Exhibit 10.28

Execution Version

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT AND GUARANTY

 

This AMENDMENT NO. 2 TO CREDIT AGREEMENT AND GUARANTY, dated as of March 22,
2019 (this “Amendment”), is made by and among VAPOTHERM, INC., a Delaware
corporation (the “Borrower”), certain Subsidiaries of the Borrower that are
signatories hereto, the Lenders signatories hereto and PERCEPTIVE CREDIT
HOLDINGS II, LP, as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”). Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided in the Credit Agreement (defined below).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, certain Subsidiary Guarantors, the Administrative Agent
and the Lenders have entered into that certain Credit Agreement and Guaranty,
dated as of April 6, 2018 (as amended by the Amendment No.1 to Credit Agreement
and Guaranty dated September 27, 2018 and as subsequently amended or otherwise
modified, the “Credit Agreement”);

 

WHEREAS, pursuant to Section 2.01(c) of the Credit Agreement and subject to the
satisfaction of the conditions precedent set forth in Section 6.03 of the Credit
Agreement, the Lenders have agreed to make a Second Delayed Draw Loan to the
Borrower on the date hereof  in a principal amount equal to $10,500,000 (the
“Second Delayed Draw Loan”);

 

WHEREAS, the Borrower has requested, among other things, that the amount of
Indebtedness permitted under Section 9.01(m) of the Credit Agreement be
increased to $500,000;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT

 

SECTION 1.1. Amendment to Section 9.01(m). Effective on the Second Amendment
Effective Date (as defined below), Section 9.01(m) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

 

“(m)Indebtedness in connection with the Borrower’s credit card program incurred
in the ordinary course of business and in an aggregate amount not to exceed
$500,000 at any time outstanding;”

 

 

 

 

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ARTICLE II

CONDITIONS PRECEDENT

 

This Amendment shall become effective upon, and shall be subject to, the prior
or simultaneous satisfaction of each of the following conditions in a manner
reasonably satisfactory to the Lenders and the Administrative Agent (the date
when all such conditions are so satisfied being the “Second Amendment Effective
Date”):

 

SECTION 2.1. Second Delayed Draw Loan. The Borrowing of the Second Delayed  Draw
Loan shall have occurred.

 

SECTION 2.2. Amended, Restated and Consolidated Warrant. The Lenders and the
Administrative Agent shall have received an executed copy of the Amended,
Restated and Consolidated Warrant, substantially in the form attached hereto as
Exhibit A.

 

SECTION 2.3. Counterparts. The Lenders and the Administrative Agent shall have
received counterparts of this Amendment executed on behalf of the Borrower.

 

SECTION 2.4. Effective Date Certificate. The Lenders and the Administrative
Agent shall have received a certificate, dated as of the date hereof and duly
executed and delivered by a Responsible Officer of the Borrower certifying as to
the matters set forth in Articles III and IV hereof, in form and substance
reasonably satisfactory to the Administrative Agent.

 

SECTION 2.5. Costs and Expenses, etc.  The Lenders and the Administrative
Agent  shall have received all fees, costs and expenses due and payable pursuant
to Section 14.03 of the Credit Agreement (including without limitation the
reasonable and documented fees and expenses of Morrison & Foerster LLP, counsel
to the Lenders and the Administrative Agent), if then invoiced, together with
any other fees separately agreed to by the Borrower and the Administrative
Agent.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders and the Administrative Agent to enter into this Amendment,
the Borrower represents and warrants to the Lenders and the Administrative Agent
as set forth below.

