Exhibit 10.4

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT AND LAWS OR PURSUANT TO RULE 144 AND EXEMPTIONS UNDER
APPLICABLE STATE SECURITIES LAWS, OR, SUBJECT TO SECTION 5.3 HEREOF, AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

WARRANT TO PURCHASE SERIES A-1 CONVERTIBLE PREFERRED STOCK

 

Issuer:  Radius Health, Inc.
Number of Shares:  
Class of Stock: Series A-1 Convertible Preferred Stock, par value $0.01 per
share
Exercise Price:  $8.142 per share, subject to adjustment
Issue Date: 
Expiration Date:

 

FOR THE AGREED UPON VALUE of $1.00, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
this Warrant is issued to LEERINK SWANN LLC (together with its successors and
permitted assigns, “Holder”) by RADIUS, INC., a Delaware corporation (the
“Company”).

 

Subject to the terms and conditions hereinafter set forth, the Holder is
entitled upon surrender of this Warrant and a duly executed Notice of Exercise
in substantially the form attached hereto as Appendix 1 (the “Notice of
Exercise”), at the principal office of the Company, 201 Broadway, 6th Floor,
Cambridge, Massachusetts 02139, or such other office as the Company shall notify
the Holder of in writing, to purchase from the Company up
to                                    of fully paid and non-assessable shares
(the “Shares”) of the Company’s Series A-1 Convertible Preferred Stock, $.01 par
value per share (the “Class”), at a purchase price per Share of eight dollars
and 142/100 ($8.142) (the “Exercise Price”).  Subject to the terms and
conditions hereinafter set forth, this Warrant may be exercised in whole or in
part at any time and from time to time until 5:00 PM, Eastern time, on the
Expiration Date set forth above, and shall be void thereafter.  Until such time
as this Warrant is exercised in full or expires, the Exercise Price and the
number of Shares are subject to adjustment from time to time as hereinafter
provided.  This Warrant is issued in connection with that certain letter
agreement dated September 24, 2010 by and between the Company and the Holder
(the “Agreement”).  Capitalized terms used and not otherwise defined herein
shall have the respective meanings set forth in the Agreement.

 

Notwithstanding the foregoing definition of Class, upon and after the automatic
or voluntary conversion, redemption or retirement of all (but not less than all)
of the outstanding

 

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shares of such Class, including without limitation the Company’s initial
registered underwritten public offering and sale of its securities (“IPO”), then
from and after the date upon which all such outstanding shares have been so
converted, redeemed or retired, “Class” shall mean the Company’s common stock,
$.01 par value per share (“Common Stock”), and this Warrant shall be exercisable
for such number of shares of Common Stock as shall equal the number of shares of
Common Stock into which the Shares would have been converted pursuant to the
Company’s Amended and Restated Certificate of Incorporation, as amended from
time to time, including without limitation the Certificate of Designation, if
any, applicable to the same class or series of preferred stock as the Shares
(the “Certificate”) had the Shares been issued and outstanding immediately prior
to such conversion, redemption or retirement, and the Exercise Price shall be
the Common Stock conversion price as determined pursuant to the Certificate
immediately prior to such conversion, redemption or retirement (all subject to
further adjustment as provided herein).

 

ARTICLE 1.  EXERCISE.

 

1.1          Method of Exercise.  The Holder may exercise this Warrant by
delivering this Warrant together with a duly executed Notice of Exercise to the
principal office of the Company.  Unless the Holder is exercising the conversion
right set forth in Section 1.2, the Holder shall also deliver to the Company a
check for the aggregate Exercise Price for the Shares being purchased.

 

1.2          Conversion Right.  In lieu of exercising this Warrant as specified
in Section 1.1, the Holder may from time to time convert this Warrant, in whole
or in part, into a number of Shares determined as follows:

 

X = Y (A-B)/A

 

where:

 

X = the number of Shares to be issued to the Holder.

 

Y = the number of Shares with respect to which this Warrant is being exercised.

 

A = the Fair Market Value (as determined pursuant to Section 1.3 below) of one
Share.

 

B = the Exercise Price.

