share

 

A =

the aggregate Warrant Price of the specified number of Converted Warrant Shares immediately prior to the exercise of the Conversion Right (i.e., the number of Converted Warrant Shares multiplied by the Warrant Price)

 

B =

the aggregate fair market value of the specified number of Converted Warrant Shares (i.e., the number of Converted Warrant Shares multiplied by the fair market value of one Converted Warrant Share)

 

No fractional Shares shall be issuable upon exercise of the Conversion Right, 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 holder an amount in cash equal to the fair market value of the resulting fractional Share on the Conversion Date (as hereinafter defined). For purposes of Section 9 of this Warrant, Shares issued pursuant to the Conversion Right shall be treated as if they were issued upon the exercise of this Warrant.

 

 

(b)               Method of Exercise. The Conversion Right may be exercised by the holder by the surrender of this Warrant at the principal office of the Company together with a written statement (which may be in the form of Exhibit A-1 or Exhibit A-2 hereto) specifying that the holder thereby intends to exercise the Conversion Right and indicating the number of Shares subject to this Warrant which are being surrendered (referred to in Section 9.2(a) hereof as the Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement, or on such later date as is specified therein (the “Conversion Date”), and, at the election of the holder hereof, may be made contingent upon the closing of the sale of the Company’s Common Stock to the public in a public offering pursuant to a Registration Statement under the Act (a “Public Offering”). Certificates for the Shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant evidencing the balance of the Shares remaining subject to this Warrant, shall be issued as of the Conversion Date and shall be delivered to the holder within thirty (30) days following the Conversion Date.

 

(c)               Determination of Fair Market Value. For purposes of this Section 9.2, “fair market value” of a Share (or Common Stock if the Shares have been converted into Common Stock) as of a particular date (the “Determination Date”) shall mean:

 

(i)            If the Conversion Right is exercised in connection with and contingent upon a Public Offering, and if the Company’s Registration Statement relating to such Public Offering (“Registration Statement”) has been declared effective by the Securities and Exchange Commission, then the initial “Price to Public” specified in the final prospectus with respect to such offering.

 

(ii)            If the Conversion Right is not exercised in connection with and contingent upon a Public Offering, then as follows:

 

(A)       If traded on a securities exchange, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock on such exchange over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible;

 

(B)       If traded on the Nasdaq Stock Market or other over-the-counter system, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each Share is then convertible; and

 

(C)       If there is no public market for the Common Stock, then fair market value shall be determined by the Board of Directors of the Company in good faith.

 

 

In making a determination under clauses (A) or (B) above, if on the Determination Date, five trading days had not passed since the closing of the Company’s initial public offering of its Common Stock (“IPO”), then the fair market value of the Common Stock shall be the average closing prices or closing bid prices, as applicable, for the shorter period beginning on and including the date of the IPO and ending on the trading day prior to the Determination Date (or if such period includes only one trading day, the closing price or closing bid price, as applicable, for such trading day). If closing prices or closing bid prices are no longer reported by a securities exchange or other trading system, the closing price or closing bid price shall be that which is reported by such securities exchange or other trading system at 4:00 p.m. New York City time on the applicable trading day.

 

9.3       Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all of the Shares subject hereto, and if the fair market value of one Share is greater than the Warrant Price then in effect, this Warrant shall be deemed automatically exercised pursuant to Section 9.2 above (even if not surrendered) immediately before its expiration. For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant to Section 9.2(c). To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 9.3, the Company agrees to promptly notify the holder hereof of the number of Shares, if any, the holder hereof is to receive by reason of such automatic exercise.

 

9.4       No Adverse Consequences to Series G Preferred. The Company agrees not to consummate any subsequent equity or convertible note financing(s), in a single transaction or series of transactions, in which the holder of this Warrant is required to invest additional funds in order to avoid Adverse Consequences to the Series G Preferred purchasable pursuant to this Warrant. An “Adverse Consequence” shall mean any forced conversion or disposition, disproportionate dilution or loss or revocation of any right of the Series G Preferred; provided that none of the following shall be deemed to be an Adverse Consequence: (a) simple pro rata economic or voting dilution, or (b) a down-round financing in which holders of Series G Preferred receive the weighted-average anti-dilution price protection afforded to the holders of Series G Preferred pursuant to the Charter.

 

10.       Representations and Warranties. The Company represents and warrants to the holder of this Warrant 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, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law or principles at equity governing specific performance, injunctive relief and other equitable remedies.

 

(b)               The Shares have 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 nonassessable and free from preemptive rights, taxes, liens and charges, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended.

 

(c)               The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Charter, and on the Date of Grant, each Share represented by this Warrant is convertible into one share of Common Stock.

 

(d)               The shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms of the Charter will be validly issued, fully paid and nonassessable and free from preemptive rights, taxes, liens and charges.

 

 

(e)               The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Charter or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and do not and will 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, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby.

 

(f)                There are no actions, suits, audits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company in any court or before any governmental commission, board or authority which, if adversely determined, could have a material adverse effect on the ability of the Company to perform its obligations under this Warrant.

 

(g)               The number of shares of Common Stock of the Company outstanding on the date hereof, on a fully diluted basis (assuming the conversion of all outstanding convertible securities and the exercise of all outstanding options and warrants), does not exceed 401,150,000 shares.

 

11.              Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

12.              Notices. Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant.

 

13.             Binding Effect on Successors. This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets, and all of the obligations of the Company relating to the Shares issuable upon the exercise or conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the holder hereof.

 

14.              Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

 

 

15.             Descriptive Headings. The descriptive headings of the various Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant.

 

16.              Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware.

 

17.             Survival of Representations, Warranties and Agreements. All representations and warranties of the Company and the holder hereof contained herein shall survive the Date of Grant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder. All agreements of the Company and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.

 

18.              Remedies. In case any one or more of the covenants, representations and warranties or agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Company), or the Company (in the case of a breach by a holder), may proceed to protect and enforce their or 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 breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.

 

19.              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 Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

 

20.             Severability. The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect.

 

21.              Recovery of Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

 

22.             Entire Agreement; Modification. This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

 

[Remainder of page intentionally blank. Signature page follows.]

 

 

The Company has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above.

 

	CVRx, INC.
	By:	/s/ John Brintnall
	Name:	John Brintnall
	Title:	Chief Financial Officer

 

	Address:	9201 W. Broadway Ave., #650
		Minneapolis, MN 55445

 

[SIGNATURE PAGE TO WARRANT (LOAN A)]

 

 

EXHIBIT A-1

 

NOTICE OF EXERCISE

 

To:	CVRx, INC. (the “Company”)

 

1.       The undersigned hereby:

 

¨

elects to purchase________ shares of [Series G Preferred] [Common Stock] of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, or

 

¨

elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please issue a certificate or certificates representing ________ shares in the name of the undersigned or in such other name or names as are specified below:

 

	(Name)
	(Address)

 

3.       The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

 

 

(Signature)

 

(Date)

 

 

EXHIBIT A-2

 

NOTICE OF EXERCISE

 

To:	CVRx, INC. (the “Company”)

 

1.      Contingent upon and effective immediately prior to the closing (the “Closing”) of the Company’s public offering contemplated by the Registration Statement on Form S___, filed________, 20__, the undersigned hereby:

 

¨       elects to purchase________shares of [Series G Preferred] [Common Stock] of the Company (or such lesser number of shares as may be sold on behalf of the undersigned at the Closing) pursuant to the terms of the attached Warrant, or

 

¨       elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please deliver to the custodian for the selling shareholders a stock certificate representing such________shares.

 

3.       The undersigned has instructed the custodian for the selling shareholders to deliver to the Company $________or, if less, the net proceeds due the undersigned from the sale of shares in the aforesaid public offering. If such net proceeds are less than the purchase price for such shares, the undersigned agrees to deliver the difference to the Company prior to the Closing.

 

 

(Signature)

 

(Date)

 

 

 

Exhibit 4.14

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THIS WARRANT.

 

CVRx, INC.

 

WARRANT TO PURCHASE SHARES

OF SERIES G PREFERRED STOCK

 

(Loan B)

 

THIS CERTIFIES THAT, for value received, HORIZON TECHNOLOGY FINANCE CORPORATION and its assignees are entitled to subscribe for and purchase 187,500 fully paid and nonassessable shares of Series G Preferred (subject to adjustment pursuant to Section 4 hereof) of CVRx, INC., a Delaware corporation (the “Company”), at the price of $0.80 per share (such price and such other price as shall result, from time to time, from the adjustments specified in Section 4 hereof is herein referred to as the “Warrant Price”), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, (a) the term “Series G Preferred” shall mean the Company’s presently authorized shares of Series G Convertible Preferred Stock, (b) “Shares” shall mean the Series G Preferred and any stock into or for which such Series G Preferred may hereafter be converted or exchanged, and after the conversion of the Series G Preferred to shares of the Company’s common stock (the “Common Stock”), shall mean the Company’s Common Stock; and (c) the term “Date of Grant” shall mean September 30, 2019, and (c) the term “Other Warrants” shall mean any other warrants issued by the Company in connection with the transaction with respect to which this Warrant was issued, and any warrant issued upon transfer or partial exercise of or in lieu of this Warrant. The term “Warrant” as used herein shall be deemed to include Other Warrants unless the context clearly requires otherwise.

 

1.                  Term. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through the date that is ten (10) years after the Date of Grant.

 

2.                  Method of Exercise; Payment; Issuance of New Warrant. Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit A-1 duly completed and executed) at the principal office of the Company and by the payment to the Company, by certified or bank check, or by wire transfer to an account designated by the Company (a “Wire Transfer”) of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased; (b) if in connection with a registered public offering of the Company’s securities, the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A-2 duly completed and executed) at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company either by certified or bank check or by Wire Transfer from the proceeds of the sale of shares to be sold by the holder in such public offering of an amount equal to the then applicable Warrant Price per share multiplied by the number of Shares then being purchased; or (c) exercise of the “net issuance” right provided for in Section 9.2 hereof. The person or persons in whose name(s) any certificate(s) representing Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. In the event of any exercise of the rights represented by this Warrant, certificates for the Shares so purchased shall be delivered to the holder hereof as soon as possible and in any event within thirty (30) days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such thirty-day period; provided, however, at such time as the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), if requested by the holder of this Warrant, the Company shall cause its transfer agent to deliver the certificate representing Shares issued upon exercise of this Warrant to a broker or other person (as directed by the holder exercising this Warrant) within the time period required to settle any trade made by the holder after exercise of this Warrant.

 

 

3.                  Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be duly authorized, validly issued, fully paid and nonassessable, and free from all preemptive rights and taxes, liens and charges with respect to the issue thereof, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of Shares to provide for the exercise of the rights represented by this Warrant and a sufficient number of shares of its Common Stock to provide for the conversion of the Series Preferred into Common Stock.

 

4.                  Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

 

(a)               Reclassification or Merger. In case of any reclassification or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another entity (other than a merger with another entity in which the Company is the acquiring and the surviving entity and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing entity, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), so that the holder of this Warrant shall have the right to receive upon exercise of such new Warrant, 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 theretofore issuable upon exercise of this Warrant, (i) the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, merger or sale by a holder of the number of Shares then purchasable under this Warrant, or (ii) in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or purchasing entity, at the option of the holder of this Warrant, the securities of the successor or purchasing entity having a value at the time of the transaction equivalent to the value of the Series G Preferred purchasable upon exercise of this Warrant at the time of the transaction. Any 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 Section 4(a) shall similarly apply to successive reclassifications, changes, mergers and sales.

 

 

(b)               Subdivision or Combination of Shares. Except as set forth in Section 4(d), if the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its outstanding Shares, the Warrant Price shall be proportionately decreased and the number of Shares issuable hereunder shall be proportionately increased in the case of a subdivision and the Warrant Price shall be proportionately increased and the number of Shares issuable hereunder shall be proportionately decreased in the case of a combination.

 

(c)               Stock Dividends and Other Distributions. Except as set forth in Section 4(d), if the Company at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Shares payable in Shares, then the Warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant 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 outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of Shares outstanding immediately after such dividend or distribution; or (ii) make any other distribution with respect to Shares (except any distribution specifically provided for in Sections 4(a) and 4(b)), then, in each such case, provision shall be made by the Company such that the holder of this Warrant shall receive upon exercise of this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Shares (or Common Stock issuable upon conversion thereof) as of the record date fixed for the determination of the shareholders of the Company entitled to receive such dividend or distribution.

 

(d)               Adjustment of Number of Shares. Notwithstanding the foregoing, no adjustment shall be made to the shares of Series G Preferred purchasable upon exercise of this Warrant or the Warrant Price if an event described above in this Section 4 results in an adjustment to the Conversion Price (as defined in the Charter (as defined below)) of the Series G Preferred under the Charter. Upon each adjustment in the Warrant Price, the number of Shares purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter.

 

 

(e)               Antidilution Rights. The other antidilution rights applicable to the Shares purchasable hereunder are set forth in the Company’s Certificate of Incorporation, as amended through the Date of Grant (the “Charter”). Such antidilution rights shall not be restated, amended, modified or waived in any manner that impacts the holder hereof in a materially different and more adverse manner than other holders of similar shares of preferred stock of the Company without such holder’s prior written consent. The Company shall promptly provide the holder hereof with any restatement, amendment, modification or waiver (to the extent such waiver applies to the rights of the Series G Preferred) of the Charter promptly after the same has been made.

 

5.                  Notice of Adjustments. Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant. In addition, whenever the conversion price or conversion ratio of the Shares shall be adjusted, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Shares after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant.

 

6.                  Fractional Shares. No fractional Shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value of a Share on the date of exercise as reasonably determined in good faith by the Company’s Board of Directors.

 

7.                  Compliance with Act; Disposition of Warrant or Shares of Series G Preferred; Market Stand-Off.

 

(a)               Compliance with Act. The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the Shares to be issued upon exercise hereof and any Common Stock issued upon conversion thereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant, or any Shares to be issued upon exercise hereof or any Common Stock issued upon conversion thereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the “Act”) or any applicable state securities laws. Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing that the Shares so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Company. This Warrant and all Shares issued upon exercise of this Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

 

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY.”

 

 

Said legend shall be removed by the Company, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated. In addition, in connection with the issuance of this Warrant, the holder specifically represents to the Company by acceptance of this Warrant as follows:

 

(1)               The holder is aware of the Company’s business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and knowledgeable decision to acquire this Warrant. The holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any “distribution” thereof in violation of the Act.

 

(2)               The holder understands that this Warrant has not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the holder’s investment intent as expressed herein.

 

(3)               The holder further understands that this Warrant must be held indefinitely unless subsequently registered under the Act and qualified under any applicable state securities laws, or unless exemptions from registration and qualification are otherwise available. The holder is aware of the provisions of Rule 144, promulgated under the Act.

 

(4)               The holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act.

 

(b)               Disposition of Warrant or Shares. With respect to any offer, sale or other disposition of this Warrant or any Shares acquired pursuant to the exercise of this Warrant prior to registration of such Warrant or shares, the holder hereof agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Warrant or such Shares or Common Stock and indicating whether or not under the Act certificates for this Warrant or such Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory opinion or other evidence, the Company, as promptly as practicable but no later than fifteen (15) days after receipt of the written notice, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such Shares or Common Stock, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 7(b) that the opinion of counsel for the holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the holder promptly with details thereof after such determination has been made. Notwithstanding the foregoing, this Warrant or such Shares or Common Stock may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 or 144A under the Act (respectively, “Rule 144” and “Rule 144A”), provided that the Company shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 or 144A have been satisfied. Each certificate representing this Warrant or the Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

 

(c)               Applicability of Restrictions. Neither any restrictions of any legend described in this Warrant nor the requirements of Section 7(b) above shall apply to any transfer of, or grant of a security interest in, this Warrant (or the Shares or Common Stock obtainable upon exercise thereof) or any part hereof (i) to a partner of the holder if the holder is a partnership or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of which the holder is a partner or to a limited liability company of which the holder is a member, (iii) to any affiliate of the holder, (iv) notwithstanding the foregoing, to any corporation, company, limited liability company, limited partnership, partnership, or other person managed or sponsored by Horizon Technology Finance Corporation ("HRZN") or in which HRZN has an interest, (v) or to a lender to the holder or any of the foregoing; provided, however, in any such transfer, if applicable, the transferee shall on the Company’s request agree in writing to be bound by the terms of this Warrant as if an original holder hereof.

 

(d)              Market Stand-Off Agreement. The holder of this Warrant agrees that the Shares shall be subject to the Market Stand-Off provisions in Section 2.10 of the Company’s Seventh Amended and Restated Investors’ Rights Agreement dated as of August 5, 2016, as amended and in effect from time to time, and that the holder of this Warrant shall comply with the restrictions on a “Holder” in such Section 2.10.

 

8.                  Rights as Shareholders; Information. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Shares or any other securities of the Company which may at any time be issuable upon the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. Notwithstanding the foregoing, the Company will transmit to the holder of this Warrant (a) such information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Company concurrently with the distribution thereof to the shareholders, (b) any stock purchase (or similar) agreement to which the Company is a party entered into on or after the Date of Grant, (c) each amendment to, or amended and restated, Charter filed by the Company with the Secretary of State of any jurisdiction, and (d) on the first day of each calendar quarter, the Company’s then current capitalization table, showing all issued and outstanding equity securities of the Company, together with all options or warrants to purchase such equity securities issued by the Company.

 

 

9.                  Additional Rights.

 

9.1       Acquisition Transactions. The Company shall provide the holder of this Warrant with at least twenty (20) days’ written notice prior to closing thereof of the terms and conditions of any of the following transactions (to the extent the Company has notice thereof): (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Company’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of.

 

9.2       Right to Convert Warrant into Stock: Net Issuance.

 

(a)               Right to Convert. In addition to and without limiting the rights of the holder under the terms of this Warrant, the holder shall have the right to convert this Warrant or any portion thereof (the “Conversion Right”) into Shares as provided in this Section 9.2 at any time or from time to time during the term of this Warrant. Upon exercise of the Conversion Right with respect to a particular number of Shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver to the holder (without payment by the holder of any exercise price or any cash or other consideration) that number of fully paid and nonassessable Shares as is determined according to the following formula:

 

X = B - A

          Y

 

Where:

X =

the number of Shares that shall be issued to holder

 

	Y =	the fair market value of one Share

	A =	the aggregate Warrant Price of the specified number of Converted Warrant Shares immediately prior to the exercise of the Conversion Right (i.e., the number of Converted Warrant Shares multiplied by the Warrant Price)

B =

the aggregate fair market value of the specified number of Converted Warrant Shares (i.e., the number of Converted Warrant Shares multiplied by the fair market value of one Converted Warrant Share)

 

No fractional Shares shall be issuable upon exercise of the Conversion Right, 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 holder an amount in cash equal to the fair market value of the resulting fractional Share on the Conversion Date (as hereinafter defined). For purposes of Section 9 of this Warrant, Shares issued pursuant to the Conversion Right shall be treated as if they were issued upon the exercise of this Warrant.

 

 

(b)               Method of Exercise. The Conversion Right may be exercised by the holder by the surrender of this Warrant at the principal office of the Company together with a written statement (which may be in the form of Exhibit A-1 or Exhibit A-2 hereto) specifying that the holder thereby intends to exercise the Conversion Right and indicating the number of Shares subject to this Warrant which are being surrendered (referred to in Section 9.2(a) hereof as the Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement, or on such later date as is specified therein (the “Conversion Date”), and, at the election of the holder hereof, may be made contingent upon the closing of the sale of the Company’s Common Stock to the public in a public offering pursuant to a Registration Statement under the Act (a “Public Offering”). Certificates for the Shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant evidencing the balance of the Shares remaining subject to this Warrant, shall be issued as of the Conversion Date and shall be delivered to the holder within thirty (30) days following the Conversion Date.

 

(c)               Determination of Fair Market Value. For purposes of this Section 9.2, “fair market value” of a Share (or Common Stock if the Shares have been converted into Common Stock) as of a particular date (the “Determination Date”) shall mean:

 

(i)            If the Conversion Right is exercised in connection with and contingent upon a Public Offering, and if the Company’s Registration Statement relating to such Public Offering (“Registration Statement”) has been declared effective by the Securities and Exchange Commission, then the initial “Price to Public” specified in the final prospectus with respect to such offering.

 

(ii)            If the Conversion Right is not exercised in connection with and contingent upon a Public Offering, then as follows:

 

(A)       If traded on a securities exchange, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock on such exchange over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible;

 

(B)       If traded on the Nasdaq Stock Market or other over-the-counter system, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each Share is then convertible; and

 

(C)        If there is no public market for the Common Stock, then fair market value shall be determined by the Board of Directors of the Company in good faith.

 

In making a determination under clauses (A) or (B) above, if on the Determination Date, five trading days had not passed since the closing of the Company’s initial public offering of its Common Stock (“IPO”), then the fair market value of the Common Stock shall be the average closing prices or closing bid prices, as applicable, for the shorter period beginning on and including the date of the IPO and ending on the trading day prior to the Determination Date (or if such period includes only one trading day, the closing price or closing bid price, as applicable, for such trading day). If closing prices or closing bid prices are no longer reported by a securities exchange or other trading system, the closing price or closing bid price shall be that which is reported by such securities exchange or other trading system at 4:00 p.m. New York City time on the applicable trading day.

 

 

9.3       Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all of the Shares subject hereto, and if the fair market value of one Share is greater than the Warrant Price then in effect, this Warrant shall be deemed automatically exercised pursuant to Section 9.2 above (even if not surrendered) immediately before its expiration. For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant to Section 9.2(c). To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 9.3, the Company agrees to promptly notify the holder hereof of the number of Shares, if any, the holder hereof is to receive by reason of such automatic exercise.

 

9.4       No Adverse Consequences to Series G Preferred. The Company agrees not to consummate any subsequent equity or convertible note financing(s), in a single transaction or series of transactions, in which the holder of this Warrant is required to invest additional funds in order to avoid Adverse Consequences to the Series G Preferred purchasable pursuant to this Warrant. An “Adverse Consequence” shall mean any forced conversion or disposition, disproportionate dilution or loss or revocation of any right of the Series G Preferred; provided that none of the following shall be deemed to be an Adverse Consequence: (a) simple pro rata economic or voting dilution, or (b) a down-round financing in which holders of Series G Preferred receive the weighted-average anti-dilution price protection afforded to the holders of Series G Preferred pursuant to the Charter.

 

10.       Representations and Warranties. The Company represents and warrants to the holder of this Warrant 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, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law or principles at equity governing specific performance, injunctive relief and other equitable remedies.

 

(b)               The Shares have 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 nonassessable and free from preemptive rights, taxes, liens and charges, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended.

 

(c)               The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Charter, and on the Date of Grant, each Share represented by this Warrant is convertible into one share of Common Stock.

 

(d)               The shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms of the Charter will be validly issued, fully paid and nonassessable and free from preemptive rights, taxes, liens and charges.

 

 

(e)               The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Charter or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and do not and will 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, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby.

 

(f)                There are no actions, suits, audits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company in any court or before any governmental commission, board or authority which, if adversely determined, could have a material adverse effect on the ability of the Company to perform its obligations under this Warrant.

 

(g)               The number of shares of Common Stock of the Company outstanding on the date hereof, on a fully diluted basis (assuming the conversion of all outstanding convertible securities and the exercise of all outstanding options and warrants), does not exceed 401,150,000 shares.

 

11.       Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

12.      Notices. Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant.

 

13.       Binding Effect on Successors. This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets, and all of the obligations of the Company relating to the Shares issuable upon the exercise or conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the holder hereof.

 

14.       Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

 

 

15.       Descriptive Headings. The descriptive headings of the various Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant.

 

16.       Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware.

 

17.       Survival of Representations, Warranties and Agreements. All representations and warranties of the Company and the holder hereof contained herein shall survive the Date of Grant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder. All agreements of the Company and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.

 

18.       Remedies. In case any one or more of the covenants, representations and warranties or agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Company), or the Company (in the case of a breach by a holder), may proceed to protect and enforce their or 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 breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.

 

19.       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 Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

 

20.       Severability. The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect.

 

21.       Recovery of Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

 

22.       Entire Agreement; Modification. This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

[Remainder of page intentionally blank. Signature page follows.]

 

 

The Company has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above.

 

	CVRx, INC.
	By:	/s/ John Brintnall
	Name:	John Brintnall
	Title:	Chief Financial Officer
	Address:	9201 W. Broadway Ave., #650
		Minneapolis, MN 55445

 

[SIGNATURE PAGE TO WARRANT (LOAN B)]

 

 

EXHIBIT A-1

 

NOTICE OF EXERCISE

To:          CVRx, INC. (the “Company”)

 

1.       The undersigned hereby:

 

¨

elects to purchase________ shares of [Series G Preferred] [Common Stock] of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, or

 

¨

elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please issue a certificate or certificates representing ________ shares in the name of the undersigned or in such other name or names as are specified below:

 

	(Name)
	(Address)

 

3.       The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

 

(Signature)

 

	(Date)

 

 

EXHIBIT A-2

 

NOTICE OF EXERCISE

 

To:          CVRx, INC. (the “Company”)

 

1.       Contingent upon and effective immediately prior to the closing (the “Closing”) of the Company’s public offering contemplated by the Registration Statement on Form S___, filed________, 20__, the undersigned hereby:

 

¨      elects to purchase________shares of [Series G Preferred] [Common Stock] of the Company (or such lesser number of shares as may be sold on behalf of the undersigned at the Closing) pursuant to the terms of the attached Warrant, or

 

¨      elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please deliver to the custodian for the selling shareholders a stock certificate representing such________shares.

 

3.       The undersigned has instructed the custodian for the selling shareholders to deliver to the Company $________or, if less, the net proceeds due the undersigned from the sale of shares in the aforesaid public offering. If such net proceeds are less than the purchase price for such shares, the undersigned agrees to deliver the difference to the Company prior to the Closing.

 

	(Signature)

 

	(Date)

 

 

Exhibit 4.15

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THIS WARRANT.

 

CVRx, INC.

 

WARRANT TO PURCHASE SHARES

OF SERIES G PREFERRED STOCK

 

(Loan C)

 

THIS CERTIFIES THAT, for value received, HORIZON TECHNOLOGY FINANCE CORPORATION and its assignees are entitled to subscribe for and purchase 187,500 fully paid and nonassessable shares of Series G Preferred (subject to adjustment pursuant to Section 4 hereof) of CVRx, INC., a Delaware corporation (the “Company”), at the price of $0.80 per share (such price and such other price as shall result, from time to time, from the adjustments specified in Section 4 hereof is herein referred to as the “Warrant Price”), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, (a) the term “Series G Preferred” shall mean the Company’s presently authorized shares of Series G Convertible Preferred Stock, (b) “Shares” shall mean the Series G Preferred and any stock into or for which such Series G Preferred may hereafter be converted or exchanged, and after the conversion of the Series G Preferred to shares of the Company’s common stock (the “Common Stock”), shall mean the Company’s Common Stock; and (c) the term “Date of Grant” shall mean September 30, 2019, and (c) the term “Other Warrants” shall mean any other warrants issued by the Company in connection with the transaction with respect to which this Warrant was issued, and any warrant issued upon transfer or partial exercise of or in lieu of this Warrant. The term “Warrant” as used herein shall be deemed to include Other Warrants unless the context clearly requires otherwise.

 

1.         Term. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through the date that is ten (10) years after the Date of Grant.

 

2.         Method of Exercise; Payment; Issuance of New Warrant. Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit A-1 duly completed and executed) at the principal office of the Company and by the payment to the Company, by certified or bank check, or by wire transfer to an account designated by the Company (a “Wire Transfer”) of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased; (b) if in connection with a registered public offering of the Company’s securities, the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A-2 duly completed and executed) at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company either by certified or bank check or by Wire Transfer from the proceeds of the sale of shares to be sold by the holder in such public offering of an amount equal to the then applicable Warrant Price per share multiplied by the number of Shares then being purchased; or (c) exercise of the “net issuance” right provided for in Section 9.2 hereof. The person or persons in whose name(s) any certificate(s) representing Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. In the event of any exercise of the rights represented by this Warrant, certificates for the Shares so purchased shall be delivered to the holder hereof as soon as possible and in any event within thirty (30) days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such thirty-day period; provided, however, at such time as the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), if requested by the holder of this Warrant, the Company shall cause its transfer agent to deliver the certificate representing Shares issued upon exercise of this Warrant to a broker or other person (as directed by the holder exercising this Warrant) within the time period required to settle any trade made by the holder after exercise of this Warrant.

 

 

3.         Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be duly authorized, validly issued, fully paid and nonassessable, and free from all preemptive rights and taxes, liens and charges with respect to the issue thereof, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of Shares to provide for the exercise of the rights represented by this Warrant and a sufficient number of shares of its Common Stock to provide for the conversion of the Series Preferred into Common Stock.

4.          Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

 

(a)               Reclassification or Merger. In case of any reclassification or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another entity (other than a merger with another entity in which the Company is the acquiring and the surviving entity and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing entity, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), so that the holder of this Warrant shall have the right to receive upon exercise of such new Warrant, 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 theretofore issuable upon exercise of this Warrant, (i) the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, merger or sale by a holder of the number of Shares then purchasable under this Warrant, or (ii) in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or purchasing entity, at the option of the holder of this Warrant, the securities of the successor or purchasing entity having a value at the time of the transaction equivalent to the value of the Series G Preferred purchasable upon exercise of this Warrant at the time of the transaction. Any 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 Section 4(a) shall similarly apply to successive reclassifications, changes, mergers and sales.

 

 

(b)               Subdivision or Combination of Shares. Except as set forth in Section 4(d), if the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its outstanding Shares, the Warrant Price shall be proportionately decreased and the number of Shares issuable hereunder shall be proportionately increased in the case of a subdivision and the Warrant Price shall be proportionately increased and the number of Shares issuable hereunder shall be proportionately decreased in the case of a combination.

 

(c)               Stock Dividends and Other Distributions. Except as set forth in Section 4(d), if the Company at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Shares payable in Shares, then the Warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant 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 outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of Shares outstanding immediately after such dividend or distribution; or (ii) make any other distribution with respect to Shares (except any distribution specifically provided for in Sections 4(a) and 4(b)), then, in each such case, provision shall be made by the Company such that the holder of this Warrant shall receive upon exercise of this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Shares (or Common Stock issuable upon conversion thereof) as of the record date fixed for the determination of the shareholders of the Company entitled to receive such dividend or distribution.

 

(d)               Adjustment of Number of Shares. Notwithstanding the foregoing, no adjustment shall be made to the shares of Series G Preferred purchasable upon exercise of this Warrant or the Warrant Price if an event described above in this Section 4 results in an adjustment to the Conversion Price (as defined in the Charter (as defined below)) of the Series G Preferred under the Charter. Upon each adjustment in the Warrant Price, the number of Shares purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter.

 

 

(e)               Antidilution Rights. The other antidilution rights applicable to the Shares purchasable hereunder are set forth in the Company’s Certificate of Incorporation, as amended through the Date of Grant (the “Charter”). Such antidilution rights shall not be restated, amended, modified or waived in any manner that impacts the holder hereof in a materially different and more adverse manner than other holders of similar shares of preferred stock of the Company without such holder’s prior written consent. The Company shall promptly provide the holder hereof with any restatement, amendment, modification or waiver (to the extent such waiver applies to the rights of the Series G Preferred) of the Charter promptly after the same has been made.

 

5.             Notice of Adjustments. Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant. In addition, whenever the conversion price or conversion ratio of the Shares shall be adjusted, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Shares after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant.

 

6.             Fractional Shares. No fractional Shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value of a Share on the date of exercise as reasonably determined in good faith by the Company’s Board of Directors.

 

7.             Compliance with Act; Disposition of Warrant or Shares of Series G Preferred; Market Stand-Off.

 

(a)               Compliance with Act. The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the Shares to be issued upon exercise hereof and any Common Stock issued upon conversion thereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant, or any Shares to be issued upon exercise hereof or any Common Stock issued upon conversion thereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the “Act”) or any applicable state securities laws. Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing that the Shares so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Company. This Warrant and all Shares issued upon exercise of this Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

 

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY.”

 

 

Said legend shall be removed by the Company, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated. In addition, in connection with the issuance of this Warrant, the holder specifically represents to the Company by acceptance of this Warrant as follows:

(1)               The holder is aware of the Company’s business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and knowledgeable decision to acquire this Warrant. The holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any “distribution” thereof in violation of the Act.

 

(2)              The holder understands that this Warrant has not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the holder’s investment intent as expressed herein.

 

(3)              The holder further understands that this Warrant must be held indefinitely unless subsequently registered under the Act and qualified under any applicable state securities laws, or unless exemptions from registration and qualification are otherwise available. The holder is aware of the provisions of Rule 144, promulgated under the Act.

 

(4)               The holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act.

 

(b)               Disposition of Warrant or Shares. With respect to any offer, sale or other disposition of this Warrant or any Shares acquired pursuant to the exercise of this Warrant prior to registration of such Warrant or shares, the holder hereof agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Warrant or such Shares or Common Stock and indicating whether or not under the Act certificates for this Warrant or such Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory opinion or other evidence, the Company, as promptly as practicable but no later than fifteen (15) days after receipt of the written notice, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such Shares or Common Stock, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 7(b) that the opinion of counsel for the holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the holder promptly with details thereof after such determination has been made. Notwithstanding the foregoing, this Warrant or such Shares or Common Stock may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 or 144A under the Act (respectively, “Rule 144” and “Rule 144A”), provided that the Company shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 or 144A have been satisfied. Each certificate representing this Warrant or the Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

 

(c)       Applicability of Restrictions. Neither any restrictions of any legend described in this Warrant nor the requirements of Section 7(b) above shall apply to any transfer of, or grant of a security interest in, this Warrant (or the Shares or Common Stock obtainable upon exercise thereof) or any part hereof (i) to a partner of the holder if the holder is a partnership or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of which the holder is a partner or to a limited liability company of which the holder is a member, (iii) to any affiliate of the holder, (iv) notwithstanding the foregoing, to any corporation, company, limited liability company, limited partnership, partnership, or other person managed or sponsored by Horizon Technology Finance Corporation ("HRZN") or in which HRZN has an interest, (v) or to a lender to the holder or any of the foregoing; provided, however, in any such transfer, if applicable, the transferee shall on the Company’s request agree in writing to be bound by the terms of this Warrant as if an original holder hereof.

 

(d)       Market Stand-Off Agreement. The holder of this Warrant agrees that the Shares shall be subject to the Market Stand-Off provisions in Section 2.10 of the Company’s Seventh Amended and Restated Investors’ Rights Agreement dated as of August 5, 2016, as amended and in effect from time to time, and that the holder of this Warrant shall comply with the restrictions on a “Holder” in such Section 2.10.

 

8.             Rights as Shareholders; Information. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Shares or any other securities of the Company which may at any time be issuable upon the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. Notwithstanding the foregoing, the Company will transmit to the holder of this Warrant (a) such information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Company concurrently with the distribution thereof to the shareholders, (b) any stock purchase (or similar) agreement to which the Company is a party entered into on or after the Date of Grant, (c) each amendment to, or amended and restated, Charter filed by the Company with the Secretary of State of any jurisdiction, and (d) on the first day of each calendar quarter, the Company’s then current capitalization table, showing all issued and outstanding equity securities of the Company, together with all options or warrants to purchase such equity securities issued by the Company.

 

 

9.          Additional Rights.

 

9.1        Acquisition Transactions. The Company shall provide the holder of this Warrant with at least twenty (20) days’ written notice prior to closing thereof of the terms and conditions of any of the following transactions (to the extent the Company has notice thereof): (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Company’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of.

 

9.2           Right to Convert Warrant into Stock: Net Issuance.

 

(a)               Right to Convert. In addition to and without limiting the rights of the holder under the terms of this Warrant, the holder shall have the right to convert this Warrant or any portion thereof (the “Conversion Right”) into Shares as provided in this Section 9.2 at any time or from time to time during the term of this Warrant. Upon exercise of the Conversion Right with respect to a particular number of Shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver to the holder (without payment by the holder of any exercise price or any cash or other consideration) that number of fully paid and nonassessable Shares as is determined according to the following formula:

 

X = B - A

           Y

 

Where:

X =

the number of Shares that shall be issued to holder

 

Y =

the fair market value of one Share

 

A =

the aggregate Warrant Price of the specified number of Converted Warrant Shares immediately prior to the exercise of the Conversion Right (i.e., the number of Converted Warrant Shares multiplied by the Warrant Price)

 

B =

the aggregate fair market value of the specified number of Converted Warrant Shares (i.e., the number of Converted Warrant Shares multiplied by the fair market value of one Converted Warrant Share)

 

No fractional Shares shall be issuable upon exercise of the Conversion Right, 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 holder an amount in cash equal to the fair market value of the resulting fractional Share on the Conversion Date (as hereinafter defined). For purposes of Section 9 of this Warrant, Shares issued pursuant to the Conversion Right shall be treated as if they were issued upon the exercise of this Warrant.

 

 

(b)               Method of Exercise. The Conversion Right may be exercised by the holder by the surrender of this Warrant at the principal office of the Company together with a written statement (which may be in the form of Exhibit A-1 or Exhibit A-2 hereto) specifying that the holder thereby intends to exercise the Conversion Right and indicating the number of Shares subject to this Warrant which are being surrendered (referred to in Section 9.2(a) hereof as the Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement, or on such later date as is specified therein (the “Conversion Date”), and, at the election of the holder hereof, may be made contingent upon the closing of the sale of the Company’s Common Stock to the public in a public offering pursuant to a Registration Statement under the Act (a “Public Offering”). Certificates for the Shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant evidencing the balance of the Shares remaining subject to this Warrant, shall be issued as of the Conversion Date and shall be delivered to the holder within thirty (30) days following the Conversion Date.

 

(c)               Determination of Fair Market Value. For purposes of this Section 9.2, “fair market value” of a Share (or Common Stock if the Shares have been converted into Common Stock) as of a particular date (the “Determination Date”) shall mean:

 

(i)            If the Conversion Right is exercised in connection with and contingent upon a Public Offering, and if the Company’s Registration Statement relating to such Public Offering (“Registration Statement”) has been declared effective by the Securities and Exchange Commission, then the initial “Price to Public” specified in the final prospectus with respect to such offering.

 

(ii)            If the Conversion Right is not exercised in connection with and contingent upon a Public Offering, then as follows:

 

(A)       If traded on a securities exchange, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock on such exchange over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible;

 

(B)       If traded on the Nasdaq Stock Market or other over-the-counter system, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each Share is then convertible; and

 

(C)       If there is no public market for the Common Stock, then fair market value shall be determined by the Board of Directors of the Company in good faith.

 

In making a determination under clauses (A) or (B) above, if on the Determination Date, five trading days had not passed since the closing of the Company’s initial public offering of its Common Stock (“IPO”), then the fair market value of the Common Stock shall be the average closing prices or closing bid prices, as applicable, for the shorter period beginning on and including the date of the IPO and ending on the trading day prior to the Determination Date (or if such period includes only one trading day, the closing price or closing bid price, as applicable, for such trading day). If closing prices or closing bid prices are no longer reported by a securities exchange or other trading system, the closing price or closing bid price shall be that which is reported by such securities exchange or other trading system at 4:00 p.m. New York City time on the applicable trading day.