 

SECTION 3.1. Representations and Warranties, etc. Immediately prior to, and
immediately after giving effect to, this Amendment, the following statements
shall be true and correct:

 

(a)the representations and warranties set forth in each Loan Document (as
defined in the Credit Agreement) shall, in each case, be true and correct in all
material respects with the same effect as if then made (or in the case of any
representation and warranty subject to a materiality qualifier, true and correct
in all respects), unless stated to relate solely to an earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date;

 

(b)the Borrower has full power, authority and legal right to enter into this
Amendment and perform its obligations under this Amendment and each Loan
Document as amended hereby or thereby;

 

(c)the transactions contemplated by this Amendment are within the Borrower’s
corporate powers and have been duly authorized by all necessary corporate and,
if required, by all necessary shareholder action. This Amendment has been duly
executed and delivered by the Borrower;

 

 

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(d)none of the transactions contemplated by this Amendment (i) requires any
Governmental Approval of, registration or filing with, or any other action by,
any Governmental Authority or any other Person, except for such as have been
obtained or made and are in full force and effect, (ii) will violate (1) any
applicable Law, the violation of which could reasonably be expected to result in
a Material Adverse Effect, (2) any Organic Document of any Obligor or any of its
Subsidiaries or (3) any order of any Governmental Authority the violation of
which could reasonably be expected to result in a Material Adverse Effect, (iii)
will violate or result in a default under any Contract binding upon any Obligor
or any of its Subsidiaries that, individually or in the aggregate, could
reasonably be expected (x) to result in a Material Adverse Effect or (y) solely
in respect of any Material Agreement, to give rise to any rights thereunder to
require any payments to be made by any such Person, any Obligor or any of their
respective Subsidiaries and (iv) will result in the creation or imposition of
any Lien (other than Permitted Liens) on any asset of any Obligor or any of its
Subsidiaries; and

 

(e)no Default or Event of Default shall have then occurred and be continuing.

 

ARTICLE IV

CONFIRMATION

 

SECTION 4.1. Guarantees, Security Interest, Continued Effectiveness. The
Borrower hereby consents to the modifications made to the Loan Documents
pursuant to this Amendment and hereby agrees that, after giving effect to this
Amendment, each Loan Document to which it is a party is and shall continue to be
in full force and effect and the same are hereby ratified in all respects,
except that upon the occurrence of the effectiveness of this Amendment, all
references in such Loan Documents to the “Credit Agreement”, “Loan Documents”,
“thereunder”, “thereof”, or words of similar import shall mean the Credit
Agreement and the other Loan Documents, as amended or otherwise modified by this
Amendment.

 

SECTION 4.2. Validity, etc.  The Borrower hereby represents and warrants, as of
the  date hereof, that immediately after giving effect to this Amendment, each
Loan Document, in each case as modified by this Amendment (where applicable and
whether directly or indirectly), to which it is a party continues to be a legal,
valid and binding obligation of such Obligor, enforceable against such Person in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in
a proceeding in equity or at law).

 

ARTICLE V

MISCELLANEOUS

 

SECTION 5.1. No Waiver. Except as expressly provided herein, (i) nothing
contained herein shall be deemed to constitute a waiver of any other existing or
future Default or Event of Default or compliance with any term or condition
contained in the Credit Agreement or any of the other Loan Documents or
constitute a course of conduct or dealing among the parties and (ii) the Lenders
and the Administrative Agent reserve all rights, privileges and remedies under
the Credit Agreement and the other Loan Documents.

SECTION 5.2. Cross-References. References in this Amendment to any Article or
Section are, unless otherwise specified, to such Article or Section of this
Amendment.

 

SECTION 5.3. Loan Document Pursuant to Credit Agreement. This Amendment is a
Loan Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated therein) be construed, administered and applied in
accordance with all of the terms and provisions of the Credit Agreement, as
amended hereby.

 

SECTION 5.4. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

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SECTION 5.5. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed signature page of this Amendment
by facsimile transmission or electronic transmission (in PDF format) shall be
effective as delivery of a manually executed counterpart hereof.

 

SECTION 5.6. Governing Law. THIS AMENDMENT SHALL  BE  GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS
OF ANY OTHER JURISDICTION; PROVIDED THAT SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW SHALL APPLY.