 

1.3          Fair Market Value.

 

1.3.1       If the Company’s Common Stock is traded in a public market on a
nationally recognized securities exchange or over the counter market and the
Shares are Common Stock, the fair market value of each Share shall be the
closing price of a Share reported for the business day immediately preceding the
date of Holder’s Notice of Exercise to the

 

2

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Company (or in the instance where the Warrant is exercised immediately prior to
the effectiveness of the Company’s initial public offering, the “price to
public” per share price specified in the final prospectus relating to such
offering).  If the Company’s Common Stock is traded in a public market on a
nationally recognized securities exchange or over the counter market and the
Shares are preferred stock, the fair market value of a Share shall be the
closing price of a share of the Company’s Common Stock reported for the business
day immediately preceding the date of Holder’s Notice of Exercise to the Company
(or in the instance where the Warrant is exercised immediately prior to the
effectiveness of the Company’s initial public offering, the initial “price to
public” per share price specified in a final prospectus relating to such
offering), in both cases, multiplied by the number of shares of the Company’s
Common Stock into which a Share is convertible.

 

1.3.2       If shares of the Class (or shares of the Company’s stock into which
shares of the Class are convertible or exchangeable) are not traded on a
nationally recognized securities exchange or over the counter market, the Board
of Directors of the Company shall determine fair market value in its reasonable
good faith judgment.

 

1.4          Delivery of Certificate and New Warrant.  Promptly after Holder
exercises or converts this Warrant, the Company at its sole expense shall
promptly deliver to Holder (i) certificates for the Shares acquired upon such
exercise, and (ii) if this Warrant has not been fully exercised or converted and
has not expired, a new warrant of like tenor representing the Shares for which
this Warrant is still exercisable.

 

1.5          Replacement of Warrants.  On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.

 

1.6          Assumption/Repurchase on Sale, Merger, or Consolidation of the
Company.

 

1.6.1       “Acquisition”.  For the purpose of this Warrant, “Acquisition” means
any sale, assignment, transfer, exclusive license, or other disposition of all
or substantially all of the assets of the Company, or any acquisition,
reorganization, consolidation, or merger of the Company where the holders of the
Company’s outstanding voting equity securities immediately prior to the
transaction (i) receive cash, stock, securities or other property in respect of
or in exchange for such voting equity securities pursuant to any of the
transactions referred to in the foregoing provisions of this Section 1.6.1, and
(ii) in the event that such transaction consists of any acquisition,
reorganization, consolidation or merger of the Company, beneficially own less
than a majority of the outstanding voting equity securities of the surviving or
successor entity immediately following the transaction.

 

1.6.2       Assumption of Warrant.  Upon the closing of any Acquisition (other
than an Acquisition in which the consideration received by the Company’s
stockholders consists

 

3

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solely of cash, debt securities or a combination of cash and debt securities),
and as a condition precedent thereto, the successor or surviving entity shall
assume the obligations of this Warrant, and this Warrant shall be exercisable
for the same securities and property as would be payable for the Shares issuable
upon exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing.  The
Exercise Price shall be adjusted accordingly, and the Exercise Price and number
and class of Shares shall continue to be subject to adjustment from time to time
in accordance with the provisions hereof.

 

1.6.3       Purchase Right.  Notwithstanding the foregoing, upon the closing of
any Acquisition in which the consideration paid to the Company or stockholders
is cash or cash equivalents, at the election of Holder, the Company shall
purchase the unexercised portion of this Warrant for cash for an amount equal to
(a) the fair market value of any consideration that would have been received by
Holder in consideration for the Shares had Holder exercised the unexercised
portion of this Warrant immediately before the record date for determining the
shareholders entitled to participate in the proceeds of the Acquisition, less
(b) the aggregate Exercise Price of the Shares, but in no event less than zero.

 

ARTICLE 2.  ADJUSTMENTS TO THE SHARES.

 

2.1          Dividends, Splits, Etc.   If the Company declares or pays a
dividend on the outstanding shares of the Class, payable in Common Stock, other
securities or any type of property, or subdivides the outstanding shares of the
Class into a greater number of shares of the Class, or subdivides the shares of
the Class in a transaction that increases the amount of Common Stock into which
such shares are convertible, then upon exercise of this Warrant, for each Share
acquired, Holder shall receive, without additional cost to Holder, the total
number and kind of securities or property to which Holder would have been
entitled had Holder owned the Shares of record as of the date the dividend or
subdivision occurred.