 

 

9.3        Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all of the Shares subject hereto, and if the fair market value of one Share is greater than the Warrant Price then in effect, this Warrant shall be deemed automatically exercised pursuant to Section 9.2 above (even if not surrendered) immediately before its expiration. For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant to Section 9.2(c). To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 9.3, the Company agrees to promptly notify the holder hereof of the number of Shares, if any, the holder hereof is to receive by reason of such automatic exercise.

 

9.4        No Adverse Consequences to Series G Preferred. The Company agrees not to consummate any subsequent equity or convertible note financing(s), in a single transaction or series of transactions, in which the holder of this Warrant is required to invest additional funds in order to avoid Adverse Consequences to the Series G Preferred purchasable pursuant to this Warrant. An “Adverse Consequence” shall mean any forced conversion or disposition, disproportionate dilution or loss or revocation of any right of the Series G Preferred; provided that none of the following shall be deemed to be an Adverse Consequence: (a) simple pro rata economic or voting dilution, or (b) a down-round financing in which holders of Series G Preferred receive the weighted-average anti-dilution price protection afforded to the holders of Series G Preferred pursuant to the Charter.

 

10.        Representations and Warranties. The Company represents and warrants to the holder of this Warrant 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, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law or principles at equity governing specific performance, injunctive relief and other equitable remedies.

 

(b)               The Shares have 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 nonassessable and free from preemptive rights, taxes, liens and charges, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended.

 

(c)               The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Charter, and on the Date of Grant, each Share represented by this Warrant is convertible into one share of Common Stock.

 

(d)              The shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms of the Charter will be validly issued, fully paid and nonassessable and free from preemptive rights, taxes, liens and charges.

 

 

(e)                 The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Charter or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and do not and will 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, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby.

 

(f)                There are no actions, suits, audits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company in any court or before any governmental commission, board or authority which, if adversely determined, could have a material adverse effect on the ability of the Company to perform its obligations under this Warrant.

 

(g)               The number of shares of Common Stock of the Company outstanding on the date hereof, on a fully diluted basis (assuming the conversion of all outstanding convertible securities and the exercise of all outstanding options and warrants), does not exceed 401,150,000 shares.

 

11.       Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

12.       Notices. Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant.

 

13.        Binding Effect on Successors. This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets, and all of the obligations of the Company relating to the Shares issuable upon the exercise or conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the holder hereof.

 

14.        Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

 

 

15.       Descriptive Headings. The descriptive headings of the various Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant.

 

16.        Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware.

 

17.        Survival of Representations, Warranties and Agreements. All representations and warranties of the Company and the holder hereof contained herein shall survive the Date of Grant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder. All agreements of the Company and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.

 

18.        Remedies. In case any one or more of the covenants, representations and warranties or agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Company), or the Company (in the case of a breach by a holder), may proceed to protect and enforce their or 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 breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.

 

19.       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 Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

 

20.        Severability. The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect.

 

21.       Recovery of Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

 

22.       Entire Agreement; Modification. This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

 

[Remainder of page intentionally blank. Signature page follows.]

 

 

The Company has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above.

 

	CVRx, INC.
	By:	/s/ John Brintnall
	Name:	John Brintnall
	Title:	Chief Financial Officer

 

Address:

9201 W. Broadway Ave., #650   Minneapolis, MN 55445

 

[SIGNATURE PAGE TO WARRANT (LOAN C)]

 

 

EXHIBIT A-1

 

NOTICE OF EXERCISE

To:          CVRx, INC. (the “Company”)

 

1.       The undersigned hereby:

 

¨

elects to purchase________ shares of [Series G Preferred] [Common Stock] of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, or

 

¨

elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please issue a certificate or certificates representing ________ shares in the name of the undersigned or in such other name or names as are specified below:

 

(Name)
(Address)

3.       The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

 

		(Signature)

 

	(Date)

 

 

EXHIBIT A-2

 

NOTICE OF EXERCISE

To:          CVRx, INC. (the “Company”)

 

1.       Contingent upon and effective immediately prior to the closing (the “Closing”) of the Company’s public offering contemplated by the Registration Statement on Form S___, filed________, 20__, the undersigned hereby:

 

¨       elects to purchase________shares of [Series G Preferred] [Common Stock] of the Company (or such lesser number of shares as may be sold on behalf of the undersigned at the Closing) pursuant to the terms of the attached Warrant, or

 

¨       elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please deliver to the custodian for the selling shareholders a stock certificate representing such________shares.

 

3.       The undersigned has instructed the custodian for the selling shareholders to deliver to the Company $________or, if less, the net proceeds due the undersigned from the sale of shares in the aforesaid public offering. If such net proceeds are less than the purchase price for such shares, the undersigned agrees to deliver the difference to the Company prior to the Closing.

 

		(Signature)

 

	(Date)

 

 

 

 

 

 

Exhibit 4.16

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THIS WARRANT.

 

CVRx, INC.

 

WARRANT TO PURCHASE SHARES

OF SERIES G PREFERRED STOCK

 

(Loan D)

 

THIS CERTIFIES THAT, for value received, HORIZON TECHNOLOGY FINANCE CORPORATION and its assignees are entitled to subscribe for and purchase 187,500 fully paid and nonassessable shares of Series G Preferred (subject to adjustment pursuant to Section 4 hereof) of CVRx, INC., a Delaware corporation (the “Company”), at the price of $0.80 per share (such price and such other price as shall result, from time to time, from the adjustments specified in Section 4 hereof is herein referred to as the “Warrant Price”), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, (a) the term “Series G Preferred” shall mean the Company’s presently authorized shares of Series G Convertible Preferred Stock, (b) “Shares” shall mean the Series G Preferred and any stock into or for which such Series G Preferred may hereafter be converted or exchanged, and after the conversion of the Series G Preferred to shares of the Company’s common stock (the “Common Stock”), shall mean the Company’s Common Stock; and (c) the term “Date of Grant” shall mean September 30, 2019, and (c) the term “Other Warrants” shall mean any other warrants issued by the Company in connection with the transaction with respect to which this Warrant was issued, and any warrant issued upon transfer or partial exercise of or in lieu of this Warrant. The term “Warrant” as used herein shall be deemed to include Other Warrants unless the context clearly requires otherwise.

 

1.                  Term. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through the date that is ten (10) years after the Date of Grant.

 

 

2.                  Method of Exercise; Payment; Issuance of New Warrant. Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit A-1 duly completed and executed) at the principal office of the Company and by the payment to the Company, by certified or bank check, or by wire transfer to an account designated by the Company (a “Wire Transfer”) of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased; (b) if in connection with a registered public offering of the Company’s securities, the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A-2 duly completed and executed) at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company either by certified or bank check or by Wire Transfer from the proceeds of the sale of shares to be sold by the holder in such public offering of an amount equal to the then applicable Warrant Price per share multiplied by the number of Shares then being purchased; or (c) exercise of the “net issuance” right provided for in Section 9.2 hereof. The person or persons in whose name(s) any certificate(s) representing Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. In the event of any exercise of the rights represented by this Warrant, certificates for the Shares so purchased shall be delivered to the holder hereof as soon as possible and in any event within thirty (30) days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such thirty-day period; provided, however, at such time as the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), if requested by the holder of this Warrant, the Company shall cause its transfer agent to deliver the certificate representing Shares issued upon exercise of this Warrant to a broker or other person (as directed by the holder exercising this Warrant) within the time period required to settle any trade made by the holder after exercise of this Warrant.

 

3.                  Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be duly authorized, validly issued, fully paid and nonassessable, and free from all preemptive rights and taxes, liens and charges with respect to the issue thereof, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of Shares to provide for the exercise of the rights represented by this Warrant and a sufficient number of shares of its Common Stock to provide for the conversion of the Series Preferred into Common Stock.

 

 

4.                  Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

 

(a)               Reclassification or Merger. In case of any reclassification or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another entity (other than a merger with another entity in which the Company is the acquiring and the surviving entity and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing entity, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), so that the holder of this Warrant shall have the right to receive upon exercise of such new Warrant, 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 theretofore issuable upon exercise of this Warrant, (i) the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, merger or sale by a holder of the number of Shares then purchasable under this Warrant, or (ii) in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or purchasing entity, at the option of the holder of this Warrant, the securities of the successor or purchasing entity having a value at the time of the transaction equivalent to the value of the Series G Preferred purchasable upon exercise of this Warrant at the time of the transaction. Any 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 Section 4(a) shall similarly apply to successive reclassifications, changes, mergers and sales.

 

 

(b)               Subdivision or Combination of Shares. Except as set forth in Section 4(d), if the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its outstanding Shares, the Warrant Price shall be proportionately decreased and the number of Shares issuable hereunder shall be proportionately increased in the case of a subdivision and the Warrant Price shall be proportionately increased and the number of Shares issuable hereunder shall be proportionately decreased in the case of a combination.

 

(c)               Stock Dividends and Other Distributions. Except as set forth in Section 4(d), if the Company at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Shares payable in Shares, then the Warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant 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 outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of Shares outstanding immediately after such dividend or distribution; or (ii) make any other distribution with respect to Shares (except any distribution specifically provided for in Sections 4(a) and 4(b)), then, in each such case, provision shall be made by the Company such that the holder of this Warrant shall receive upon exercise of this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Shares (or Common Stock issuable upon conversion thereof) as of the record date fixed for the determination of the shareholders of the Company entitled to receive such dividend or distribution.

 

(d)               Adjustment of Number of Shares. Notwithstanding the foregoing, no adjustment shall be made to the shares of Series G Preferred purchasable upon exercise of this Warrant or the Warrant Price if an event described above in this Section 4 results in an adjustment to the Conversion Price (as defined in the Charter (as defined below)) of the Series G Preferred under the Charter. Upon each adjustment in the Warrant Price, the number of Shares purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter.

 

 

(e)               Antidilution Rights. The other antidilution rights applicable to the Shares purchasable hereunder are set forth in the Company’s Certificate of Incorporation, as amended through the Date of Grant (the “Charter”). Such antidilution rights shall not be restated, amended, modified or waived in any manner that impacts the holder hereof in a materially different and more adverse manner than other holders of similar shares of preferred stock of the Company without such holder’s prior written consent. The Company shall promptly provide the holder hereof with any restatement, amendment, modification or waiver (to the extent such waiver applies to the rights of the Series G Preferred) of the Charter promptly after the same has been made.

 

5.                  Notice of Adjustments. Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant. In addition, whenever the conversion price or conversion ratio of the Shares shall be adjusted, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Shares after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 12 hereof, by first class mail, postage prepaid) to the holder of this Warrant.

 

6.                  Fractional Shares. No fractional Shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value of a Share on the date of exercise as reasonably determined in good faith by the Company’s Board of Directors.

 

7.                  Compliance with Act; Disposition of Warrant or Shares of Series G Preferred; Market Stand-Off.

 

(a)               Compliance with Act. The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the Shares to be issued upon exercise hereof and any Common Stock issued upon conversion thereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant, or any Shares to be issued upon exercise hereof or any Common Stock issued upon conversion thereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the “Act”) or any applicable state securities laws. Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing that the Shares so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Company. This Warrant and all Shares issued upon exercise of this Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

 

 

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY.”

 

Said legend shall be removed by the Company, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated. In addition, in connection with the issuance of this Warrant, the holder specifically represents to the Company by acceptance of this Warrant as follows:

 

(1)               The holder is aware of the Company’s business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and knowledgeable decision to acquire this Warrant. The holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any “distribution” thereof in violation of the Act.

 

(2)               The holder understands that this Warrant has not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the holder’s investment intent as expressed herein.

 

(3)               The holder further understands that this Warrant must be held indefinitely unless subsequently registered under the Act and qualified under any applicable state securities laws, or unless exemptions from registration and qualification are otherwise available. The holder is aware of the provisions of Rule 144, promulgated under the Act.

 

(4)               The holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act.

 

(b)               Disposition of Warrant or Shares. With respect to any offer, sale or other disposition of this Warrant or any Shares acquired pursuant to the exercise of this Warrant prior to registration of such Warrant or shares, the holder hereof agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Warrant or such Shares or Common Stock and indicating whether or not under the Act certificates for this Warrant or such Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory opinion or other evidence, the Company, as promptly as practicable but no later than fifteen (15) days after receipt of the written notice, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such Shares or Common Stock, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 7(b) that the opinion of counsel for the holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the holder promptly with details thereof after such determination has been made. Notwithstanding the foregoing, this Warrant or such Shares or Common Stock may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 or 144A under the Act (respectively, “Rule 144” and “Rule 144A”), provided that the Company shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 or 144A have been satisfied. Each certificate representing this Warrant or the Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

 

(c)               Applicability of Restrictions. Neither any restrictions of any legend described in this Warrant nor the requirements of Section 7(b) above shall apply to any transfer of, or grant of a security interest in, this Warrant (or the Shares or Common Stock obtainable upon exercise thereof) or any part hereof (i) to a partner of the holder if the holder is a partnership or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of which the holder is a partner or to a limited liability company of which the holder is a member, (iii) to any affiliate of the holder, (iv) notwithstanding the foregoing, to any corporation, company, limited liability company, limited partnership, partnership, or other person managed or sponsored by Horizon Technology Finance Corporation ("HRZN") or in which HRZN has an interest, (v) or to a lender to the holder or any of the foregoing; provided, however, in any such transfer, if applicable, the transferee shall on the Company’s request agree in writing to be bound by the terms of this Warrant as if an original holder hereof.

 

(d)               Market Stand-Off Agreement. The holder of this Warrant agrees that the Shares shall be subject to the Market Stand-Off provisions in Section 2.10 of the Company’s Seventh Amended and Restated Investors’ Rights Agreement dated as of August 5, 2016, as amended and in effect from time to time, and that the holder of this Warrant shall comply with the restrictions on a “Holder” in such Section 2.10.

 

8.                  Rights as Shareholders; Information. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Shares or any other securities of the Company which may at any time be issuable upon the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. Notwithstanding the foregoing, the Company will transmit to the holder of this Warrant (a) such information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Company concurrently with the distribution thereof to the shareholders, (b) any stock purchase (or similar) agreement to which the Company is a party entered into on or after the Date of Grant, (c) each amendment to, or amended and restated, Charter filed by the Company with the Secretary of State of any jurisdiction, and (d) on the first day of each calendar quarter, the Company’s then current capitalization table, showing all issued and outstanding equity securities of the Company, together with all options or warrants to purchase such equity securities issued by the Company.

 

 

9.                  Additional Rights.

 

9.1       Acquisition Transactions. The Company shall provide the holder of this Warrant with at least twenty (20) days’ written notice prior to closing thereof of the terms and conditions of any of the following transactions (to the extent the Company has notice thereof): (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Company’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of.

 

9.2       Right to Convert Warrant into Stock: Net Issuance.

 

(a)               Right to Convert. In addition to and without limiting the rights of the holder under the terms of this Warrant, the holder shall have the right to convert this Warrant or any portion thereof (the “Conversion Right”) into Shares as provided in this Section 9.2 at any time or from time to time during the term of this Warrant. Upon exercise of the Conversion Right with respect to a particular number of Shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver to the holder (without payment by the holder of any exercise price or any cash or other consideration) that number of fully paid and nonassessable Shares as is determined according to the following formula:

 

X = B - A

          Y

 

Where:	X=	the number of Shares that shall be issued to holder
	Y =	the fair market value of one Share

	A =	the aggregate Warrant Price of the specified number of Converted Warrant Shares immediately prior to the exercise of the Conversion Right (i.e., the number of Converted Warrant Shares multiplied by the Warrant Price)

B =

the aggregate fair market value of the specified number of Converted Warrant Shares (i.e., the number of Converted Warrant Shares multiplied by the fair market value of one Converted Warrant Share)

 

No fractional Shares shall be issuable upon exercise of the Conversion Right, 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 holder an amount in cash equal to the fair market value of the resulting fractional Share on the Conversion Date (as hereinafter defined). For purposes of Section 9 of this Warrant, Shares issued pursuant to the Conversion Right shall be treated as if they were issued upon the exercise of this Warrant.

 

 

(b)               Method of Exercise. The Conversion Right may be exercised by the holder by the surrender of this Warrant at the principal office of the Company together with a written statement (which may be in the form of Exhibit A-1 or Exhibit A-2 hereto) specifying that the holder thereby intends to exercise the Conversion Right and indicating the number of Shares subject to this Warrant which are being surrendered (referred to in Section 9.2(a) hereof as the Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement, or on such later date as is specified therein (the “Conversion Date”), and, at the election of the holder hereof, may be made contingent upon the closing of the sale of the Company’s Common Stock to the public in a public offering pursuant to a Registration Statement under the Act (a “Public Offering”). Certificates for the Shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant evidencing the balance of the Shares remaining subject to this Warrant, shall be issued as of the Conversion Date and shall be delivered to the holder within thirty (30) days following the Conversion Date.

 

(c)               Determination of Fair Market Value. For purposes of this Section 9.2, “fair market value” of a Share (or Common Stock if the Shares have been converted into Common Stock) as of a particular date (the “Determination Date”) shall mean:

 

(i)            If the Conversion Right is exercised in connection with and contingent upon a Public Offering, and if the Company’s Registration Statement relating to such Public Offering (“Registration Statement”) has been declared effective by the Securities and Exchange Commission, then the initial “Price to Public” specified in the final prospectus with respect to such offering.

 

(ii)            If the Conversion Right is not exercised in connection with and contingent upon a Public Offering, then as follows:

(A)       If traded on a securities exchange, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock on such exchange over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible;

 

(B)       If traded on the Nasdaq Stock Market or other over-the-counter system, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the Common Stock over the five trading days immediately prior to the Determination Date, and the fair market value of the Shares shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each Share is then convertible; and

 

(C)       If there is no public market for the Common Stock, then fair market value shall be determined by the Board of Directors of the Company in good faith.

 

In making a determination under clauses (A) or (B) above, if on the Determination Date, five trading days had not passed since the closing of the Company’s initial public offering of its Common Stock (“IPO”), then the fair market value of the Common Stock shall be the average closing prices or closing bid prices, as applicable, for the shorter period beginning on and including the date of the IPO and ending on the trading day prior to the Determination Date (or if such period includes only one trading day, the closing price or closing bid price, as applicable, for such trading day). If closing prices or closing bid prices are no longer reported by a securities exchange or other trading system, the closing price or closing bid price shall be that which is reported by such securities exchange or other trading system at 4:00 p.m. New York City time on the applicable trading day.

 

 

9.3       Exercise Prior to Expiration. To the extent this Warrant is not previously exercised as to all of the Shares subject hereto, and if the fair market value of one Share is greater than the Warrant Price then in effect, this Warrant shall be deemed automatically exercised pursuant to Section 9.2 above (even if not surrendered) immediately before its expiration. For purposes of such automatic exercise, the fair market value of one Share upon such expiration shall be determined pursuant to Section 9.2(c). To the extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 9.3, the Company agrees to promptly notify the holder hereof of the number of Shares, if any, the holder hereof is to receive by reason of such automatic exercise.

 

9.4       No Adverse Consequences to Series G Preferred. The Company agrees not to consummate any subsequent equity or convertible note financing(s), in a single transaction or series of transactions, in which the holder of this Warrant is required to invest additional funds in order to avoid Adverse Consequences to the Series G Preferred purchasable pursuant to this Warrant. An “Adverse Consequence” shall mean any forced conversion or disposition, disproportionate dilution or loss or revocation of any right of the Series G Preferred; provided that none of the following shall be deemed to be an Adverse Consequence: (a) simple pro rata economic or voting dilution, or (b) a down-round financing in which holders of Series G Preferred receive the weighted-average anti-dilution price protection afforded to the holders of Series G Preferred pursuant to the Charter.

 

10.       Representations and Warranties. The Company represents and warrants to the holder of this Warrant 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, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law or principles at equity governing specific performance, injunctive relief and other equitable remedies.

 

(b)               The Shares have 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 nonassessable and free from preemptive rights, taxes, liens and charges, other than those set forth in the Charter and the Company’s Amended and Restated Bylaws, as amended.

 

(c)               The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Charter, and on the Date of Grant, each Share represented by this Warrant is convertible into one share of Common Stock.

 

(d)               The shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms of the Charter will be validly issued, fully paid and nonassessable and free from preemptive rights, taxes, liens and charges.

 

 

(e)               The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Charter or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and do not and will 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, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby.

 

(f)                There are no actions, suits, audits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company in any court or before any governmental commission, board or authority which, if adversely determined, could have a material adverse effect on the ability of the Company to perform its obligations under this Warrant.

 

(g)               The number of shares of Common Stock of the Company outstanding on the date hereof, on a fully diluted basis (assuming the conversion of all outstanding convertible securities and the exercise of all outstanding options and warrants), does not exceed 401,150,000 shares.

 

11.              Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

12.              Notices. Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant.

 

13.              Binding Effect on Successors. This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets, and all of the obligations of the Company relating to the Shares issuable upon the exercise or conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the holder hereof.

 

14.              Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

 

 

15.              Descriptive Headings. The descriptive headings of the various Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant.

 

16.              Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware.

 

17.              Survival of Representations, Warranties and Agreements. All representations and warranties of the Company and the holder hereof contained herein shall survive the Date of Grant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder. All agreements of the Company and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.

 

18.              Remedies. In case any one or more of the covenants, representations and warranties or agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Company), or the Company (in the case of a breach by a holder), may proceed to protect and enforce their or 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 breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.

 

19.              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 Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

 

20.              Severability. The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect.

 

21.              Recovery of Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

 

22.              Entire Agreement; Modification. This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

 

[Remainder of page intentionally blank. Signature page follows.]

 

 

The Company has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above.

 

	CVRx, INC.
	By:	/s/ John Brintnall
	Name:	John Brintnall
	Title:	Chief Financial Officer
	Address:	9201 W. Broadway Ave., #650
		Minneapolis, MN 55445

 

[SIGNATURE PAGE TO WARRANT (LOAN D)]

 

 

EXHIBIT A-1

 

NOTICE OF EXERCISE

 

To:	CVRx, INC. (the “Company”)

 

1.       The undersigned hereby:

 

	¨	elects to purchase________ shares of [Series G Preferred] [Common Stock] of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, or

¨

elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please issue a certificate or certificates representing ________ shares in the name of the undersigned or in such other name or names as are specified below:

 

(Name)
(Address)

  

3.       The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

 

	(Signature)

	(Date)

 

 

EXHIBIT A-2

 

NOTICE OF EXERCISE

 

To:    CVRx, INC. (the “Company”)

 

1.       Contingent upon and effective immediately prior to the closing (the “Closing”) of the Company’s public offering contemplated by the Registration Statement on Form S___, filed________, 20__, the undersigned hereby:

 

¨       elects to purchase________shares of [Series G Preferred] [Common Stock] of the Company (or such lesser number of shares as may be sold on behalf of the undersigned at the Closing) pursuant to the terms of the attached Warrant, or

 

¨       elects to exercise its net issuance rights pursuant to Section 9.2 of the attached Warrant with respect to________Shares of [Series G Preferred] [Common Stock].

 

2.       Please deliver to the custodian for the selling shareholders a stock certificate representing such________shares.

 

3.       The undersigned has instructed the custodian for the selling shareholders to deliver to the Company $________or, if less, the net proceeds due the undersigned from the sale of shares in the aforesaid public offering. If such net proceeds are less than the purchase price for such shares, the undersigned agrees to deliver the difference to the Company prior to the Closing.

 

	(Signature)

	(Date)

 

 

 

 

 

 

Exhibit 10.4

 

LEASE AMENDING AGREEMENT NO. 3

 

This LEASE AMENDING AGREEMENT NO. 3 (this "Amendment") is dated April 21, 2016, for reference purposes only, by CVRx, Inc., a Delaware corporation ("Tenant") and AX CROSSTOWN VI L.P. ("Landlord"), with reference to the following facts:

 

A.       Landlord, as successor in title to DUKE REALTY LIMITED PARTNERSHIP, and Tenant are the current parties to that certain Lease, dated as of October 13, 2008, as amended by that certain Letter of Understanding dated December 3, 2009, as further amended by that certain First Lease Amendment dated November 30, 2010, as further amended by that certain Second Lease Amendment dated October 22, 2012, each between Landlord’s predecessor in interest and Tenant (collectively the "Lease"), for the lease by Tenant of space in a building known as Crosstown North Business Center VI located at 9201 West Broadway North, Brooklyn Park, Minnesota 55445, consisting of approximately 26,379 square feet, as more particularly described in the Lease (the "Current Premises"). All capitalized terms referred to in this Amendment shall have the same meaning defined in the Lease, except where expressly defined to the contrary in this Amendment.

 

B.       Tenant and Landlord desire to amend the Lease so as to conditionally release Tenant of its obligations under the Lease as Tenant’s obligations pertaining to 2,489 square feet of the Current Premises, as shown on the attached Exhibit A (“Released Premises”), upon the terms and conditions set forth below, and extend the term of the Lease for the Remainder Premises as defined below to July 31, 2021, and to make certain other specific modifications to the Lease as set forth below, upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.0

Confirmation. Tenant acknowledges and agrees that, as of the date of this Amendment: (a) Tenant is in sole possession of the Current Premises demised under the Lease; (b) all work, improvements and furnishings required to have been performed or provided by Landlord under the Lease on or before the date hereof have been completed and accepted by Tenant; (c) Tenant has no presently enforceable offset, claim, recoupment or defense against the payment of rent and other sums and the performance of all obligations of Tenant under the Lease and the Lease is binding on Tenant and is in full force and effect, and Tenant has no current defenses to the enforcement of the Lease; (d) Tenant has not assigned the Lease, or sublet any portion of the Current Premises, and (e) Tenant is not in default of the Lease and Tenant acknowledges that, to Tenant’s knowledge, Landlord is not in default of the Lease.

 

2.0

Premises. Effective as of one calendar day following the Surrender Date (as defined below), the square footage of the Current Premises shall be reduced to approximately 23,890 total square feet (“Remainder Premises”). One calendar day after the Surrender Date (as defined in Section 3.0 below), and continuing throughout the Extension Term (as defined in Section 5.0 below), the Remainder Premises shall be the “Leased Premises” for all purposes under the Lease, as amended by this Amendment. The parties understand and agree that Tenant shall irrevocably surrender the Released Premises to Landlord with the intent and purpose that the estate of Tenant in and to the Released Premises be wholly extinguished on the Surrender Date, and that the term of the Lease with respect to the Released Premises shall expire in the same manner and with the same effect as if such date were the date set forth in the Lease for the expiration of the Term therefor, and that Tenant shall be responsible to surrender the Released Premises to Landlord in the condition as required in the Lease and pursuant to Section 4.0 below.

 

 

3.0

Released Premises Term. The Term of the Lease for the Released Premises shall terminate on the date that Tenant complies with the terms and conditions set forth in Section 4.0 below (“Surrender Date”). Except as specifically modified herein, all terms of the Lease shall apply through and including the Surrender Date.

 

4.0

Surrender of Possession. Tenant shall (i) surrender possession and unconditionally vacate the Released Premises, in the condition required in the Lease and herein, as and when required by Landlord pursuant to Section 8.0 below; and (ii) pay to Landlord all rent (including Base Rent and Tenant’s Proportionate Share of Operating Expenses), and any other charges due under the Lease or this Amendment through and including the Surrender Date. Upon satisfaction of the foregoing, Landlord shall be deemed to have conditionally accepted the surrender of the Released Premises effective as of the Surrender Date. Tenant agrees to surrender possession of the Released Premises in the condition as required under the Lease.

 

5.0

Remainder Premises Term. The Term of the Lease for the Remainder Premises shall be extended for an additional sixty (60) consecutive months commencing August 1, 2016 and will expire on July 31, 2021 (the “Extension Term”).

 

6.0

Rent. Through the Surrender Date, Tenant shall pay Landlord Base Rent for the Current Premises, together with “Tenant’s Proportionate Share of Operating Expenses”, as provided in the Lease. Commencing on the first calendar day following the Surrender Date, the monthly Base Rent shall be as follows:

Time Period		Monthly Base Rent
Surrender Date plus 1 day - July 31, 2017		$	16,922.08
August 1, 2017-July 31, 2018		$	17,340.16
August 1, 2018-July 31, 2019		$	17,778.14
August 1, 2019-July 31, 2020		$	18,216.13
August 1, 2020-July 31, 2021		$	18,674.02

 

7.0

Proportionate Share of Expenses. As of the next calendar day following the Surrender Date, “Tenant’s Proportionate Share,” as defined in the Lease, of Operating Expenses (including Real Estate Taxes and insurance) shall be 32.8%.

 

 

8.0

Condition of Premises. Subject to Landlord’s completion of Landlord’s Work (as hereinafter defined), Tenant shall accept the Remainder Premises in its as-is condition as of the commencement of the Extension Term, and Landlord shall have no obligation to make or pay for any alterations, additions, improvement or renovations in or to the Remainder Premises to prepare the same for Tenant’s occupancy during the Extension Term except that Landlord, at its sole cost and expense, shall (i) demise the Remainder Premises from the Released Premises (including separation of electrical and other utilities as necessary), using building standard materials, and (ii) perform the limited improvements as described in that certain construction bid from The Bainey Group dated March 11, 2016 attached hereto as Exhibit B (“Bid”), including alternates 1, 2, 3, 5a, 5c, and 5e set forth in the Bid (such demising work and limited improvements collectively referred to as “Landlord’s Work”) . In connection with the foregoing, Tenant agrees that Landlord may commence Landlord’s Work on or about May 1, 2016, and that, following the commencement of Landlord’s Work, Tenant shall vacate and surrender the Released Premises to Landlord in the condition required under the Lease within ____________ (__) days after receipt of written notice from Landlord. In addition, Tenant agrees to reasonably cooperate with Landlord and not interfere with any construction of Landlord’s Work, including clearing and providing at least eight (8) feet of clear, unrestricted or uninhibited access on both sides of the location of the demising wall, and that during the construction of Landlord’s Work, any personal property of Tenant in the Current Premises, or any possession by Tenant of the Remainder Premises or the Released Premises, if applicable, shall be at Tenant’s sole risk, cost, and liability, except to the extent of the negligence or willful misconduct of Landlord or its agents, contractors or employees. The performance of Landlord’s Work shall not in any manner be deemed an interference with Tenant’s quiet use and enjoyment of the Remainder Premises, but Landlord agrees to use commercially reasonable efforts to minimize interference with Tenant’s business operations in the Remainder Premises during the course of Landlord’s Work. In the event Tenant requests alternates, additional work, or changes to Landlord’s Work which changes will result in a net additional expense to Landlord or delay delivery of the Released Premises to the future tenant of the same, Tenant shall reimburse Landlord for the same as additional rent within thirty (30) days of written demand therefor and reasonably detailed supporting documentation. Landlord shall use commercially reasonable efforts to substantially complete Landlord’s Work by no later than July 31, 2016.

 

9.0

Option to Extend Lease Term. Landlord hereby grants to Tenant one (1) option (“Option”) to extend the Lease Term for a period of five (5) years (“Option Term”) immediately following the expiration of the Extension Term. The Option shall be exercised, if at all, by written notice (“Option Notice”) delivered by Tenant to Landlord not later than nine (9) full months (but no earlier than twelve (12) full months) prior to the expiration of the Extension Term. Further, the Option shall not be deemed to be properly exercised if, as of the date of the Option Notice, Tenant (i) is in uncured default under the Lease continuing beyond the expiration of any applicable notice, grace and/or cure period, (ii) has assigned the Lease or its interest therein, or (iii) has sublet more than fifty percent (50%) of the Remainder Premises. Provided Tenant has properly and timely exercised the Option, the Extension Term shall be extended by the Option Term, and all terms, covenants and conditions of the Lease shall remain unmodified and in full force and effect, except for the Annual Base Rent, which shall be adjusted to the “Fair Market Rental Value” for the Remainder Premises, as reasonably determined by Landlord as provided below. As used herein, “Fair Market Rental Value” shall mean the projected prevailing rental rate (but not inducements or other concessions) as of the first day of the Option Term for similarly improved premises situated in a similar building in a similar Northwest suburban market area, within or close to the Building with similar loading, clear height, and other attributes of the Building. No additional options to extend the Option Term shall be granted or allowed unless specifically agreed to in writing between Landlord and Tenant.

 

 

Landlord shall notify Tenant in writing of such determination of Fair Market Rental Value within twenty (20) days after Landlord’s receipt of the Option Notice. If Tenant shall dispute Landlord’s determination of Fair Market Rental Value, then Tenant shall notify Landlord of Tenant’s objections within ten (10) days of Tenant’s receipt of Landlord’s determination, and such objection notice shall further set forth Tenant’s determination of Fair Market Rental Value. Upon receipt of such notice from Tenant, Landlord and Tenant shall attempt in good faith to resolve their differences within thirty (30) days thereafter (the “Negotiation Period”). Should the parties be unable to resolve their differences within the Negotiation Period, Tenant may elect to rescind its Option Notice by delivering written notice thereof to Landlord within five (5) business days after the expiration of the Negotiation Period. If Tenant does not rescind its Option Notice within said five (5) business day period, then each party shall have the right to submit the issue for neutral binding arbitration (and not by court action) to the American Arbitration Association in accordance with the rules of such Association then in effect. The party submitting to arbitration shall exercise such right of arbitration by delivering written notice of such election within thirty (30) days after the date of Tenant’s objections and Tenant’s determination of Fair Market Rental Value. If the arbitrator shall decide that Landlord’s determination of Fair Market Rental Value was reasonable, then the Fair Market Rental Value shall be the amount previously determined by Landlord. If the arbitrator shall determine that Landlord’s determination of Fair Market Rental Value was unreasonable, then the arbitrator shall be permitted to determine Fair Market Rental Value. The decision of the arbitrator shall be binding upon both parties. Each party shall share equally the cost of the arbitration process.

 

10.0

Option Rights. All option rights, if any, contained in the Lease, including, without limitation, options to extend or renew the term of the Lease or to expand the Premises, and the Right of First Offer are hereby deleted and are of no force and effect, and the only option of Tenant shall be as set forth in paragraph 9.0 above.

 

11.0

Real Estate Brokers. Notwithstanding anything to the contrary contained in the Lease, Landlord and Tenant each represents and warrants to the other party that it has not authorized or employed, or acted by implication to authorize or employ, any real estate broker or salesman to act for it in connection with this Amendment, except for CBRE, Inc., representing Landlord and Carlson-Commercial, representing the Tenant, each of whom shall be paid a commission by Landlord pursuant to a separate written agreement. Landlord and Tenant shall each indemnify, defend and hold the other party harmless from and against any and all claims by any other real estate broker or salesman whom the indemnifying party authorized or employed, or acted by implication to authorize or employ, to act for the indemnifying party in connection with this Amendment.

 

12.0

Landlord's Notice Address. Effective immediately: (a) Landlord's notice address under the Lease is hereby amended and restated as follows: AX CROSSTOWN VI L.P. c/o CBRE, Inc., 4400 West 78th Street, Suite 200, Minneapolis, MN 55435, with a copy to the Landlord, AX CROSSTOWN VI L.P., Attn: Mr. Jim Green, CFO, Suite 300-360 Main Street, Winnipeg, MB R3C 3Z3; and (b) all payments required to be made by Tenant under the Lease shall be paid to Landlord at AX Crosstown VI L.P., P.O. Box 6180-0267 Hicksville, NY 11802-6180.

 

13.0

General Provisions.

 

13.1

Further Assurances. Landlord and Tenant each agree to execute any and all documents and agreements reasonably requested by the other party to further evidence or effectuate this Amendment.

 

 

13.2

Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.

 

13.3

Reaffirmation. As amended hereby, the Lease shall remain in full force and effect.

 

13.4

Conflicts. In case of any conflict between any term or provision of this Amendment and the Lease, the term or provision of this Amendment shall govern.

 

13.5

Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one agreement.

 

14.0

Effectiveness. The parties agree that the submission of a draft or copy of this Amendment for review or signature by a party is not intended, nor shall it constitute or be deemed, by either party to be an offer to enter into a legally binding agreement with respect to the subject matter hereof and may not be relied on for any legal or equitable rights or obligations. Any draft or document submitted by Landlord or its agents to Tenant shall not constitute a reservation of or option or offer in favor of Tenant. The parties shall be legally bound with respect to the subject matter hereof pursuant to the terms of this Amendment only if, as and when all the parties have executed and delivered this Amendment to each other. Prior to the complete execution and delivery of this Amendment by all parties, each party shall be free to negotiate the form and terms of this Amendment in a manner acceptable to each party in its sole and absolute discretion. The parties acknowledge and agree that the execution and delivery by one party prior to the execution and delivery of this Amendment by the other party shall be of no force and effect and shall in no way prejudice the party so executing this Amendment or the party that has not executed this Amendment.

 

[Signatures to follow on next page.]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the dates specified beside their respective signatures.

 

LANDLORD:

 

AX CROSSTOWN VI L.P.,

a Delaware limited partnership

By Its General Partner:

AX Crosstown VI, LLC,

a Delaware limited liability company

 

By:	/s/ Brad Goerzen		Date:	June 6, 2016
Name:	Brad Goerzen
Its:	Authorized Signatory
By:	/s/ David L. Johnson		Date:	June 16, 2016
Name:	David L. Johnson
Its:	Authorized Signatory
TENANT:
CVRx, Inc.,
a Delaware corporation
By:	/s/ Joe Duprey		Date:	May 31, 2016
Name:	Joe Duprey
Its:	Sr. V.P. RD&D&O

 

 

EXHIBIT A

 

Released Premises

 

 

Exhibit 10.6

 

EIGHTH AMENDED AND RESTATED VOTING AGREEMENT

 

This EIGHTH AMENDED AND RESTATED Voting Agreement (this “Agreement”) is made as of the 1^st day of July, 2020 (the “Effective Date”), by and among CVRx, Inc., a Delaware corporation (the “Company”), and the holders of Series A-2 Preferred Stock (as defined below) listed on Schedule A hereto (the “Series A Purchasers”), the holders of Series B-2 Preferred Stock (as defined below) listed on Schedule B hereto (the “Series B Purchasers”), the holders of Series C-2 Preferred Stock (as defined below) listed on Schedule C hereto (the “Series C Purchasers”), the holders of Series D-2 Preferred Stock (as defined below) listed on Schedule D hereto (the “Series D Purchasers”), the holders of Series E-2 Preferred Stock (as defined below) listed on Schedule E hereto (the “Series E Purchasers”), the holders of Series F-2 Preferred Stock (as defined below) listed on Schedule F hereto (the “Series F Purchasers”), the holders and purchasers of Series G Preferred Stock (as defined below) listed on Schedule G hereto (the “Series G Purchasers”), and the holders of Common Stock (as defined below) listed on Schedule H hereto, and any other holder or purchaser of the Company’s capital stock who executes this Agreement (any holder of voting stock who is a party to this Agreement is hereinafter referred to individually as a “Voting Party” and collectively as the “Voting Parties”).