 

SECTION 5.7. Full Force and Effect; Limited Amendment. Except as
expressly  amended hereby, the Borrower agrees that all of the representations,
warranties, terms, covenants, conditions and other provisions of the Credit
Agreement and the other Loan Documents shall remain unchanged and shall continue
to be, and shall remain, in full force and effect in accordance with their
respective terms. The amendments and other waivers and modifications set forth
in this Amendment shall be limited precisely as provided for herein to the
provisions expressly amended herein or otherwise modified or waived hereby and
shall not be deemed to be an amendment to, waiver of, consent to or modification
of any other term or provision of the Credit Agreement or any other Loan
Document or of any transaction or further or future action on the part of any
Credit Party which would require the consent of the Lenders under the Credit
Agreement or any of the Loan Documents.

 

[Signature pages to follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first above written.

 

 

BORROWER:

VAPOTHERM, INC.

By

/s/ John Landry

 

Name:

John Landry

 

Title:

Chief Financial Officer

 

 

 

 

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ADMINISTRATIVE AGENT:

PERCEPTIVE CREDIT HOLDINGS II, LP

By Perceptive Credit Opportunities GP, LLC, its

General Partner

 

By

/s/ Sandeep Dixit

 

Name:

Sandeep Dixit

 

Title:

 

 

By

/s/ Sam Chawla

 

Name:

Sam Chawla

 

Title:

Portfolio Manager

 

 

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LENDER:

PERCEPTIVE CREDIT HOLDINGS II, LP

By: Perceptive Credit Opportunities GP, LLC, its

General Partner

 

By

/s/ Sandeep Dixit

 

Name:

Sandeep Dixit

 

Title:

 

 

By

/s/ Sam Chawla

 

Name:

Sam Chawla

 

Title:

Portfolio Manager

 

 

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EXHIBIT A

 

Amended, Restated and Consolidated Warrant

 

See Attached

 

 

 

 

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Execution Version

 

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
THE SUBJECT OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE, AND THE SAME HAVE BEEN (OR
WILL BE, WITH RESPECT TO THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) ISSUED IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND
APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER SUCH SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM.

 

 

AMENDED, RESTATED AND CONSOLIDATED

WARRANT TO PURCHASE SHARES OF

COMMON STOCK OF VAPOTHERM, INC.

WHEREAS, this Warrant (defined below) is dated and issued as of March 22, 2019;

 

WHEREAS, reference is made to that certain Credit Agreement and Guaranty, dated
as of April 6, 2018 (as subsequently amended or otherwise modified, the “Credit
Agreement”), among Vapotherm, Inc., a Delaware corporation (the “Company”),
various guarantors and lenders party thereto from time to time, and Perceptive
Credit Holdings II, LP acting as the administrative agent for the lenders party
to the Credit Agreement. Capitalized terms used and not otherwise defined herein
shall have the meanings given them in the Credit Agreement;

 

WHEREAS, pursuant to the Credit Agreement and the making of various Loans
thereunder, the Company issued the following warrants to Perceptive Credit
Holdings II, LP (in such capacity, and together with its successors, transferees
and assigns, the “Holder”):

 

(a)A Warrant issued on April 6, 2018 (the “First Warrant”) exercisable for
527,705 shares of the Company’s Series D Preferred Stock at an exercise price of
$1.137 per share;

 

(b)A Warrant issued on July 19, 2018 (the “Second Warrant”) exercisable for
263,853 shares of the Company’s Series D Preferred Stock at an exercise price of
$1.137 per share; and

 

(c)A Warrant issued on September 27, 2018 (the “Third Warrant” and, together
with the First Warrant and the Second Warrant, the “Original Warrants”)
exercisable for 52,771 shares of the Company’s Series D Preferred Stock at an
exercise price of $1.137 per share;

 

WHEREAS, on November 9, 2018, the Company consummated an initial public offering
(the “IPO”) of its common stock, $0.001 par value (the “Common Stock”);

WHEREAS, pursuant to Section 2.01(c) of the Credit Agreement, the Company has
requested that the lenders under the Credit Agreement make a Second Delayed Draw
Loan (as defined in the Credit Agreement) in the aggregate amount of $10,500,000
on the date hereof and has agreed to issue a Second Delayed Draw Warrant (as
defined in the Credit Agreement, the “Fourth Warrant”) to the Holder in relation
thereto; and

 

WHEREAS, in connection with the IPO and the issuance of the Fourth Warrant, the
Company and the Holder wish to amend and restate the Original Warrants and
consolidate the Original Warrants and the Fourth Warrant.