 

2.2          Reclassification, Exchange or Substitution.  Upon any
reclassification, exchange, substitution, reorganization or other event that
results in a change of the number and/or class of the securities issuable upon
exercise or conversion of this Warrant, Holder shall be entitled to receive,
upon exercise or conversion of this Warrant, the number and kind of securities
and property that Holder would have received for the Shares if this Warrant had
been exercised immediately before such reclassification, exchange, substitution,
reorganization or other event.  The Company or its successor shall promptly
issue to Holder a new warrant of like tenor for such new securities or other
property.  The new warrant shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article 2 including, without limitation, adjustments to the Exercise Price and
to the number of securities or property issuable upon exercise of the new
warrant.  The provisions of this Section 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, reorganizations or other events.

 

2.3          Adjustments for Combinations, Etc.  If the outstanding shares of
the Class are combined or consolidated, by reclassification or otherwise, into a
lesser number of shares, the

 

4

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Exercise Price shall be proportionately increased and the number of Shares
issuable upon exercise or conversion of this Warrant shall be proportionately
decreased.

 

2.4          No Impairment.  The Company shall not, by amendment of the
Certificate or its by-laws or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Article 2 and in taking all such action as may be necessary or appropriate
to protect Holder’s rights under this Article against impairment.

 

2.5          Adjustments for Dilutive Issuances.  The Conversion Price (as
defined in the Certificate) with respect to the Class is subject to adjustment
for Dilutive Issuances (as defined in the Certificate) in accordance with
Section 7(e)(i) of Part A of Article III of the Certificate.

 

2.6          Fractional Shares.  No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share.  If a fractional Share
interest arises upon any exercise or conversion of this Warrant, the Company
shall eliminate such fractional Share interest by paying Holder an amount
computed by multiplying such fractional interest by the Fair Market Value
(determined in accordance with Section 1.3 above) of one Share.

 

2.7          Certificate as to Adjustments.  Upon each adjustment of the
Exercise Price, number or class of Shares or number of shares of Common Stock or
other securities for which the Shares are convertible or exchangeable, the
Company at its expense shall promptly compute such adjustment, and furnish
Holder with a certificate of its chief financial officer setting forth such
adjustment and the facts upon which such adjustment is based.  The Company shall
at any time and from time to time, upon written request, furnish Holder with a
certificate setting forth the Exercise Price, number and class of Shares and
conversion ratio in effect upon the date thereof and the series of adjustments
leading to such Exercise Price, number and class of Shares and conversion ratio.

 

ARTICLE 3.  COVENANTS OF THE COMPANY.

 

3.1          Notice of Certain Events.  If the Company proposes at any time
(a) to declare any dividend or distribution upon any of its capital stock,
whether in cash, property, stock, or other securities and whether or not a
regular cash dividend; (b) to offer for subscription pro rata to the holders of
any class or series of its stock any additional shares of stock of any class or
series or other rights; (c) to effect any reclassification or recapitalization
of any of its securities; (d) to merge or consolidate with or into any other
corporation, or sell, lease, license, or convey all or substantially all of its
assets, or to liquidate, dissolve or wind up; or (e) offer holders of
registration rights the opportunity to participate in an underwritten public
offering of the Company’s securities for cash, then, in connection with each
such event, the Company shall give Holder (1) at least 20 days prior written
notice of the date on which a record will be taken for such dividend,
distribution, or subscription rights (and specifying the date on which the
holders

 

5

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of securities of the Company shall be entitled to receive such dividend,
distribution or rights) or for determining rights to vote, if any, in respect of
the matters referred to in (c) and (d) above; (2) in the case of the matters
referred to in (c) and (d) above at least 20 days prior written notice of the
date when the same will take place (and specifying the date on which the holders
of securities of the Company will be entitled to exchange their securities of
the Company for securities or other property deliverable upon the occurrence of
such event); and (3) in the case of the matter referred to in (e) above, the
same notice as is given to the holders of such registration rights.