 

RECITALS

 

A.                The Series A Purchasers hold shares of the Company’s Series A-2 Convertible Preferred Stock, par value $.01 per share (the “Series A Preferred Stock”). The Series B Purchasers hold shares of the Company’s Series B-2 Convertible Preferred Stock, par value $.01 per share (the “Series B Preferred Stock”). The Series C Purchasers hold shares of the Company’s Series C-2 Convertible Preferred Stock, par value $.01 per share (the “Series C Preferred Stock”). The Series D Purchasers hold shares of the Company’s Series D-2 Convertible Preferred Stock, par value $.01 per share (the “Series D Preferred Stock”). The Series E Purchasers hold shares of the Company’s Series E-2 Convertible Preferred Stock, par value $.01 per share (the “Series E Preferred Stock”). The Series F Purchasers hold shares of the Company’s Series F-2 Convertible Preferred Stock, par value $.01 per share (the “Series F Preferred Stock”). The Series G Purchasers hold or are purchasing shares of the Company’s Series G Convertible Preferred Stock, par value $.01 per share (the “Series G Preferred Stock”). The holders of Common Stock hold shares of Common Stock, par value $.01 per share (the “Common Stock”), certain of which shares were acquired upon conversion of prior series of the Company’s preferred stock.

 

B.                 The Series G Purchasers acquired or wish to acquire shares of the Company’s Series G Preferred Stock (together with the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, the Series D Preferred Stock, the Series E Preferred Stock and the Series F Preferred Stock, the “Preferred Stock”).

 

C.                 The Company and certain new and existing Series G Purchasers have entered into that certain Series G Preferred Stock Purchase Agreement, dated as of the Effective Date (the “Purchase Agreement”). In addition, the Company and certain Series G Purchasers are party to that certain Series G Preferred Stock Purchase Agreement, dated as of May 31, 2016, as amended, and as further amended as of the Effective Date (the “Prior Purchase Agreement”).

 

 

D.                The Company and the Series A Purchasers, Series B Purchasers, Series C Purchasers, Series D Purchasers, the Series E Purchasers, the Series F Purchasers, certain of the Series G Purchasers and certain other Voting Parties entered into that certain Seventh Amended and Restated Voting Agreement dated as of August 5, 2016 (the “Seventh Amended and Restated Voting Agreement”).

 

E.                 In connection with the Closing contemplated by the Purchase Agreement, the parties to the Seventh Amended and Restated Voting Agreement wish to amend and restate such agreement as set forth below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, and other consideration, the receipt and adequacy of which hereby is acknowledged, the parties agree as follows:

 

1.                  Board of Directors. From and after the date of this Agreement and until the provisions of this Section 1 cease to be effective pursuant to the terms of this Agreement, each of the Voting Parties shall vote, or cause the vote of (through a stockholder meeting, by written consent or otherwise), all shares of Preferred Stock, Common Stock and any other voting securities of the Company over which such Voting Party has voting control (including any other voting securities acquired by such Voting Party after the date hereof) (collectively, the “Voting Securities”), and will take all other necessary or desirable actions within his, her or its control (whether in his, her or its capacity as a stockholder, director or officer of the Company or otherwise) in order to ensure that the size of the Board of Directors (the “Board”) shall be eight (8) and to cause the election to the Board of:

 

(a)       With respect to the election of Preferred Directors (as defined in the Twelfth Amended and Restated Certificate of Incorporation of the Company, as may be amended from time to time (the “Certificate”)):

 

(i)       so long as New Enterprise Associates 10, Limited Partnership or its affiliates (“New Enterprise Associates”) continue to hold at least 2,573,927 shares of Preferred Stock (appropriately adjusted for any recapitalizations, stock combinations, stock dividends, stock splits and the like affecting such Preferred Stock), one designee of New Enterprise Associates, who shall initially be Ali Behbahani;

 

(ii)       so long as Johnson & Johnson Innovation – JJDC, Inc. or its affiliates (“JJDC”) continues to hold at least 3,500,000 shares of Preferred Stock (appropriately adjusted for any recapitalizations, stock combinations, stock dividends, stock splits and the like affecting such Preferred Stock), one designee of JJDC who shall initially be V. Kadir Kadhiresan;

 

 

(iii)        so long as Coöperatieve Gilde Healthcare IV U.A. or its affiliates (“Gilde”) continues to hold at least 8,500,000 shares of Preferred Stock (appropriately adjusted for any recapitalizations, stock combinations, stock dividends, stock splits and the like affecting such Preferred Stock), one designee of Gilde who shall initially be Geoff Pardo; and

 

(iv)       so long as Strategic Health Investment Partners or its affiliates (“SHIP”) continues to hold at least 8,500,000 shares of Preferred Stock (appropriately adjusted for any recapitalizations, stock combinations, stock dividends, stock splits and the like affecting such Preferred Stock), one designee of SHIP who shall initially be Mudit K. Jain, PhD; and

 

(v)       so long as Vensana Capital Management, LLC or its affiliates (“Vensana”) continues to hold at least 8,500,000 shares of Preferred Stock (appropriately adjusted for any recapitalizations, stock combinations, stock dividends, stock splits and the like affecting such Preferred Stock), one designee of Vensana who shall initially be Kirk Nielsen.

 

(b)       With respect to the election of the Common Director (as defined in the Certificate) the Company’s then-current Chief Executive Officer who shall initially be Nadim Yared; and

 

(c)       With respect to the election of the remaining directors to be elected by the holders of Common Stock and Preferred Stock voting together as a single class on an as-converted to Common Stock basis, such designees as designated by the Nominating and Governance Committee of the Board, who shall be independent representatives with relevant industry or business experience. Such remaining directors shall initially be John Nehra and Joseph Slattery.

 

2.                  Vacancies. In the event that any representative designated as provided in Section 1 above for any reason ceases to serve as a member of the Board during his or her term of office, the parties hereto shall cause the resulting vacancy to be filled by a representative designated as provided in Section 1 by the respective person or persons who designated the vacating representative. Each of the Voting Parties shall attend, and vote its shares of the voting stock of the Company in accordance with this Agreement at, each annual meeting of the stockholders of the Company, each special meeting of the stockholders of the Company and any actions by written consent involving the election of directors of the Company.

 

3.                  Removal and Substitution of Directors. Directors may be removed at any time with or without cause, provided that no party hereto shall vote for the removal of a director nominated or designated and elected pursuant to this Agreement, and no such vote shall be effective, unless the parties who are entitled to nominate or designate such director voting as described above shall specify. The Company hereby agrees to take such actions as are necessary, and each of the Purchasers agrees to vote his, her or its shares of Preferred Stock of the Company (and any other shares of the capital stock of the Company over which he, she or it exercises voting control) and take such other actions as are necessary, for the removal of any director upon the request of the party or parties entitled to nominate such director and for the election to the Board of Directors of a substitute designated by such party or parties in accordance with the provisions of Section 1.

 

 

4.                  Voting in Future Financings.

 

(a)       The Voting Parties who are signatories to this Agreement (the “Signatory Parties”) shall vote, or cause the vote of (through a stockholder meeting, by written consent or otherwise), all Voting Securities and will take all other necessary or desirable actions within his, or her or its control in favor of any future financing (including all related corporate actions and amendments to existing agreements) that is approved by (i) the Board and (ii) at least three of New Enterprise Associates, JJDC, Gilde, SHIP and Vensana (the “Major Investors”).

 

(b)       In the event of a future financing of the Company that involves any reduction in the liquidation preferences (whether effected through conversion of Preferred Stock to Common Stock or otherwise) associated with any of the Preferred Stock, such reduction in liquidation preferences will be made in accordance with the liquidation waterfall in the Certificate to the benefit of the most senior series of preferred stock (and, for any series that is pari passu with another series, in reverse chronological order in which shares of such series were first sold). Therefore, any reduction to the liquidation preferences of any Preferred Stock will first be made to the Series A-2 Preferred Stock until the liquidation preference of the Series A-2 Preferred Stock have been eliminated, then to the Series B-2 Preferred Stock until the liquidation preference of the Series B-2 Preferred Stock have been eliminated, then to the Series C-2 Preferred Stock until the liquidation preference of the Series C-2 Preferred Stock have been eliminated, then to the Series D-2 Preferred Stock until the liquidation preference of the Series D-2 Preferred Stock have been eliminated, then to the Series E-2 Preferred Stock until the liquidation preference of the Series E-2 Preferred Stock have been eliminated, then to the Series F-2 Preferred Stock until the liquidation preference of the Series F-2 Preferred Stock have been eliminated, and then last to the Series G Preferred Stock, with the intent of not reducing the liquidation preference of the Series G Preferred Stock to the maximum extent possible. The Signatory Voting Parties shall vote, or cause the vote of (through a stockholder meeting, by written consent or otherwise), all Voting Securities and will take all other necessary or desirable actions within his, her or its control in favor of any future financing only to the extent it is structured in accordance with the foregoing and any reduction in the liquidation preference of any shares of a series applies equally to all shares of the same series; provided that any rights or benefits that are tied to actual participation in a future financing (such as a pay-to-play feature) shall not constitute unequal treatment.

 

5.                  Drag-Along Provisions.

 

(a)       In the event that an Acquisition or an Asset Transfer (as defined in the Certificate) (a “Sale Transaction”) is approved by the Board and at least three of the Major Investors (the “Majority”), specifying that this Section 5 shall apply to such transaction, then, subject to each of the conditions set forth in subsection (b) below, each of the Signatory Voting Parties and the Company hereby agree:

 

(i)       if such Sale Transaction requires stockholder approval, to vote, or cause the vote of (through a stockholder meeting, by written consent or otherwise), all Voting Securities and to take all other necessary or desirable actions within his, her or its control in favor of such Sale Transaction and to vote in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Sale Transaction;

 

 

(ii)       if such Sale Transaction is effected through a sale of stock by the Company’s stockholders, to sell the same proportion of shares of capital stock of the Company beneficially held by such Signatory Voting Party as is being sold by the Majority to the person to whom the Majority propose to sell their shares, and, except as permitted in Section 5(b) below, on the same terms and conditions as the other stockholders of the Company;

 

(iii)       to execute and deliver all related documentation and take such other action in support of the Sale Transaction as shall reasonably be requested by the Company or the Majority in order to carry out the terms and provision of this Section 5, including, without limitation, executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, any associated indemnity agreement, or escrow agreement, any associated voting, support, or joinder agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances), and any similar or related documents;

 

(iv)       not to deposit, and to cause their affiliates not to deposit, except as provided in this Agreement, any shares of the Company owned by such party or affiliate in a voting trust or subject any shares to any arrangement or agreement with respect to the voting of such shares, unless specifically requested to do so by the acquirer in connection with the Sale Transaction;

 

(v)       to refrain from (i) exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Sale Transaction, or (ii) asserting any claim or commencing any suit (x) challenging the Sale Transaction or this Agreement, or (y) alleging a breach of any fiduciary duty of the Majority or any affiliate or associate thereof (including, without limitation, aiding and abetting breach of fiduciary duty) in connection with the evaluation, negotiation or entry into the Sale Transaction, or the consummation of the transactions contemplated thereby;

 

(vi)       if the consideration to be paid in exchange for the shares pursuant to this Section 5 includes any securities and due receipt thereof by any stockholder would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities; or (y) the provision to any stockholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), the Company may cause to be paid to any such stockholder in lieu thereof, against surrender of the shares which would have otherwise been sold by such stockholder, an amount in cash equal to the fair value (as determined in good faith by the Board) of the securities which such stockholder would otherwise receive as of the date of the issuance of such securities in exchange for the shares; and

 

 

(vii)       in the event that the Majority, in connection with such Sale Transaction, appoint a stockholder representative (the “Stockholder Representative”) with respect to matters affecting the stockholders under the applicable definitive transaction agreements following consummation of such Sale Transaction, (x) to consent to (i) the appointment of such Stockholder Representative, (ii) the establishment of any applicable escrow, expense or similar fund in connection with any indemnification or similar obligations, and (iii) the payment of such stockholder’s pro rata portion (from the applicable escrow or expense fund or otherwise) of any and all reasonable fees and expenses to such Stockholder Representative in connection with such Stockholder Representative’s services and duties in connection with such Sale Transaction and its related service as the representative of the stockholders, and (y) not to assert any claim or commence any suit against the Stockholder Representative or any other stockholder with respect to any action or inaction taken or failed to be taken by the Stockholder Representative, within the scope of the Stockholder Representative’s authority, in connection with its service as the Stockholder Representative, absent fraud, bad faith, gross negligence or willful misconduct.

 

(b)       Notwithstanding anything to the contrary set forth herein, a Signatory Voting Party will not be required to comply with Section 5(a) above in connection with any proposed Sale Transaction, unless:

 

(i)       any representations and warranties to be made by such stockholder in connection with the proposed Sale Transaction are limited to representations and warranties related to authority, ownership and the ability to convey title to such shares, including, but not limited to, representations and warranties that (i) the stockholder holds all right, title and interest in and to the shares such stockholder purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of the stockholder in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by the stockholder have been duly executed by the stockholder and delivered to the acquirer and are enforceable (subject to customary limitations) against the stockholder in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into by the stockholder in connection with the transaction, nor the performance of the stockholder’s obligations thereunder, will cause a breach or violation of the terms of any agreement to which the stockholder is a party, or any law or judgment, order or decree of any court or governmental agency that applies to the stockholder;

 

(ii)       such stockholder is not required to agree (unless such stockholder is a Company officer or employee) to any restrictive covenant in connection with the proposed Sale Transaction (including without limitation any covenant not to compete or covenant not to solicit customers, employees or suppliers of any party to the proposed Sale Transaction);

 

(iii)       the stockholder is not liable for the breach of any representation, warranty or covenant made by any other person in connection with the proposed Sale Transaction, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of identical representations, warranties and covenants provided by all stockholders);

 

 

(iv)       liability shall be limited to such stockholder's applicable share (determined based on the respective proceeds payable to each stockholder in connection with such proposed Sale Transaction in accordance with the provisions of the Certificate) of a negotiated aggregate indemnification amount that applies equally to all stockholders but that in no event exceeds the amount of consideration otherwise payable to such stockholder in connection with such proposed Sale Transaction, except with respect to claims related to fraud by such stockholder, the liability for which need not be limited as to such stockholder;

 

(v)       upon the consummation of the proposed Sale Transaction (i) each holder of each class or series of the capital stock of the Company will receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock, and if any holders of any capital stock of the Company are given a choice as to the form of consideration to be received as a result of the proposed Sale Transaction, all holders of such capital stock will be given the same option, (ii) each holder of a series of Preferred Stock will receive the same amount of consideration per share of such series of Preferred Stock as is received by other holders in respect of their shares of such same series, (iii) each holder of Common Stock will receive the same amount of consideration per share of Common Stock as is received by other holders in respect of their shares of Common Stock, and (iv) unless waived pursuant to the terms of the Certificate and as may be required by law, the aggregate consideration receivable by all holders of the Preferred Stock and Common Stock shall be allocated among the holders of Preferred Stock and Common Stock on the basis of the relative liquidation preferences to which the holders of each respective series of Preferred Stock and the holders of Common Stock are entitled in a deemed Liquidation Event (assuming for this purpose that the proposed Sale Transaction is a deemed Liquidation Event) in accordance with the Company’s Certificate of Incorporation in effect immediately prior to the proposed Sale Transaction; provided, however, that, notwithstanding the foregoing provisions of this subsection (v), if the consideration to be paid in exchange for any Voting Securities held by a Signatory Party pursuant to this subsection (v) includes any securities and due receipt thereof by such Signatory Party would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities; or (y) the provision to any Signatory Party of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Signatory Party in lieu thereof, against surrender of the holder’s shares, which would have otherwise been sold by such Signatory Party, an amount in cash equal to the fair value (as determined in good faith by the Board) of the securities which such Signatory Party would otherwise receive as of the date of the issuance of such securities in exchange for the Signatory Party’s shares;

 

 

(vi)       subject to subsection (v) above, requiring the same form of consideration to be available to the holders of any single class or series of capital stock, if any holders of any capital stock of the Company are given an option as to the form and amount of consideration to be received as a result of the proposed Sale Transaction, all holders of such capital stock will be given the same option; provided, however, that nothing in this subsection (vi) shall entitle any holder to receive any form of consideration that such holder would be ineligible to receive as a result of such holder’s failure to satisfy any condition, requirement or limitation that is generally applicable to the Company’s stockholders.

 

(c)       No Signatory Voting Party shall be a party to any sale of a majority of the outstanding capital stock of the Company to any third party unless (a) all holders of Preferred Stock are allowed to participate in such transaction(s) and (b) the consideration received pursuant to such transaction is allocated among the parties thereto in the manner specified in the Company’s Certificate of Incorporation in effect immediately prior to the Stock Sale (as if such transaction(s) were a deemed Liquidation Event), unless the holders of at least the requisite percentage required to waive treatment of the transaction(s) as a deemed Liquidation Event pursuant to the terms of the Certificate, elect to allocate the consideration differently by written notice given to the Company at least ten days prior to the effective date of any such transaction or series of related transactions.

 

6.                  Legends on Stock Certificates. The Company agrees that it shall cause the certificates representing shares held by the Voting Parties to bear the following legend (together with any other legends required by separate agreement and applicable laws):

 

THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY, THE FOUNDERS AND THE PURCHASERS (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT.

 

7.                  Application of Agreement to After-Acquired-Shares. All of the provisions of Section 1, Section 2, Section 3, Section 4 and Section 5 shall apply to all Voting Securities held by the Voting Parties, whether issued before or after the Closing Date, and all securities issued as a replacement for the shares or with respect to the shares as a result of any stock dividend, stock split or other similar event.

 

8.                  Covenants of the Company.

 

(a)       The Company agrees to ensure that the rights granted hereunder are effective and that the parties hereto enjoy the benefits thereof. Such actions include, without limitation, the use of the Company’s best efforts to assist in the nomination and election of the directors as provided above.

 

 

(b)       The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Agreement and in the taking of all such actions as may be necessary, appropriate or reasonably requested by the holders of a majority of the outstanding voting securities held by the parties hereto assuming conversion of all outstanding securities in order to protect the rights of the parties hereunder against impairment.

 

(c)       The Company shall take such action as may be necessary to cause the Board to meet no less often than five times per year, of which four such meetings shall be held in person; provided, however, the Board may consent by majority vote to waive the covenant contained in this Section 8(c). Notwithstanding the foregoing, a director shall be permitted to participate via conference telephone, as needed, if unable to attend an in-person meeting.

 

(d)       The Company shall take such action as may be necessary to cause the Board to form and maintain an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The Preferred Director designated by JJDC, New Enterprise Associates, SHIP and Vensana shall each have a right to serve as a member of each such committee. The Preferred Director designated by SHIP and Vensana shall each also have a right to serve as a member of any standing committee of the Board, and the Preferred Director designated by Vensana shall have a right to serve as a member of the Sale Bonus Plan Committee. The Compensation Committee shall approve all increases in compensation for executive officers of the Company, all annual bonuses to be paid to executive officers of the Company and all grants of stock options or other equity awards to employees. The Audit Committee will approve the engagement of the Company’s independent auditors and approve the audit report prior to its issuance each year.

 

(e)       Series G Approval. The Company shall not take any action requiring a separate series vote of the Series G Preferred Stock under the Company’s Twelfth Amended and Restated Certificate of Incorporation (including without limitation Article 5.B.(b)(viii) and Article 5.B.(e)(i)) without also obtaining the vote or written consent of the Majority.

 

9.                  No Heightened Duties. Each party hereby acknowledges and agrees that no fiduciary duty, duty of care, duty of loyalty or other heightened duty shall be created or imposed upon any party to any other party, the Company or other stockholder of the Company, by reason of this Agreement and/or any right or obligation hereunder.

 

10.              Entire Agreement; Amendments; Waivers. This Agreement (including the Schedules hereto) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof, and shall amend and restate the Seventh Amended and Restated Voting Agreement effective upon this Agreement’s execution by the Company and the holders of at least fifty-two percent (52%) of the outstanding shares of Preferred Stock as set forth in such agreement. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated, except by a written instrument signed by the Company and by holders of at least fifty-three percent (53%) of the shares of Preferred Stock, provided, however, that (i) Sections 4, 5 and 8(e) can be amended only by a written instrument signed by the Company, by the Majority and by the holders of a majority of the shares of Preferred Stock held by all Signatory Parties and (ii) neither the right of New Enterprise Associates, JJDC, Gilde, SHIP or Vensana to designate or remove its representative directors or fill any vacancy, nor the obligations of any other party pursuant to Section 1 hereof with respect to New Enterprise Associates, JJDC, Gilde, SHIP or Vensana (or the provisions of the subsection of Section 1(a), Section 8(d) or Section 8(e) applicable to New Enterprise Associates, JJDC, Gilde, SHIP or Vensana), shall be amended or waived without the consent of New Enterprise Associates, JJDC, Gilde, SHIP or Vensana, as applicable. Any amendment or waiver not effected in accordance with this Section 10 shall be null and void and non-binding upon the Voting Parties or Signatory Parties, as applicable, and their respective successors and assigns. No waivers of any breach of this Agreement extended by any party hereto to any other party shall be construed as a waiver of any rights or remedies of such party or any other party hereto with respect to any subsequent breach.

 

 

11.              Notices. Unless otherwise provided, any notice and other communications required or permitted under this Agreement shall be in writing and shall be mailed by United States first-class mail, postage prepaid, sent by electronic mail or facsimile or delivered personally by hand or by a nationally recognized courier addressed to the party to be notified at the mailing or electronic address indicated for such party on the books of the Company, or at such other address, electronic address or facsimile number as such party may designate, with a copy of such notice to any counsel listed for such party on the schedules hereto, or, in the case of any notice or other communication to the Company, to the Company at 9201 West Broadway Avenue, Suite 650, Minneapolis, MN 55445, Attention: CFO, with a copy of such notice to Faegre Drinker Biddle & Reath LLP, 90 South Seventh Street, Minneapolis, MN 55402, Attention: Amy C. Seidel, or at such other address as the Company shall have furnished to each holder in writing. All such notices and other written communications shall be effective on the earlier of: (i) five (5) days from the date of mailing, (ii) when sent, if sent by electronic mail, (iii) confirmed facsimile transfer, or (iv) actual receipt by the party to be notified.

 

12.              Grant of Proxy. Should the provisions of this Agreement be construed to constitute the granting of proxies, such proxies shall be deemed coupled with an interest and are irrevocable for the term of this Agreement.

 

13.              Severability. If one or more provisions of or obligations under this Agreement are held to be invalid, illegal, or unenforceable under applicable law, then such provision or obligation shall be excluded from this Agreement, and the remaining provisions of and obligations under this Agreement shall be enforceable in full in accordance with their terms.

 

14.              Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

 

15.              Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

 

16.              Successors and Assigns. Subject to Section 10 above, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

17.              Specific Performance. The parties hereby acknowledge that it is impossible to measure in money the damages which will accrue to a party hereto or to its heirs, personal representatives, or assignees by reason of a party’s failure to perform its obligations under this Agreement and therefore agree that, in addition to and without limiting any remedies available at law, each of the parties hereto shall have full equitable remedies available to such party.

 

18.              Termination. This Agreement shall terminate and the obligations of the Voting Parties to vote their respective shares of voting securities shall cease upon the earlier to occur of:

 

(a)       the closing of a public offering that constitutes a Qualified Public Offering, as such term is defined in the Certificate; or

 

(b)       the closing of an Acquisition or an Asset Transfer.

 

[Remainder of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties hereto have entered into this Eighth Amended and Restated Voting Agreement as of the Effective Date.

 

	COMPANY
	CVRx, Inc.
	/s/ Nadim Yared
	Nadim Yared
	Chief Executive Officer

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

 

IN WITNESS WHEREOF, the parties hereto have entered into this Eighth Amended and Restated Voting Agreement as of the Effective Date.

 

	New Enterprise Associates VIII, Limited Partnership
	By:	NEA Partners VIII, L.P.
		its General Partner
	By:	/s/ Louis Citron
	Its:
	New Enterprise Associates 8A, Limited Partnership
	By:	NEA Partners 10, L.P.
		its General Partner
	By:	/s/ Louis Citron
	Its:
	New Enterprise Associates 10, Limited Partnership
	By:	NEA Partners 10, L.P.
		its General Partner
	By:	/s/ Louis Citron
	Its:

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	Johnson & Johnson Innovation – JJDC, Inc.
	By:	/s/ V. Kadir Kadhiresan
	Name:	V. Kadir Kadhiresan
	Title:	Vice President, Venture Investments

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	COÖPERATIEVE GILDE HEALTHCARE IV U.A.
	By:	/s/ Edwin de Graaf
		Name: Edwin de Graaf
		Title:
	By:	/s/ Marc Perret
		Name: Marc Perret
		Title:

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	ACTION POTENTIAL VENTURE CAPITAL LIMITED
	By:	/s/ Subesh Williams
		Name: Subesh Williams
		Title: Director

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	Ysios BioFund I F.C.R.
	By:	Ysios Capital Partners SGEIC, SAU
		Its management company
		By:	/s/ Joël Jean-Mairet
		Name:	Joël Jean-Mairet
		Its:	Managing Partner

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	WINDHAM LIFE SCIENCES PARTNERS II, L.P.
	By :	Windham Life Sciences Partners II
		General Partner, LLC
	By:	/s/ Adam Fine
	Name:	Adam Fine
	Title:	Managing Member

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	Kathryn S. Nehra Family Trust
	/s/ G. Henry Entwisle
	Name:	G. Henry Entwisle
	Title:	Trustee

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	Lauren M. Nehra Family Trust
	/s/ G. Henry Entwisle
	Name:	G. Henry Entwisle
	Title:	Trustee

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	Graf Capital Investors LLC
	By:	/s/ Andrew Graf
	Name:	Andrew Graf
	Title:	Manager

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	John D. McNeill
	Revocable Trust U/A/D 10/21/2004
	By:	/s/ John D. McNeill
	Name:	John D. McNeill
	Its:	Trustee

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	/s/ Robert K. Anderson
	Robert K. Anderson

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	Wendyce H. Brody Separate Property Trust dated August 3, 2016
	/s/ Wendyce H. Brody
	Name:
	Trustee

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	JACK E. MEYER AND MARY LOU MEYER, AND SUCCESSORS, TRUSTEES OF THE JACK E. MEYER REVOCABLE TRUST DATED OCTOBER 15, 2003
	/s/ Jack E. Meyer
	Jack E. Meyer, Trustee
	/s/ Mary Lou Meyer
	Mary Lou Meyer, Trustee

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	/s/ Michael T. Kelly
	Michael T. Kelly

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

  

	Strategic Healthcare Investment Partners I, L.P.
		By:       SHIP I GP, LLC
		Its:        General Partner
	By:	/s/ Mudit K. Jain
		Mudit K. Jain, PhD
		General Partner

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

  

	VENSANA CAPITAL I, L.P.
	By:	Vensana Capital I GP, LLC
	Its:	General Partner
	By:	/s/ Kirk Nielsen
		Name:	Kirk Nielsen
		Title:	Managing Partner

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

  

	Hatteras Venture Partners VI, LP
	By:	Hatteras Venture Advisors VI, LLC, its general partner
	By:	/s/ Doug Reed
		Doug Reed
		Manager

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

	Venrock Healthcare Capital Partners III, L.P.
	By:	VHCP Management III, LLC, its general partner
	By:	VR Advisor, LLC, its manager
	VHCP Co-Investment Holdings III, LLC
	By:	VHCP Management III, LLC, its manager
	By:	VR Advisor, LLC, its manager
	By:	/s/ Nimish Shah
		Authorized Signatory

 

Signature Page to Eighth Amended and Restated Voting Agreement

 

 

SCHEDULE A

 

HOLDERS OF SERIES A-2 PREFERRED STOCK

 

W.R. Brody Revocable Trust dated 8-15-2016

Wendyce H. Brody Separate Property Trust dated August 3, 2016

Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Revocable Trust dated October 15, 2003

NEA Ventures 2001, Limited Partnership

New Enterprise Associates 10, Limited Partnership

Bank of America, N.A., as Trustee for the Thomas R. Hektner Roth IRA #1877067

 

 

SCHEDULE B

 

HOLDERS OF SERIES B-2 PREFERRED STOCK

 

TH&CH, LLC

Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Revocable Trust dated October 15, 2003

New Enterprise Associates 10, Limited Partnership

New Enterprise Associates 8A, Limited Partnership

Action Potential Venture Capital Limited

 

 

SCHEDULE C

 

HOLDERS OF SERIES C-2 PREFERRED STOCK

 

New Enterprise Associates VIII, Limited Partnership

New Enterprise Associates 8A, Limited Partnership

New Enterprise Associates 10, Limited Partnership

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

TH&CH, LLC

Michael T. Kelly

Action Potential Venture Capital Limited

 

  

SCHEDULE D

 

HOLDERS OF SERIES D-2 PREFERRED STOCK

 

Johnson & Johnson Innovation – JJDC, Inc.*

New Enterprise Associates VIII, Limited Partnership

New Enterprise Associates 8A, Limited Partnership

New Enterprise Associates 10, Limited Partnership

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

TH&CH, LLC

Action Potential Venture Capital Limited

 

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

 

SCHEDULE E

 

HOLDERS OF SERIES E-2 PREFERRED STOCK

 

Johnson & Johnson Innovation – JJDC, Inc.*

 

New Enterprise Associates 10, Limited Partnership

 

John D. McNeill Revocable Trust U/A/D 10/21/2004

 

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

 

Kathryn S. Nehra Family Trust

 

Lauren M. Nehra Family Trust

 

Action Potential Venture Capital Limited

 

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

 

SCHEDULE F

 

HOLDERS OF SERIES F-2 PREFERRED STOCK

 

Johnson & Johnson Innovation – JJDC, Inc.*

New Enterprise Associates VIII, LP

New Enterprise Associates 8A, Limited Partnership

New Enterprise Associates 10, Limited Partnership

John D. McNeill Revocable Trust U/A/D 10/21/2004

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

Kathryn S. Nehra Family Trust

Lauren M. Nehra Family Trust   Robert K. Anderson   W.R. Brody Revocable Trust dated 8-15-2016   Wendyce H. Brody Separate Property Trust dated August 3, 2016   Michael T. Kelly   Bank of America, N.A., as Trustee for the Thomas R. Hektner Roth IRA #1877067   Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Rev Trust dated October 15, 2003   Ysios BioFund I F.C.R.   Total Renal Care, Inc.   CardioNord AB   John R. Brintnall

Action Potential Venture Capital Limited

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

 

SCHEDULE G

 

HOLDERS AND PURCHASERS OF SERIES G PREFERRED STOCK INVESTORS

 

Johnson & Johnson Innovation – JJDC, Inc.*

 

New Enterprise Associates VIII, LP

 

New Enterprise Associates 8A, Limited Partnership

 

New Enterprise Associates 10, Limited Partnership

 

John D. McNeill Revocable Trust U/A/D 10/21/2004

 

Graf Capital Investors LLC

 

Kathryn S. Nehra Family Trust

 

Lauren M. Nehra Family Trust

 

Robert K. Anderson

 

W.R. Brody Revocable Trust dated 8-15-2016

 

Wendyce H. Brody Separate Property Trust dated August 3, 2016

 

Michael T. Kelly

 

Thomas R. Hektner Revocable Trust dated December 24, 1992, as amended

 

Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Rev Trust dated October 15, 2003

 

Ysios BioFund I F.C.R.

 

Total Renal Care, Inc.

 

CardioNord AB

 

John R. Brintnall

 

Action Potential Venture Capital Limited

 

Coöperatieve Gilde Healthcare IV U.A.

 

Windham Life Sciences Partners II, L.P.

 

Strategic Healthcare Investment Partners I, L.P.**

 

Vensana Capital I, L.P.

 

Hatteras Venture Partners VI, LP

 

Venrock Healthcare Capital Partners III, L.P.

 

VHCP Co-Investment Holdings III, LLC

 

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

**Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to:

 

Cooley LLP, 3175 Hanover Street, Palo Alto, CA 94304-1130, Attn: John Sellers; jsellers@cooley.com.

 

 

SCHEDULE H

 

HOLDERS OF COMMON STOCK

 

Ameriprise Trust Company FBO Robert S. Kieval IRA Acct. 17549387-3-021

Bobby I. Griffin and Barbara P. Griffin, trustees of the Bobby I. Griffin Revocable Trust dated June 13, 2011

Christopher H. and Kathryn Porter, JTWROS

D. William Kaufman, TTEE of the Dale A. Spencer Revocable Trust U/A

JDC Spencer Investment Co.,LLP

OCI, Ltd.

Joshua Makower, Trustee U/A 5/6/97 by Makower Family Trust

Larry Wales

Leslie S. Matthews

Pensco Trust Company CUST FBO Matthew M. Burns ROTH/IRA

Peter T. Keith and Barbara A. Keith, JTWROS

William H. Kucheman

Susanne M. Olin   Edward S. Andrle

Tyler P. Lipschultz

Vertical Fund I, LP

Vertical Fund II, LP

Vickie E. Selzer

Frazier Affiliates IV, L.P.

Frazier Healthcare IV, L.P.

New Enterprise Associates VIII, Limited Partnership

Bruns H. Grayson

New Enterprise Associates 8A, Limited Partnership

Robert Kieval

 

Roy Martin   TH&CH, LLC   Dover Street VII, LP   HarbourVest Partners VIII Venture Fund LP   HarbourVest Partners VII Venture Ltd.   Anupam Dalal   Andrew Jensen   Leerink Revelation Healthcare Fund I, L.P.   Susan Adams   Adams Street Trust – ABS Ventures VI, L.P. Series   Philip Black   The 2003 Secondary Brinson Partnership Fund Offshore Series Company Ltd.   R. William Burgess, Jr.   Castelein Family Partnership   Caley Castelein   Maria Chapital   Dunlap-Black Investments LLC   Mary Emmerling   Virginia Gambale   Bruns Grayson   John R. Luongo and Rhonda R. Luongo, Trustees or Successor Trustee, of The Luongo Living Trust U/A/D November 17, 1988   W. Andrew Mims   Matthias Norweg   James Sanger   James & Sarah Shapiro Family Trust dtd 9/10/91   James Shapiro   The Richard and Helen Spalding Revocable Trust dtd 3/29/1999   Pierre Suhrcke   Thayer Swartwood   Scott Yaphe   Action Potential Venture Capital Limited

 

 

Exhibit 10.7

 

CVRx, INC.

 

EIGHTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS EIGHTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of the 1^st day of July, 2020, by and among CVRx, Inc., a Delaware corporation (the “Company”), and (a) each of the holders of Series A-2 Convertible Preferred Stock of the Company, listed on Schedule A, (b) each of the holders of Series B-2 Convertible Preferred Stock of the Company, listed on Schedule B, (c) each of the holders of Series C-2 Convertible Preferred Stock of the Company, listed on Schedule C, (d) each of the holders of Series D-2 Convertible Preferred Stock of the Company, listed on Schedule D, (e) each of the holders of Series E-2 Convertible Preferred Stock of the Company, listed on Schedule E, (f) each of the holders of Series F-2 Convertible Preferred Stock of the Company, listed on Schedule F, (g) each of the holders and purchasers of Series G Convertible Preferred Stock of the Company, listed on Schedule G, and (h) each of the holders of the Common Shares of the Company, listed on Schedule H.

 

WHEREAS, the parties hereto desire to restrict the sale, assignment, transfer, encumbrance or other disposition of the Shares (as defined below) which the Stockholders (as defined below) currently own or hereafter acquire, and to provide for certain rights and obligations in respect thereto as hereinafter provided.

 

SECTION 1

 

DEFINITIONS

 

1.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

 

(a) “Co-Sale Stockholder” shall mean each of the Stockholders party hereto.

 

(b) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

 

(c) “Common Shares” shall mean shares of the Company’s Common Stock, par value $.01 per share.

 

(d) “Common Stockholders” shall mean the holders of Common Shares.

 

(e) “EIF” shall mean the European Investment Fund and its co-investors.

 

(f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

 

(g) “Holder” shall mean any person who holds Registrable Securities and any holder of Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

(h) “Permitted Transfer” shall mean (i) any transfer of Shares by a Stockholder to such Stockholder’s spouse, parents, siblings (by blood, marriage or adoption) or lineal descendants (by blood, marriage or adoption); (ii) any transfer of Shares by a Stockholder to a trust, partnership, limited liability company or other similar entity for the benefit of such Stockholder or such Stockholder’s spouse, parents, siblings or lineal descendants; (iii) any transfer of Shares by a Stockholder, upon a Stockholder’s death to, the executors, administrators, testamentary trustees, legatees or beneficiaries of such Stockholder; (iv) any transfer of Shares by a Stockholder to any person who controls, is controlled by or is under common control with such Stockholder (within the meaning of the Securities Act); (v) any transfer of Shares by a Stockholder who is a partnership to its current and former partners; (vi) any transfer of Shares by a Stockholder who is a limited liability company to its members; and (vii) any transfer of Shares by a Stockholder who is a corporation to an officer, director or principal shareholder of such corporation.

 

(i) “Preferred Shares” shall mean the Series A-2 Preferred Shares, Series B-2 Preferred Shares, Series C-2 Preferred Shares, Series D-2 Preferred Shares, Series E-2 Preferred Shares, Series F-2 Preferred Shares and Series G Preferred Shares.

 

(j) “Preferred Stockholders” shall mean the holders of Preferred Shares.

 

(k) “Qualified Preferred Stockholder” shall mean a Preferred Stockholder who owns at least 2,900,000 Series G Preferred Shares (appropriately adjusted for any recapitalizations, stock combinations, stock dividends, stock splits and the like affecting such Preferred Shares).

 

(l) “Qualified Public Offering” shall have the meaning set forth in the Company’s Twelfth Amended and Restated Certificate of Incorporation.

 

(m) “Registrable Securities” shall mean the Series A Registrable Securities, the Series B Registrable Securities, the Series C Registrable Securities, the Series D Registrable Securities, the Series E Registrable Securities, the Series F Registrable Securities and the Series G Registrable Securities.

 

(n) The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

 

(o) “Registration Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company and fees and disbursements of one special counsel to any Holders participating in such registration, blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include (i) Selling Expenses and (ii) compensation of regular employees of the Company, which shall be paid in any event by the Company.

 

 

(p) “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

(q) “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

(r) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

(s) “Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder (other than the fees and disbursements of counsel included in Registration Expenses).

 

(t) “Series A Holder” shall mean any person who holds Series A Registrable Securities and any holder of Series A Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

(u) “Series A Initiating Holders” shall mean any Series A Holder or Series A Holders who in the aggregate hold not less than fifty percent (50%) of the then outstanding Series A Registrable Securities.

 

(v) “Series A Preferred Shares” shall mean the Company’s shares of Series A-1 Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(w) “Series A-1 Preferred Shares” shall mean the Company’s shares of Series A-1 Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(x) “Series A-2 Preferred Shares” shall mean the Company’s shares of Series A-2 Convertible Preferred Stock, par value $.01 per share.

 

(y) “Series A Registrable Securities” shall mean any (A) Common Shares issued or issuable pursuant to the conversion of the Series A Preferred Shares, Series A-1 Preferred Shares and Series A-2 Preferred Shares, and (B) any Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (A) above, provided, however, that Series A Registrable Securities shall not include any Common Shares which have previously been registered or which have been sold to the public.

 

(z) “Series B Holder” shall mean any person who holds Series B Registrable Securities and any holder of Series B Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

 

(aa) “Series B Initiating Holders” shall mean any Series B Holder or Series B Holders who in the aggregate hold not less than fifty percent (50%) of the then outstanding Series B Registrable Securities.

 

(bb) “Series B Preferred Shares” shall mean the Company’s shares of Series B Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(cc) “Series B-1 Preferred Shares” shall mean the Company’s shares of Series B-1 Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(dd) “Series B-2 Preferred Shares” shall mean the Company’s shares of Series B-2 Convertible Preferred Stock, par value $.01 per share.