 

 

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NOW, THEREFORE, for good and sufficient consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

1.Amendment, Restatement and Consolidation. Each of the Original Warrants is
hereby amended and restated in its entirety as set forth herein, and the
Original Warrants are hereby collectively combined and consolidated to read in
their entirety as this singular warrant (as so amended, restated, combined and
consolidated, this “Warrant”).

 

2.Issuance. This Warrant is issued to the Holder as of March 22, 2019.

 

3.Certain Defined Terms. As used herein, the following terms shall have the
following respective meanings:

 

(a)“Arbiter” is defined in Section 5.5.

 

(b)“Common Stock” is defined in the recitals above.

 

(c)“Company” is defined in the recitals above.

 

(d)“Credit Agreement” is defined in the recitals above.

 

(e)“Exercise Price” is defined in Section 4.1.

 

(f)“Fair Market Value” is defined in Section 5.2.

 

(g)“First Warrant” is defined in the recitals above.

 

(h)“Fourth Warrant” is defined in the recitals above.

 

(i)“Holder” is defined in the recitals above.

 

(j)“IPO” is defined in the recitals above.

 

(k)“Original Warrants” is defined in the recitals above.

 

(l)“Registration Rights Agreement” means that certain Tenth Amended and Restated
Registration Rights Agreement, dated as of September 27, 2018, by and among the
Company and various of its shareholders, as in effect on the date hereof.

 

(m)“SEC” is defined in Section 8.2.

 

(n)“Second Warrant” is defined in the recitals above.

 

(o)“Termination Date” means March [__], 2029.

 

(p)“Third Warrant” is defined in the recitals above.

 

(q)“Warrant Register” is defined in Section 9.1.

 

(r)“Warrant Shares” means the shares of the Company’s Common Stock for which
this Warrant is exercised or exercisable, as applicable.

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4.Exercise Price; Number of shares.

 

4.1Subject to the terms and conditions hereinafter set forth, on or after the
date hereof, the Holder is entitled to purchase from the Company, at a price per
share of $15.92 (the “Exercise Price”), 80,097 shares of the Company’s Common
Stock, in each case subject to adjustment as set forth herein.

 

4.2Until such time as this Warrant is exercised in full or expires the
securities issuable upon exercise of this Warrant are subject to adjustment as
hereinafter provided.

 

5.Exercise of Warrant.

 

5.1The purchase rights represented by this Warrant are exercisable by the Holder
in whole or in part at any time prior to the Termination Date, by the surrender
of this Warrant and delivery to the Company of a Notice of Exercise in
substantially the form annexed as Exhibit A, duly completed and executed on
behalf of the Holder, and upon payment of the Exercise Price for the Warrant
Shares to be purchased either (a) in cash, by check or by wire transfer, or (b)
by cancellation by the Holder of indebtedness of the Company owed to the Holder,
or (c) by a combination of the methods described in clauses (a) and (b) above,
or (d) pursuant to the cashless exercise method described in Section 5.2 below.

 

5.2Cashless Exercise Election. The Holder may elect to receive Warrant Shares
equal to the value of this Warrant by surrender of this Warrant to the Company,
in which event the Company shall issue to the Holder that number of Warrant
Shares determined by use of the following formula:

 

X = Y(A-B)

A

 

where:         X =

 

the number of Warrant Shares to be issued;

 

 

 

                    Y =

 

the number of  Warrant  Shares  purchasable  under  the Warrant or, if only a
portion of the Warrant is being exercised, the portion of the Warrant being
exercised;

 

 

 

                    A =

 

the Fair Market Value of one Warrant Share for which this Warrant is being
exercised (as applicable); and

 

 

 

                    B =

 

the Exercise Price.