 

ARTICLE 4.  REPRESENTATIONS OF THE COMPANY

 

4.1          Purchase for Investment.  The Holder represents and warrants that
it is acquiring the Warrant, and upon exercise will hold the Shares, solely for
its account for investment and not with a view to or for sale or distribution of
said Warrant or Shares in violation of the Securities Act.  The Holder also
represents that the entire legal and beneficial interests of the Warrant and
Shares the Holder is acquiring is being acquired for, and will be held for, its
account only.

 

4.2          Securities Not Registered.  The Holder understands that the Warrant
has not been registered under the Securities Act on the basis that no
distribution or public offering of the stock of the Company is to be effected. 
The Holder realizes that the basis for the exemption may not be present if,
notwithstanding its representations, it has in mind merely acquiring the
securities for a fixed or determinable period in the future, or for a market
rise, or for sale if the market does not rise.  The Holder has no such
intention.

 

4.3          Securities to be Held Indefinitely.  The Holder recognizes that the
Warrant and Shares being acquired by it must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available.  The Holder recognizes that except as expressly set
forth herein, the Company has no obligation to register the Warrant or to comply
with any exemption from such registration.

 

4.4          Rule 144.  The Holder is aware that neither the Warrant nor the
Shares may be sold pursuant to Rule 144 adopted under the Securities Act unless
certain conditions are met and until the Holder has held the Shares for at least
one year.

 

ARTICLE 5.  MISCELLANEOUS.

 

5.1          Automatic Conversion upon Expiration.  In the event that, upon the
Expiration Date, the Fair Market Value of one Share (or other security issuable
upon the exercise hereof) as determined in accordance with Section 1.3 above is
greater than the Exercise Price in effect on such date, then this Warrant shall
automatically be deemed on and as of such date to be converted pursuant to
Section 1.2 above as to all Shares (or such other securities) for which it shall
not previously have been exercised or converted, and the Company shall promptly
deliver a certificate representing the Shares (or such other securities) issued
upon such conversion to the Holder.

 

6

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5.2          Legends.  This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND LAWS OR
PURSUANT TO RULE 144 AND EXEMPTIONS UNDER APPLICABLE STATE SECURITIES LAW, OR,
SUBJECT TO SECTION 5.3 OF THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE
COMPANY TO LEERINK SWAN LLC DATED AS OF MAY 17, 2011, AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.

 

5.3          Compliance with Securities Laws on Transfer.  This Warrant and the
Shares (and the securities, if any, issued and issuable, upon conversion of the
Shares, if any) may not be transferred or assigned in whole or in part without
compliance with applicable federal and state securities laws by the transferor
and the transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company).  The Company shall not require
Holder to provide an opinion of counsel if the transfer is to an affiliate of
Holder, or if (a) there is no material question as to the availability of
current information as referenced in Rule 144(c), (b) Holder represents that it
has complied with Rule 144(d) and (e) in reasonable detail, (c) the selling
broker represents that it has complied with Rule 144(f), and (d) the Company is
provided with a copy of Holder’s notice of proposed sale.

 

5.4          Transfer Procedure.  Following its receipt of this executed
Warrant, Holder may, subject to Section 5.3 above, transfer all or part of this
Warrant and/or the Shares (or the securities, if any, issued and issuable upon
conversion of the Shares) at any time and from time to time by giving the
Company notice of the portion of the Warrant and/or Shares (or the securities,
if any, issued and issuable upon conversion of the Shares) being transferred
setting forth the name, address and taxpayer identification number of the
transferee and surrendering this Warrant to the Company for reissuance to the
transferee(s) (and Holder if applicable); provided, that at all times prior to
the Company’s IPO, Holder shall not, without the prior written consent of the
Company, transfer this Warrant (or any part hereof), any Shares, or any
securities issued or issuable upon conversion of the Shares, to any person who
directly competes with the Company, unless such transfer is in connection with
an Acquisition of the Company by any such person or the stock of the transferee
is publicly traded.