 

(ee) “Series B Registrable Securities” shall mean any (A) Common Shares issued or issuable pursuant to the conversion of the Series B Preferred Shares, Series B-1 Preferred Shares and Series B-2 Preferred Shares, and (B) any Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (A) above, provided, however, that Series B Registrable Securities shall not include any Common Shares which have previously been registered or which have been sold to the public.

 

(ff) “Series C Holder” shall mean any person who holds Series C Registrable Securities and any holder of Series C Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

(gg) “Series C Initiating Holders” shall mean any Series C Holder or Series C Holders who in the aggregate hold not less than fifty percent (50%) of the then outstanding Series C Registrable Securities.

 

(hh) “Series C Preferred Shares” shall mean the Company’s shares of Series C Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(ii) “Series C-1 Preferred Shares” shall mean the Company’s shares of Series C-1 Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(jj) “Series C-2 Preferred Shares” shall mean the Company’s shares of Series C-2 Convertible Preferred Stock, par value $.01 per share.

 

(kk) “Series C Registrable Securities” shall mean any (A) Common Shares issued or issuable pursuant to the conversion of the Series C Preferred Shares, Series C-1 Preferred Shares and Series C-2 Preferred Shares, and (B) any Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (A) above, provided, however, that Series C Registrable Securities shall not include any Common Shares which have previously been registered or which have been sold to the public.

 

 

(ll) “Series D Holder” shall mean any person who holds Series D Registrable Securities and any holder of Series D Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

(mm) “Series D Initiating Holders” shall mean any Series D Holder or Series D Holders who in the aggregate hold not less than fifty percent (50%) of the then outstanding Series D Registrable Securities.

 

(nn) “Series D Preferred Shares” shall mean the Company’s shares of Series D Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(oo) “Series D-1 Preferred Shares” shall mean the Company’s shares of Series D-1 Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(pp) “Series D-2 Preferred Shares” shall mean the Company’s shares of Series D-2 Convertible Preferred Stock, par value $.01 per share.

 

(qq) “Series D Registrable Securities” shall mean any (A) Common Shares issued or issuable pursuant to the conversion of the Series D Preferred Shares, Series D-1 Preferred Shares and Series D-2 Preferred Shares, and (B) any Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (A) above, provided, however, that Series D Registrable Securities shall not include any Common Shares which have previously been registered or which have been sold to the public.

 

(rr) “Series E Holder” shall mean any person who holds Series E Registrable Securities and any holder of Series E Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

(ss) “Series E Initiating Holders” shall mean any Series E Holder or Series E Holders who in the aggregate hold not less than fifty percent (50%) of the then outstanding Series E Registrable Securities.

 

(tt) “Series E Preferred Shares” shall mean the Company’s shares of Series E Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(uu) “Series E-1 Preferred Shares” shall mean the Company’s shares of Series E-1 Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(vv) “Series E-2 Preferred Shares” shall mean the Company’s shares of Series E-2 Convertible Preferred Stock, par value $.01 per share.

 

(ww) “Series E Registrable Securities” shall mean any (A) Common Shares issued or issuable pursuant to the conversion of the Series E Preferred Shares, Series E-1 Preferred Shares and Series E-2 Preferred Shares, and (B) any Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (A) above, provided, however, that Series E Registrable Securities shall not include any Common Shares which have previously been registered or which have been sold to the public.

 

 

(xx) “Series F Holder” shall mean any person who holds Series F Registrable Securities and any holder of Series F Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

(yy) “Series F Initiating Holders” shall mean any Series F Holder or Series F Holders who in the aggregate hold not less than fifty percent (50%) of the then outstanding Series F Registrable Securities.

 

(zz) “Series F Preferred Shares” shall mean the Company’s shares of Series F Convertible Preferred Stock, par value $.01 per share, which have since been converted to Common Shares.

 

(aaa) “Series F-2 Preferred Shares” shall mean the Company’s shares of Series F-2 Convertible Preferred Stock, par value $.01 per share.

 

(bbb) “Series F Registrable Securities” shall mean any (A) Common Shares issued or issuable pursuant to the conversion of the Series F Preferred Shares and Series F-2 Preferred Shares, and (B) any Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (A) above, provided, however, that Series F Registrable Securities shall not include any Common Shares which have previously been registered or which have been sold to the public.

 

(ccc) “Series G Holder” shall mean any person who holds Series G Registrable Securities and any holder of Series G Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

(ddd) “Series G Initiating Holders” shall mean any Series G Holder or Series G Holders who in the aggregate hold not less than fifty percent (50%) of the then outstanding Series G Registrable Securities.

 

(eee) “Series G Preferred Shares” shall mean the Company’s shares of Series G Convertible Preferred Stock, par value $.01 per share.

 

(fff) “Series G Preferred Stock Purchase Agreement (2016)” shall mean the Series G Preferred Stock Purchase Agreement dated May 31, 2016 between the Company and the purchasers of Series G Preferred Shares, as amended.

 

(ggg) “Series G Preferred Stock Purchase Agreement (2020)” shall mean the Series G Preferred Stock Purchase Agreement dated July 1, 2020 between the Company and the purchasers of Series G Preferred Shares.

 

(hhh) “Series G Registrable Securities” shall mean (A) Common Shares issued or issuable pursuant to the conversion of the Series G Preferred Shares and (B) any Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of shares referenced (A) above, provided, however, that Series G Registrable Securities shall not include any Common Shares which have previously been registered or which have been sold to the public.

 

 

(iii) “Shares” shall mean the Common Shares and Preferred Shares.

 

(jjj) “Stockholders” shall mean the Common Stockholders and the Preferred Stockholders.

 

SECTION 2

 

Registration Rights

 

2.1 Demand Registration.

 

(a) Request for Registration from Series A Holders. If at any time or times after the earlier of (i) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public, and (ii) three years after the date of this Agreement, the Company shall receive from the Series A Initiating Holders a written request that the Company effect any registration with respect to all or a part of the Series A Registrable Securities, the aggregate proceeds of which (after deduction for underwriter’s discounts and expenses related to the issuance) exceed $10,000,000, the Company will:

 

(i) within ten (10) days of receipt thereof, give written notice of the proposed registration to all other Holders; and

 

(ii) use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is delivered.

 

(b) Request for Registration from Series B Holders. If at any time or times after the earlier of (i) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public, and (ii) three years after the date of this Agreement, the Company shall receive from the Series B Initiating Holders a written request that the Company effect any registration with respect to all or a part of the Series B Registrable Securities, the aggregate proceeds of which (after deduction for underwriter’s discounts and expenses related to the issuance) exceed $10,000,000, the Company will:

 

(i) within ten (10) days of receipt thereof, give written notice of the proposed registration to all other Holders; and

 

 

(ii) use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is delivered.

 

(c) Request for Registration from Series C Holders. If at any time or times after the earlier of (i) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public, and (ii) three years after the date of this Agreement, the Company shall receive from the Series C Initiating Holders a written request that the Company effect any registration with respect to all or a part of the Series C Registrable Securities, the aggregate proceeds of which (after deduction for underwriter’s discounts and expenses related to the issuance) exceed $10,000,000, the Company will:

 

(i) within ten (10) days of receipt thereof, give written notice of the proposed registration to all other Holders; and

 

(ii) use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is delivered.

 

(d) Request for Registration from Series D Holders. If at any time or times after the earlier of (i) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public, and (ii) three years after the date of this Agreement, the Company shall receive from the Series D Initiating Holders a written request that the Company effect any registration with respect to all or a part of the Series D Registrable Securities, the aggregate proceeds of which (after deduction for underwriter’s discounts and expenses related to the issuance) exceed $10,000,000, the Company will:

 

(i) within ten (10) days of receipt thereof, give written notice of the proposed registration to all other Holders; and

 

(ii) use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is delivered.

 

 

(e) Request for Registration from Series E Holders. If at any time or times after the earlier of (i) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public, and (ii) three years after the date of this Agreement, the Company shall receive from the Series E Initiating Holders a written request that the Company effect any registration with respect to all or a part of the Series E Registrable Securities, the aggregate proceeds of which (after deduction for underwriter’s discounts and expenses related to the issuance) exceed $10,000,000, the Company will:

 

(i) within ten (10) days of receipt thereof, give written notice of the proposed registration to all other Holders; and

 

(ii) use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is delivered.

 

(f) Request for Registration from Series F Holders. If at any time or times after the earlier of (i) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public, and (ii) three years after the date of this Agreement, the Company shall receive from the Series F Initiating Holders a written request that the Company effect any registration with respect to all or a part of the Series F Registrable Securities, the aggregate proceeds of which (after deduction for underwriter’s discounts and expenses related to the issuance) exceed $10,000,000, the Company will:

 

(i) within ten (10) days of receipt thereof, give written notice of the proposed registration to all other Holders; and

 

(ii) use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is delivered.

 

 

(g) Request for Registration from Series G Holders. If at any time or times after the earlier of (i) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public, and (ii) three years after the date of this Agreement, the Company shall receive from the Series G Initiating Holders a written request that the Company effect any registration with respect to all or a part of the Series G Registrable Securities, the aggregate proceeds of which (after deduction for underwriter’s discounts and expenses related to the issuance) exceed $10,000,000, the Company will:

 

(i) within ten (10) days of receipt thereof, give written notice of the proposed registration to all other Holders; and

 

(ii) use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is delivered.

 

(h) Limitations on Registration. The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to Section 2.1(a), (b), (c), (d), (e), (f) or (g):

 

(i) In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(ii) During the period starting with the date forty-five (45) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date ninety (90) days after the effective date of, a registration initiated by the Company for it or any of its security holders (other than the initial public offering of the Company for which the period shall be extended to six (6) months after the effective date of the offering); provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or

 

(iii) If the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, the Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable, propose to dispose of shares of Registrable Securities which may be immediately registered on Form S-3 pursuant to a request made under Section 2.3 hereof.

 

The Company shall not be obligated to effect, or to take any action to effect, (a) any registration pursuant to Section 2.1(a) after the Company has initiated two (2) such registrations (but not including any registration effected pursuant to Section 2.3), (b) any registration pursuant to Section 2.1(b) after the Company has initiated two (2) such registrations (but not including any registration effected pursuant to Section 2.3), (c) any registration pursuant to Section 2.1(c) after the Company has initiated two (2) such registrations (but not including any registration effected pursuant to Section 2.3), (d) any registration pursuant to Section 2.1(d) after the Company has initiated two (2) such registrations (but not including any registration effected pursuant to Section 2.3), (e) any registration pursuant to Section 2.1(e) after the Company has initiated two (2) such registrations (but not including any registration effected pursuant to Section 2.3), (f) any registration pursuant to Section 2.1(f) after the Company has initiated two (2) such registrations (but not including any registration effected pursuant to Section 2.3), (g) any registration pursuant to Section 2.1(g) after the Company has initiated two (2) such registrations (but not including any registration effected pursuant to Section 2.3), so long as such 2.1(a), 2.1(b), 2.1(c), 2.1(d), 2.1(e), 2.1(f) or 2.1(g) registrations (i) have been declared or ordered effective and have been pursuant to which securities have been sold or (ii) have been withdrawn by the Holders (if the Holders have not elected to bear the Registration Expenses pursuant to Section 2.4 hereof and would, absent such election, have been required to bear such expenses by Section 2.4).

 

 

(i) Registration Statement. Subject to Section 2.1(h), the Company shall file a registration statement covering the Registrable Securities so requested to be registered under Section 2.1(a), 2.1(b), 2.1(c), 2.1(d), 2.1(e), 2.1(f), 2.1(g) or 2.3 as soon as practicable, and in any event within forty-five (45) days after receipt of the request or requests of the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable; provided, however, that if (i) in the good faith judgment of the Board of Directors of the Company, such registration would be seriously detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is essential to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the Chief Executive Officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, essential to defer the filing of such registration statement, then the Company shall have the right to defer such filing for the period during which such disclosure would be seriously detrimental, provided that (except as provided in this clause (h) above) the Company may not defer the filing for a period of more than ninety (90) days after receipt of the request of the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable, and, provided further, that the Company shall not defer its obligation in this manner more than once in any twelve (12) month period.

 

(j) Inclusion of Other Securities of the Company. The registration statement filed pursuant to the request of the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, the Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable, may, subject to the provisions of Sections 2.1(k) and 2.1(l) hereof, include other securities of the Company, with respect to which registration rights have been granted, and may include securities of the Company being sold for the account of the Company.

 

 

(k) Underwriting. The right of any Holder to registration pursuant to Section 2.1 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable, and such Holder with respect to such participation and inclusion) to the extent provided herein. A Holder may elect to include in such underwriting all or a part of the Registrable Securities he or she holds.

 

(l) Procedures. If the Company shall request inclusion in any registration pursuant to Section 2.1 of securities being sold for its own account, or if other persons shall request inclusion in any registration pursuant to Section 2.1, the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders, the Series F Initiating Holders or Series G Initiating Holders, as applicable, shall, on behalf of all Holders, offer to include such securities in the underwriting and may condition such offer on their acceptance of the further applicable provisions of this Section 2 (including Section 2.10). The Company shall (together with all Holders and other persons proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by a majority in interest of the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable, which underwriters are reasonably acceptable to the Company. If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded in such manner shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to Section 2.1(m), then the Company shall offer to all Holders who have retained rights to include securities in the registration the right to include additional securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion in accordance with Section 2.1(l).

 

 

 

(m) Priority on Demand Registration. Notwithstanding any other provision of this Section 2.1, if the representative of the underwriters advises the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, the Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable, in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, the Series E Initiating Holders, the Series F Initiating Holders or the Series G Initiating Holders, as applicable, shall so advise all Holders, and the number of shares to be included in the underwriting or registration shall be allocated as follows: (i) in the case of a registration requested by Series G Initiating Holders, (A) first, among all Series G Holders, (B) second, among all other Holders, including the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders and Series F Initiating Holders, as applicable, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company requested for inclusion by the Holders and (C) third, to any other Common Shares of the Company (including Common Shares issued or issuable upon conversion of any currently unissued series of Preferred Shares) or other securities of the Company (collectively, the “Other Shares”), (ii) in the case of a registration requested by Series F Initiating Holders, (A) first, among all Series F Holders, (B) second, among all other Holders, including the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D, Series E Initiating Holders and Series G Initiating Holders, as applicable, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company requested for inclusion by the Holders and (C) third, to the Other Shares, (iii) in the case of a registration requested by Series E Initiating Holders, (A) first, among all Series E Holders, (B) second, among all other Holders, including the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series F Initiating Holders and Series G Initiating Holders, as applicable, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company requested for inclusion by the Holders and (C) third, to any other Common Shares of the Company (including Common Shares issued or issuable upon conversion of any currently unissued series of Preferred Shares) or the Other Shares, (iv) in the case of a registration requested by Series D Initiating Holders, (A) first, among all Series D Holders, (B) second, among all other Holders, including the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series E Initiating Holders, Series F Initiating Holders and Series G Initiating Holders, as applicable, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company requested for inclusion by the Holders and (C) third, to the Other Shares and (v) in any other case, (A) first, among all Holders, including, without limitation, the Series A Initiating Holders, Series B Initiating Holders, Series C Initiating Holders, Series D Initiating Holders, Series E Initiating Holders, Series F Initiating Holders or Series G Initiating Holders, as applicable, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company requested for inclusion by the Holders and (B) second, to any Other Shares. In the case of clauses (i), (ii), (iii), (iv) and (v) above, the Other Shares shall be excluded first, pro rata based on the number of shares held by each Holder thereof, and then, in the event of the complete exclusion of Other Shares from such registration, if the aggregate number of Registrable Securities cannot be so included as a result of such limitations, the remaining Registrable Securities shall be excluded, pro rata based on the number of shares held by each Holder thereof.

 

2.2 Company Registration.

 

(a) If the Company shall determine to register any of its securities either for its own account or the account of a security holder or holders, other than a registration relating solely to employee benefit plans, or a registration relating solely to a Rule 145 transaction, the Company will:

 

(i) promptly give to each Holder written notice thereof; and

 

(ii) use its best efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made by any Holder and received by the Company within twenty (20) days after the written notice from the Company described in clause (i) above is delivered by the Company. Such written request may specify all or a part of a Holder’s Registrable Securities.

 

 

(b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i). In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company. If any person does not agree to the terms of any such underwriting, he or she shall be excluded therefrom by written notice from the Company or the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares of Registrable Securities to be included in such registration was previously reduced as a result of marketing factors, the Company shall then offer to all persons who have retained the right to include securities in the registration the right to include additional securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among the persons requesting additional inclusion in accordance with this Section 2.2.

 

(c) Priority on Company Registrations. Notwithstanding any other provision of this Section 2.2, if the representative of the underwriters advises the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the representative may (subject to the limitations set forth below) exclude the Registrable Securities from, or limit the number of Registrable Securities to be included in, the registration and underwriting as set forth below:

 

(i) Initial Public Offering. If the registration is the first Company-initiated registered offering of the Company’s securities to the general public, the Company may limit, to the extent so advised by the underwriters, the amount of securities (including Registrable Securities) to be included in the registration by the Company’s Stockholders (including the Holders), provided, that (i) first, the securities the Company proposes to sell shall be included, (ii) second, the Registrable Securities, if any, requested to be included in the registration shall be included, pro rata among the Holders of such Registrable Securities on the basis of the number of shares each such Holder requested to be included in the registration, and (iii) third, Other Shares shall be included, pro rata among the holders of such Other Shares on the basis of the number of Other Shares each such holder requested to be included in the registration.

 

(ii) Subsequent Offering. If such registration is a subsequent Company-initiated registered offering of the Company’s securities to the general public, the Company may limit, to the extent so advised by the underwriters, the amount of securities to be included in the registration by the Company’s Stockholders (including the Holders); provided, that (i) first, the securities the Company proposed to sell shall be included, (ii) second, Registrable Securities requested to be included in the registration shall be included, pro rata among the Holders of such Registrable Securities on the basis of the number of shares each such Holder requested to be included in the registration and (iii) third, Other Shares, pro rata among the holders of such Other Shares on the basis of the number of Other Shares each such holder requested to be included in the registration; provided, that, the Holders shall be entitled to register at least twenty-five percent (25%) of the securities to be included in any such registration.

 

 

2.3 Registration on Form S-3.

 

(a) After its initial public offering, the Company shall use its best efforts to qualify for registration on Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2, any Holders shall have the right to request registrations on Form S-3 or any similar short form registration (such requests shall be in writing and shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by such Holder or Holders); provided, however, that the Company shall not be obligated to effect any such registration if: (i) the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) on Form S-3 at an aggregate price to the public of less than $5,000,000; (ii) in a given twelve (12) month period, after the Company has effected one such registration in any such period pursuant to this Section 2.3(a); (iii) the registration is in any jurisdiction in which the Company would be required to qualify to do business or execute a general consent to service of process to effect such registration; or (iv) after the Company has effectuated five such registrations.

 

(b) If a request complying with the requirements of Section 2.3 (a) hereof is delivered to the Company, the provisions of Sections 2.1(a)(i) and (ii), Section 2.1(b)(i) and (ii), Section 2.1(c)(i) and (ii), Section 2.1(d)(i) and (ii), Section 2.1(e)(i) and (ii), Section 2.1(f)(i) and (ii), Section 2.1(g)(i) and (ii) and Section 2.1(h) hereof shall apply to such registration. If the registration is for an underwritten offering, the provisions of Sections 2.1(i), 2.1(j), 2.1(k), 2.1(l) and 2.1(m) hereof shall apply to such registration.

 

2.4 Expenses of Registration. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Sections 2.1, 2.2 and 2.3 hereof shall be borne by the Company; provided, however, that if the Holders bear the Registration Expenses for any registration proceeding begun pursuant to Section 2.1 and subsequently withdrawn by the Holders registering shares therein, such registration proceeding shall not be counted as a requested registration pursuant to Section 2.1 hereof, except in the event that such withdrawal is based upon material adverse information relating to the Company that is different from the information known or available (upon request from the Company or otherwise) to the Holders requesting registration at the time of their request for registration under Section 2.1, in which event such registration shall not be treated as a counted registration for purposes of Section 2.1 hereof, even though the Holders do not bear the Registration Expenses for such registration. All Selling Expenses relating to securities so registered shall be borne by the Holders of such securities pro rata on the basis of the number of shares of securities so registered on their behalf.

 

 

2.5 Registration Procedures. In the case of each registration effected by the Company pursuant to this Section 2, the Company will keep each Holder participating in such registration advised in writing as to the initiation of each registration and as to the completion thereof. At its expense, the Company will use its best efforts to:

 

(a) Keep such registration effective for a period of one hundred twenty (120) days or until the Holder or Holders have completed the distribution described in the registration statement relating thereto, whichever first occurs; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an underwriter of Common Shares (or other securities) of the Company; and (ii) in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, such one hundred twenty (120) day period shall be extended to a period of one year;

 

(b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

 

(c) Furnish such number of prospectuses and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

 

(d) Notify each Holder covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing, and at the request of any such seller, prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing;

 

(e) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed;

 

(f) Provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(g) In connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1 hereof, the Company will enter into an underwriting agreement reasonably necessary to effect the offer and sale of the Registrable Securities, provided such underwriting agreement contains customary underwriting provisions and provided further that if the underwriter so requests the underwriting agreement will contain customary contribution provisions;

 

 

(h) Furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 2, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 2, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities;

 

(i) Register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

 

(j) Promptly notify the Holders and the underwriters, if any, of the following events and (if requested by any such persons) confirm such notification in writing: (i) the filing of the prospectus or any prospectus supplement and the registration statement and any amendment or post-effective amendment thereto and, with respect to the registration statement or any post-effective amendment thereto, the declaration of the effectiveness of such document; (ii) any requests by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information; (iii) the issuance or threat of issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose; and (iv) the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threat of initiation of any proceeding for such purpose;

 

(k) Cause all such Registrable Securities to be listed on each securities exchange on which the same class of securities issued by the Company is then listed;

 

(l) Except in the case of any registration of Registrable Securities on Form S-3 that is not an underwritten offering, enter into such customary agreements (including, without limitation, underwriting agreements in customary form) and take all such other actions as shall be necessary or customary in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, effecting a stock split or a combination of shares);

 

 

(m) Except in the case of any registration of Registrable Securities on Form S-3 that is not an underwritten offering, make available for inspection by any Holder, any underwriter participating in any disposition pursuant to the registration statement and any attorney, accountant or other agent retained by any such Holder or underwriter (“Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company in each case that are relevant to such registration statement (“Records”), and cause the Company’s officers, directors, employees and independent accountants to supply all relevant information reasonably requested by any such Inspector in connection with the registration statement; provided that the Company shall not be required to comply with this Section 2.5(m) to the extent there is a reasonable likelihood, in the reasonable judgment of the Company, that such delivery could result in the loss of any attorney-client privilege related thereto; and provided further that Records that the Company determines, in good faith, to be confidential and that it notifies the Inspectors are confidential shall be used only in connection with such registration, and shall be kept confidential and shall not be disclosed by the Inspectors (other than to any Holder) unless (i) such Records have become generally available to the public or (ii) the disclosure of such Records may be necessary or appropriate (A) in compliance with any law, rule, regulation or order applicable to any such Inspector or Holder, (B) in response to any subpoena or other legal process or (C) in connection with any litigation to which any such Inspector or Holder is a party; provided, that prior notice be provided as soon as practicable to the Company of the potential disclosure of any information by such Inspector pursuant to this clause to permit the Company to obtain a protective order (or waive the provisions of this clause) and that such Inspector shall take such actions as are reasonably necessary to protect the confidentiality of such information to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder or any Inspector;

 

(n) Permit any Holder to participate in the preparation of such registration or comparable statement and to require the insertion therein of material furnished to the Company in writing relating to such Holder or its plan of distribution, which in the reasonable judgment of the Holder and its counsel should be included;

 

(o) Make every commercially reasonable effort to prevent the entry of any order suspending the effectiveness of the registration statement and, in the event of the issuance of any such stop order, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any security included in such registration statement for sale in any jurisdiction, the Company shall use its commercially reasonable best efforts promptly to obtain the withdrawal of such order;

 

(p) Use its commercially reasonable best efforts to cause such Registrable Securities covered by the registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof to consummate the disposition of such Registrable Securities;

 

(q) Cooperate with the selling Holders and the underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends, and enable such Registrable Securities to be in such lots and registered in such names as the underwriters may request at least two (2) business days prior to any delivery of Registrable Securities to the underwriters; and

 

 

(r) Except in the case of a registration of Registrable Securities on Form S-3 that is not an underwritten offering, obtain an opinion from the Company’s counsel and a “cold comfort” letter from the Company’s independent public accountants who have certified the Company’s financial statements included or incorporated by reference in the registration statement, in each case dated the effective date of the registration statement (and if such registration involves an underwritten offering, a bring-down “cold comfort” letter dated the date of the closing under the underwriting agreement), in customary form and covering such matters as are customarily covered by such opinions and “cold comfort” letters delivered to underwriters in underwritten public offerings, which opinion and letter shall be reasonably satisfactory to the managing underwriters, if any, and to the Holders of a majority of the Registrable Securities participating in the offering, and furnish to each Holder participating in the offering and to each underwriter, if any, a copy of such opinion and letter addressed to such Holder and underwriter.

 

2.6 Indemnification.

 

(a) The Company will indemnify each Holder, each of its officers, directors, partners, employees, members, legal counsel, accountants and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls any underwriter within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each such Holder, each of its officers, directors, partners, employees, members and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action; provided that, the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder or underwriter and stated to be specifically for use therein.

 

(b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other such Holder, each of its officers and directors and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, officers, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder, and stated to be specifically for use therein; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder; and provided further that the obligations of each such Holder hereunder shall be limited to an amount equal to the net proceeds after expenses and commissions to such Holder from Registrable Securities sold in such offering. 

 

 

(c) Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that, counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent, but only to the extent, that the Indemnifying Party’s ability to defend against such claim or litigation is impaired as a result of such failure to give notice.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

 

(d) If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnified Party on the one hand and of the Indemnifying Party on the other in connection with the actions or omissions that resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations; provided, that in no event shall any contribution by a Holder under this subsection 2.6(d) exceed the net proceeds (after expenses and commissions) from the offering received by such Holder. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

 

2.7 Information by Holder. Each Holder shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 2.

 

2.8 Limitations on Registration of Issues of Securities. From and after the date of this Agreement, the Company shall not, without the prior written consent of holders of a majority of the Preferred Shares, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are equal to or more favorable than the registration rights granted to the Holders hereunder.

 

2.9 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to:

 

(a) Make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act;

 

(b) File with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements;

 

(c) So long as a Holder owns any Registrable Securities, furnish to the Holder forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.

 

2.10 “Market Stand-Off” Agreement. If requested by the Company and an underwriter of Common Shares (or other securities) of the Company, a Holder shall not sell or otherwise transfer or dispose of any Common Shares (or other securities) of the Company held by such Holder (other than those included in the registration) for no more than 180 days from the effective date of the first registration of the Company’s securities, including securities to be sold on its behalf to the public in an underwritten offering; provided, however, that all executive officers, directors and one percent (1%) or greater stockholders (calculated on an as-converted, as-if-exercised basis) of the Company must enter into similar lock-up agreements as well. The Company agrees to use its best efforts to negotiate an underwriting agreement and individual lock-up agreements that provide for pro rata release from the lock-up such that, if (i) the Chief Executive Officer of the Company, (ii) the Named Executive Officers of the Company so named in the registration statement under which such Common Shares (or other securities) are registered, (iii) a Director of the Company or (iv) any stockholder holding greater than five percent (5%) of the outstanding capital stock of the Company is wholly or partially released from the lock-up, each Holder shall be similarly released to the same extent pro rata in accordance with such party’s holdings.

 

 

The obligations described in this Section 2.10 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day period.

 

Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in the Company’s initial public offering under the Securities Act that are consistent with this Section 2.10 or that are necessary to give further effect thereto.

 

2.11 Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.12 Termination of Registration Rights. The right of any Holder to request registration or inclusion in any registration pursuant to Section 2.1, 2.2 or 2.3 shall terminate upon the earlier of (i) all shares of Registrable Securities held or entitled to be held upon conversion by such Holder may immediately be sold under Rule 144 within a ninety (90) day period for any continuous one hundred and eighty day (180) day period so long as the Company has completed a Qualified Public Offering, or (ii) the expiration of seven (7) years after the closing of a Qualified Public Offering.

 

SECTION 3

 

General Prohibition on Transfers; Permitted Transfers

 

3.1 Transfer Restriction. No Stockholder shall directly or indirectly sell, exchange or otherwise transfer to any person any Shares unless (i) such Stockholder has complied with all of the terms of this Agreement, including, without limitation, Section 4.1, if applicable; and (ii) as a condition precedent to such transfer, the transferee becomes a party to this Agreement by executing a copy of this Agreement, which such execution shall provide such transferee with all of the rights and obligations of a Stockholder hereunder. Any purported sale, exchange or other transfer in violation of any provision of this Agreement shall be void and ineffectual and shall not operate to transfer any interest or title to the purported transferee.

 

3.2 Restrictive Legends. Each certificate representing the Shares shall be stamped or otherwise imprinted with a legends in substantially the following forms:

 

 

(a) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.”

 

(b) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN INVESTORS’ RIGHTS AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SECURITIES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH INVESTORS’ RIGHTS AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.”

 

3.3 Notice of Proposed Transfer. Notwithstanding the requirements of Section 4.1, prior to any proposed transfer of any Shares, unless there is in effect a registration statement under the Securities Act covering the proposed transfer, such Stockholder shall give written notice to the Company of such Stockholder’s intention to effect such transfer. Each such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail, and shall be accompanied (except in the case of Permitted Transfers) by either (a) a written opinion of legal counsel who shall be reasonably satisfactory to the Company addressed to the Company and reasonably satisfactory in form and substance to the Company’s counsel, to the effect that the proposed transfer of the Shares may be effected without registration under the Securities Act, or (b) such other showing that may be reasonably satisfactory to legal counsel to the Company, whereupon the holder of such Shares shall be entitled to transfer such Shares in accordance with the terms of the notice delivered by the holder to the Company; provided, however, that no opinion or “No Action” letter need be obtained with respect to a Permitted Transfer provided that, in all such cases, written notice thereof is promptly given to the Company, the transfer complies with the terms and conditions of this Agreement and the transferee agrees to be bound by the provisions of this Agreement. Each certificate evidencing the Shares transferred as above provided shall bear the appropriate restrictive legends set forth in Section 3.2 above, except that such certificate shall not bear the restrictive legend contained in Section 3.2(a) if in the opinion of counsel for the Company such legend is not required in order to establish compliance with any provisions of the Securities Act.

 

SECTION 4

 

Co-Sale; Right of First Offer

 

4.1 Grant; Notice.

 

(a) In the event a Co-Sale Stockholder proposes to sell, transfer or otherwise dispose of (a “Transfer”) any of such Co-Sale Stockholder’s Shares (the “Co-Sale Shares”) to any proposed purchaser or transferee (a “Transferee”), each of the other Co-Sale Stockholders (the “Non-Selling Holders”) shall have a right of co-sale on the terms described in Section 4.2 to sell such Non-Selling Holder’s Co-Sale Pro Rata Share (as defined in Section 4.2(b) below) of such Co-Sale Shares; provided, however, that such right of co-sale shall be triggered only in the event that the Company and/or the Company’s stockholders do not first purchase such Co-Sale Shares subject to any existing rights of first refusal; and provided, further, that such Transfer is not excepted from the provisions of this Section 4.1 pursuant to Section 4.5.

 

 

(b) Immediately upon the expiration or waiver of any existing right of first refusal in favor of the Company and/or the Company’s stockholders with respect to the Co-Sale Shares, the Co-Sale Stockholder shall deliver a notice (the “Notice”) to each Non-Selling Holder and to the Company stating, in reasonable detail, (i) his or her bona fide intention to Transfer such Co-Sale Shares, (ii) the number of such Co-Sale Shares to be Transferred, (iii) the price and material terms and conditions upon which the proposed Transfer is to be made, (iv) the identity of the Transferee and (v) all other information reasonably necessary to fully describe the proposed Transfer. The Notice shall include a copy of any written proposal or letter of intent or other agreement relating to the proposed Transfer.

 

(c) Within 30 days after delivery of the Notice, each Non-Selling Holder shall indicate in writing to the Co-Sale Stockholder, the Company and each other Non-Selling Holder whether it elects to exercise its co-sale right as provided in Section 4.2 below and the number of shares such Non-Selling Holder elects to sell (the “Purchaser Election Notice”). Any Non-Selling Holder’s failure to deliver a Purchaser Election Notice with respect to such Co-Sale Shares within such 30-day period shall be automatically deemed to be a delivery of a Purchaser Election Notice indicating such Non-Selling Holder’s election not to exercise any co-sale rights with respect to the proposed Transfer.

 

(d) In the event that the Company assigns its right of first refusal under Section 5.06 of the Company’s Amended and Restated Bylaws, as amended, as permitted by clause (c) of such Section 5.06, the Company shall assign such right to all Qualified Preferred Stockholders on a pro rata basis. For purposes of the foregoing, the Company shall assign its right of first refusal to each Qualified Preferred Stockholder with respect to that number of shares of capital stock equal to the product obtained by multiplying (i) the aggregate number of shares of each class or series of capital stock for which the Company is assigning its right of first refusal by (ii) a fraction, (1) the numerator of which is the number of shares of capital stock (on an as-converted basis) held by such Qualified Preferred Stockholder, and (2) the denominator of which is the total number of shares of capital stock (on an as-converted basis) held by all Qualified Preferred Stockholders.

 

 

 

4.2 Right of Co-Sale.

 

(a) Any Non-Selling Holder who timely delivers a Purchaser Election Notice pursuant to Section 4.1(c) above indicating an election to exercise such Non-Selling Holder’s right of co-sale with respect to the Transfer referred to by the Notice and the number of shares such Non-Selling Holder elects to sell (up to such Non-Selling Holder’s Co-Sale Pro Rata Share), shall have the right to sell to the Transferee all or any part of that number of Preferred Shares of Common Shares held by it equal to its Co-Sale Pro Rata Share of the Co-Sale Shares subject to the Notice and on the terms and conditions set forth in the Notice. Notwithstanding the foregoing, to the extent the Transferee requires that the Co-Sale Shares to be purchased be Common Shares, Series A-2 Preferred Shares, Series B-2 Preferred Shares, Series C-2 Preferred Shares, Series D-2 Preferred Shares, Series E-2 Preferred Shares, Series F-2 Preferred Shares or Series G Preferred Shares, each Non-Selling Holder’s right of co-sale shall be contingent upon the ability of such Non-Selling Holder to sell Common Shares, Series A-2 Preferred Shares, Series B-2 Preferred Shares, Series C-2 Preferred Shares, Series D-2 Preferred Shares Series E-2 Preferred Shares, Series F-2 Preferred Shares or Series G Preferred Shares, as the case may be. To the extent one or more of the Non-Selling Holders exercises such right of co-sale in accordance with the terms and conditions set forth herein, the number of shares of Co-Sale Shares that such Co-Sale Stockholder may sell in the Transfer shall be correspondingly reduced. If the consideration to be paid by the Transferee is of a nature that cannot be given to such Non-Selling Holder, then such Non-Selling Holder shall have the right to sell its Co-Sale Pro Rata Share of the Co-Sale Shares subject to the Notice to the Co-Sale Stockholder at the fair market value per share of such consideration as reasonably determined by the Board of Directors of the Company acting in good faith. To the extent that any prospective Transferee refuses to purchase shares or other securities from any Non-Selling Holder exercising its right of co-sale hereunder or to the extent the Co-Sale Stockholder wishes to delay the purchase of shares or other securities from the Non-Selling Holder, the Co-Sale Stockholder shall not sell to such prospective Transferee any securities unless and until, simultaneously with such sale, the Co-Sale Stockholder shall purchase such shares or other securities from such Non-Selling Holder for the same consideration and on the same terms and conditions as the proposed Transfer described in the Notice.

 

(b) Each Non-Selling Holder’s “Co-Sale Pro Rata Share” for purposes of the right of co-sale hereunder is that number of Common Shares equal to the product obtained by multiplying (i) the aggregate number of Common Shares (on an as-converted, as-exercised basis) covered by the Notice by (ii) a fraction, (1) the numerator of which is the number of Common Shares (on an as-converted, as-exercised basis) held by such Non-Selling Holder at the time of the Transfer, and (2) the denominator of which is the total number of Common Shares (on an as-converted, as-exercised basis) held by such Co-Sale Stockholder and all Non-Selling Holders at the time of the delivery of the Notice.

 

4.3 Transfer of Shares by Co-Sale Stockholder. Subject to (a) any right of first refusal in favor of the Company and/or any stockholders of the Company and (b) the right of co-sale contained in Section 4.2, the Co-Sale Stockholder may, not later than 90 days following delivery of the Notice, conclude a Transfer of any or all of the Co-Sale Shares covered by the Notice less any securities sold or to be sold to the Transferee by a Non-Selling Holder pursuant to Section 4.2(a) above, on terms and conditions the same or substantially the same as those described in the Notice. The rights of co-sale contained in Section 4.2 shall be binding upon any Transferee of Co-Sale Shares other than a Transferee acquiring Co-Sale Shares in a transaction which complies with this Section 4.

 

4.4 Termination of Rights of Co-Sale. Notwithstanding anything in this Agreement to the contrary, this Section shall terminate on the earliest of (i) the closing of the Company’s Qualified Public Offering or (ii) the closing of an Asset Transfer or Acquisition (as such terms are defined in the Company’s Twelfth Amended and Restated Certificate of Incorporation).

 

 

4.5 Exceptions.

 

(a) Notwithstanding anything to the contrary in this Agreement, any Co-Sale Stockholder may transfer all or part of his Co-Sale Shares without first complying with the provisions of Sections 4.1 through 4.3 above to: (i) such Co-Sale Stockholder’s ancestors, descendants, siblings or spouse, any executor or administrator of his estate or to a custodian, trustee (including a trustee of a voting trust), executor or other fiduciary primarily for the account of such Co-Sale Stockholder or his ancestors, descendants, siblings or spouse, (ii) any executor or other fiduciary primarily for the account of a non-profit organization or directly to a non-profit organization, (iii) if such Co-Sale Stockholder is an entity, to any of its affiliates, or (iv) the recipient of any other Permitted Transfer (each, an “Exempted Transferee”); provided, however, that this Agreement shall be binding upon each such Exempted Transferee and, prior to the completion of such transfer, each Exempted Transferee or his or its legal representative shall have executed documents in form and substance reasonably satisfactory to the Company, evidenced by their written acknowledgment of such satisfaction, assuming the obligations of the Co-Sale Stockholder under this Agreement with respect to the transferred shares. Such transferred shares shall remain “Co-Sale Shares” hereunder, and references to a “Co-Sale Stockholder” hereunder shall be deemed thereafter to apply to and include the transferor or transferees of any such shares.

 

4.6 Right of First Offer.

 

(a) The Company hereby grants to each Qualified Preferred Stockholder a right of first offer with respect to future sales by the Company of its Securities (as hereinafter defined). A Qualified Preferred Stockholder shall be entitled to apportion the right of first offer hereby granted it among itself and its partners and affiliates in such proportions as it deems appropriate.