 

 

 

 

As of any date of determination, if the Warrant Shares are listed on an
established national or regional stock exchange, are admitted to quotation on
the National Association of Securities Dealers Automated Quotation System, or
are publicly traded on an established securities market, then notwithstanding
anything else contained in the Warrant, the “Fair Market Value” of one Warrant
Share shall be the closing price of one Warrant Share on such exchange or in
such market (the highest such closing price if there is more than one such
exchange or market) on the trading day immediately preceding the date on which
such determination is being made (or, if there is no such reported closing
price, the “Fair Market Value” shall be the mean between the highest bid and
lowest asked prices or between the high and low sale prices on such trading
day), or, if no sale of any Warrant Shares of is reported for such trading day,
on the next preceding day on which any sale shall have been reported. If the
Warrant Shares are not listed on such an exchange, quoted on such system or
traded on such a market on the date of exercise, the “Fair Market Value” of the
Warrant Shares shall be determined in good faith by mutual agreement of the
Holder and the Company, subject to Section 5.5 below.

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5.3Issuance Date; Partial Exercise; Conditional Exercise.

 

(a)Any term or provision hereof to the contrary notwithstanding, this Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
Person entitled to receive the shares issuable upon such exercise shall be
treated for all purposes as the holder of record of such Warrant Shares as of
the close of business on such date. As promptly as practicable on or after such
date and in any event within three (3) days thereafter, the Company shall
deliver to the Holder a certificate or certificates for the number of Warrant
Shares issuable upon such exercise. In the event that this Warrant is exercised
in part, the Company shall execute and deliver a new Warrant of like tenor
exercisable for the number of Warrant Shares for which this Warrant may then be
exercised.

 

(b)Conditional Exercise. Notwithstanding any other provision hereof, if an
exercise of all or any portion of this Warrant is to be made in connection with
a sale of the Company (pursuant to a merger, sale of stock, or otherwise) or any
other transaction involving the Company of the type described in Section 12.1,
such exercise may, at the election of the Holder, be conditioned upon the
consummation of such transaction, in which case such exercise shall not be
deemed to be effective until immediately prior to the consummation of such
transaction, and if such transaction does not occur on the scheduled date
therefor the Holder  may, in its sole discretion, elect to rescind its election
to exercise this Warrant.

 

5.4Company Covenant. The Company covenants that all securities which may be
issued upon exercise of this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable and free of all Taxes, liens and
charges caused or created by the Company with respect to the issuance thereof
and sufficient shares of Common Stock of the Company shall be reserved for
issuance upon conversion of the Warrant Shares.

 

5.5Dispute Resolution. In the case of any dispute as to the determination of any
valuation of Warrant Stock, the calculation of the Exercise Price, the
determination of Fair Market Value or any other computation or valuation
required to be made hereunder or in connection herewith, in the event the
Holder, on the one hand, and the Company, on the other hand, are unable to
settle such dispute within five (5) Business Days, then either party may elect
to submit the disputed matter(s) for resolution by a reputable investment bank
or another firm as may be mutually agreed upon by the Holder and the Company
(the “Arbiter”). The Arbiter’s determination of such disputed matter(s) shall be
binding upon all parties absent demonstrable error, and the Company and the
Holder shall each pay one half of the fees and costs of such firm.

 

5.6Expiration. Subject to the proviso below, this Warrant shall automatically
expire and be of no further force and effect without any action by the Holder
immediately prior to 5:00 p.m. New York City time on the Termination Date;
provided that if the Fair Market Value of one share of Warrant Stock is greater
than the Exercise Price (on any automatic expiration or termination hereunder)
then this Warrant will be deemed exercised as of such date (and prior to the
event giving rise to such expiration) or, if such day is not a Business Day, on
the immediately preceding Business Day, as the case may be, pursuant to Section
5.2 above.