 

5.5          Effect of Violation of Transfer Restrictions; Preventive Measures. 
Any offer, sale, assignment, transfer, endorsement, pledge, mortgage,
hypothecation, or other conveyance or disposition of all or any portion of this
Warrant or any Shares issued from time to time upon

 

7

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exercise of this Warrant, or of any interest in this Warrant or any of such
Shares, in violation of this Section 5 shall be null and void.  The Company may
make a notation on its records or give instructions to any of its transfer
agents in order to implement the restrictions on transfer set forth in this
Section 5.

 

5.6          Warrant Binding Upon Assignee or Successor.  The terms and
conditions of this Warrant shall be binding upon any permitted assignee and
successor of the Holder.  Any such successor or assignee shall be obligated to
and shall immediately execute an instrument which provides that such party is
bound under the terms of this Warrant.  Any transfer, assignment or other
disposition without such execution by the proposed transferee, assignee or
successor shall be null and void.

 

5.7          No Rights as Stockholder.  The Holder shall not be entitled to vote
or to receive dividends or to be deemed the holder of shares of the Company’s
capital stock that may at any time be issuable upon exercise of this Warrant for
any purpose whatsoever, nor shall anything contained herein be construed to
confer upon the Holder any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance or
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger or conveyance or otherwise), or to receive notice
of meetings, or to receive dividends or subscription rights, until the Holder
shall have exercised the Warrant and shall have been issued Shares in accordance
with the provisions hereof.

 

5.8          Notices.  All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally, or mailed by first-class registered or certified mail, postage
prepaid, or sent via reputable overnight courier service, fee prepaid, at such
address as may have been furnished to the Company or the Holder, as the case may
be, in writing by the Company or such holder from time to time, but in all
cases, unless instructed in writing otherwise, the Company shall deliver a copy
of all notices to Holder to Leerink Swann LLC, One Federal Street, 37th Floor,
Boston, Massachusetts 02110, Attention Donald D. Notman, Jr.

 

5.9          Waiver.  This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

 

5.10        Attorneys Fees.  In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys’ fees.

 

5.11        Survival of Representations, Warranties and Agreements.  All
representations and warranties of the Company contained herein shall survive the
date of this Warrant, the exercise or conversion of this Warrant (or any part
hereof) and/or the termination or expiration of rights

 

8

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hereunder.  All agreements of the Company contained herein shall survive
indefinitely until, by their respective terms, they are no longer operative. 
The obligations of the Holder (and/or of any transferee of the Warrant or any
Shares issued from time to time upon exercise of this Warrant) shall, with
respect to any Shares issued upon exercise of this Warrant, survive the
exercise, expiration or other termination, or transfer, of this Warrant
indefinitely.

 

5.12        Counterparts.  This Warrant may be executed in counterparts, all of
which together shall constitute one and the same agreement.

 

5.13        Governing Law.  This Warrant shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, without giving
effect to its principles regarding conflicts of law.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Series A-1
Convertible Preferred Stock to be executed as an instrument under seal by its
duly authorized representative as of the date first above written.

 

 

“COMPANY”

 

 

 

RADIUS HEALTH, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

S-1

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APPENDIX 1

 

NOTICE OF EXERCISE

 

1.             The undersigned hereby elects to purchase               shares of
the                          stock of                                     
pursuant to Section 1.1 of the attached Warrant, and tenders herewith payment of
the Exercise Price of such shares in full.

 

1.             The undersigned hereby elects to convert the attached Warrant
into Shares in the manner specified in Section 1.2 of the attached Warrant. 
This conversion is exercised with respect to                          of shares
of the                                                  Stock of
                                      .

 

[Strike paragraph that does not apply.]

 

2.             Please issue a certificate or certificates representing said
Shares in the name of the undersigned or in such other name as is specified
below:

 

 

 

 

 

(Name)

 

 

 

 

 

 

 

 

 

 

 

(Address)

 

 

3.             The undersigned represents it is acquiring the Shares solely for
its own account and not as a nominee for any other party and not with a view
toward the resale or distribution thereof except in compliance with applicable
securities laws.

 

 

 

 

 

 

(Signature)

 

 

 

 

(Date)

 

 

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