 

(b) Each time the Company proposes to offer any shares of or securities convertible into or exercisable for any shares of any class of its capital stock (the “Securities”), the Company shall first make an offering of such Securities to each Qualified Preferred Stockholder in accordance with the following provisions and subject to applicable securities laws:

 

(i) The Company shall deliver a notice (the “Offer Notice”) to the Qualified Preferred Stockholders stating (i) its bona fide intention to offer such Securities, (ii) the number of Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such Securities.

 

(ii) By written notification received by the Company within twenty (20) days after giving of the Offer Notice, each Qualified Preferred Stockholder may elect to purchase or obtain, at the price and on the terms specified in the Offer Notice, up to that portion of such Securities which equals the proportion that the number of Shares issued and held by such Qualified Preferred Stockholder, on an as-converted, as exercised basis, bears to the total number of Shares of the Company then outstanding on an as-converted, as-exercised basis (the “Proportionate Share”).

 

(iii) If all shares which Qualified Preferred Stockholders are entitled to obtain pursuant to subsection 4.6(b)(ii) above are not elected to be obtained, the Company may, during the ninety (90) day period following the expiration of the period provided in subsection 4.6(b)(ii) above, offer the remaining unsubscribed portion of such shares to any person or persons at a price not less than and upon terms no more favorable to the offeree than those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Securities shall not be offered unless first reoffered to the Qualified Preferred Stockholders in accordance herewith.

 

 

(iv) The right of first offer in this Section 4.6 shall not be applicable to (i) the issuance or sale of Securities (or options therefor) granted to employees, directors or consultants of the Company pursuant to a stock option plan unanimously approved by the Board, (ii) the issuance of securities pursuant to the conversion or exercise of convertible or exercisable securities, (iii) the issuance or sale of Securities (or options therefor) to lending or leasing institutions approved by the Board in connection with the Company’s senior, secured debt or equipment leasing provided that such Common Shares issued or issuable do not exceed five percent (5%) of the capital stock of the Company, measured on an as-converted, as-exercised basis, as of the date of this Agreement, (iv) the issuance of Securities in connection with a bona fide business acquisition of or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, in each case, approved by the Board of Directors, (v) the issuance of Securities in the initial public offering of the Company’s capital stock, (vi) the issuance of Series E-2 Preferred Shares or Series G Preferred Shares (and Common Shares issuable upon conversion of such Series E-2 Preferred Shares or Series G Preferred Shares) pursuant to the warrant, issued to Biosense Webster, Inc. on September 28, 2018, or (vii) the issuance of Series G Preferred Shares pursuant to the Series G Preferred Stock Purchase Agreement (2016) or the Series G Preferred Stock Purchase Agreement (2020).

 

(v) The right of first offer will terminate (i) at, and pursuant to, a Qualified Public Offering, or (ii) the closing of any Acquisition or Asset Transfer (as such terms are defined in the Twelfth Amended and Restated Certificate of Incorporation of the Company).

 

SECTION 5

 

COVENANTS

 

5.1 Financial and Other Information. The Company hereby covenants and agrees to furnish the following reports to each Qualified Preferred Stockholder:

 

(a) As soon as practicable after the end of each fiscal year of the Company, and in any event within ninety (90) days thereafter, an audited consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with generally accepted accounting principles (“GAAP”) consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and certified by independent public accountants of recognized national standing selected by the Company;

 

 

(b) As soon as practicable after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, and in any event within thirty (30) days thereafter, (i) an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and consolidated statements of income and cash flows of the Company and its subsidiaries for such period and for the current fiscal year to date, prepared in accordance with GAAP consistently applied and setting forth in comparative form (A) the figures for the corresponding periods of the previous fiscal year and (B) the Company’s current budget (including any amendments to the Budget as approved by the Board of Directors), subject to changes resulting from normal year-end audit adjustments, all in reasonable detail and certified by the principal financial or accounting officer of the Company, except that such financial statements need not contain the notes required by GAAP;

 

(c) Within thirty (30) days of the end of each month, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such month, and consolidated statements of income and cash flows of the Company and its subsidiaries for such period, prepared in accordance with GAAP consistently applied and setting forth in comparative form the figures for the corresponding periods of the previous fiscal year, subject to changes resulting from normal year-end audit adjustments, all in reasonable detail and certified by the principal financial or accounting officer of the Company, except that such financial statements need not contain the notes required by GAAP;

 

(d) Prior to the beginning of each fiscal year, an annual financial plan of the Company, set forth by fiscal quarter, which financial plan shall have been approved by the Board of Directors;

 

(e) Promptly upon becoming available, copies of all audit reports prepared for or delivered to the management of the Company by its outside accountants;

 

(f) Promptly, from time to time, such other information (in writing if so requested) regarding the assets and properties and operations, business affairs and financial condition of the Company as may be reasonably requested;

 

(g) Promptly, upon any proposed Asset Transfer or an Acquisition or an initial public offering of the Company’s securities, notice of such transaction and any agreements or documents relating thereto, in which case the Qualified Preferred Holder will be afforded five (5) calendar days to review and comment on such agreements or documents (and the Qualified Preferred Holder may, at its own expense, retain its own counsel in connection therewith); and

 

(h) Promptly following such time as the Company does not have sufficient operating capital to operate the Company in a manner similar to its then-current operations for a period of at least sixty (60) days, notice of such fact.

 

5.2 Visitation and Observer Rights. In addition to any rights of inspection afforded stockholders by statute, and so long as Preferred Shares are outstanding, the Company shall permit each Qualified Preferred Stockholder to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such times as reasonably may be requested by the Holder.

 

 

5.3 Board Visitation Rights.

 

(a) So long as Ysios is a Qualified Preferred Stockholder for purposes of Sections 5.1 and 5.2 of this Agreement, Ysios shall have a right to send a visitor who will not be a member of the Board of Directors to all meetings of the Board of Directors, except that the visitor may be excluded from access to any material or meeting or portion thereof if the Company believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege, to protect highly confidential proprietary information, or for other similar reasons. The Company will reimburse the reasonable travel expenses of the visitor to attend regularly scheduled in-person meetings of the Board of Directors, up to a maximum of $10,000 per year.

 

(b) So long as Action Potential Venture Capital Limited or its affiliates (“APVC”) continues to hold at least 8,750,000 Series G Preferred Shares, APVC shall have a right to send a visitor who will not be a member of the Board of Directors to all meetings of the Board of Directors, except that the visitor may be excluded from access to any material or meeting or portion thereof if the Company believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege, to protect highly confidential proprietary information, or for other similar reasons.

 

(c) So long as Hatteras Venture Partners or its affiliates (“HVP”) continues to hold at least 8,000,000 Series G Preferred Shares, HVP shall have a right to send a visitor who will not be a member of the Board of Directors to all meetings of the Board of Directors, except that the visitor may be excluded from access to any material or meeting or portion thereof if the Company believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege, to protect highly confidential proprietary information, or for other similar reasons.

 

5.4 EIF Audit Rights. A portion of the investment made by Coöperatieve Gilde Healthcare IV U.A. (“Gilde”) originated from the European Recovery Program – EIF Facility. EIF and its co-investors will have the right to audit the use by Gilde of the contributions to Gilde by examining the Company’s relevant books and documents at reasonable times upon reasonable notice. The audit may be conducted either in person by the EIF or by a duly authorized third party. Additionally, the Company shall provide Gilde specific information (e.g., headcount information) required by the EIF upon request.

 

5.5 Directors and Officers Insurance; Expenses. The Company hereby covenants that it currently has and shall retain in full force and effect one or more policies of directors and officers insurance, covering all directors and officers of the Company, issued by insurers of recognized responsibility, insuring against such losses and risks, and in such amounts, as are customary in the case of corporations of established reputation engaged in a comparable business. The Company will reimburse the members of the Board of Directors for all reasonable out-of-pocket expenses incurred in attending board meetings and other pre-authorized actions associated with the performance of their duties.

 

 

5.6 Indemnification. The Certificate of Incorporation or Bylaws of the Company shall at all times provide for the exculpation and indemnification of the Board to the fullest extent permitted by law of the jurisdiction in which the Company is organized, which provisions shall not be amended except as required by applicable law or except to make changes permitted by law that would enlarge the right of indemnifications of the Board.

 

5.7 Warrants. The Company hereby covenants that it will issue no warrants or other instruments exercisable for or convertible into Preferred Shares.

 

5.8 Non-Competition Agreements; Confidentiality and Inventions Agreements. The Company shall enter into non-competition agreements with each future officer and employee with scientific, technical, managerial and/or operational responsibility in a form that is standard for a comparable business. The Company shall enter into non-disclosure and non-solicitation provisions with each future officer and employee in a form that is standard for a comparable business. The Company shall enter into agreements with each future officer and employee with scientific, technical, managerial and/or operational experience containing provisions assigning all intellectual property rights to the Company in a form that is standard for a comparable business. Notwithstanding the foregoing, as it relates to the Company’s employees outside of the United States, the Company’s obligations above shall be limited to taking reasonable efforts to obtain such agreements and shall not require the Company to request any agreements that do not comply with applicable local laws.

 

5.9 Independent Accountants. The Company shall continue to retain independent public accountants of recognized national standing who shall audit the Company’s financial statements at the end of each fiscal year. In the event the services of the independent public accountants so engaged, or any firm of independent public accountants hereafter engaged by the Company, are terminated, the Company will promptly thereafter engage another firm of independent public accountants of recognized national standing.

 

5.10 Insurance. The Company shall continue to maintain valid policies of insurance with respect to its properties and business of the kinds and in the amounts not less than is customarily obtained by corporations engaged in the same business and similarly situated, including, without limitation, workers compensation insurance and insurance against casualty loss, public liability, libel, slander, defamation, advertising injury and other risks.

 

5.11 Reservation of Common Shares. The Company shall at all times reserve and keep available out of its authorized but unissued Common Shares, solely for the purpose of effecting the conversion of the Preferred Shares, such number of Common Shares as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Shares; and if at any time the number of authorized but unissued Common Shares shall not be sufficient to effect the conversion of all then outstanding Preferred Shares, in addition to such other remedies as shall be available to the Preferred Stockholders, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Common Shares to such number of shares as shall be sufficient for such purposes, including, without limitation, using its best efforts to obtain the requisite stockholder approval of any necessary amendment to the Company’s Certificate of Incorporation.

 

 

5.12 Use of Proceeds. The Company currently intends to use the proceeds from the sale of the Series G Preferred Shares for:

 

(i) Completing the Company’s U.S. heart failure IDE trial and data analysis for FDA;

 

(ii) Commercializing the Company’s heart failure and hypertension products; and

 

(iii) Such other priorities to be determined through consultation with the Board of Directors.

 

Without limiting the foregoing, none of the proceeds of the offering of Series G Preferred Shares will be used to purchase or carry (or refinance any borrowing the proceeds of which were used to purchase or carry) any “security” within the meaning of the Securities Act, except as permitted by any investment policy approved by the Board of Directors of the Company. Notwithstanding the foregoing, the parties acknowledge that if, after the Company has exercised its reasonable efforts to accomplish the priorities described above (including adjusting its head count and other variable costs as appropriate to achieve such objectives), the Company’s Board of Directors determines in good faith, after consultation with its financial advisors and outside counsel, that it would constitute a breach of fiduciary duty under applicable law for the Board of Directors to authorize the Company to continue to use the proceeds from the sale of the Series G Preferred Shares for the priorities described above due to reasons other than the Company’s failure to use reasonable efforts to accomplish such priorities, the Board of Directors may determine alternative uses of the proceeds.

 

5.13 Future Co-Sale Rights. The Company hereby covenants that as a condition of the future sale of its Common Shares or Preferred Shares, it will require that any stockholder who purchases at least 500,000 Common Shares or Preferred Shares execute this Agreement, as such may be amended from time to time and to the extent such stockholder is not already a party hereto, in order that such stockholder becomes subject to the co-sale rights contained in Sections 4.1 through 4.4.

 

5.14 Termination of Covenants. The covenants provided in this Section 5, other than Section 5.15 below, shall terminate unless earlier terminated in accordance with their terms upon the earlier of: (i) the closing of a Qualified Public Offering when, as a result thereof, the Company is subject to the periodic reporting requirements of the Exchange Act or (ii) the closing of any Asset Transfer or Acquisition.

 

5.15 SBA Matters.

 

(a) For a period of one year following the date hereof, the Company shall not change the nature of its business activity if such change would render the Company ineligible as provided in 13 C.F.R. Section 107.720.

 

(b) So long as any Stockholder that is a licensed Small Business Investment Company (an “SBIC Investor”) holds any securities of the Company, the Company will at all times comply with the non-discrimination requirements of 13 C.F.R. Part 112, 113, and 117.

 

 

(c) Upon request of an SBIC Investor, within ninety (90) days after the end of each fiscal year and at such other times as an SBIC Investor may reasonably request, the Company shall deliver to such SBIC Investor a written assessment, in form and substance satisfactory to such SBIC Investor, of the economic impact of such SBIC Investor’s financing specifying the full-time equivalent jobs created or retained in connection with such investment, and the impact of the financing on the Company’s business in terms of profit and on taxes paid by the Company and its employees. Upon request, the Company agrees to promptly provide each SBIC Investor with sufficient information to permit such Purchasers to comply with their obligations under the Small Business Investment Act; provided however, each SBIC Investor agrees that it will protect any information which the Company labels as confidential to the extent permitted by law. Any submission of any financial information under this paragraph shall include a certificate of the Company’s president, chief executive officer, treasurer or chief financial officer.

 

(d) So long as any SBIC Investor holds any securities of the Company, the Company shall notify each SBIC Investor (i) at least fifteen (15) days prior to taking any action after which the number of record holders of the Company’s voting securities would be increased from fewer than fifty (50) to fifty (50) or more, and (ii) of any other action or occurrence after which the number of record holders of the Company’s voting securities was increased (or would increase) from fewer than fifty (50) to fifty (50) or more, as soon as practicable after the Company becomes aware that such other action or occurrence has occurred or is proposed to occur.

 

(e) The Company shall provide each SBIC Investor and the Small Business Administration (the “SBA”) reasonable access to the Company’s books and records for the purpose of confirming the use of proceeds described in Section 5.12 above.

 

5.16 Publicity. The Company shall originate no written or oral or other public disclosure (a “Release”) that mentions Johnson & Johnson Innovation – JJDC, Inc. (“JJDC”) (or the name of any affiliate or investor of JJDC), including for the avoidance of doubt, any publicity, news release or other announcement regarding the existence of any arrangement between the Company and JJDC (or any affiliate of JJDC) without JJDC’s prior consent in each instance, unless such disclosure is reasonably necessary to comply with applicable laws; provided, however, that in the event of a legally required Release, the Company will immediately consult with JJDC with respect to the text of such Release and will provide JJDC with a copy of the Release prior to its publication.

 

5.17 JJDC Information Rights. For so long as JJDC continues to hold at least its Preferred Shares, (i) upon reasonable periodic request, the Company shall provide JJDC’s medical device group affiliate with information about the Company’s business, (ii) representatives of JJDC’s medical device group affiliate shall have the opportunity to meet with management of the Company at least once per quarter, at such times to be reasonably agreed by the Company and JJDC, and (iii) JJDC will be able to nominate one member to the Company’s Scientific Advisory Board.

 

5.18 Policies Regarding GSK Standards of Conduct. APVC, a wholly owned subsidiary of GlaxoSmithKline plc (“GSK”), has adopted policies pursuant to which it has committed to the highest standards of conduct in all aspects of its business and to conduct business with honesty and integrity, and in compliance with all applicable legal and regulatory requirements. In particular, the Company acknowledges receipt of the “Prevention of Corruption - Third Party Guidelines.” APVC also expects its business partners to comply with these same ethical standards, particularly with respect to the conduct of research and development. Accordingly, the Company shall use commercially reasonable efforts to ensure that it and any of its subsidiaries operate to these same standards of conduct, including the principles set forth in the “Prevention of Corruption - Third Party Guidelines.” The Company shall use commercially reasonable efforts to notify APVC if it becomes aware of any activities or proposed activities to be conducted by itself or any of its subsidiaries that may be contrary to GSK’s publicly announced ethical standards or the principles set forth in the “Prevention of Corruption - Third Party Guidelines” of which the Company is aware or has been notified.

 

 

SECTION 6

 

MISCELLANEOUS

 

6.1 Governing law. This Agreement shall be governed in all respects by the laws of the state of Delaware without regard to the conflict of laws principles thereunder.

 

6.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

 

6.3 Entire Agreement; Amendment; Waiver. This Agreement (including the Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof, and shall amend and restate the Seventh Amended and Restated Investors’ Rights Agreement by and among the Company and certain of its stockholders dated August 5, 2016, effective upon this Agreement’s execution by the Company and the holders of at least a majority of the Series A-2 Preferred Shares, Series B-2 Preferred Shares, Series C-2 Preferred Shares, Series D-2 Preferred Shares, Series E-2 Preferred Shares, Series F-2 Preferred Shares and Series G Preferred Shares. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated, except by a written instrument signed by the Company and by holders of at least fifty-three percent (53%) of the Preferred Shares; provided, that no consent of any Preferred Stockholder shall be necessary for any amendment and/or restatement which merely includes additional holders of Preferred Shares or other preferred stock of the Company as “Preferred Stockholders” as parties hereto or additional holders of Common Shares as “Common Stockholders” as parties hereto solely for purposes of Sections 4.1 through 4.5 and which does not materially increase such Preferred Stockholders’ obligations hereunder (other than to increase the number of aggregate Common Shares (on an as-converted, as-exercised basis) subject hereto as a result of the addition of such additional stockholder); provided, however, that Sections 5.16 and 5.17 may not be amended without the consent of JJDC and Section 5.4 may not be amended without the consent of Gilde. Any such amendment, waiver, discharge or termination shall be binding on all the Stockholders, but in no event shall the obligation of any Stockholders hereunder be materially increased, except upon the written consent of such Stockholders.

 

6.4 Notices, etc. Unless otherwise provided, any notice and other communications required or permitted under this Agreement shall be in writing and shall be mailed by United States first-class mail, postage prepaid, sent by electronic mail or facsimile or delivered personally by hand or by a nationally recognized courier addressed to the party to be notified at the mailing or electronic address indicated for such party on the books of the Company, or at such other address, electronic address or facsimile number as such party may designate, with a copy of such notice to any counsel listed for such party on the schedules hereto, or, in the case of any notice or other communication to the Company, to the Company at 9201 West Broadway Avenue, Suite 650, Minneapolis, MN 55445, Attention: CFO, with a copy of such notice to Faegre Drinker Biddle & Reath LLP, 90 South Seventh Street, Minneapolis, MN 55402, Attention: Amy C. Seidel, or at such other address as the Company shall have furnished to each holder in writing. All such notices and other written communications shall be effective on the earlier of: (i) five (5) days from the date of mailing, (ii) when sent, if sent by electronic mail, (iii) confirmed facsimile transfer, or (iv) actual receipt by the party to be notified.

 

 

6.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Stockholder, upon any breach or default of the Company under this Agreement shall impair any such right, power or remedy of such Stockholder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Stockholder of any breach or default under this Agreement or any waiver on the part of any Stockholder of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any Stockholder, shall be cumulative and not alternative.

 

6.6 Rights; Separability. Unless otherwise expressly provided herein, a Stockholder’s rights hereunder are several rights, not rights jointly held with any of the other Stockholders. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

6.7 Confidentiality. Each Stockholder shall keep confidential and shall not disclose or divulge any confidential, proprietary or secret information which such Stockholder may obtain from the Company, and which the Company has prominently marked “confidential”, “proprietary” or “secret” or has otherwise identified as being such, pursuant to financial statements, reports and other materials submitted by the Company as required hereunder, unless such information is or becomes known to the Stockholder from a source other than the Company or is or becomes publicly known, unless the Company gives its written consent to the Stockholder’s release of such information, or unless otherwise required to be disclosed by law, except that no such written consent shall be required (and Stockholder shall be free to release such information) if such information is to be provided to a Stockholder’s counsel or accountant, or to an officer, director or general or limited partner or corporate affiliate of a Stockholder or to employees of, or consultants to, a Stockholder on a “need to know” basis, provided that the Stockholder shall inform the recipient of the confidential nature of such information and shall instruct the recipient to treat the information as confidential and, in the case of disclosure to a corporate affiliate, such recipient shall be bound by an obligation to keep such information confidential.

 

 

6.8 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

6.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

6.10 Aggregation of Shares. All Shares held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Eighth Amended and Restated Investors’ Rights Agreement effective as of the day and year first above written.

 

	COMPANY
	CVRx, Inc.
	/s/ Nadim Yared
	Nadim Yared
	Chief Executive Officer

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

 

IN WITNESS WHEREOF, the parties have executed this Eighth Amended and Restated Investors’ Rights Agreement effective as of the day and year first above written.

 

	New Enterprise Associates VIII, Limited Partnership
	By:	NEA Partners VIII, L.P.
		its General Partner
	By:	/s/ Louis Citron
	Its:
	New Enterprise Associates 8A, Limited Partnership
	By:	NEA Partners 10, L.P.
		its General Partner
	By:	/s/ Louis Citron
	Its:
	New Enterprise Associates 10, Limited Partnership
	By:	NEA Partners 10, L.P.
		its General Partner
	By:	/s/ Louis Citron
	Its:

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Johnson & Johnson Innovation – JJDC, Inc.
	By:	/s/ V. Kadir Kadhiresan
	Name:  V. Kadir Kadhiresan
	Title:  Vice President, Venture Investments

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	COÖPERATIEVE GILDE HEALTHCARE IV U.A.
	By:	/s/ Edwin de Graaf
		Name: Edwin de Graaf
		Title:
	By:	/s/ Marc Perret
		Name: Marc Perret
		Title:

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	ACTION POTENTIAL VENTURE CAPITAL LIMITED
	By:	/s/ Subesh Williams
		Name: Subesh Williams
		Title: Director

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Ysios BioFund I F.C.R.
	By:	Ysios Capital Partners SGEIC, SAU
		Its management company
		By:	/s/ Joël Jean-Mairet
		Name:  Joël Jean-Mairet
		Its: Managing Partner

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	WINDHAM LIFE SCIENCES PARTNERS II, L.P.
	By:	Windham Life Sciences Partners II
		General Partner, LLC
	By:	/s/ Adam Fine
	Name:  Adam Fine
	Title:    Managing Member

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Kathryn S. Nehra Family Trust
	/s/ G. Henry Entwisle
	Name:	G. Henry Entwisle
	Title:	Trustee

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Lauren M. Nehra Family Trust
	/s/ G. Henry Entwisle
	Name:	G. Henry Entwisle
	Title:	Trustee

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Graf Capital Investors LLC
	By:	/s/ Andrew Graf
	Name:	Andrew Graf
	Title:	Manager

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	John D. McNeill
	Revocable Trust U/A/D 10/21/2004
	By:	/s/ John D. McNeill
	Name:	John D. McNeill
	Its: Trustee

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	/s/ Robert K. Anderson
	Robert K. Anderson

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Wendyce H. Brody Separate Property Trust
	dated August 3, 2016
	/s/ Wendyce H. Brody
	Name:
	Trustee

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	JACK E. MEYER AND MARY LOU MEYER,
	AND SUCCESSORS, TRUSTEES OF THE
	JACK E. MEYER REVOCABLE TRUST
	DATED OCTOBER 15, 2003
	/s/ Jack E. Meyer
	Jack E. Meyer, Trustee
	/s/ Mary Lou Meyer
	Mary Lou Meyer, Trustee

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	/s/ Michael T. Kelly
	Michael T. Kelly

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

 

	Strategic Healthcare Investment Partners I, L.P.
	By:	SHIP I GP, LLC
	Its:	General Partner
	By:	/s/ Mudit K. Jain
		Mudit K. Jain, PhD
		General Partner

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	VENSANA CAPITAL I, L.P.
	By:	Vensana Capital I GP, LLC
	Its:	General Partner
	By:	/s/ Kirk Nielsen
		Name: Kirk Nielsen
		Title:   Managing Partner

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Hatteras Venture Partners VI, LP
	By:	Hatteras Venture Advisors VI, LLC, its general partner
	By:	/s/ Doug Reed
		Doug Reed
		Manager

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

	Venrock Healthcare Capital Partners III, L.P.
	By:	VHCP Management III, LLC, its general partner
	By:	VR Advisor, LLC, its manager
	VHCP Co-Investment Holdings III, LLC
	By:	VHCP Management III, LLC, its manager
	By:	VR Advisor, LLC, its manager
	By:	/s/ Nimish Shah
		Authorized Signatory

 

Signature Page to Eighth Amended and Restated Investors’ Rights Agreement

 

 

SCHEDULE A

 

HOLDERS OF SERIES A-2 PREFERRED STOCK

 

W.R. Brody Revocable Trust dated 8-15-2016

Wendyce H. Brody Separate Property Trust dated August 3, 2016

Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Revocable Trust dated October 15, 2003

NEA Ventures 2001, Limited Partnership

New Enterprise Associates 10, Limited Partnership

Bank of America, N.A., as Trustee for the Thomas R. Hektner Roth IRA #1877067

 

 

SCHEDULE B

 

HOLDERS OF SERIES B-2 PREFERRED STOCK

 

TH&CH, LLC

Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Revocable Trust dated October 15, 2003

New Enterprise Associates 10, Limited Partnership

New Enterprise Associates 8A, Limited Partnership

Action Potential Venture Capital Limited

 

 

 

SCHEDULE C

 

HOLDERS OF SERIES C-2 PREFERRED STOCK

 

New Enterprise Associates VIII, Limited Partnership

New Enterprise Associates 8A, Limited Partnership

New Enterprise Associates 10, Limited Partnership

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

TH&CH, LLC

Michael T. Kelly

Action Potential Venture Capital Limited

 

SCHEDULE D

 

HOLDERS OF SERIES D-2 PREFERRED STOCK

 

Johnson & Johnson Innovation – JJDC, Inc.*

New Enterprise Associates VIII, Limited Partnership

New Enterprise Associates 8A, Limited Partnership

New Enterprise Associates 10, Limited Partnership

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

TH&CH, LLC

Action Potential Venture Capital Limited

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

 

SCHEDULE E

 

HOLDERS OF SERIES E-2 PREFERRED STOCK

 

Johnson & Johnson Innovation – JJDC, Inc.*

New Enterprise Associates 10, Limited Partnership

John D. McNeill Revocable Trust U/A/D 10/21/2004

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

Kathryn S. Nehra Family Trust

Lauren M. Nehra Family Trust

Action Potential Venture Capital Limited

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

 

SCHEDULE F

 

HOLDERS OF SERIES F-2 PREFERRED STOCK

 

Johnson & Johnson Innovation – JJDC, Inc.*

 

New Enterprise Associates VIII, LP

 

New Enterprise Associates 8A, Limited Partnership

 

New Enterprise Associates 10, Limited Partnership

 

John D. McNeill Revocable Trust U/A/D 10/21/2004

 

A. Jay Graf and Mary Ann Graf 2010 Irrevocable Trust u/a/d December 23, 2010, as amended

 

Kathryn S. Nehra Family Trust

 

Lauren M. Nehra Family Trust   Robert K. Anderson   W.R. Brody Revocable Trust dated 8-15-2016   Wendyce H. Brody Separate Property Trust dated August 3, 2016   Michael T. Kelly   Bank of America, N.A., as Trustee for the Thomas R. Hektner Roth IRA #1877067   Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Rev Trust dated October 15, 2003   Ysios BioFund I F.C.R.   Total Renal Care, Inc.   CardioNord AB   John R. Brintnall   Action Potential Venture Capital Limited

 

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

 

SCHEDULE G

 

HOLDERS AND PURCHASERS OF SERIES G PREFERRED STOCK

 

Johnson & Johnson Innovation – JJDC, Inc.*

New Enterprise Associates VIII, LP

New Enterprise Associates 8A, Limited Partnership

New Enterprise Associates 10, Limited Partnership

John D. McNeill Revocable Trust U/A/D 10/21/2004

Graf Capital Investors LLC

Kathryn S. Nehra Family Trust

Lauren M. Nehra Family Trust   Robert K. Anderson   W.R. Brody Revocable Trust dated 8-15-2016   Wendyce H. Brody Separate Property Trust dated August 3, 2016   Michael T. Kelly   Bank of America, N.A., as Trustee for the Thomas R. Hektner Roth IRA #1877067   Thomas R. Hektner Revocable Trust dated December 24, 1992, as amended   Jack E. Meyer and Mary Lou Meyer, and Successors, Trustees of the Jack E. Meyer Rev Trust dated October 15, 2003   Ysios BioFund I F.C.R.   Total Renal Care, Inc.   CardioNord AB   John R. Brintnall   Action Potential Venture Capital Limited

Coöperatieve Gilde Healthcare IV U.A.

 

Windham Life Sciences Partners II, L.P.  

 

Strategic Healthcare Investment Partners I, L.P.**  

 

Vensana Capital I, L.P.  

 

Hatteras Venture Partners VI, LP

 

Venrock Healthcare Capital Partners III, L.P.  

 

VHCP Co-Investment Holdings III, LLC

 

*Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Johnson & Johnson Innovation (JJDC), One Johnson & Johnson Plaza, New Brunswick, NJ 08933, Attn: Kevin Norman, and JJDC Operations, 410 George Street, New Brunswick, NJ 08933, Attn: Linda Vogel.

 

**Send copies of any notices to such Investor given pursuant to Section 6.4 of this Agreement to: Cooley LLP, 3175 Hanover Street, Palo Alto, CA 94304-1130, Attn: John Sellers; jsellers@cooley.com.

 

 

SCHEDULE H

 

HOLDERS OF COMMON SHARES

 

Ameriprise Trust Company FBO Robert S. Kieval IRA Acct. 17549387-3-021

Bobby I. Griffin and Barbara P. Griffin, trustees of the Bobby I. Griffin Revocable Trust dated June 13, 2011

Christopher H. and Kathryn Porter, JTWROS

D. William Kaufman, TTEES of the Dale A. Spencer Revocable Trust U/A

JDC Spencer Investment Co., LLP

OCI, Ltd.

Joshua Makower, Trustee U/A 5/6/97 by Makower Family Trust

Larry Wales

Leslie S. Matthews

Pensco Trust Company CUST FBO Matthew M. Burns Roth IRA

Peter T. Keith and Barbara A. Keith, JTWROS

William H. Kucheman

Susanne M. Olin   Edward S. Andrle

Tyler P. Lipschultz

Vertical Fund I, LP

Vertical Fund II, LP

Vickie E. Selzer

Frazier Affiliates IV, L.P.

Frazier Healthcare IV, L.P.

New Enterprise Associates VIII, Limited Partnership

Bruns H. Grayson

New Enterprise Associates 8A, Limited Partnership

Nadim Yared   John R. Brintnall   Martin A. Rossing   Dean Bruhn-Ding   Robert S. Kieval

TH&CH, LLC

 

Dover Street VII, LP   HarbourVest Partners VIII Venture Fund LP   HarbourVest Partners VII Venture Ltd.   Anupam Dalal   Andrew Jensen   Leerink Revelation Healthcare Fund I, L.P.   Susan Adams   Adams Street Trust – ABS Ventures VI, L.P. Series   Philip Black   The 2003 Secondary Brinson Partnership Fund Offshore Series Company Ltd.   R. William Burgess, Jr.   Castelein Family Partnership   Caley Castelein   Maria Chapital   Dunlap-Black Investments LLC   Mary Emmerling   Virginia Gambale   Bruns Grayson   John R. Luongo and Rhonda R. Luongo, Trustees or Successor Trustee, of The Luongo Living Trust U/A/D November 17, 1988   W. Andrew Mims   Matthias Norweg   James Sanger   James & Sarah Shapiro Family Trust dtd 9/10/91   James Shapiro   The Richard and Helen Spalding Revocable Trust dtd 3/29/1999   Pierre Suhrcke   Thayer Swartwood   Scott Yaphe   Action Potential Venture Capital Limited

 

 

 

Exhibit 10.8

 

[As amended and restated]

 

CVRx, INC.
2001 STOCK INCENTIVE PLAN

 

Section 1.    Purpose of the Plan.

 

This Plan shall be known as the “CVRx, Inc. 2001 Stock Incentive Plan” and is hereinafter referred to as the “Plan.” The purpose of this Plan is to promote the interests of the Company and its stockholders by aiding in maintaining and developing employees, officers, consultants, independent contractors and non-employee directors capable of assuring the future success of CVRx, Inc., a Delaware corporation (the “Company”), to offer such persons additional incentives to put forth maximum efforts for the success of the business and to afford them an opportunity to acquire a proprietary interest in the Company through stock options and restricted stock grants as provided herein. Options granted under this Plan may be either incentive stock options (“Incentive Stock Options”) within the meaning of Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”), or options which do not qualify as Incentive Stock Options.

 

Section 2.     Stock Subject to the Plan.

 

(a)       Subject to adjustment as provided in Section 11, the maximum number of shares granted as restricted stock and shares on which options may be exercised under this Plan shall be 105,781,000 shares (the “Shares”) of the Company’s common stock, par value $.01 per share (the “Common Stock”), and the maximum number of Shares available for granting Incentive Stock Options under this Plan shall not exceed 105,781,000, subject to adjustment as provided in Section 11 and subject to the provisions of Section 422 or 424 of the Code or any successor provision. The Shares may be either authorized but unissued shares of Common Stock, or issued shares of Common Stock which have been reacquired by the Company. If an option or restricted stock grant under this Plan expires or for any reason is terminated or expires unexercised with respect to any Shares, such Shares shall again be available for options or restricted stock awards thereafter granted during the term of this Plan.

 

Section 3.     Administration of Plan.

 

(a)       This Plan shall be administered by the Board of Directors of the Company or a committee of three or more directors of the Company. The members of such committee shall be appointed by and serve at the pleasure of the Board of Directors. Such committee shall consist of not less than that number of directors that shall be required to permit options or restricted stock granted under this Plan to qualify under Rule 16b-3 (or any successor rule or regulation) promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, each of whom shall be a “Non-Employee Director” within the meaning of such Rule. If the Company is subject to Section 162(m) of the Code, the Company expects to have this Plan administered in accordance with the requirements for the award of “qualified performance-based compensation” within the meaning of such Section and each member of such committee shall be an “outside director” within the meaning of such Section. If any such committee is established, the Board of Directors may, at any time and from time to time, without any further action of such committee, exercise the powers and duties of such committee under this Plan. The group administering this Plan at any time shall be referred to herein as the “Committee.”

 

(b)       The Committee shall have plenary authority in its discretion, but subject to the express provisions of this Plan (i) to determine the persons to whom and the time or times at which options or restricted stock shall be granted and the number of Shares to be subject to each option or grant of restricted stock, (ii) to determine the purchase price of the Shares covered by each option, (iii) to determine the terms and conditions of each option and grant of restricted stock, (iv) to accelerate the time at which all or any part of an option may be exercised or at which all or any part of the restrictions with respect to restricted stock shall lapse, (v) to amend or modify the terms of any option or restricted stock grant with the consent of the holder of the option or restricted stock, (vi) to interpret this Plan, (vii) to prescribe, amend and rescind rules and regulations relating to this Plan, (viii) to determine the terms and provisions of each option and restricted stock agreement with respect to options and restricted stock granted under this Plan (which agreements need not be identical), including the designation of those options intended to be Incentive Stock Options, and (ix) to make all other determinations necessary or advisable for the administration of this Plan, subject to the exclusive authority of the Board of Directors under Section 13 to amend or terminate this Plan. The Committee’s determinations on the foregoing matters, unless otherwise disapproved by the Board of Directors of the Company, shall be final and conclusive.

 

 

(c)       The Committee shall select one of its members as its Chair and shall hold its meetings at such times and places as it may determine. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by not less than a majority of its members. Any decision or determination that is set forth in a written document and signed by all of the members of the Committee shall be fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a Secretary and may make such rules and regulations for the conduct of its business as it shall deem advisable.

 

Section 4.     Eligibility.

 

Incentive Stock Options may only be granted under this Plan to any full or part-time employee (which term as used herein includes, but is not limited to, officers and directors who are also employees) of the Company and of its present and future subsidiary corporations (herein called “subsidiaries”) that qualify as “subsidiary corporations” of the Company within the meaning of Section 424(f) of the Code or any successor provision. Full and part-time employees of the Company and its subsidiaries, members of the Board of Directors of the Company or one of its subsidiaries who are not also employees thereof, and consultants or independent contractors providing valuable services to the Company or one of its subsidiaries who are not also employees thereof shall be eligible to receive options which do not qualify as Incentive Stock Options and to receive grants of restricted stock. In determining the persons to whom options or restricted stock grants shall be granted and the number of Shares subject to each option or grant, the Committee may take into account the nature of services rendered by the respective persons, their present and potential contributions to the success of the Company and such other factors as the Committee in its discretion shall deem relevant. A person who has been granted an option or restricted stock grant under this Plan may be granted additional options or restricted stock grants under this Plan if the Committee shall so determine; provided, however, that to the extent the aggregate fair market value (determined at the time the Incentive Stock Option is granted) of the Shares with respect to which all Incentive Stock Options are exercisable for the first time by an employee during any calendar year (under all plans described in Section 422 of the Code of his or her employer corporation and its parent and subsidiary corporations described in Section 424(e) or 424(f) of the Code) exceeds $100,000, such options shall be treated as options which do not qualify as Incentive Stock Options. Incentive Stock Options may only be granted under this Plan within ten years from the date on which this Plan was adopted by the Board of Directors.

 

Section 5.     Restricted Stock Grants.

 

(a)       Each restricted stock award made under this Plan shall be for such number of Shares as the Committee shall determine. Shares of restricted stock shall be subject to such restrictions as the Committee may impose (including, without limitation, a waiver by the recipient of the restricted stock of the right to vote or to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate. Each restricted stock award shall be set forth in an agreement setting forth the terms of such award.

 

(b)       Except as otherwise determined by the Committee, upon termination of employment or other service (as determined under criteria established by the Committee) during the applicable restriction period, all Shares of restricted stock at such time subject to restriction shall be forfeited and reacquired by the Company; provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of restricted stock.

 

(c)       At the time of a restricted stock award, a certificate representing the number of Shares awarded thereunder shall be registered in the name of the grantee. The certificate shall be held by the Company or any custodian appointed by the Company for the account of the grantee subject to the terms and conditions of this Plan, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such restricted stock. The grantee shall not be entitled to delivery of the stock certificate until the expiration of the restricted period and the fulfillment of any other restrictive conditions set forth in the restricted stock agreement with respect to such Shares. Unless the Committee determines otherwise and the determination is set forth in the restricted stock award agreement, the grantee shall have all rights of a stockholder with respect to the Shares, including the right to receive dividends and the right to vote such Shares, subject to the provisions of this Plan, including those with respect to forfeiture of the Shares and restrictions on the transfer or pledge of the Shares. Any Shares, any other securities of the Company and any other property (except for cash dividends) distributed with respect to the Shares subject to restricted stock awards shall be subject to the same restrictions, terms and conditions as such restricted Shares.

 

 

(d)       At the end of the restricted period and provided that any other restrictive conditions of the restricted stock award are met, or at such earlier time as otherwise determined by the Committee, all restrictions set forth in the agreement relating to the restricted stock award or in this Plan shall lapse as to the restricted Shares subject thereto. Upon payment by the grantee to the Company of any withholding tax required to be paid, a stock certificate for the appropriate number of Shares, free of the restrictions and the restricted stock legend, shall be delivered to the grantee or his or her beneficiary or estate, as the case may be.

 

(e)       Restricted stock grants shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.