 

5.7Limitations on Exercise. The Company shall not effect the exercise of this
Warrant, and no holder of this Warrant (including the initial Holder) shall have
the right to exercise this Warrant, to the extent that after giving effect to
such exercise, such Person (together with such Person’s Affiliates) would
beneficially own in excess of 9.99% (the “Maximum Percentage”) of the Common
Stock outstanding immediately after giving effect to such  exercise. For
purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by such Person and its Affiliates shall include the
number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which the determination of such sentence is being made, but shall
exclude shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised portion

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of this Warrant beneficially owned by such Person and its Affiliates and (ii)
exercise or conversion of the unexercised or unconverted portion of any other
securities of the Company beneficially owned by such Person and its Affiliates
(including, without limitation, any convertible notes or convertible shares or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock, a holder of this Warrant may rely on the
number of outstanding shares of Common Stock as reflected in the most recent of
(1) the Company’s most recent Form 10-K, Form 10-Q or other public filing with
the SEC, as the case may be, (2) a more recent public announcement by the
Company or (3) any other notice by the Company or its transfer agent setting
forth the number of shares of Common Stock outstanding. For any reason at any
time, upon the written or oral request of the Holder, the Company shall within
two (2) Business Days confirm to the Holder the number of shares of Common Stock
then outstanding.

6.No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.

 

7.Lost, Stolen, Destroyed or Mutilated Notes. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, the Company shall issue a new Warrant of like tenor
and amount.

 

8.Certain Rights, etc.

 

8.1Rights of Holder. The Holder shall not be entitled to vote or receive
dividends or be deemed the holder of any Warrant Shares that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the Holder, 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 give or
withhold consent to any corporate action or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until the Warrant shall
have been exercised and the securities purchasable upon the exercise hereof
shall have been issued, as provided herein.

 

8.2Rule 144 Compliance. At all times following a Public Offering by the Company,
for the purpose of making available to the Holder the benefits of Rule 144 and
any other rule or regulation of the Securities and Exchange Commission (the
“SEC”) that may at any time permit a holder to sell securities of the Company to
the public without registration or pursuant to a registration statement, the
Company shall (a) use reasonable commercial efforts to make and keep adequate
public information available, as required by clause (c) of Rule 144; (b) use
reasonable commercial efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and (c) furnish, or otherwise make available to the Holder so
long as the Holder owns shares of Warrant Stock, promptly upon request, a
written statement by the Company as to its compliance with the reporting
requirements of Rule 144 and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed or furnished by the Company as the Holder may reasonably request in
connection with the sale of common stock of the Company without registration.

 

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9.Transfer of Warrant.

 

9.1Warrant Register. The Company will maintain a register (the “Warrant
Register”) containing the name and address of the Holder. The Holder may change
its address as shown on the Warrant Register by providing notice to the Company
requesting such change. Until this Warrant is transferred on the Warrant
Register, the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding any notice
to the contrary.

 

9.2Transferability and Nonnegotiability of Warrant. Subject to the provisions of
this Section 9.2 and upon providing the Company with written notice, the Holder
of this Warrant may transfer all or part of this Warrant or the Warrant Shares
issuable upon exercise of this Warrant (or the Shares issuable directly or
indirectly, upon conversion of the Warrant Shares, if any) to any assignee or
transferee; provided that, in connection with any such transfer, the Holder will
give the Company notice of the portion of the Warrant being transferred with the
name, address and taxpayer identification number of the transferee and the
Holder will surrender this Warrant to the Company for reissuance to the
transferee(s) (and the Holder if applicable). Promptly, but in any event upon
five (5) Business Days following receipt by the Company of such notice, the
Company shall modify and adjust the Warrant Register, as necessary and
appropriate, to reflect such transfer or assignment. The Warrant and the Warrant
Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of Warrant 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 transferee (including,
without limitation, the delivery of investment representation letters and legal
opinions reasonably satisfactory to the Company, as reasonably requested by the
Company).

 

10.Notices.

 

10.1Notices of Adjustment. Whenever the number of Warrant Shares purchasable
hereunder shall be adjusted pursuant to Section 12 hereof, the Company shall
ensure that the Holder is provided notice in the form of a certificate 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
number of Warrant Shares purchasable hereunder after giving effect to such
adjustment.