 

(f)       Within 30 days after a recipient is granted a restricted stock award, the Company, if the recipient so elects, will prepare and file, and the recipient will sign, an effective election with the Internal Revenue Service under Section 83(b) of the Code relative to the Shares granted.

 

Section 6.     Option Grants.

 

(a)       Each option grant made under this Plan shall be for such number of Shares as the Committee shall determine. Subject to the provisions of Section 9, the option price for all stock options granted under this Plan shall be determined by the Committee; provided, however, that the purchase price per Share for an Incentive Stock Option shall be not less than 100% of the fair market value of a Share at the date of granting of such option. For purposes of the preceding sentence and for all other valuation purposes under this Plan, the fair market value of the Shares shall be as reasonably determined by the Committee. If on the date of grant of any option granted under this Plan, the Shares are not publicly traded, the Committee shall make a good faith attempt to satisfy the option price requirement of this Section 6 and in connection therewith shall take such action as it deems necessary or advisable. Each option grant shall be set forth in an agreement setting forth the terms of such option.

 

(b)       Subject to the provisions of Section 9, each option and all rights and obligations thereunder shall expire on the date determined by the Committee and specified in the option agreement. The Committee shall be under no duty to provide terms of like duration for options granted under this Plan, but the term of any stock option may not extend more than ten (10) years from the date of granting of such option.

 

(c)       Options shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.

 

Section 7.     Option Exercise.

 

(a)       The Committee shall have full and complete authority to determine whether the option will be exercisable in full at any time or from time to time during the term of the option, or to provide for the exercise thereof in such installments, upon the occurrence of such events and at such times during the term of the option as the Committee may determine.

 

(b)       The exercise of any option granted hereunder shall only be effective at such time that the sale of Shares pursuant to such exercise will not violate any applicable domestic or foreign securities or other laws.

 

(c)       An optionee electing to exercise an option shall; give written notice to the Company of such election and of the number of Shares subject to such exercise. The full purchase price of such Shares shall be tendered with such notice of exercise. Payment shall be made to the Company either in cash (including check, bank draft or money order), or, at the discretion of the Committee, (i) by delivery of the optionee’s promissory note, which shall provide for interest at a rate not less than the minimum rate required to avoid the imputation of income, original issue discount or a below-market-rate loan pursuant to Sections 483, 1274 or 7872 of the Code or any successor provisions thereto, (ii) by delivering certificates for shares of Common Stock already owned by the optionee having a fair market value equal to the full purchase price of the Shares, provided that such shares of Common Stock shall either (A) have been held by the optionee for at least six months if such shares were acquired by exercise of stock options under any of the Company’s plans or (B) shall have been acquired in a purchase from a party other than the Company or an affiliate of the Company, or (iii) any combination of cash, promissory notes and shares of Common Stock; provided, however, that an optionee shall not be entitled to tender shares of Common Stock pursuant to successive, substantially simultaneous exercises of options granted under this or any other stock option plan of the Company. The fair market value of such tendered shares of Common Stock shall be determined as provided in Section 6. Until such person has been issued a certificate or certificates for the Shares subject to such exercise, he or she shall possess no rights as a stockholder with respect to such-Shares.

 

 

Section 8.     Additional Restrictions.

 

All Shares or other securities delivered under this Plan pursuant to any option or restricted stock grant or the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under this Plan, applicable federal or state securities laws and regulatory requirements, which restrictions shall be contained in the agreement relating to the option or restricted stock grant. The Committee shall cause appropriate entries to be made or legends to be affixed to certificates representing the Shares to reflect such restrictions. If any securities of the Company are traded on a securities exchange, the Company shall not be required to deliver any Shares or other securities covered by an option or restricted stock grant unless and until such Shares or other securities have been admitted for trading on such securities exchange.

 

Section 9.     Ten Percent Shareholder Rule.

 

Notwithstanding any other provision in this Plan, if at the time an option is otherwise to be granted pursuant to this Plan the optionee owns directly or indirectly (within the meaning of Section 424(d) of the Code) shares of common stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporations (within the meaning of Section 424(e) or 424(0 of the Code), if any, then any Incentive Stock Option to be granted to such optionee pursuant to this Plan shall satisfy the requirements of Section 422(c)(7) of the Code, the option price shall be not less than 110% of the fair market value of the Shares determined as described herein, and such option by its terms shall not be exercisable after the expiration of five (5) years from the date such option is granted.

 

Section 10.     Non-Transferability.

 

No option granted under this Plan and no award of restricted stock (prior to the lapsing of the restrictions) and no right under any such option or award of restricted stock shall be transferable by the recipient otherwise than by will or by the laws of descent and distribution; provided that stock options and restricted stock awards may be transferred by gift by the optionee or awardee with the prior approval of the Committee. During the lifetime of an optionee, an option shall be exercisable only by such optionee. No option granted under this Plan and no award of restricted stock (prior to the lapsing of the restrictions) or right under any such option or award of restricted stock may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any affiliate.

 

Section 11.     Adjustments.

 

In the event of any equity restructuring (within the meaning of Financial Accounting Standards No. 123 (revised 2004)) that causes the per Share value of Shares to change, such as a stock dividend, stock split, spin off, rights offering, or recapitalization through a large, nonrecurring cash dividend, the Committee shall cause there to be made an equitable adjustment to (i) the number and type of Shares that may be issued under the Plan, (ii) the limitations on the number of Shares that may be issued to an individual Participant in any calendar year and (iii) the number and type of Shares subject to and the price per Share (if applicable) of any then outstanding awards of options and awards of restricted stock; provided, in each case, that with respect to Incentive Stock Options, no such adjustment shall be authorized to the extent that such adjustment would cause such options to violate Section 422(b) of the Code or any successor provision; provided further, with respect to all awards, no such adjustment shall be authorized to the extent that such adjustment would cause the awards to be subject to adverse tax consequences under Section 409A of the Code.  In the event of any other change in corporate capitalization, such as a merger, consolidation, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code), or any partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of benefits or potential benefits.  In either case, any such adjustment shall be conclusive and binding for all purposes of the Plan.  Unless otherwise determined by the Committee, the number of Shares subject to an award shall always be a whole number.  In no event shall an outstanding option be amended for the sole purpose of reducing the price per Share thereof.

 

 

Section 12.     Income Tax Withholding; Tax Bonuses.

 

(a)       In order to comply with all applicable domestic or foreign income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, state or local payroll, withholding, income or other taxes, which are the sole and absolute responsibility of the person receiving the option or the restricted stock under this Plan, are withheld or collected from such person. In order to assist the recipient in paying all or a portion of the federal, state or local taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an option or restricted stock, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the recipient to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such option or restricted stock grant with a fair market value equal to the amount of such taxes, or (ii) delivering to the Company shares of Common Stock other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such option or restricted stock grant with a fair market value equal to the amount of such taxes. The fair market value of shares of Common Stock shall be determined in accordance with Section 6. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined.

 

(b)       The Committee, in its discretion, shall have the authority, at the time of grant of any option or restricted stock under this Plan or at any time thereafter, to approve cash bonuses to designated recipients to be paid upon their exercise or receipt of (or the lapse of restrictions relating to) the option or restricted stock grant in order to provide funds to pay all or a portion of federal, state or local taxes due as a result of such exercise or receipt (or the lapse of such restrictions). The Committee shall have full authority in its discretion to determine the amount of any such tax bonus.

 

Section 13. Amendment and Termination.

 

(a)       The Company’s Board of Directors may amend, alter, suspend, discontinue or terminate this Plan at any time; provided, however, that notwithstanding any other provision of this Plan or any option agreement, without the approval of the shareholders of the Company, no such amendment, alteration, suspension, discontinuation or termination shall be made that, absent such approval (i) would violate the rules or regulations of any securities exchange that are applicable to the Company; or (ii) would cause the Company to be unable, under the Code, to grant Incentive Stock Options under this Plan.

 

(b)       The Committee may waive any conditions of or rights of the Company under any outstanding option or restricted stock grant, prospectively or retroactively. Except as otherwise provided herein or in the option or restricted stock agreement, the Committee may not amend, alter, suspend, discontinue or terminate any outstanding option or restricted stock grant, prospectively or retroactively, if such action would adversely affect the rights of the holder of such option or restricted stock, without the consent of the holder or beneficiary thereof.

 

(c)       The Committee may correct any defect, supply any omission or reconcile any inconsistency in this Plan or any option or restricted stock agreement in the manner and to the extent it shall deem desirable to carry this Plan into effect.

 

 

Section 14. Time of Granting.

 

The granting of an option or an award of restricted stock pursuant to this Plan shall be effective only if either (a) a written agreement shall have been duly executed and delivered by and on behalf of the Company and the person to whom such option or restricted stock is granted, or (b) the Company shall have delivered a grant notice to such person. Nothing contained in this Plan or in any resolution adopted or to be adopted by the Board of Directors or by the stockholders of the Company, and no action taken by the Committee or the Board of Directors (other than the execution and delivery of such an agreement), shall constitute the granting of an option or award of restricted stock hereunder.

 

Section 15.     No Right to Awards; No Guaranty of Continued Service or Future Benefits.

 

(a)       No person shall have any claim to be granted any option or restricted stock grant under this Plan, and there is no obligation for uniformity of treatment of employees, directors, consultants, independent contracts or holders or beneficiaries of options or restricted stock grants under this Plan. The terms and conditions of options and restricted stock grants need not be the same with respect to any recipient or with respect to different recipients.

 

(b)       Nothing in this Plan or in any agreement hereunder shall confer on any employee, director, consultant or independent contractor any right to continue in the employ or service of the Company or any of its subsidiaries or affect in any way the right of the Company or any of its subsidiaries to terminate any such person’s employment or other services at any time, with or without cause. In addition, the Company or an affiliate may at any time terminate the employment or service of an employee, director, consultant or independent contractor free from any liability or any claim under this Plan or any award or agreement with respect to an option or restricted stock grant hereunder, unless otherwise expressly provided in this Plan or in any such agreement.

 

(c)       Options shall be granted under this Plan in the sole discretion of the Board of Directors or the Committee and will not form part of the recipient’s salary or entitle the recipient to similar option grants in the future.

 

Section 16.     General Provisions.

 

(a)       Nothing in this Plan shall prevent the Company or any affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

 

(b)       The validity, construction and effect of this Plan or any option or restricted stock agreement hereunder, and any rules and regulations relating to this Plan or any option or restricted stock agreement hereunder, shall be determined in accordance with the laws of the State of Minnesota.

 

(c)       If any provision of this Plan or any option or restricted stock agreement hereunder is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify this Plan or any option or restricted stock agreement hereunder under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of this Plan or the option or restricted stock agreement hereunder, such provision shall be stricken as to such jurisdiction or option or restricted stock agreement, and the remainder of this Plan or any such agreement shall remain in full force and effect.

 

(d)       Neither this Plan nor any option or restricted stock grant hereunder shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any affiliate of the Company and a recipient or any other person.

 

(e)       No fractional Shares shall be issued or delivered pursuant to this Plan or any option or restricted stock grant hereunder, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

 

(f)       Headings are given to the Sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision hereof.

 

 

Section 17.     Effective Date and Termination of Plan.

 

(a)       This Plan shall be effective as of June 15, 2001 (the date of its adoption by the Board of Directors), subject to approval by the shareholders of the Company within twelve (12) months thereafter. Any Award granted under the Plan prior to shareholder approval of the Plan shall be subject to shareholder approval of the Plan.

 

(b)       Unless this Plan shall have been discontinued as provided in Section 13 above, this Plan shall terminate on June 28, 2023. No option or restricted stock may be granted after such termination, but termination of this Plan shall not, without the consent of the recipient, alter or impair any rights or obligations under any option or restricted stock theretofore granted.

 

 

 

 

 

 

 

 

 

Exhibit 10.11

 

VENTURE LOAN AND SECURITY AGREEMENT
	Dated as of September 30, 2019
by and among   HORIZON TECHNOLOGY FINANCE CORPORATION, a Delaware corporation 312 Farmington Avenue Farmington, CT 06032   as a Lender and Collateral Agent
And   CVRx, INC., a Delaware corporation 9201 W. Broadway Ave., #650 Minneapolis, MN 55445   as Borrower
Loan A Commitment Amount: $5,000,000   Loan B Commitment Amount: $5,000,000   Loan C Commitment Amount: $5,000,000   Loan D Commitment Amount: $5,000,000

 

	Loan A Commitment Termination Date:	October 18, 2019
	Loan B Commitment Termination Date:	October 18, 2019
	Loan C Commitment Termination Date:	October 18, 2019
	Loan D Commitment Termination Date:	October 18, 2019

 

 

The Lender, Collateral Agent and Borrower hereby agree as follows:

 

AGREEMENT

 

1.                  Definitions and Construction.

 

1.1        Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“Account Control Agreement” means an agreement acceptable to Lender which perfects via control Lender’s and Collateral Agent’s security interest in Borrower’s deposit accounts and/or securities accounts.

 

“Affiliate” means, with respect to any Person, any other Person that owns or controls directly or indirectly ten percent (10%) or more of the stock of another entity of such Person, any other Person that controls or is controlled by or is under common control with such Person and each of such Person’s officers, directors, managers, joint venturers or partners. For purposes of this definition, the term “control” of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting Equity Securities, by contract or otherwise and the terms “controlled by” and “under common control with” shall have correlative meanings.

 

“Agreement” means this certain Venture Loan and Security Agreement by and among Borrower, Collateral Agent and Lender dated as of the date on the cover page hereto (as it may from time to time be amended, modified or supplemented in a writing signed by Borrower, Collateral Agent and Lender).

 

“Anti-Terrorism Laws” means any laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

 

“Borrower” means Borrower as set forth on the cover page of this Agreement.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banking institutions are authorized or required to close in Connecticut or Minnesota.

 

“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any state thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) certificates of deposit maturing no more than one (1) year after issue provided that the account in which any such certificate of deposit is maintained is subject to an Account Control Agreement and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.

 

 

“Claim” has the meaning given such term in Section 10.3 of this Agreement.

 

“Code” means the Uniform Commercial Code as adopted and in effect in the State of Connecticut, as amended from time to time; provided that if by reason of mandatory provisions of law, the creation and/or perfection or the effect of perfection or non-perfection of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Connecticut, the term “Code” shall also mean the Uniform Commercial Code as in effect from time to time in such jurisdiction for purposes of the provisions hereof relating to such creation, perfection or effect of perfection or non-perfection.

 

“Collateral” has the meaning given such term in Section 4.1 of this Agreement.

 

“Collateral Agent” means Horizon, or any successor collateral agent appointed by Lenders.

 

“Commitment Amount” means the Loan A Commitment Amount, the Loan B Commitment Amount, the Loan C Commitment Amount or the Loan D Commitment Amount, as applicable.

 

“Commitment Fee” has the meaning given such term in Section 2.6(c) of this Agreement.

 

“Consolidated” means the consolidation of accounts in accordance with GAAP.

 

“Default” means any Event of Default or any event which with the passing of time or the giving of notice or both would become an Event of Default hereunder.

 

“Default Rate” means the per annum rate of interest equal to five percent (5%) over the Loan Rate, but such rate shall in no event be more than the highest rate permitted by applicable law to be charged on commercial loans in a default situation.

 

“Disclosure Schedule” means Exhibit A attached hereto.

 

“Environmental Laws” means all foreign, federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental, health, safety and land use matters, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act and the Emergency Planning and Community Right-to-Know Act.

 

“Equity Securities” of any Person means (a) all common stock, preferred stock, participations, shares, partnership interests, membership interests or other equity interests in and of such Person (regardless of how designated and whether or not voting or non-voting) and (b) all warrants, options and other rights to acquire any of the foregoing.

 

“ERISA” has the meaning given to such term in Section 7.12 of this Agreement.

 

 

“Event of Default” has the meaning given to such term in Section 8 of this Agreement.

 

“Excluded Accounts” means any deposit or securities accounts maintained by Borrower or a Subsidiary (a) with financial institutions outside of the United States, provided that the aggregate amount on deposit in any such deposit or securities accounts shall not exceed $350,000, or (b) exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any of its Subsidiaries’, employees, provided, however, that the amount on deposit in such accounts listed in this clause (b) shall not exceed the amount necessary to fund one full payroll cycle of Borrower or the applicable Subsidiary.

 

“Foreign Subsidiary” means a Subsidiary that is not an entity organized under the laws of the United States or any territory thereof.

 

“Funding Certificate” means a certificate executed by a duly authorized Responsible Officer of Borrower substantially in the form of Exhibit B or such other form as Lender may agree to accept.

 

“Funding Date” means any date on which a Loan is made to or on account of Borrower under this Agreement.

 

“GAAP” means generally accepted accounting principles as in effect in the United States of America from time to time, consistently applied.

 

“Good Faith Deposit” has the meaning given such term in Section 2.6(a) of this Agreement.

 

“Governmental Authority” means (a) any federal, state, county, municipal or foreign government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body, (c) any court or administrative tribunal, or (d) with respect to any Person, any arbitration tribunal or other non-governmental authority to whose jurisdiction that Person has consented.

 

“Hazardous Materials” means all those substances which are regulated by, or which may form the basis of liability under, any Environmental Law, including all substances identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent, special waste, hazardous substance, hazardous material, or toxic substance, or petroleum or petroleum derived substance or waste.

 

“Horizon” means Horizon Technology Finance Corporation.

 

“Indebtedness” means, with respect to any Person, the aggregate amount of, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade payables aged less than one hundred eighty (180) days), (d) all capital lease obligations of such Person, (e) all obligations or liabilities of others secured by a Lien on any asset of such Person, whether or not such obligation or liability is assumed, and (f) all obligations or liabilities of others guaranteed by such Person that constitutes Indebtedness under any of clauses (a) through (e) above.

 

 

“Indemnified Person” has the meaning given such term in Section 10.3 of this Agreement.

 

“Intellectual Property” means, with respect to any Person, all of such Person’s right, title and interest in and to patents, patent rights (and applications and registrations therefor and divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same), trademarks and service marks (and applications and registrations therefor and the goodwill associated therewith), whether registered or not, inventions, copyrights (including applications and registrations therefor and like protections in each work or authorship and derivative work thereof), whether published or unpublished, mask works (and applications and registrations therefor), trade names, trade styles, software and computer programs, source code, object code, trade secrets, licenses, methods, processes, know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research and development, all whether now owned or subsequently acquired or developed by such Person and whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media (but not including embedded computer programs and supporting information included within the definition of “goods” under the Code).

 

“Interest Only Extension Milestone” means Borrower providing Lender with evidence reasonably satisfactory to Lender that Borrower has, during the period commencing on the date of this Agreement, and continuing through the Loan Amortization Date, received cash proceeds of not less than Seventy-Five Million Dollars ($75,000,000) as the result of either (a) the closing of Borrower’s initial public offering of its common stock, or (b) a private sale of its Equity Securities.

 

“Internal Revenue Code” has the meaning given such term in Section 5.19 of this Agreement.

 

“Investment” means the purchase or acquisition of any capital stock, equity interest, or any obligations or other securities of, or any interest in, any Person, or the extension of any advance, loan, extension of credit or capital contribution to, or any other investment in, or deposit with, any Person.

 

“Landlord Agreement” means an agreement substantially in the form provided by Lender to Borrower or such other form as Lender may agree to accept.

 

“Lender” means the Lender as set forth on the cover page of this Agreement.

 

“Lender’s Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, documentation, drafting, amendment, modification, administration, perfection and funding of the Loan Documents; and all of Lender’s attorneys’ fees, costs and expenses incurred in enforcing or defending the Loan Documents (including fees and expenses of appeal or review), including the exercise of any rights or remedies afforded hereunder or under applicable law, whether or not suit is brought, whether before or after bankruptcy or insolvency, including all fees and costs incurred by Lender in connection with such Lender’s enforcement of its rights in a bankruptcy or insolvency proceeding filed by or against Borrower, any Subsidiary or their respective Property.

 

 

“Lien” means any voluntary or involuntary security interest, pledge, bailment, lease, mortgage, hypothecation, conditional sales and title retention agreement, encumbrance or other lien with respect to any Property in favor of any Person.

 

“Liquidity Release Milestone” means Borrower providing Lender with evidence reasonably satisfactory to Lender that Borrower has received cash proceeds of not less than Twenty-Five Million Dollars ($25,000,000) as the result of either (a) the sale of its Equity Securities or (b) the issuance of promissory notes, which notes shall be subordinated to the Obligations pursuant to the terms of a subordination or similar agreement in form and substance acceptable to Lender in its sole discretion.

 

“Loan” means each advance of credit by Lender to Borrower under this Agreement.

 

“Loan A” means the advance of credit by Lender to Borrower under this Agreement in the Loan A Commitment Amount.

 

“Loan A Commitment Amount” has the meaning set forth on the cover page of this Agreement.

 

“Loan A Commitment Termination Date” has the meaning set forth on the cover page of this Agreement.

 

“Loan A Final Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan Amortization Date” means, with respect to each Loan, the Payment Date on which Borrower is required, pursuant to Section 2.2 (a) below, to commence making equal payments of principal plus accrued interest on the outstanding principal amount of such Loan.

 

“Loan B” means the advance of credit by Lender to Borrower under this Agreement in the Loan B Commitment Amount.

 

“Loan B Commitment Amount” has the meaning set forth on the cover page of this Agreement.

 

“Loan B Commitment Termination Date” has the meaning set forth on the cover page of this Agreement.

 

“Loan B Final Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan C” means the advance of credit by Lender to Borrower under this Agreement in the Loan C Commitment Amount.

 

“Loan C Commitment Amount” has the meaning set forth on the cover page of this Agreement.

 

 

“Loan C Commitment Termination Date” has the meaning set forth on the cover page of this Agreement.

 

“Loan C Final Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan D” means the advance of credit by Lender to Borrower under this Agreement in the Loan D Commitment Amount.

 

“Loan D Commitment Amount” has the meaning set forth on the cover page of this Agreement.

 

“Loan D Commitment Termination Date” has the meaning set forth on the cover page of this Agreement.

 

“Loan D Final Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan Documents” means, collectively, this Agreement, the Notes, the Warrants, any Landlord Agreement, any Account Control Agreement and all other documents, instruments and agreements entered into in connection with this Agreement.

 

“Loan Rate” means, with respect to each Loan, the per annum rate of interest equal to 10.00% plus the amount by which the one month LIBOR Rate (rounded to the nearest one hundredth percent), as reported in the Wall Street Journal exceeds 2.2%, provided, however that to the extent LIBOR (a) is no longer reported in the Wall Street Journal, (b) is no longer widely used as a benchmark market rate for new facilities of this type, or (c) becomes permanently unavailable, Lender, in consultation with Borrower, shall select a successor benchmark rate, which successor rate shall be selected and applied in a manner consistent with market practice, or if there is no consistent market practice, such successor rate shall be selected and applied in a manner reasonably determined by Lender, in consultation with Borrower. Notwithstanding the foregoing, in no event shall the Loan Rate be less than 10.0%.

 

“Material Adverse Effect” means a material adverse effect on (a) the condition (financial or otherwise), business, operations, or Properties of Borrower, (b) the ability of Borrower to perform its Obligations under the Loan Documents or (c) the Collateral or Collateral Agent’s or Lender’s security interest in the Collateral.

 

“Maturity Date” means, with respect to each Loan, sixty (60) months from the first day of the month next following the month in which the Funding Date for such Loan occurs, or if earlier, the date of acceleration of such Loan following an Event of Default or the date of prepayment, whichever is applicable.

 

“Note” means each promissory note executed in connection with a Loan in substantially the form of Exhibit C attached hereto.

 

 

“Obligations” means all debt, principal, interest, fees, charges, expenses and attorneys’ fees and costs and other amounts, obligations, covenants, and duties owing by Borrower to Collateral Agent or Lender of any kind and description (whether pursuant to or evidenced by the Loan Documents (other than the Warrants), or by any other agreement between Lender and Borrower (other than the Warrants), and whether or not for the payment of money), whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including all Lender’s Expenses.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“Officer’s Certificate” means a certificate executed by a Responsible Officer substantially in the form of Exhibit E or such other form as Lender may agree to accept.

 

“Payment Date” has the meaning given such term in Section 2.2(a) of this Agreement.

 

“Permitted Indebtedness” means and includes:

 

(a)   Indebtedness of Borrower to Lender and Collateral Agent under the Loan Documents;

 

(b)   Indebtedness arising from the endorsement of instruments in the ordinary course of business;

 

(c)   Except as set forth in clause (h) below, Indebtedness of Borrower existing on the date hereof and set forth on the Disclosure Schedule;

 

(d)   intercompany Indebtedness owed by any Subsidiary to Borrower or any wholly-owned Subsidiary, as applicable; provided that, if applicable, such Indebtedness is also permitted as a Permitted Investment and, in the case of such Indebtedness owed to Borrower, such Indebtedness shall be evidenced by one or more promissory notes;

 

(e)   Indebtedness secured by Liens permitted by clause (e) of the definition of Permitted Liens, up to an aggregate principal amount of Five Hundred Thousand Dollars ($500,000) at any one time;

 

(f)    Indebtedness incurred under performance, surety, statutory and approval bonds; provided that the aggregate amount of such Indebtedness may not exceed One Hundred Thousand Dollars ($100,000) at any time;

 

(g)   currency swap and similar transactions entered into in the ordinary course of business and not for speculative purposes, provided that the aggregate liability ensuing from such transactions of Borrower and its Subsidiaries may not exceed One Hundred Thousand Dollars ($100,000) at any given time;

 

(h)   Indebtedness owed by Borrower to the Swiss Subsidiary existing on the date hereof and set forth on the Disclosure Schedule and as otherwise incurred in connection with the Internal Agreement dated January 1, 2013 between Borrower and the Swiss Subsidiary (formerly known as CVRx Switzerland Ltd liab. CO), as amended from time to time; and

 

 

(i)   extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness under subsections (b) through (h) above; provided that the principal amount thereof is not increased (except with respect to the Indebtedness described in clause (h)) or the terms thereof are not modified to impose materially more burdensome terms upon Borrower or its Subsidiary, as the case may be.

 

“Permitted Investments” means and includes any of the following Investments as to which Collateral Agent and Lender have a perfected security interest:

 

(a)   Deposits and deposit accounts with commercial banks organized under the laws of the United States or a state thereof to the extent: (i) the deposit accounts of each such institution are insured by the Federal Deposit Insurance Corporation up to the legal limit; and (ii) each such institution has an aggregate capital and surplus of not less than One Hundred Million Dollars ($100,000,000);

 

(b)   (i) Investments consisting of cash and Cash Equivalents, and (ii) any other Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Lender;

 

(c)   Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;

 

(d)   Investments pursuant to or arising under currency agreements or interest rate agreements entered into in the ordinary course of business;

 

(e)   Investments by Borrower in the Swiss Subsidiary, in an amount of not more than Three Million Dollars ($3,000,000) per calendar year;

 

(f)    Investments by Borrower and Subsidiaries in their Subsidiaries or otherwise disclosed on the Disclosure Schedule outstanding on the date hereof;

 

(g)   Investments consisting of securities accounts in which Collateral Agent has a perfected security interest and any Excluded Accounts so long as such accounts are maintained in accordance with the provisions of this Agreement;

 

(h)   Investments in connection with Transfers permitted by Section 7.4;

 

(i)   Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of Equity Securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s board of directors, in an amount not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate for clauses (i) and (ii) in any fiscal year;

 

 

(j)   Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

 

(k)   Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this clause (k) shall not apply to Investments of Borrower in any Subsidiary;

 

(l)   non-cash Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s or any Subsidiary’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support; and

 

(m) other Investments aggregating not in excess of One Hundred Thousand Dollars ($100,000) at any time.

 

“Permitted Liens” means and includes:

 

(a)   the Liens created by this Agreement;

 

(b)   Liens for fees, taxes, levies, imposts, duties or other governmental charges of any kind which are not yet delinquent or which are being contested in good faith by appropriate proceedings which suspend the collection thereof (provided that such appropriate proceedings do not involve any substantial danger of the sale, forfeiture or loss of any material item of Collateral which in the aggregate is material to Borrower and that Borrower has adequately bonded such Lien or reserves sufficient to discharge such Lien have been provided on the books of Borrower);

 

(c)   Liens identified on the Disclosure Schedule;

 

(d)   carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens arising in the ordinary course of business and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings (provided that such appropriate proceedings do not involve any substantial danger of the sale, forfeiture or loss of any material item of Collateral or Collateral which in the aggregate is material to Borrower and that Borrower has adequately bonded such Lien or reserves sufficient to discharge such Lien have been provided on the books of Borrower);

 

(e)   Liens upon any equipment or other personal property acquired by Borrower after the date hereof to secure (i) the purchase price of such equipment or other personal property, or (ii) capital lease obligations or indebtedness incurred solely for the purpose of financing the acquisition of such equipment or other personal property; provided that (A) such Liens are confined solely to the equipment or other personal property so acquired and the amount secured does not exceed the acquisition price thereof, and (B) no such Lien shall be created, incurred, assumed or suffered to exist in favor of Borrower’s officers, directors or shareholders holding five percent (5%) or more of Borrower’s Equity Securities; and

 

 

(f)    non-exclusive licenses of Intellectual Property entered into in the ordinary course of business;

 

(g)   Liens to secure the performance of bids, tenders, contracts (other than for the payment of Indebtedness), leases, liability to insurance carriers, surety or appeal bonds, performance bonds or other obligations of a like nature; provided that such Liens must be restricted to account balances in segregated accounts or in the form of deposits with parties to which such Liens are being granted, and may not secure Indebtedness exceeding, in the aggregate, One Hundred Thousand Dollars ($100,000) at any time;

 

(h)   Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);

 

(i)   leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a security interest therein;

 

(j)   banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of business;

 

(k)   Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.9; and

 

(l)   Liens incurred in the extension, renewal or refinancing of the obligations secured by Liens described in (a) through (k), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the obligations may not increase.

 

“Person” means and includes any individual, any partnership, any corporation, any business trust, any joint stock company, any limited liability company, any unincorporated association or any other entity and any domestic or foreign national, state or local government, any political subdivision thereof, and any department, agency, authority or bureau of any of the foregoing.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, whether tangible or intangible.

 

“Responsible Officer” has the meaning given such term in Section 6.3 of this Agreement.

 

“Restricted License” means any license or other agreement (except for any licenses or other agreements related to over-the-counter software that is commercially available to the public) with respect to which Borrower is the licensee and such license or agreement is material to Borrower’s business and (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property or (b) for which a default under or termination of could interfere with Collateral Agent’s or Lender’s right to sell any Collateral.

 

 

“Sanctions” means any sanction administered or enforced by the United States Government (including, without limitation, OFAC and the United States Department of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

 

“Scheduled Payments” has the meaning given such term in Section 2.2(a) of this Agreement.

 

“Solvent” has the meaning given such term in Section 5.12 of this Agreement.

 

“Subsidiary” means any corporation or other entity of which a majority of the outstanding Equity Securities entitled to vote for the election of directors or other governing body (otherwise than as the result of a default) is owned by Borrower directly or indirectly through Subsidiaries.

 

“Swiss Subsidiary” means CVRx Switzerland LLC, a wholly owned Subsidiary of Borrower formed pursuant to the laws of Switzerland.

 

“Transfer” has the meaning given such term in Section 7.4 of this Agreement.

 

“Warrant” means the separate warrant or warrants dated on or about the date hereof in favor of each Lender or its designees to purchase securities of Borrower.

 

1.2  Construction. References in this Agreement to “Articles,” “Sections,” “Exhibits,” “Schedules” and “Annexes” are to recitals, articles, sections, exhibits, schedules and annexes herein and hereto unless otherwise indicated. References in this Agreement and each of the other Loan Documents to any document, instrument or agreement shall include (a) all exhibits, schedules, annexes and other attachments thereto, (b) all documents, instruments or agreements issued or executed in replacement thereof, and (c) such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time (subject, in the case of clauses (b) and (c), to any restrictions on such replacement, amendment, modification or supplement set forth in the Loan Documents). The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement or any other Loan Document shall refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. The words “include” and “including” and words of similar import when used in this Agreement or any other Loan Document shall not be construed to be limiting or exclusive. Unless the context requires otherwise, any reference in this Agreement or any other Loan Document to any Person shall be construed to include such Person’s successors and assigns. Unless otherwise indicated in this Agreement or any other Loan Document, all accounting terms used in this Agreement or any other Loan Document shall be construed, and all accounting and financial computations hereunder or thereunder shall be computed, in accordance with GAAP, and all terms describing Collateral shall be construed in accordance with the Code. The terms and information set forth on the cover page of this Agreement are incorporated into this Agreement.

 

 

 

2.                  Loans; Repayment.

 

2.1         Commitments.

 

(a)   The Commitment Amounts. Subject to the terms and conditions of this Agreement and relying upon the representations and warranties herein set forth as and when made or deemed to be made, Lender agrees to lend to Borrower prior to the Loan A Commitment Termination Date, Loan A, prior to the Loan B Commitment Termination Date, Loan B, prior to the Loan C Commitment Termination Date, Loan C and prior to the Loan D Commitment Termination Date, Loan D.

 

(b)   The Loans and the Notes. The obligation of Borrower to repay the unpaid principal amount of and interest on each Loan shall be evidenced by a Note issued to the Lender.

 

(c)   Use of Proceeds. The proceeds of each Loan shall be used solely for working capital or general corporate purposes of Borrower, including the repayment of Borrower’s Indebtedness to Oxford Finance LLC in the approximate amount of Nine Million Seven Hundred Fifty Thousand Dollars ($9,750,000).

 

(d)  Termination of Commitment to Lend. Notwithstanding anything in the Loan Documents, Lender’s obligation to lend the undisbursed portion of the Commitment Amount to Borrower hereunder shall terminate on the earlier of (i) at Lender’s sole election, the occurrence of any Default or Event of Default hereunder, and (ii) with respect to Loan A, the Loan A Commitment Termination Date, with respect to Loan B, the Loan B Commitment Termination Date, with respect to Loan C, the Loan C Commitment Termination Date and with respect to Loan D, the Loan D Commitment Termination Date. Notwithstanding the foregoing, Lender’s obligation to lend the undisbursed portion of the Commitment Amount to Borrower shall terminate if, in Lender’s sole discretion, there has been a material adverse change in the general affairs, management, results of operations, condition (financial or otherwise) or prospects of Borrower, whether or not arising from transactions in the ordinary course of business, or there has been any material adverse deviation by Borrower from the business plan of Borrower presented to Lender on or before the date of this Agreement.

 

2.2         Payments.

 

(a)   Scheduled Payments. Borrower shall make (i) a payment of accrued but unpaid interest only to Lender on the outstanding principal amount of each Loan on the first twenty-four (24) Payment Dates specified in the Note applicable to such Loan and (ii) an equal payment of principal plus accrued interest to Lender on the outstanding principal amount of each Loan on the next thirty-six (36) Payment Dates as set forth in the Note (collectively, the “Initial Scheduled Payments”). Notwithstanding, and in lieu of, the foregoing, if Borrower satisfies the Interest Only Extension Milestone, then, Borrower shall make (i) a payment of accrued but unpaid interest only to Lender on the outstanding principal amount of each Loan on the first thirty-six (36) Payment Dates specified in the Note applicable to such Loan and (ii) an equal payment of principal plus accrued interest to Lender on the outstanding principal amount of each Loan on the next twenty-four (24) Payment Dates as set forth in the Note (collectively, the “Revised Scheduled Payments” and collectively with the “Initial Scheduled Payments”, the “Scheduled Payments”). Borrower shall make such Scheduled Payments commencing on the date set forth in the Note applicable to such Loan and continuing thereafter on the first Business Day of each calendar month (each a “Payment Date”) through the Maturity Date. In any event, all unpaid principal and accrued interest shall be due and payable in full on the Maturity Date.

 

 

(b)   Interim Payment. Unless the Funding Date for a Loan is the first day of a calendar month, Borrower shall pay the per diem interest (accruing at the Loan Rate from the Funding Date through the last day of that month) payable with respect to such Loan on the first Business Day of the next calendar month.

 

(c)   Payment of Interest. Borrower shall pay interest on each Loan at a per annum rate of interest equal to the Loan Rate. The Loan Rate shall initially be calculated using the LIBOR Rate reported in the Wall Street Journal on the date which is five (5) Business Days prior to the proposed date of disbursement of the Loan, but shall thereafter be calculated for each calendar month using the LIBOR Rate reported in the Wall Street Journal on the first calendar day of such month, provided, however, that if the first calendar day of any month is not a Business Day, the Loan Rate shall be calculated using the LIBOR Rate reported in the Wall Street Journal on the Business Day immediately preceding the first calendar day of such month. Interest (including interest at the Default Rate, if applicable) shall be computed on the basis of a 360-day year for the actual number of days elapsed. Notwithstanding any other provision hereof, the amount of interest payable hereunder shall not in any event exceed the maximum amount permitted by the law applicable to interest charged on commercial loans.

 

(d)   Application of Payments. All payments received by Lender prior to an Event of Default shall be applied as follows: (i) first, to Lender’s Expenses then due and owing; and (ii) second, ratably, to all Scheduled Payments then due and owing (provided, however, if such payments are not sufficient to pay the whole amount then due, such payments shall be applied first to unpaid interest at the Loan Rate, then to the remaining amounts then due). After an Event of Default, all payments and application of proceeds shall be made as set forth in Section 9.7.

 

(e)   Late Payment Fee. Borrower shall pay to Lender a late payment fee equal to six percent (6%) of the unpaid amount of any Scheduled Payment not paid when due to such Lender.

 

(f)    Default Rate. Borrower shall pay interest at a per annum rate equal to the Default Rate on any amounts required to be paid by Borrower to Collateral Agent or Lender under this Agreement or the other Loan Documents (including Scheduled Payments), payable with respect to any Loan, accrued and unpaid interest, and any fees or other amounts which remain unpaid after such amounts are due. If an Event of Default has occurred and the Obligations have been accelerated (whether automatically or by Lender’s election), Borrower shall pay interest on the aggregate, outstanding accelerated balance hereunder from the date of the Event of Default until all Events of Default are cured, at a per annum rate equal to the Default Rate.

 

 

(g)   Final Payment.

 

(i)              Loan A Final Payment. Borrower shall pay to Lender a payment in the amount of One Hundred Seventy-Five Thousand Dollars ($175,000) (the “Loan A Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan A, (B) an Event of Default and demand by Lender of payment in full of Loan A or (C) the Maturity Date, as applicable.

 

(ii)            Loan B Final Payment. Borrower shall pay to Lender a payment in the amount of One Hundred Seventy-Five Thousand Dollars ($175,000) (the “Loan B Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan B, (B) an Event of Default and demand by Lender of payment in full of Loan B or (C) the Maturity Date, as applicable.

 

(iii)            Loan C Final Payment. Borrower shall pay to Lender a payment in the amount of One Hundred Seventy-Five Thousand Dollars ($175,000) (the “Loan C Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan C, (B) an Event of Default and demand by Lender of payment in full of Loan C or (C) the Maturity Date, as applicable.

 

(iv)            Loan D Final Payment. Borrower shall pay to Lender a payment in the amount of One Hundred Seventy-Five Thousand Dollars ($175,000) (the “Loan D Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan D, (B) an Event of Default and demand by Lender of payment in full of Loan D or (C) the Maturity Date, as applicable.

 

2.3  Prepayments.

 

(a)   Mandatory Prepayment Upon an Acceleration. If the Loans are accelerated following the occurrence of an Event of Default pursuant to Section 9.1(a) hereof, then Borrower, in addition to any other amounts which may be due and owing hereunder, shall immediately pay to Lender the amount set forth in Section 2.3(b) below, as if Borrower had opted to prepay on the date of such acceleration.

 

(b)   Optional Prepayment. Upon ten (10) Business Days’ prior written notice to Lender, Borrower may, at its option, at any time, prepay all (and not less than all) of the outstanding Loans by simultaneously paying to Lender an amount equal to (i) any accrued and unpaid interest on the outstanding principal balance of the Loans; plus (ii) an amount equal to (A) if such Loan is prepaid on or before the Loan Amortization Date applicable to such Loan, three percent (3%) of the then outstanding principal balance of such Loan, (B) if such Loan is prepaid after the Loan Amortization Date applicable to such Loan, but on or before the date that is twelve (12) months after such Loan Amortization Date, two percent (2%) of the then outstanding principal balance of such Loan, or (C) if such Loan is prepaid more than twelve (12) months after the Loan Amortization Date applicable to such Loan, one percent (1%) of the then outstanding principal balance of such Loan; plus (iii) the outstanding principal balance of such Loan; plus (iv) all other sums, if any, that shall have become due and payable hereunder.

 

 

2.4  Other Payment Terms.

 

(a)   Place and Manner. Borrower shall make all payments due to Lender in lawful money of the United States. All payments of principal, interest, fees and other amounts payable by Borrower hereunder shall be made, in immediately available funds, not later than 12:00 p.m. Connecticut time, on the date on which such payment is due. Borrower shall make such payments to Lender via wire transfer or ACH as instructed by Lender from time to time.

 

(b)   Date. Whenever any payment is due hereunder on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall be included in the computation of interest or fees, as the case may be.

 

(c)   Taxes.

 

(i)            Unless otherwise required under applicable law, any and all payments made hereunder or under the Notes shall be made free and clear of and without deduction for any taxes; provided that if Borrower shall be required to deduct any taxes from such payments, then (A) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.4(c)) the Lender receives an amount equal to the sum it would have received had no such deductions been made, (B) Borrower shall make such deductions and (C) Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(ii)            Borrower shall indemnify Lender, within 10 days after written demand therefor, for the full amount of any taxes imposed or asserted directly on Lender by any Governmental Authority on or attributable to amounts payable under this Agreement solely as a result of Lender entering into this Agreement to the extent such taxes are paid by Lender, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided, however, that such indemnified taxes shall not include income or franchise taxes imposed on (or measured by) Lender’s net income by the jurisdiction, or any political subdivision thereof or taxing authority therein, under the laws of which such recipient is organized or in which its principal office is located or in which its applicable lending office is located. A certificate as to the amount of such payment or liability delivered to Borrower by Lender shall be conclusive absent manifest error.

 

(iii)           As soon as practicable after any payment of taxes by Borrower hereunder to a Governmental Authority, Borrower shall deliver to Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Lender.

 

(iv)            If Lender is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement, Lender shall deliver to Borrower, as reasonably requested by Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.

 

 

(v)            If Lender receives a refund in respect of taxes paid by Borrower pursuant to this Section 2.4(c), which in the sole discretion of Lender exercised in good faith is allocable to such payment, it shall promptly pay such refund, together with any other amounts paid by Borrower in connection with such refunded taxes, to Borrower, net of all out-of-pocket expenses (including any taxes to which Lender has become subject as a result of its receipt of such refund) of Lender incurred in obtaining such refund and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that Borrower, upon the request of the Lender, shall repay to Lender amounts paid over pursuant to the preceding clause (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (v), in no event will Lender be required to pay any amount to Borrower pursuant to this paragraph (v) the payment of which would place Lender in a less favorable net after-tax position than Lender would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to Borrower or any other Person.

 

2.5  Procedure for Making the Loans.

 

(a)   (a)  Notice. Except with respect to the initial Loans to be made by Lender to Borrower on the date hereof, Borrower shall notify Lender of the date on which Borrower desires Lender to make any Loan at least five (5) Business Days in advance of the desired Funding Date, unless the Lender elects at its sole discretion to allow the Funding Date for a Loan to be made by Lender to be within five (5) Business Days of Borrower’s notice. Borrower’s execution and delivery to Lender of one or more Notes in respect of a Loan shall be Borrower’s agreement to the terms and calculations thereunder with respect to such Loan. Lender’s obligation to make any Loan shall be expressly subject to the satisfaction of the conditions set forth in Section 3.

 

(b)   Loan Rate Calculation. Prior to each Funding Date for any Loan, Lender shall establish the Loan Rate with respect to such Loan, to be executed by Borrower with respect to such Loan and shall be conclusive in the absence of a manifest error.

 

(c)   Disbursement. Lender shall disburse the proceeds of each Loan by wire transfer to Borrower at the account specified in the Funding Certificate for such Loan.

 

2.6  Good Faith Deposit; Legal and Closing Expenses; and Commitment Fee.

 

(a)   Good Faith Deposit. Borrower has delivered to Lender a good faith deposit in the amount of One Hundred Thousand Dollars ($100,000) (the “Good Faith Deposit”). The Good Faith Deposit paid to Lender will be credited to the Commitment Fee payable to the Lender. If the Funding Date does not occur, Lender shall retain the Good Faith Deposit as compensation for its time, expenses and opportunity cost.

 

(b)   Legal, Due Diligence and Documentation Expenses. Concurrently with its execution and delivery of this Agreement, Borrower shall pay to Lender all of Lender’s reasonable legal, due diligence and documentation expenses in connection with the negotiation and documentation of this Agreement and the Loan Documents.

 

(c)   Commitment Fee. Borrower shall pay, concurrently with its execution and delivery of this Agreement, a commitment fee to Lender in the amount of Two Hundred Thousand Dollars ($200,000) (the “Commitment Fee”). The Commitment Fee shall be retained by the Lender and be deemed fully earned upon receipt.

 

 

3.                  Conditions of Loan.

 

3.1  Conditions Precedent to Closing. At the time of the execution and delivery of this Agreement, Lender shall have received, in form and substance reasonably satisfactory to Lender, all of the following (unless Lender has agreed to waive such condition or document, in which case such condition or document shall be a condition precedent to the making of any Loan and shall be deemed added to Section 3.2):

 

(a)   Loan Agreement. This Agreement duly executed by Borrower, Collateral Agent and Lender.

 

(b)   Warrants. The Warrants duly executed by Borrower.

 

(c)   Secretary’s Certificate. A certificate of the secretary or assistant secretary of Borrower, dated as of the date hereof, with copies of the following documents attached: (i) the certificate of incorporation and bylaws (or equivalent documents) of Borrower certified by Borrower as being complete and in full force and effect on the date thereof, (ii) incumbency and representative signatures, and (iii) resolutions authorizing the execution and delivery of this Agreement and each of the other Loan Documents.

 

(d)   Good Standing Certificates. A good standing certificate from Borrower’s state of organization and the state in which Borrower’s principal place of business is located, each dated as of a date no earlier than thirty (30) days prior to the date hereof.

 

(e)   Certificate of Insurance. Evidence of the insurance coverage required by Section 6.8 of this Agreement.

 

(f)    Consents. All necessary consents of shareholders and other third parties with respect to the execution, delivery and performance of this Agreement, the Warrants and the other Loan Documents.

 

(g)   Legal Opinion. A legal opinion of Borrower’s counsel, dated as of the date hereof, covering the matters set forth in Exhibit D hereto.

 

(h)   Account Control Agreements. Account Control Agreements for all of Borrower’s deposit accounts and securities accounts to the extent required pursuant to Section 7.17 hereof duly executed by all of the parties thereto.

 

(i)    Grants of Security Interests in Intellectual Property. Grants of security interests in any U.S. federally registered Intellectual Property, in the forms provided by Lender.

 

 

(j)     Fees and Expenses. Payment of all fees and expenses then due hereunder or under any other Loan Document.

 

(k)   Other Documents. Such other documents and completion of such other matters, as Lender may reasonably deem necessary or appropriate.

 

3.2  Conditions Precedent to Making Loan A, Loan B, Loan C and Loan D. The obligation of Lender to make Loan A, Loan B, Loan C or Loan D is further subject to satisfaction of the following conditions as of the applicable Funding Date:

 

(a)   No Default. No Default or Event of Default shall have occurred and be continuing.

 

(b)   Landlord Agreements. Borrower shall have provided Lender with a Landlord Agreement in respect of Borrower’s leased location in Minneapolis, Minnesota and each other leased location to the extent that the value of the Collateral located at such leased location exceeds $500,000.

 

(c)   Note. Borrower shall have duly executed and delivered a Note in the amount of each of Loan A, Loan B, Loan C and Loan D to Lender.

 

(d)   UCC Financing Statements. Lender shall have received such documents, instruments and agreements, including UCC financing statements or amendments to UCC financing statements and UCC financing statement searches, as Lender shall reasonably request to evidence the perfection and priority of the security interests granted to Collateral Agent and Lender pursuant to Section 4. Borrower authorizes Collateral Agent and Lender to file any UCC financing statements, continuations of or amendments to UCC financing statements they deem necessary to perfect its security interest in the Collateral.

 

(e)   Funding Certificate. Borrower shall have duly executed and delivered to Lender a Funding Certificate for such Loans.

 

(f)    Payoff Letter. Borrower shall have delivered to Lender a payoff letter containing the amount required to repay, in full, all Indebtedness owed by Borrower and/or its Subsidiaries to Oxford Finance LLC, which letter shall authorize Borrower or its agent, upon the repayment in full of such Indebtedness, to take all steps required to release all liens and security interests securing any such Indebtedness owed by Borrower to Oxford Finance LLC.

 

(g)   Representations and Warranties. The representations and warranties made by Borrower in Section 5 and in the other Loan Documents shall be true and correct as of such Funding Date.

 

(h)   Other Documents. Borrower shall have provided Lender with such other documents and completion of such other matters, as Lender may reasonably deem necessary or appropriate.

 

3.3  Covenant to Deliver. Borrower agrees (not as a condition but as a covenant) to deliver to Lender each item required to be delivered to Lender as a condition to any Loan, if such Loan is advanced. Borrower expressly agrees that the extension of any Loan prior to the receipt by Lender of any such item shall not constitute a waiver by Lender of Borrower’s obligation to deliver such item, and any such extension in the absence of a required item shall be in each Lender’s sole discretion.

 

 

4.                  Creation of Security Interest.

 

4.1  Grant of Security Interests. Borrower grants to Collateral Agent and Lender a valid, continuing security interest in all presently existing and hereafter acquired or arising Collateral in order to secure prompt, full and complete payment of any and all Obligations and in order to secure prompt, full and complete performance by Borrower of each of its covenants and duties under each of the Loan Documents (other than the Warrants). The “Collateral” shall mean and include all right, title, interest, claims and demands of Borrower in the following:

 

(a)   All goods (and embedded computer programs and supporting information included within the definition of “goods” under the Code) and equipment now owned or hereafter acquired, including all laboratory equipment, computer equipment, office equipment, machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located;

 

(b)   All inventory now owned or hereafter acquired, including all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower’s books relating to any of the foregoing;

 

(c)   All contract rights and general intangibles (including Intellectual Property), now owned or hereafter acquired, including goodwill, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, software, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payment intangibles, commercial tort claims, payments of insurance and rights to payment of any kind;

 

(d)   All now existing and hereafter arising accounts, contract rights, royalties, license rights, license fees and all other forms of obligations owing to Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Borrower (subject, in each case, to the contractual rights of third parties to require funds received by Borrower to be expended in a particular manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s books relating to any of the foregoing;

 

(e)   All documents, cash, deposit accounts, letters of credit and letters of credit rights (whether or not the letter of credit is evidenced by a writing) and other supporting obligations, certificates of deposit, instruments, promissory notes, chattel paper (whether tangible or electronic) and investment property, including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, now owned or hereafter acquired and Borrower’s books relating to the foregoing; and

 

 

(f)    To the extent not covered by clauses (a) through (e), all other personal property of the Borrower, whether tangible or intangible, and any and all rights and interests in any of the above and the foregoing and, any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds thereof, including insurance, condemnation, requisition or similar payments and proceeds of the sale or licensing of Intellectual Property;

 

provided, however, that, to the extent that the Collateral would otherwise include the voting Equity Securities of the Swiss Subsidiary or any other Foreign Subsidiary, the Collateral shall not include more than 65% of such voting Equity Securities. Notwithstanding the foregoing, upon Lender or Collateral Agent’s request, Borrower shall pledge all of its interest in the Equity Securities of the Swiss Subsidiary or any other Foreign Subsidiary.

 

4.2  After-Acquired Property. If Borrower shall at any time acquire a commercial tort claim, as defined in the Code, Borrower shall promptly notify Collateral Agent and Lender in writing signed by Borrower of the brief details thereof and grant to Collateral Agent and Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to Collateral Agent and Lender.

 

4.3  Duration of Security Interest. Collateral Agent’s and Lender’s security interest in the Collateral shall continue until the indefeasible payment in full and the satisfaction of all Obligations, and termination of Lender’s commitment to fund the Loans, whereupon such security interest shall terminate. Collateral Agent and Lender shall, at Borrower’s sole cost and expense, execute such further documents and take such further actions as may be reasonably necessary to make effective the release contemplated by this Section 4.3, including duly authorizing and delivering termination statements for filing in all relevant jurisdictions under the Code.

 

4.4  Location and Possession of Collateral. The Collateral is and shall remain at Borrower’s location listed on the cover page hereof, the locations set forth in the Disclosure Schedule or any additional locations from time to time so long as Borrower has delivered written notice to the Collateral Agent not less than ten (10) Business Days prior to the date on which Collateral is moved to any other location. Borrower shall retain full rights to the Collateral (except only as may be otherwise required by Collateral Agent or Lender for perfection of the security interests therein created hereunder) and so long as no Event of Default has occurred, shall be entitled to manage, operate and use the same and each part thereof with the rights and franchises appertaining thereto; provided that the possession, enjoyment, control and use of the Collateral shall at all times be subject to the observance and performance of the terms of this Agreement.

 

4.5  Delivery of Additional Documentation Required. Borrower shall from time to time execute and deliver to Collateral Agent and Lender, at the request of Collateral Agent or Lender, all financing statements and other documents Collateral Agent or Lender may reasonably request, in form satisfactory to Collateral Agent and Lender, to perfect and continue Collateral Agent’s and Lender’s perfected security interests in the Collateral and in order to consummate fully all of the transactions contemplated under the Loan Documents.

 

 

4.6  Right to Inspect. Collateral Agent and Lender (through any of their officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours, to inspect the books and records of Borrower and Subsidiaries and to make copies thereof and to inspect, test, and appraise the Collateral in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral; provided that in connection with any inspection, test, or appraisal, Collateral Agent and Lender, and their officers, employees and agents, shall adhere to Borrower’s policies and procedures with respect to the treatment or protection of any Collateral, including, without limitation, Borrower’s sterilization procedures. Any inspection, test or appraisal conducted hereunder shall be conducted at the sole cost and expense of Borrower; provided that so long as not Event of Default has occurred and is continuing, Borrower shall not be obligated to pay or reimburse Collateral Agent or Lender for more than one such inspection, test or appraisal during any fiscal year of Borrower.

 

4.7  Intellectual Property.

 

(a)   At Lender’s request upon the occurrence and during the continuance of an Event of Default, Borrower shall register or cause to be registered with the United States Copyright Office (i) any software (material to the business of Borrower) developed or acquired by Borrower in connection with any product developed or acquired for sale or licensing, (ii) any software (material to the business of Borrower) developed or acquired by Borrower hereafter from time to time in connection with any product developed or acquired for sale or licensing, and (iii) any major revisions or upgrades to any software that has previously been registered by or on behalf of Borrower with the United States Copyright Office.

 

(b)   Borrower shall promptly notify Lender on or before the federal registration or filing by Borrower of any material patent or patent application, or trademark or trademark application, or copyright or copyright application and shall promptly execute and deliver to Lender any grants of security interests in same, in form acceptable to Lender, to file with the United States Patent and Trademark Office or the United States Copyright Office, as applicable.

 

4.8  Protection of Intellectual Property. Borrower shall:

 

(a)   protect, defend and maintain the validity and enforceability of its Intellectual Property and promptly advise Collateral Agent in writing of material infringements;

 

(b)   not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Lender’s written consent;

 

(c)   provide written notice to Collateral Agent within ten (10) days of entering or becoming bound by any Restricted License; and

 

 

(d)   take such commercially reasonable steps as Collateral Agent or Lender requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Collateral Agent and Lender to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Collateral Agent and Lender to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent’s or Lender’s rights and remedies under this Agreement and the other Loan Documents.

 

5.                  Representations and Warranties. Except as set forth in the Disclosure Schedule, Borrower represents and warrants as follows:

 

5.1  Organization and Qualification. Each of Borrower and its Subsidiaries is a corporation duly organized and validly existing under the laws of its state of incorporation and qualified and licensed to do business in, and is in good standing in, any jurisdiction in which the conduct of its business or its ownership of Property requires that it be so qualified and licensed, except for such states as to which any failure to so qualify would not have a Material Adverse Effect.

 

5.2  Authority. Borrower has all necessary power and authority to execute, deliver, and perform in accordance with the terms thereof, the Loan Documents to which it is a party. Borrower and Subsidiaries have all requisite power and authority to own and operate their Property and to carry on their businesses as now conducted. Borrower and Subsidiaries have obtained all licenses, permits, approvals and other authorizations necessary for the operation of their business, except where failure to obtain such licenses, permits, approvals and other authorizations would not be reasonably expected to have a Material Adverse Effect.

 

5.3  Conflict with Other Instruments, etc. Neither the execution and delivery of any Loan Document to which Borrower is a party nor the consummation of the transactions therein contemplated nor compliance with the terms, conditions and provisions thereof will conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation, the by-laws, or any other organizational documents of Borrower or any law or any regulation, order, writ, injunction or decree of any court or Governmental Authority by which Borrower or any Subsidiary or any of their respective property or assets may be bound or affected or any material agreement or instrument to which Borrower is a party or by which it or any of its Property is bound or to which it or any of its Property is subject, or constitute a default thereunder or result in the creation or imposition of any Lien, other than Permitted Liens.

 

5.4  Authorization; Enforceability. The execution and delivery of this Agreement, the granting of the security interest in the Collateral, the incurrence of the Loans, the execution and delivery of the other Loan Documents to which Borrower is a party and the consummation of the transactions herein and therein contemplated have each been duly authorized by all necessary action on the part of Borrower. No authorization, consent, approval, license or exemption of, and no registration, qualification, designation, declaration or filing with, or notice to, any Person is, was or will be necessary to (a) the valid execution and delivery of any Loan Document to which Borrower is a party, (b) the performance of Borrower’s obligations under any Loan Document or (c) the granting of the security interest in the Collateral, except for filings in connection with the perfection of the security interest in any of the Collateral or the issuance of the Warrants, except (with respect to clauses (a) through (c)), such authorizations, consents, approvals, licenses or exemptions that have been obtained and such registrations, qualifications, designations, declarations or filings that have been made and such notices that have been given. The Loan Documents have been duly executed and delivered and constitute legal, valid and binding obligations of Borrower, enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application relating to or affecting the enforcement of creditors’ rights or by general principles of equity.

 

 

5.5  No Prior Encumbrances. Borrower has good and marketable title to the Collateral, free and clear of Liens except for Permitted Liens. Borrower has good title and ownership of, or is licensed under, all of Borrower’s current Intellectual Property. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers, resellers and/or distributors in the ordinary course of business, (b) over-the-counter software that is commercially available to the public and (c) material Intellectual Property licensed to Borrower and noted on the Disclosure Schedule. Each patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. Except as noted on the Disclosure Schedule, Borrower is not a party to, nor is it bound by, any Restricted License. Borrower has not received any communications alleging that Borrower has violated, or by conducting its business as proposed, would violate any proprietary rights of any other Person. Borrower has no knowledge of any infringement or violation by it of the intellectual property rights of any third party and has no knowledge of any violation or infringement by a third party of any of its Intellectual Property. The Collateral and the Intellectual Property constitute substantially all of the assets and property of Borrower, and Borrower owns all Intellectual Property associated with the business of Borrower and Subsidiaries, free and clear of any liens other than Permitted Liens.

 

5.6  Security Interest. The provisions of this Agreement are sufficient to create legal and valid security interests in the Collateral in favor of Collateral Agent and Lender, and, assuming the proper filing of one or more financing statement(s) identifying the Collateral with the proper state and/or local authorities, the security interests in the Collateral granted to Collateral Agent and Lender pursuant to this Agreement will be perfected in that portion of such Collateral in which a security interest may be perfected by the filing of a financing statement under the Code (excluding commercial tort claims and timber to be cute) and to the extent perfected in accordance with the foregoing, such security interests (a) constitute and will continue to constitute first priority security interests (except to the extent any Permitted Liens may have a superior priority to Collateral Agent’s and Lender’s Liens under this Agreement) and (b) are and will continue to be superior and prior to the rights of all other creditors of Borrower (except to the extent any Permitted Liens may have a superior priority to Collateral Agent’s and Lender’s Liens under this Agreement).

 

5.7  Name; Location of Principal Place of Business and Collateral. Borrower has not done business under any name other than that specified on the signature page hereof. Borrower’s jurisdiction of incorporation, principal place of business, and the place where Borrower maintains its records concerning the Collateral are presently located in the state and at the address set forth on the cover page of this Agreement. The Collateral is presently located at the address set forth on the cover page hereof or as set forth in the Disclosure Schedule.

 

 

 

5.8  Litigation. There are no actions or proceedings pending by or against Borrower or any Subsidiary before any court, arbitral tribunal, regulatory organization, administrative agency or similar body in which an adverse decision could have a Material Adverse Effect. Borrower does not have knowledge of any such pending or threatened actions or proceedings.

 

5.9  Financial Statements. All financial statements relating to Borrower, any Subsidiary or any Affiliate that have been or may hereafter be delivered by Borrower to Collateral Agent or Lender present fairly in all material respects Borrower’s Consolidated financial condition as of the date thereof and Borrower’s Consolidated results of operations for the period then ended.

 

5.10       No Material Adverse Effect. No event has occurred and no condition exists which could reasonably be expected to have a Material Adverse Effect since December 31, 2018.

 

5.11       Full Disclosure. No representation, warranty or other statement made by Borrower in any Loan Document (including the Disclosure Schedule), certificate or written statement furnished to Collateral Agent or Lender contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. There is no fact known to Borrower which materially adversely affects, or which could in the future be reasonably expected to materially adversely affect, its ability to perform its material obligations under this Agreement.

 

5.12       Solvency, Etc. Borrower is Solvent (as defined below) and, after the execution and delivery of the Loan Documents and the consummation of the transactions contemplated thereby, Borrower will be Solvent. “Solvent” means, with respect to any Person on any date, that on such date (a) the fair value of the property of such Person is greater than the fair value of the liabilities (including contingent liabilities) of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital.

 

5.13       Subsidiaries. Except for the Swiss Subsidiary, Borrower has no Subsidiaries as of the date hereof.

 

5.14       Capitalization. All issued and outstanding Equity Securities of Borrower are duly authorized and validly issued, fully paid and non-assessable, and such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities, except for such compliance with such laws that would not reasonably be expected to result in a Material Adverse Effect.

 

 

5.15       Catastrophic Events; Labor Disputes. None of Borrower, any Subsidiary or any of their respective Property is or has been affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or other casualty that could reasonably be expected to have a Material Adverse Effect. There are no disputes presently subject to grievance procedure, arbitration or litigation under any of the collective bargaining agreements, employment contracts or employee welfare or incentive plans to which Borrower or any Subsidiary is a party, and there are no strikes, lockouts, work stoppages or slowdowns, or, to the knowledge of Borrower, jurisdictional disputes or organizing activity occurring or threatened which could reasonably be expected to have a Material Adverse Effect.

 

5.16       Certain Agreements of Officers, Employees and Consultants.

 

(a)   No Violation. To the knowledge of Borrower, no officer, employee or consultant of Borrower is, or is now expected to be, in violation of any term of any employment contract, proprietary information agreement, nondisclosure agreement, noncompetition agreement or any other material contract or agreement or any restrictive covenant relating to the right of any such officer, employee or consultant to be employed by Borrower because of the nature of the business conducted or to be conducted by Borrower or relating to the use of trade secrets or proprietary information of others, and to Borrower’s knowledge, the continued employment of Borrower’s officers, employees and consultants does not subject Borrower to any material liability for any claim or claims arising out of or in connection with any such contract, agreement, or covenant.

 

(b)   No Present Intention to Terminate. To the knowledge of Borrower, no officer of Borrower, and no employee or consultant of Borrower whose termination, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, has any present intention of terminating his or her employment or consulting relationship with Borrower.

 

5.17       No Plan Assets. Neither Borrower nor any Subsidiary is an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of Borrower or any Subsidiary constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) neither Borrower nor any Subsidiary is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Borrower or any Subsidiary are not subject to state statutes regulating investment of, and fiduciary obligations with respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Internal Revenue Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Loan Agreement.

 

5.18       Sanctions, Etc. None of Borrower, any of its Subsidiaries or, any director, officer, employee, agent or Affiliate of Borrower or any of its Subsidiaries, is a Person that is, or is owned or controlled by Persons that are, (a) the subject or target of any Sanctions or (b) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions. To the best of Borrower’s knowledge, as of the date hereof and at all times throughout the term of this Agreement, including after giving effect to any transfers of interests permitted pursuant to the Loan Documents, none of the funds of Borrower, any Subsidiary or of their Affiliates have been (or will be) derived from any unlawful activity with the result that the investment in the respective party (whether directly or indirectly), is prohibited by applicable law or the Loans are in violation of applicable law.

 

 

5.19       Regulatory Compliance. Borrower is not a “bank holding company” or a direct or indirect subsidiary of a “bank holding company” as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of Governors of the Federal Reserve System. Neither Borrower nor any Subsidiary is an “investment company” or a company controlled by an “investment company” under the Investment Company Act of 1940. Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System) and no proceeds of any Loan will be used to purchase or carry margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

 

5.20       Payment of Taxes. Except as included in the Disclosure Schedule or as otherwise disclosed in writing to Lender, all federal and other material tax returns, reports and statements (including any attachments thereto or amendments thereof) of Borrower and its Subsidiaries filed or required to be filed by any of them have been timely filed (or extensions have been obtained and such extensions have not expired) and all taxes shown on such tax returns or otherwise due and payable and all assessments, fees and other governmental charges upon Borrower, its Subsidiaries and their respective properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable, except for the payment of any such taxes, assessments, fees and other governmental charges which are being diligently contested by Borrower in good faith by appropriate proceedings and for which adequate reserves have been made under GAAP. To the knowledge of Borrower, no tax return of Borrower or any Subsidiary is currently under an audit or examination, and Borrower has not received written notice of any proposed audit or examination, in each case, where a material amount of tax is at issue. Borrower is not an “S corporation” within the meaning of Section 1361(a)(1) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

 

5.21       Anti-Terrorism Laws. Borrower will not, directly or indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as lender, underwriter, advisor, investor or otherwise). Lender hereby notifies Borrower that pursuant to the requirements of Anti-Terrorism Laws, and Lender’s policies and practices, Lender is required to obtain, verify and record certain information and documentation that identifies Borrower and its principals, which information includes the name and address of Borrower and its principals and such other information that will allow Lender to identify such party in accordance with Anti-Terrorism Laws.

 

6.                  Affirmative Covenants. Borrower, until the full and complete payment of the Obligations, covenants and agrees that:

 

6.1  Good Standing. Borrower shall maintain, and cause each of its Subsidiaries to maintain, its corporate existence and its good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect. Borrower shall maintain, and cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which could reasonably be expected to have a Material Adverse Effect.

 

 

6.2  Government Compliance. Borrower shall comply, and cause each of its Subsidiaries to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could reasonably be expected to have a Material Adverse Effect.

 

6.3  Financial Statements, Reports, Certificates. Borrower shall deliver to Lender: (a) as soon as available, but in any event within thirty (30) days after the end of each month, (i) a Borrower prepared Consolidated balance sheet, Consolidated income statement and Consolidated cash flow statement covering Borrower’s operations during such period, certified by Borrower’s president, treasurer or chief financial officer (each, a “Responsible Officer”); (b) ”) and (ii) Borrower’s then current capitalization table, showing all issued and outstanding Equity Securities of the Borrower; (b) as soon as available, but in any event within one hundred eighty (180) days after the end of Borrower’s fiscal year, audited Consolidated financial statements of Borrower prepared in accordance with GAAP, together with an unqualified opinion on such financial statements of a nationally recognized or other independent public accounting firm reasonably acceptable to Lender; and (c) as soon as available, but in any event within thirty (30) days after the earlier of (i) the end of Borrower’s fiscal year or (ii) the date of Borrower’s board of directors’ adoption, Borrower’s operating budget and plan for the next fiscal year; and (d) such other financial information as Lender may reasonably request from time to time. From and after such time as Borrower becomes a publicly reporting company, promptly as they are available and in any event: (i) at the time of filing of Borrower’s Form 10-K with the Securities and Exchange Commission after the end of each fiscal year of Borrower, the financial statements of Borrower filed with such Form 10-K; and (ii) at the time of filing of Borrower’s Form 10-Q with the Securities and Exchange Commission after the end of each of the first three fiscal quarters of Borrower, the Consolidated financial statements of Borrower filed with such Form 10-Q. In addition, Borrower shall deliver to Lender (A) promptly upon becoming available, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders and (B) immediately upon receipt of notice thereof, a report of any material legal actions pending or threatened against Borrower or any Subsidiary or the commencement of any action, proceeding or governmental investigation involving Borrower or any Subsidiary is commenced that is reasonably expected to result in damages or costs to Borrower of One Hundred Thousand Dollars ($100,000) or more.

 

6.4  Certificates of Compliance. Each time financial statements are furnished pursuant to Section 6.3 above, Borrower shall deliver to Lender an Officer’s Certificate signed by a Responsible Officer in the form of, and certifying to the matters set forth in Exhibit E hereto.

 

6.5  Notice of Defaults. As soon as possible, and in any event within five (5) days after the discovery of a Default or an Event of Default, Borrower shall provide Lender with an Officer’s Certificate setting forth the facts relating to or giving rise to such Default or Event of Default and the action which Borrower proposes to take with respect thereto.

 

 

6.6  Taxes. Borrower shall make, and cause each Subsidiary to make, due and timely payment or deposit of all federal, state, and local taxes, assessments, or contributions required of it by law or imposed upon any Property belonging to it, and will execute and deliver to Collateral Agent and Lender, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower will make, and cause each Subsidiary to make, timely payment or deposit of all tax payments and withholding taxes required of it by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Collateral Agent and Lender with proof satisfactory to Lender indicating that Borrower and each Subsidiary has made such payments or deposits; provided that Borrower or its Subsidiaries need not make any payment if (a) the failure to make such payment could not reasonably be expected to have a Material Adverse Effect or (b) the amount or validity of such payment is contested in good faith by appropriate proceedings which suspend the collection thereof (provided that such proceedings do not involve any substantial danger of the sale, forfeiture or loss of any material item of Collateral or Collateral which in the aggregate is material to Borrower and that Borrower has adequately bonded such amounts or reserves sufficient to discharge such amounts have been provided on the books of Borrower). In addition, Borrower shall not change, and shall not permit any Subsidiary to change, its respective jurisdiction of residence for taxation purposes.

 

6.7  Use; Maintenance. Borrower shall keep and maintain all items of equipment and other similar types of personal property that form any significant portion or portions of the Collateral in good operating condition and repair (normal wear and tear excepted) and shall make all necessary replacements thereof and renewals thereto so that the value and operating efficiency thereof shall at all times be maintained and preserved.; provided, however, that nothing in this Section 6.7 shall prevent Borrower from discontinuing the operation and maintenance of any of its properties if such discontinuance is, in the reasonable judgment of Borrower, desirable in the conduct of Borrower’s business. Borrower shall not permit any such material item of Collateral to become a fixture to real estate or an accession to other personal property, without the prior written consent of Collateral Agent and Lender. Borrower shall not permit any such material item of Collateral to be operated or maintained in violation of any applicable law, statute, rule or regulation. With respect to items of leased equipment (to the extent Collateral Agent and Lender have any security interest in any residual Borrower’s interest in such equipment under the lease), Borrower shall keep, maintain, repair, replace and operate such leased equipment in accordance with the terms of the applicable lease.

 

6.8  Insurance. Borrower shall keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location, and as Collateral Agent or Lender may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to Collateral Agent and Lender. All property policies shall have a lender’s loss payable endorsement showing Collateral Agent and Lender as an additional loss payee and all liability policies shall show Collateral Agent and Lender as an additional insured and all policies shall provide that the insurer must give Collateral Agent at least thirty (30) days notice before canceling its policy. At Collateral Agent’s or Lender’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any property policy shall, at Collateral Agent’s or Lender’s option, be payable to Collateral Agent, for the benefit of Lender, or to Lender on account of the Obligations. Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any property policy, toward the replacement or repair of destroyed or damaged property; provided that (a) any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent and Lender have been granted a first priority security interest and (b) after the occurrence and during the continuation of an Event of Default all proceeds payable under such property policy shall, at the option of Collateral Agent or Lender, be payable to Collateral Agent, for the benefit of Lender, or to Lender on account of the Obligations. If Borrower fails to obtain insurance as required under Section 6.8 or to pay any amount or furnish any required proof of payment to third persons and Collateral Agent, Collateral Agent or Lender may make all or part of such payment or obtain such insurance policies required in Section 6.8, and take any action under the policies Collateral Agent or Lender deems prudent. On or prior to the first Funding Date and prior to each policy renewal, Borrower shall furnish to Collateral Agent certificates of insurance or other evidence satisfactory to Collateral Agent that insurance complying with all of the above requirements is in effect.

 

 

6.9  Further Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments and take such further action as may reasonably be requested by Collateral Agent or Lender to make effective the purposes of this Agreement, including the continued perfection and priority of Collateral Agent’s Lender’s security interest in the Collateral.

 

6.10       Equity Investment Opportunities. Borrower may offer Lender or its assignees, at Borrower’s sole discretion, an opportunity to purchase securities in any future equity financing of Borrower on such terms as such securities are offered to other investors or such other terms as mutually agreed by Borrower and Lender and otherwise acceptable to the investors leading the equity financing.

 

6.11       Subsidiaries. Borrower, upon Lender’s or Collateral Agent’s request, shall cause any Subsidiary to provide Lender and Collateral Agent with a guaranty of the Obligations and a security interest in such Subsidiary’s assets to secure such guaranty.

 

6.12       Keeping of Books. Borrower shall keep proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of Borrower and its Subsidiaries in accordance with GAAP.

 

6.13       Liquidity. Borrower shall, at all times during the period commencing on the date of this Agreement and continuing until the date on which Borrower satisfies the Liquidity Release Milestone, maintain cash on deposit in accounts over which Lender maintains an Account Control Agreement in an amount not less than Five Million Dollars ($5,000,000).

 

6.14       BAROSTIM Neo Sales. Borrower shall achieve revenue from the sale of its BAROSTIM Neo product for heart failure within the United States in an amount not less than:

 

(a)   Five Hundred Thousand Dollars ($500,000) during the period commencing on the date of this Agreement and continuing through December 31, 2020;

 

(b)   Five Million Eight Hundred Fifty-Two Thousand Dollars ($5,852,000) during the period commencing on January 1, 2021 and continuing through December 31, 2021;

 

(c)   Fourteen Million Five Hundred Seventy-Four Thousand Dollars ($14,574,000) during the period commencing on January 1, 2022 and continuing through December 31, 2022; and

 

 

(d)   Five Million Dollars ($5,000,000) during each calendar quarter commencing on January 1, 2023 and continuing until the indefeasible repayment in full of the Obligations.

 

7.                  Negative Covenants. Borrower, until the full and complete payment of the Obligations, covenants and agrees that Borrower shall not:

 

7.1  Name; Jurisdiction of Incorporation. Change its name or jurisdiction of incorporation without thirty (30) days prior written notice to Collateral Agent.

 

7.2  Collateral Control. Subject to its rights under Sections 4.4 and 7.4, remove any items of Collateral from Borrower’s facility located at the address set forth on the cover page hereof or as set forth on the Disclosure Schedule.

 

7.3  Liens. Create, incur, allow or suffer, or permit any Subsidiary to create, incur, allow or suffer, any Lien on any of its property, or assign or convey any right to receive income, including the sale of any accounts except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein (except for Permitted Liens that are permitted by the terms of this Agreement to have priority to Collateral Agent’s and Lender’s Liens), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent, for the benefit of Lender, or Lender) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual Property, except (a) as otherwise permitted in Section 7.4 hereof and (b) as permitted in the definition of “Permitted Liens” herein.

 

7.4  Other Dispositions of Collateral. Convey, sell, lease or otherwise dispose of, or permit any Subsidiary to convey, sell, lease or otherwise dispose, of all or any part of the Collateral to any Person (collectively, a “Transfer”), except for: (a) Transfers of inventory in the ordinary course of business; (b) Transfers of worn-out or obsolete equipment made in the ordinary course of business; and (c) Transfers in connection with Permitted Liens and Permitted Investments.

 

7.5  Distributions. (a) Pay any dividends or make any distributions, or permit any Subsidiary to pay any dividends or make any distributions, on their respective Equity Securities; (b) purchase, redeem, retire, defease or otherwise acquire, or permit any Subsidiary to purchase, redeem, retire, defease or otherwise acquire, for value any of their respective Equity Securities (other than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements or similar arrangements in an aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) in any fiscal year); (c) return, or permit any Subsidiary to return, any capital to any holder of its Equity Securities as such; (d) make, or permit any Subsidiary to make, any distribution of assets, Equity Securities, obligations or securities to any holder of its Equity Securities as such; or (e) set apart any sum for any such purpose; except for: (i) dividends payable solely in common stock, (ii) dividends paid by any Subsidiary to Borrower.

 

 

7.6  Mergers or Acquisitions. Merge or consolidate, or permit any Subsidiary to merge or consolidate, with or into any other Person or acquire, or permit any Subsidiary to acquire, all or substantially all of the capital stock or assets of another Person; provided that (a) any Subsidiary may merge into another Subsidiary and (b) any Subsidiary may merge into Borrower so long as Borrower is the surviving entity.

 

7.7  Change in Business or Ownership. Change in Business or Ownership. Engage, or permit any Subsidiary to engage, in any business other than the businesses currently engaged in by Borrower or such Subsidiary, as applicable, or reasonably related thereto or enter into any transaction or series of related transactions in which holders of Borrower’s voting stock who were not holders of Borrower’s voting stock immediately prior to the first such transaction own more than forty-nine percent (49%) of Borrower’s voting stock immediately after giving effect to such transaction or related series of such transactions other than (a) by the sale by Borrower of Borrower’s Equity Securities in a public offering or private placement of public equity or (b) by the sale by Borrower of Borrower’s Equity Securities to venture capital investors, private equity investors or corporate partners so long as Borrower identifies to Lender and Collateral Agent the venture capital investors, private equity investors or corporate partners prior to the execution of a definitive agreement relating to such change of ownership and any such venture capital investors, private equity investors or corporate partners that purchase or otherwise acquire twenty-five percent (25%) or more of the ownership of Borrower in one or a series of transactions have cleared Lender’s “know your customer” checks.