 

10.2Notices of Record Date. In case:

 

(a)The Company shall take a record of the holders of the equity securities at
the time receivable upon the exercise of this Warrant for the purpose of
entitling them to receive any dividend or other distribution, or any right to
subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

(b)The Company shall propose at any time to merge with or into any other entity,
to sell, lease or convey all or substantially all its property or business, to
liquidate, dissolve or wind up, or to file a registration statement relating to
an initial public offering, then, and in each such case, the Company shall
provide to the Holder at least fifteen (15) days’ prior written notice of the
date on which a record shall be taken for determining rights to vote in respect
of such event or the date on which the Company expects to file a registration
statement.

10.3Manner of Notices. All notices, demands, requests or other communications
that may be or are required to be given, served or sent by any party pursuant to
this Warrant shall be in writing, shall reference this Warrant and shall be
mailed by first class, registered or certified mail, return receipt requested,
postage prepaid, or transmitted by hand delivery, overnight courier or facsimile
transmission, addressed as follows: (a) if to the Company, at Vapotherm, Inc.,
22 Industrial Drive, Suite 1, Exeter, NH 03833, Attention: President; and (b) if
to the Holder, at the address set forth on the Warrant Register; or, in any such
case, at such other address or

6

 

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addresses as shall have been furnished in writing by such party to the others.
Each notice or other communication that is mailed, delivered or transmitted  in
the manner described above shall be deemed sufficiently given, served, sent and
received for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, the fax confirmation sheet or the
affidavit of messenger being deemed conclusive evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.

 

11.Amendments. This Warrant may not be amended or otherwise modified, and the
observance of any term hereof may not be waived, without the written consent of
the parties hereto. No waivers of or exceptions to any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.

 

12.Adjustments. The number of Warrant Shares purchasable hereunder are subject
to adjustment from time to time as follows:

 

12.1Merger, Sale of Assets, Etc. If at any time while this Warrant, or any
portion hereof, is outstanding and unexpired there shall be (a) a reorganization
(other than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), a merger or consolidation of the Company with or
into another entity in which the Company is not the surviving entity, or a
reverse triangular merger in which the Company is the surviving entity but the
capital stock of the Company outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (b) a sale or transfer of the Company’s
properties and assets as, or substantially as, an entirety to any other Person,
and if, as a part of such reorganization, merger, consolidation, sale or
transfer, provisions are made so that the holders of securities are thereafter
entitled to receive cash or shares of stock or other securities or property of
the successor entity resulting from such reorganization, merger, consolidation,
sale or transfer, the Company shall then ensure that the Holder also shall be
entitled to cash or shares of stock or other securities or property of the
successor entity resulting from such reorganization, consolidation, merger, sale
or transfer as if this Warrant had been exercised in full immediately before
such reorganization, merger, consolidation, sale or transfer, all subject to
further adjustment as provided in this Section 12. The Company represents and
covenants that the foregoing provisions of this Section 12 shall similarly apply
to successive reorganizations, consolidations, mergers, sales and transfers and
to the stock or securities of any other entity which are at the time receivable
upon the exercise of this Warrant. If the per share consideration payable to the
Holder for shares in connection with any such transaction is in a form other
than cash or freely marketable securities, then the value of such consideration
shall be determined in good faith by mutual agreement of the Holder and the
Company, subject to Section 5.5. In all events, appropriate adjustment shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of the Holder after the transaction, to the end that the
provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.

 

12.2Reclassification, Etc. If the Company, at any time while this Warrant, or
any portion thereof, remains outstanding and unexpired, by reclassification of
securities or otherwise, intends to change any of the Warrant Shares as to which
purchase rights under this Warrant exist into the same or a different number of
securities of any other class or classes, the Company represents and covenants
that this Warrant shall thereafter represent the right to acquire such number
and kind of securities as would have been issuable as the result of such change
with respect to the securities which were subject to the purchase rights under
this Warrant immediately prior to such reclassification or other change and the
Warrant Share Amount shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 12.