 

7.8  Transactions With Affiliates; Creation of Subsidiaries. (a) Enter, or permit any Subsidiary to enter, into any contractual obligation with any Affiliate or engage in any other transaction with any Affiliate except for (i) transactions that are in the ordinary course of Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non-affiliated Person, (iii) Investments by Borrower’s investors in Borrower or its Subsidiaries, and (iv) transactions expressly permitted by any other section of this Agreement to be carried out between Borrower and its Subsidiaries or Affiliates; or (b) create a Subsidiary without providing at least 10 Business Days advance notice thereof to Lender and, if requested by Lender, such Subsidiary guarantees the Obligations and grants a security interest in its assets to secure such guaranty, in each case on terms reasonably satisfactory to Collateral Agent and Lender.

 

7.9  Indebtedness Payments. (a) Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled repayment thereof any Indebtedness for borrowed money (other than amounts due or permitted to be prepaid under this Agreement) or lease obligations, (b) amend, modify or otherwise change the terms of any Indebtedness for borrowed money or lease obligations so as to accelerate the scheduled repayment thereof or (c) repay any notes to officers, directors or shareholders.

 

7.10       Indebtedness. Create, incur, assume or permit, or permit any Subsidiary to create, incur, or permit to exist, any Indebtedness except Permitted Indebtedness.

 

7.11       Investments. Make, or permit any Subsidiary to make, any Investment except for Permitted Investments.

 

 

7.12       Compliance. (a) Become, or permit any Subsidiary to become, an “investment company” or a company controlled by an “investment company” under the Investment Company Act of 1940, or undertake as one of its important activities, extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Loan for that purpose; (b) become, or permit any Subsidiary to become, subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money; or (c) (i) fail, or permit any Subsidiary to fail, to meet the minimum funding requirements of the Employment Retirement Income Security Act of 1974, and its regulations, as amended from time to time (“ERISA”), permit, or (ii) permit, or permit any Subsidiary to permit, a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; (d) fail, or permit any Subsidiary to fail, to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have Material Adverse Effect.

 

7.13       Maintenance of Accounts. (a) Maintain any deposit account or securities account except (i) accounts with respect to which Collateral Agent and Lender has obtained a perfected security interest in such accounts through one or more Account Control Agreements and (ii) Excluded Accounts or (b) grant or allow any other Person (other than Collateral Agent or Lender) to perfect a security interest in, or enter into any agreements with any Persons (other than Collateral Agent or Lender) accomplishing perfection via control as to, any of its deposit accounts or securities accounts except Excluded Accounts.

 

7.14       Negative Pledge Regarding Intellectual Property. Create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any Lien of any kind upon any Intellectual Property or Transfer any Intellectual Property, whether now owned or hereafter acquired, other than non-exclusive licenses of Intellectual Property entered into in the ordinary course of business.

 

8.                 Events of Default. Any one or more of the following events shall constitute an “Event of Default” by Borrower under this Agreement:

 

8.1  Failure to Pay. If Borrower fails to pay when due and payable or when declared due and payable in accordance with the Loan Documents: (a) any Scheduled Payment on the relevant Payment Date or on the relevant Maturity Date; or (b) any other portion of the Obligations within five (5) days after receipt of written notice from Lender that such payment is due.

 

8.2  Certain Covenant Defaults. If Borrower fails to perform any obligation arising under Sections 6.5, 6.8, 6.13, or 6.14 or violates any of the covenants contained in Section 7 of this Agreement.

 

8.3  Other Covenant Defaults. If Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant, or agreement contained in this Agreement (other than as set forth in Sections 8.1, 8.2 or 8.4 through 8.14), in any of the other Loan Documents and Borrower has failed to cure such default within fifteen (15) days of the occurrence of such default. During this fifteen (15) day period, the failure to cure the default is not an Event of Default.

 

 

8.4     Material Adverse Change. If there occurs a material adverse change in Borrower’s business, or if there is a material impairment of the prospect of repayment of any portion of the Obligations owing to Collateral Agent or Lender or a material impairment of the value or priority of Collateral Agent’s and Lender’s security interest in the Collateral.

 

8.5     Investor Abandonment. If Lender determines in its reasonable good faith judgment, that it is the clear intention of Borrower’s investors not to continue to fund Borrower in the amounts and within the timeframe necessary to enable Borrower to satisfy the Obligations as they become due and payable.

 

8.6  Seizure of Assets, Etc. (a) If any material portion of Borrower’s or any Subsidiary’s assets (i) is attached, seized, subjected to a writ or distress warrant, or is levied upon or (ii) comes into the possession of any trustee, receiver or Person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, (b) if Borrower or any Subsidiary is enjoined, restrained or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, (c) if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s or any Subsidiary’s assets or (d) if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s or any Subsidiary’s assets by the United States Government, or any department agency or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten (10) days after Borrower receives notice thereof; provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower.

 

8.7  Service of Process. (a) The service of process upon Collateral Agent or Lender seeking to attach by a trustee or other process any funds of Borrower on deposit or otherwise held by Collateral Agent or Lender, (b) the delivery upon Collateral Agent or Lender of a notice of foreclosure by any Person seeking to attach or foreclose on any funds of Borrower on deposit or otherwise held by Collateral Agent or Lender or (c) the delivery of a notice of foreclosure or exclusive control to any entity holding or maintaining Borrower’s deposit accounts or accounts holding securities by any Person (other than Collateral Agent or Lender) seeking to foreclose or attach any such accounts or securities.

 

8.8  Default on Indebtedness. One or more defaults shall exist under any agreement with any third party or parties which consists of the failure to pay any Indebtedness of Borrower or any Subsidiary at maturity or which results in a right by such third party or parties, whether or not exercised, to accelerate the maturity of Indebtedness in an aggregate amount in excess of One Hundred Thousand Dollars ($100,000) or a default shall exist under any financing agreement with a Lender or any Lender’s Affiliates.

 

8.9  Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) shall be rendered against Borrower or any Subsidiary and shall remain unsatisfied and unstayed for a period of ten (10) days or more.

 

8.10       Misrepresentations. If any material misrepresentation or material misstatement exists now or hereafter in any warranty, representation, statement, certification, or report made to Collateral Agent or Lender by Borrower or any officer, employee, agent, or director of Borrower.

 

 

8.11   Breach of Warrant. If Borrower shall breach any material term of any Warrant.

 

8.12   Unenforceable Loan Document. If any Loan Document shall in any material respect cease to be, or Borrower shall assert that any Loan Document is not, a legal, valid and binding obligation of Borrower enforceable in accordance with its terms.

 

8.13   Involuntary Insolvency Proceeding. (a) If a proceeding shall have been instituted in a court having jurisdiction in the premises (i) seeking a decree or order for relief in respect of Borrower or any Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) for the appointment of a receiver, liquidator, administrator, assignee, custodian, trustee (or similar official) of Borrower or any Subsidiary or for any substantial part of its Property or (iii) for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days or (b) such court shall enter a decree or order granting the relief sought in any such proceeding.

 

8.14   Voluntary Insolvency Proceeding. If Borrower or any Subsidiary shall (a) commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (b) consent to the entry of an order for relief in an involuntary case under any such law, (c) consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian (or other similar official) of Borrower or any Subsidiary or for any substantial part of its Property, (d) shall make a general assignment for the benefit of creditors, (e) shall fail generally to pay its debts as they become due or (f) take any corporate action in furtherance of any of the foregoing.

 

9.                  Lender’s Rights and Remedies.

 

9.1  Rights and Remedies. Upon the occurrence of any Default or Event of Default, Lender shall not have any further obligation to advance money or extend credit to or for the benefit of Borrower. In addition, upon the occurrence of an Event of Default, Collateral Agent and Lender shall have the rights, options, duties and remedies of a secured party as permitted by law and, in addition to and without limitation of the foregoing, Collateral Agent, on behalf of Lender, or Lender (acting alone) may, at its election, without notice of election and without demand, do any one or more of the following, all of which are authorized by Borrower:

 

(a)   Acceleration of Obligations. Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, including (i) any accrued and unpaid interest, (ii) the amounts which would have otherwise come due under Section 2.3(b)(ii) if the Loans had been voluntarily prepaid, (iii) the unpaid principal balance of the Loans and (iv) all other sums, if any, that shall have become due and payable hereunder, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.13 or 8.14 all Obligations shall become immediately due and payable without any action by Collateral Agent or Lender);

 

 

(b)   Protection of Collateral. Make such payments and do such acts as Collateral Agent or Lender considers necessary or reasonable to protect Collateral Agent’s and Lender’s security interest in the Collateral. Borrower agrees to assemble the Collateral if Collateral Agent or Lender so requires and to make the Collateral available to Collateral Agent or Lender as Collateral Agent or Lender may designate. Borrower authorizes Collateral Agent, Lender and their designees and agents to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any Lien which in Collateral Agent’s or Lender’s determination appears or is claimed to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any of Borrower’s owned premises, Borrower hereby grants Collateral Agent and Lender a license to enter into possession of such premises and to occupy the same, without charge, for up to one hundred twenty (120) days in order to exercise any of Collateral Agent’s and Lender’s rights or remedies provided herein, at law, in equity, or otherwise;

 

(c)   Preparation of Collateral for Sale. Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Collateral Agent, Lender and their agents and any purchasers at or after foreclosure are hereby granted a non-exclusive, irrevocable, perpetual, fully paid, royalty-free license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s Intellectual Property, including labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any Property of a similar nature, now or at any time hereafter owned or acquired by Borrower or in which Borrower now or at any time hereafter has any rights; provided that such license shall only be exercisable in connection with the disposition of Collateral upon Collateral Agent’s or Lender’s exercise of its remedies hereunder;

 

(d)   Sale of Collateral. Sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s premises) as Collateral Agent or Lender determines are commercially reasonable; and

 

(e)   Purchase of Collateral. Credit bid and purchase all or any portion of the Collateral at any public sale.

 

Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower.

 

9.2  Set Off Right. Collateral Agent and Lender may set off and apply to the Obligations any and all Indebtedness at any time owing to or for the credit or the account of Borrower or any other assets of Borrower in Collateral Agent’s or Lender’s possession or control.

 

 

 

9.3  Effect of Sale. Upon the occurrence of an Event of Default, to the extent permitted by law, Borrower covenants that it will not at any time insist upon or plead, or in any manner whatsoever claim or take any benefit or advantage of, any stay or extension law now or at any time hereafter in force, nor claim, take nor insist upon any benefit or advantage of or from any law now or hereafter in force providing for the valuation or appraisement of the Collateral or any part thereof prior to any sale or sales thereof to be made pursuant to any provision herein contained, or to the decree, judgment or order of any court of competent jurisdiction; nor, after such sale or sales, claim or exercise any right under any statute now or hereafter made or enacted by any state or otherwise to redeem the property so sold or any part thereof, and, to the full extent legally permitted, except as to rights expressly provided herein, hereby expressly waives for itself and on behalf of each and every Person, except decree or judgment creditors of Borrower, acquiring any interest in or title to the Collateral or any part thereof subsequent to the date of this Agreement, all benefit and advantage of any such law or laws, and covenants that it will not invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any power herein granted and delegated to Collateral Agent or Lender, but will suffer and permit the execution of every such power as though no such power, law or laws had been made or enacted. Any sale, whether under any power of sale hereby given or by virtue of judicial proceedings, shall operate to divest all right, title, interest, claim and demand whatsoever, either at law or in equity, of Borrower in and to the Property sold, and shall be a perpetual bar, both at law and in equity, against Borrower, its successors and assigns, and against any and all Persons claiming the Property sold or any part thereof under, by or through Borrower, its successors or assigns.

 

9.4  Power of Attorney in Respect of the Collateral. Borrower does hereby irrevocably appoint Collateral Agent, on behalf of Lender (which appointment is coupled with an interest) the true and lawful attorney in fact of Borrower, with full power of substitution and in its name to file any notices of security interests, financing statements and continuations and amendments thereof pursuant to the Code or federal law, as may be necessary to perfect or to continue the perfection of Collateral Agent’s and Lender’s security interests in the Collateral. Borrower does hereby irrevocably appoint Collateral Agent, on behalf of Lender (which appointment is coupled with an interest) on the occurrence of an Event of Default, the true and lawful attorney in fact of Borrower, with full power of substitution and in its name: (a) to ask, demand, collect, receive, receipt for, sue for, compound and give acquittance for any and all rents, issues, profits, avails, distributions, income, payment draws and other sums in which a security interest is granted under Section 4 with full power to settle, adjust or compromise any claim thereunder as fully as if Collateral Agent or Lender were Borrower itself; (b) to receive payment of and to endorse the name of Borrower to any items of Collateral (including checks, drafts and other orders for the payment of money) that come into Collateral Agent’s or Lender’s possession or under Collateral Agent’s or Lender’s control; (c) to make all demands, consents and waivers, or take any other action with respect to, the Collateral; (d) in Collateral Agent’s or Lender’s discretion to file any claim or take any other action or proceedings, either in its own name or in the name of Borrower or otherwise, which Collateral Agent or Lender may reasonably deem necessary or appropriate to protect and preserve the right, title and interest of Collateral Agent and Lender in and to the Collateral; (e) endorse Borrower’s name on any checks or other forms of payment or security; (f) sign Borrower’s name on any invoice or bill of lading for any account or drafts against account debtors; (g) make, settle, and adjust all claims under Borrower’s insurance policies; (h) settle and adjust disputes and claims about the accounts directly with account debtors, for amounts and on terms Collateral Agent or Lender determines reasonable; (i) transfer the Collateral into the name of Collateral Agent, Lender or a third party as the Code permits; and (j) to otherwise act with respect thereto as though Collateral Agent or Lender were the outright owner of the Collateral.

 

 

9.5  Lender’s Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Collateral Agent or Lender may, after the expiration of any applicable period of grace and upon written notice to Borrower, do any or all of the following: (a) make payment of the same or any part thereof; or (b) obtain and maintain insurance policies of the type discussed in Section 6.8 of this Agreement, and take any action with respect to such policies as Collateral Agent or Lender deems prudent. Any amounts paid or deposited by Collateral Agent or Lender shall constitute Lender’s Expenses, shall be immediately due and payable, shall bear interest at the Default Rate and shall be secured by the Collateral. Any payments made by Collateral Agent or Lender shall not constitute an agreement by Collateral Agent or Lender to make similar payments in the future or a waiver by Collateral Agent or Lender of any Event of Default under this Agreement. Borrower shall pay all reasonable fees and expenses, including Lender’s Expenses, incurred by Collateral Agent or Lender in the enforcement or attempt to enforce any of the Obligations hereunder not performed when due.

 

9.6  Remedies Cumulative; Independent Nature of Lender’s Rights. Collateral Agent’s and Lender’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Collateral Agent and Lender shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No failure on the part of Collateral Agent or Lender to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right. The Obligations of Borrower to Lender or Collateral Agent may be enforced by Lender or Collateral Agent against Borrower in accordance with the terms of this Agreement and the other Loan Documents and, to the fullest extent permitted by applicable law, it shall not be necessary for Collateral Agent or Lender, as applicable, to be joined as an additional party in any proceeding to enforce such Obligations.

 

9.7  Application of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts of any kind held by Collateral Agent or Lender, at the time of or received by Collateral Agent or Lender after the occurrence of an Event of Default hereunder) shall be paid to and applied as follows:

 

(a) First, to the payment of out-of-pocket costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Collateral Agent or Lender, including Lender’s Expenses;

 

(b) Second, to the payment to Lender of the amount then owing or unpaid on the Loans for any accrued and unpaid interest, the amounts which would have otherwise come due under Section 2.3(b)(ii), if the Loans had been voluntarily prepaid, the principal balance of the Loans, and all other Obligations with respect to the Loans (provided, however, if such proceeds shall be insufficient to pay in full the whole amount so due, owing or unpaid upon the Loans, then first, to the unpaid interest thereon ratably, second, to the amounts which would have otherwise come due under Section 2.3(b)(ii) ratably, if the Loans had been voluntarily prepaid, third, to the principal balance of the Loans ratably, and fourth, to the ratable payment of other amounts then payable to Lender under any of the Loan Documents); and

 

 

(c)   Third, to the payment of the surplus, if any, to Borrower, its successors and assigns or to the Person lawfully entitled to receive the same.

 

9.8  Reinstatement of Rights. If Collateral Agent or Lender shall have proceeded to enforce any right under this Agreement or any other Loan Document by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely, then and in every such case (unless otherwise ordered by a court of competent jurisdiction), Collateral Agent and Lender shall be restored to their former position and rights hereunder with respect to the Property subject to the security interest created under this Agreement.

 

10.              Waivers; Indemnification.

 

10.1       Demand; Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, (except as specifically provided herein), nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Collateral Agent or Lender on which Borrower may in any way be liable.

 

10.2       Lender’s Liability for Collateral. So long as Collateral Agent and Lender comply with their obligations, if any, under the Code, neither Collateral Agent nor Lender shall in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause other than Collateral Agent’s or Lender’s gross negligence or willful misconduct; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person whomsoever. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower.

 

 

10.3       Indemnification and Waiver. Whether or not the transactions contemplated hereby shall be consummated:

 

(a)   General Indemnity. Borrower agrees upon demand to pay or reimburse Collateral Agent and Lender for all liabilities, obligations and out-of-pocket expenses, including Lender’s Expenses and reasonable fees and expenses of counsel for Collateral Agent and Lender from time to time arising in connection with the enforcement or collection of sums due under the Loan Documents, and in connection with any amendment or modification of the Loan Documents or any “work-out” in connection with the Loan Documents. Borrower shall indemnify, reimburse and hold Collateral Agent, Lender, and each of their respective successors, assigns, agents, attorneys, officers, directors, equity holders, servants, agents and employees (each an “Indemnified Person”) harmless from and against all liabilities, losses, damages, actions, suits, demands, claims of any kind and nature (including claims relating to environmental discharge, cleanup or compliance), all costs and expenses whatsoever to the extent they may be incurred or suffered by such Indemnified Person in connection therewith (including reasonable attorneys’ fees and expenses), fines, penalties (and other charges of any applicable Governmental Authority), licensing fees relating to any item of Collateral, damage to or loss of use of property (including consequential or special damages to third parties or damages to Borrower’s property), or bodily injury to or death of any person (including any agent or employee of Borrower) (each, a “Claim”), directly or indirectly relating to or arising out of the use of the proceeds of the Loans or otherwise, the falsity of any representation or warranty of Borrower or Borrower’s failure to comply with the terms of this Agreement or any other Loan Document. The foregoing indemnity shall cover, without limitation, (i) any Claim in connection with a design or other defect (latent or patent) in any item of equipment or product included in the Collateral, (ii) any Claim for infringement of any patent, copyright, trademark or other intellectual property right, (iii) any Claim resulting from the presence on or under or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials on the premises owned, occupied or leased by Borrower, including any Claims asserted or arising under any Environmental Law, (iv) any Claim for negligence or strict or absolute liability in tort or (v) any Claim asserted as to or arising under any Account Control Agreement or any Landlord Agreement; provided, however, Borrower shall not indemnify any Indemnified Person for any liability incurred by such Indemnified Person as a direct and sole result of such Indemnified Person’s gross negligence or willful misconduct. Such indemnities shall continue in full force and effect, notwithstanding the expiration or termination of this Agreement. Upon Collateral Agent’s or Lender’s written demand, Borrower shall assume and diligently conduct, at its sole cost and expense, the entire defense of Collateral Agent and Lender, each of their members, partners, and each of their respective, agents, employees, directors, officers, equity holders, successors and assigns against any indemnified Claim described in this Section 10.3(a). Borrower shall not settle or compromise any Claim against or involving Collateral Agent or Lender without first obtaining Collateral Agent’s or Lender’s written consent thereto, which consent shall not be unreasonably withheld.

 

(b)  Waiver. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, BORROWER AGREES THAT IT SHALL NOT SEEK FROM COLLATERAL AGENT OR LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

 

(c)   Survival; Defense. The obligations in this Section 10.3 shall survive payment of all other Obligations pursuant to Section 12.8. At the election of any Indemnified Person, Borrower shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person’s reasonable discretion, at the sole cost and expense of Borrower. All amounts owing under this Section 10.3 shall be paid within thirty (30) days after written demand.

 

11.              Notices. Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by certified mail, postage prepaid, return receipt requested, by prepaid nationally recognized overnight courier to Borrower or to Lender, as the case may be, at their respective addresses set forth below:

 

 

	If to Borrower:	CVRx, Inc. 9201 W. Broadway Ave., #650 Minneapolis, MN 55445 Attention: Chief Financial Officer Ph: 763-416-2853
	If to Horizon:	Horizon Technology Finance Corporation 312 Farmington Avenue Farmington, CT 06032 Attention: Legal Department Ph: (860) 676-8654

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

 

12.              General Provisions.

 

12.1       Successors and Assigns. This Agreement and the Loan Documents shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, neither this Agreement nor any rights hereunder may be assigned by Borrower without Lender’s prior written consent, which consent may be granted or withheld in Lender’s sole discretion. Lender shall have the right without the consent of or notice to Borrower to sell, transfer, assign, negotiate, or grant participations in all or any part of, or any interest in Lender’s rights and benefits hereunder. Collateral Agent and Lender may disclose the Loan Documents and any other financial or other information relating to Borrower to any potential participant or assignee of any of the Loans; provided that such participant or assignee agrees to protect the confidentiality of such documents and information using the same measures that it uses to protect its own confidential information.

 

12.2       Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

 

12.3       Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

12.4       Entire Agreement; Construction; Amendments and Waivers.

 

(a)   Entire Agreement. This Agreement and each of the other Loan Documents, taken together, constitute and contain the entire agreement among Borrower, Collateral Agent and Lender and supersede any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof. Borrower acknowledges that it is not relying on any representation or agreement made by Collateral Agent, Lender or any employee, attorney or agent thereof, other than the specific agreements set forth in this Agreement and the Loan Documents.

 

(b)   Construction. This Agreement is the result of negotiations between and has been reviewed by each of Borrower, Collateral Agent and Lender as of the date hereof and their respective counsel; accordingly, this Agreement shall be deemed to be the product of the parties hereto, and no ambiguity shall be construed in favor of or against Borrower, Collateral Agent or Lender. Borrower, Collateral Agent and Lender agree that they intend the literal words of this Agreement and the other Loan Documents and that no parol evidence shall be necessary or appropriate to establish Borrower’s, Collateral Agent’s or Lender’s actual intentions.

 

 

(c)   Amendments and Waivers. Any and all discharges or waivers of, or consents to any departures from any provision of this Agreement or of any of the other Loan Documents shall not be effective without the written consent of Lender; provided that no such discharge, waiver or consent affecting the rights or duties of the Collateral Agent under this Agreement or any other Loan Document shall be effective without the written consent of the Collateral Agent. Any and all amendments and modifications of this Agreement or of any of the other Loan Documents shall not be effective without the written consent of Lender and Borrower; provided that no such amendment or modification affecting the rights or duties of the Collateral Agent under this Agreement or any other Loan Document shall be effective without the written consent of the Collateral Agent. Any waiver or consent with respect to any provision of the Loan Documents shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances. Any amendment, modification, waiver or consent affected in accordance with this Section 12.4 shall be binding upon Collateral Agent, Lender and on Borrower.

 

12.5       Reliance by Lender. All covenants, agreements, representations and warranties made herein by Borrower shall be deemed to be material to and to have been relied upon by Collateral Agent and Lender, notwithstanding any investigation by Collateral Agent or Lender.

 

12.6       No Set-Offs by Borrower. All sums payable by Borrower pursuant to this Agreement or any of the other Loan Documents shall be payable without notice or demand and shall be payable in United States Dollars without set-off or reduction of any manner whatsoever.

 

12.7       Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts (including signatures delivered by facsimile or other electronic means), each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.

 

12.8       Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations or commitment to fund remain outstanding. The obligations of Borrower to indemnify Collateral Agent and Lender with respect to the expenses, damages, losses, costs and liabilities described in Section 10.3 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Collateral Agent or Lender have run.

 

13.              Relationship of Parties. Borrower and Lender acknowledge, understand and agree that the relationship between Borrower, on the one hand, and Lender, on the other, is, and at all times shall remain solely that of a borrower and lender. Lender shall not, under any circumstances, be construed to be a partner or a joint venturer of Borrower or any of its Affiliates; nor shall Lender, under any circumstances, be deemed to be in a relationship of confidence or trust or a fiduciary relationship with Borrower or any of its Affiliates, or to owe any fiduciary duty or any other duty to Borrower or any of its Affiliates. Neither Collateral Agent nor Lender undertakes or assumes any responsibility or duty to Borrower or any of its Affiliates to select, review, inspect, supervise, pass judgment upon or otherwise inform Borrower or any of its Affiliates of any matter in connection with its or their Property, any Collateral held by Collateral Agent or Lender or the operations of Borrower or any of its Affiliates. Borrower and each of its Affiliates shall rely entirely on their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by Collateral Agent or Lender in connection with such matters is solely for the protection of Collateral Agent and Lender and neither Borrower nor any Affiliate is entitled to rely thereon.

 

 

14.              Confidentiality. All information (other than periodic reports filed by Borrower with the Securities and Exchange Commission) disclosed by Borrower to Collateral Agent or Lender in writing or through inspection pursuant to this Agreement that is marked confidential shall be considered confidential. Collateral Agent and Lender agrees to use the same degree of care to safeguard and prevent disclosure of such confidential information as Collateral Agent and Lender uses with its own confidential information, but in any event no less than a reasonable degree of care. Neither Collateral Agent nor Lender shall disclose such information to any third party (other than (a) to another party hereto, (b) to Collateral Agent’s or Lender’s members, partners, attorneys, governmental regulators (including any self-regulatory authority) or auditors, (c) to Collateral Agent’s or Lender’s subsidiaries and affiliates, (d) on a confidential basis, to any rating agency, (e) to prospective transferees and purchasers of the Loans or any actual or prospective party (or its Affiliates) to any swap, derivative or other transaction under which payments are to be made by reference to the Obligations, Borrower, any Loan Document or any payment thereunder, all subject to the same confidentiality obligation set forth herein or (f) as required by law, regulation, subpoena or other order to be disclosed) and shall use such information only for purposes of evaluation of its investment in Borrower and the exercise of Collateral Agent’s or Lender’s rights and the enforcement of its remedies under this Agreement and the other Loan Documents. The obligations of confidentiality shall not apply to any information that (i) was known to the public prior to disclosure by Borrower under this Agreement, (ii) becomes known to the public through no fault of Collateral Agent or Lender, (iii) is disclosed to Collateral Agent or Lender on a non-confidential basis by a third party or (iv) is independently developed by Collateral Agent or Lender. Notwithstanding the foregoing, Collateral Agent’s and Lender’s agreement of confidentiality shall not apply if Collateral Agent or Lender has acquired indefeasible title to any Collateral or in connection with any enforcement or exercise of Collateral Agent’s or Lender’s rights and remedies under this Agreement following an Event of Default, including the enforcement of Collateral Agent’s and Lender’s security interest in the Collateral.

 

15.              CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT. EACH OF BORROWER, COLLATERAL AGENT AND LENDER HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT. BORROWER, COLLATERAL AGENT AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

 

[Remainder of page intentionally left blank.]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

 

	BORROWER:
	CVRx, INC.
	By:	/s/ John Brintnall
	Name:  John Brintnall
	Title:    Chief Financial Officer
	LENDER:
	HORIZON TECHNOLOGY FINANCE CORPORATION
	By:	/s/ Robert D. Pomeroy, Jr.
	Name:  Robert D. Pomeroy, Jr.
	Title:    Chief Executive Officer

 

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A	Disclosure Schedule
Exhibit B	Funding Certificate
Exhibit C	Form of Note
Exhibit D	Form of Legal Opinion
Exhibit E	Form of Officer’s Certificate

 

 

 

EXHIBIT A

 

DISCLOSURE SCHEDULE

 

[See attached.]

 

 

EXHIBIT B

 

FUNDING CERTIFICATE

 

The undersigned, being the duly elected and acting of CVRx, INC., a Delaware corporation (“Borrower”), does hereby certify to HORIZON TECHNOLOGY FINANCE CORPORATION (“Horizon” or “Lender”) in connection with that certain Venture Loan and Security Agreement dated as of September 30, 2019 by and among Borrower, Lender and Lender as Collateral Agent (the “Loan Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement) that:

 

1.

The representations and warranties made by Borrower in Section 5 of the Loan Agreement and in the other Loan Documents are true and correct as of the date hereof.

 

2.

No event or condition has occurred that would constitute a Default or an Event of Default under the Loan Agreement or any other Loan Document.

 

3.

Borrower is in compliance with the covenants and requirements contained in Sections 4, 6 and 7 of the Loan Agreement.

 

4.

All conditions referred to in Section 3 of the Loan Agreement to the making of the Loan to be made on or about the date hereof have been satisfied.

 

5.

No material adverse change in the general affairs, management, results of operations, condition (financial or otherwise) of Borrower, whether or not arising from transactions in the ordinary course of business, has occurred.

 

6.

The proceeds for Loans A, B, C and D shall be disbursed as follows:

 

Disbursement from Horizon:
Loan Amount			$
Less:
Legal Fees			$
Balance of Commitment Fee			$

 

Net Proceeds due from Horizon:

$

 

 

7.

A portion of the aggregate net proceeds of Loans A, B, C and D in the amount of $_________________ shall be transferred by Horizon to Oxford Finance LLC’s account as follows:

 

Account Name:

Bank Name:

Bank Address:

Attention:

Telephone:

Account Number:

ABA Number:

 

8.

A portion of the aggregate net proceeds of Loans A, B, C and D in the amount of $_________________ shall be transferred by Horizon to Borrower’s account as follows:

 

Account Name:

Bank Name:

Bank Address:

Attention:

Telephone:

Account Number:

ABA Number:

 

Dated: September 30, 2019

	BORROWER:
	CVRx, INC.
	By:
	Name:
	Title:

 

[Signature page to Funding Certificate]

 

 

EXHIBIT C

 

SECURED PROMISSORY NOTE

 

(Loan [A/B/C/D])

 

$5,000,000

Dated: September 30, 2019

 

FOR VALUE RECEIVED, the undersigned, CVRx, a Delaware corporation (“Borrower”), HEREBY PROMISES TO PAY to HORIZON TECHNOLOGY FINANCE CORPORATION, a Delaware corporation (“Lender”) the principal amount of Five Million Dollars ($5,000,000) or such lesser amount as shall equal the outstanding principal balance of Loan [_] (the “Loan”) made to Borrower by Lender pursuant to the Loan Agreement (as defined below), and to pay all other amounts due with respect to the Loan on the dates and in the amounts set forth in the Loan Agreement. Capitalized terms used but not defined herein shall have the meaning ascribed thereto in the Loan Agreement.

 

Interest on the principal amount of this Note from the date of this Note shall accrue at the Loan Rate or, if applicable, the Default Rate, each as established in accordance with the Loan Agreement (as defined below). Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed. If the Funding Date is not the first day of the month, interim interest accruing from the Funding Date through the last day of that month shall be paid on the first calendar day of the next calendar month.

 

Commencing [_], 201[_], through and including [_], 201[_], on the first day of each month (each an “Initial Interest Payment Date”) Borrower shall make payments of accrued interest only on the outstanding principal amount of the Loan. Commencing on [_], 201[_], and continuing on the first day of each month thereafter (each an “Initial Principal and Interest Payment Date”), Borrower shall make to Lender [_] ([_]) equal payments of principal in the amount of [______________] plus accrued interest on the then outstanding principal amount due hereunder.

 

Notwithstanding, and in lieu of, the foregoing, commencing [_], 201[_], through and including [_], 201[_], on the first day of each month (each an “Extended Interest Payment Date”) Borrower shall make payments of accrued interest only on the outstanding principal amount of the Loan. Commencing on [_], 201[_], and continuing on the first day of each month thereafter (each a “Revised Principal and Interest Payment Date”, and collectively with each Initial Interest Payment Date, each Initial Principal and Interest Payment Date and each Extended Interest Payment Date, each a “Payment Date”), Borrower shall make to Lender [_] ([_]) equal payments of principal in the amount of [______________] plus accrued interest on the then outstanding principal amount due hereunder.

 

On the earliest to occur of (i) [_], 201[_], (ii) payment in full of the principal balance of the Loan or (iii) an Event of Default and demand by Lender of payment in full of the Loan, Borrower shall make a payment of [_] and 00/100 Dollars ($[_]) to Lender (the “Final Payment”). If not sooner paid, all outstanding amounts hereunder and under the Loan Agreement shall become due and payable on [_], 201[_].

 

Principal, interest and all other amounts due with respect to the Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement. The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.

 

 

This Note is referred to in, and is entitled to the benefits of, the Venture Loan and Security Agreement dated as of the date hereof (the “Loan Agreement”), among Borrower, Lender and Lender as Collateral Agent. The Loan Agreement, among other things, (a) provides for the making of a secured Loan to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.

 

This Note may not be prepaid, except as set forth in Section 2.3 of the Loan Agreement.

 

This Note and the obligation of Borrower to repay the unpaid principal amount of the Loan, interest on the Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.

 

Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived.

 

Borrower shall pay all fees and expenses, including attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due.

 

Any reference herein to Lender shall be deemed to include and apply to every subsequent holder of this Note. Reference is made to the Loan Agreement for provisions concerning optional and mandatory prepayments, Collateral, acceleration and other material terms affecting this Note.

 

This Note shall be governed by and construed under the laws of the State of Connecticut. Borrower agrees that any action or proceeding brought to enforce or arising out of this Note may be commenced in the state or federal courts located within the State of Connecticut.

 

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.

 

	BORROWER:
	CVRx, INC.
	By:
	Name:
	Title:

 

[SIGNATURE PAGE TO SECURED PROMISSORY NOTE (LOAN A/B/C/D)]

 

 

EXHIBIT D

 

ITEMS TO BE COVERED BY OPINION OF BORROWER’S COUNSEL

 

1.       Borrower is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified and authorized to do business in the State of Minnesota.

 

2.       Borrower has the full corporate power, authority and legal right, and has obtained all necessary approvals, consents and given all notices to execute and deliver the Loan Documents and perform the terms thereof.

 

3.       The Loan Documents have been duly authorized, executed and delivered by Borrower and constitute valid, legal and binding agreements, and are enforceable in accordance with their terms.

 

4.       To our knowledge, there is no action, suit, audit, investigation, proceeding or patent claim pending or threatened against Borrower in any court or before any governmental commission, agency, board or authority.

 

5.       The Shares (as defined in the Warrant) issuable pursuant to exercise or conversion of the Warrant have been duly authorized and reserved for issuance by Borrower and, when issued in accordance with the terms thereof, will be validly issued, fully paid and nonassessable.

 

6.       The shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved and, when issued in accordance with the terms of Borrower’s Certificate of Incorporation, as amended, will be validly issued, fully paid and nonassessable.

 

7.       The execution and delivery of the Loan Documents are not, and the issuance of the Shares upon exercise of the Warrant in accordance with the terms thereof will not be, inconsistent with Borrower’s Certificate of Incorporation, as amended, or Bylaws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to Borrower, and do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other agreement or instrument of which Borrower 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, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby.

 

 

EXHIBIT E

 

FORM OF OFFICER’S CERTIFICATE

 

TO:	HORIZON TECHNOLOGY FINANCE CORPORATION, as Lender
FROM:	CVRx, INC., as Borrower

The undersigned authorized officer (“Officer”) of CVRx, INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Venture Loan and Security Agreement dated as of September 30, 2019 by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),

 

(a)               Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below;

 

(b)               There are no Events of Default, except as noted below;

 

(c)               Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.

 

(d)               Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;

 

(e)               No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

 

Attached are the required documents, if any, supporting our certification(s). The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year-end audit adjustments as to the interim financial statements.

 

 

Please indicate compliance status since the last Officer’s Certificate by circling Yes, No, or N/A under “Complies” column.

 

Reporting Covenant

Requirement

Actual

Complies

 

1)	Financial statements	Monthly within 30 days		Yes	No	N/A
2)	Borrowing Base Certificate	Monthly within 30 days		Yes	No	N/A
3)	Annual (CPA Audited) statements	Within 180 days after FYE		Yes	No	N/A
4)	Annual Financial Projections/Budget (prepared on a monthly basis)	Annually (within 30 days of the earlier of (i) FYE or (ii) BoD approval), and when revised		Yes	No	N/A
5)	A/R & A/P agings	Monthly within 30 days		Yes	No	N/A
6)	8-K, 10-K and 10-Q Filings	If applicable, within 5 days of filing		Yes	No	N/A
7)	Officer’s Certificate	Monthly within 30 days		Yes	No	N/A
8)	IP Report	When required due to new IP filings		Yes	No	N/A
9)	Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period	$___________________
10)	Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period	$___________________

 

 

Deposit and Securities Accounts: (Please list all accounts; attach separate sheet if additional space needed)

 

	Institution Name	Account Number	New Account?		Account Control Agreement in place?
1)			Yes	No	Yes	No
2)			Yes	No	Yes	No
3)			Yes	No	Yes	No
4)			Yes	No	Yes	No

 

Financial Covenants

 

	Covenant	Requirement	Actual	Compliance
	Unrestricted cash on deposit in accounts over which Lender maintains an Account Control Agreement (Section 6.13)	$5,000,000	[$________]	Yes	No
	BAROSTIM Neo gross sales (Section 6.14)	[$_________]	[$________]	Yes	No

 

Other Matters

 

If the response to any of the below is “Yes”, please provide an explanation of the circumstances giving rise to such “Yes” response on an attachment hereto.

 

1)	Have there been any changes in senior management since the last Officer’s Certificate?	Yes	No
2)	Has there been any transfers/sales/disposals/retirement or relocation of Collateral or IP prohibited by the Loan Agreement?	Yes	No
3)	Have there been any new or pending claims or causes of action against Borrower that involve more than One Hundred Thousand Dollars ($100,000.00)?	Yes	No
4)	Has any IP been abandoned, forfeited or dedicated to the public since the last Officer’s Certificate?	Yes	No
5)	Has any Default or Event of Default occurred since the last Officer’s Certificate?	Yes	No
6)	Has Borrower sold new shares of equity or made adjustments to existing shares of equity? If yes, please provide applicable supporting documentation.	Yes	No
7)	Has any direct or indirect Subsidiary been formed since the last Officer’s Certificate?	Yes	No
8)	Has any piece of a Borrower’s property been subject to a Lien (other than the lien of Lender pursuant to the Loan Agreement) since the date of the last Officer’s Certificate?	Yes	No
9)	Has any Borrower or any Subsidiary incurred any Indebtedness since the date of the last Officer’s Certificate?	Yes	No
10)	Has Borrower or any Subsidiary made any Investment since the date of the last Officer’s Certificate?	Yes	No

 

Exceptions:  Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.” Attach separate sheet if additional space needed.)

 

 

CVRx, INC.
By
Name:
Title:
Date:

 

 

 

Exhibit 21.1

CVRx, Inc.

List of Subsidiaries

 

Name of Company		State or Other Jurisdiction of Incorporation/Organization
CVRx Switzerland LLC		Switzerland

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We have issued our report dated April 9, 2021, with respect to the consolidated financial statements of CVRx, Inc. contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

 

/s/ GRANT THORNTON LLP
Minneapolis, Minnesota
June 4, 2021