 

7

 

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12.3Split, Subdivision or Combination of Shares. If while this Warrant, or any
portion thereof, remains outstanding and unexpired the Company shall split,
subdivide or combine the securities as to which purchase rights under this
Warrant exist, into a different number of securities of the same class, the
Company represents and covenants that the number of Warrant Shares issuable upon
exercise of this Warrant shall be proportionately increased or decreased, as the
case may be.

 

12.4Adjustments for Dividends in Stock or Other Securities or Property. If while
this Warrant, or any portion hereof, remains outstanding and unexpired, holders
of Warrant Shares, or any security into which Warrant Shares are convertible,
shall have received, or, on or after the record date fixed for the determination
of eligible security holders, shall have become entitled to receive, without
payment therefor, other or additional securities or property (other than cash)
of the Company by way of dividend, then and in each case, this Warrant shall
represent the right to acquire, in addition to the number of Warrant Shares
receivable upon exercise of this Warrant, and without payment of any additional
consideration therefor, the amount of such other or additional securities or
property (other than cash) of the Company which the Holder of this Warrant would
hold on the date of such exercise had it been the holder of record of the
security receivable upon exercise of this Warrant on the date thereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional securities
available by it as aforesaid during such period, giving effect to all
adjustments called for during such period by the provisions of this Section 11.

 

12.5Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section 12, the Company shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and furnish
to the Holder the certificate described in Section 10.1 above. The Company
shall, upon the written request, at any time, furnish or cause to be furnished
to the Holder a like certificate setting forth such adjustments and
readjustments and the number of shares and the amount, if any, of other property
which at the time would be received upon the exercise of the Warrant.

 

12.6No Impairment. The Company shall not, by any voluntary action, avoid or seek
to avoid the observance or performance of any of the terms to be observed or
performed hereunder, but shall at all times in good faith assist in the carrying
out of all the provisions of this Section 12 and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holder against impairment. Without limiting the foregoing, if any event of the
type contemplated by the provisions of this Section 12 but not expressly
provided for by such provisions occurs (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights with
equity features), then the Company shall make an appropriate adjustment in the
amount of Warrant Stock issuable upon exercise of this Warrant and/or the
Exercise Price so as to protect the rights of the Holder in a manner consistent
with the provisions of this Section 12.

 

13.Certain Agreements; Registration Rights, etc.

 

(a)

After exercise of this Warrant in whole or in part, the Holder shall, if the
Company so requests in writing, become a party to, by execution and delivery to
the Company of a counterpart signature page, joinder agreement, instrument of
accession or similar instrument, the Registration Rights Agreement, as an
investor stockholder party thereto, solely to the extent each such agreement is
then by its terms in force and effect and has not been amended or otherwise
modified in a manner adverse to the interests of the Holder as provided in such
agreements as of the date hereof (except to the extent the Holder has given its
prior written consent to such any such amendment or modification).

 

8

 

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(b)

All common stock issuable upon conversion of Warrant Shares shall have the same
"piggyback" registration rights as are set forth in the Registration Rights
Agreement, and by accepting this Warrant, the Holder agrees to be subject to
corresponding obligations and restrictions of the holders of "piggyback"
registration rights, including the market standoff obligations (of up to 180
days) contained in the Registration Rights Agreement, in each case whether or
not the Holder becomes a party to such agreement pursuant to clause (a) above.

 

14.Severability. If any provision of this Warrant shall be declared void or
unenforceable by any judicial or administrative authority, the validity of any
other provision and of the entire Warrant shall not be affected thereby.

 

15.Legends. This Warrant and the Warrant Shares (and the securities issuable,
directly or indirectly, upon conversion of 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, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.

 

16.Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICT OF LAWS
PROVISIONS. Any claim, cause of action, suit or demand allegedly arising out of
or related to this Warrant, or the relationship of the parties, shall be brought
exclusively in the state courts of New York located in the Borough of Manhattan
or the federal courts of the United States located in the Southern District of
New York, and the parties irrevocably consent to the exclusive jurisdiction and
venue of such courts and waive any objections they may have at any time to such
exclusive jurisdiction and venue.

 

17.Counterparts; Facsimile. This Warrant may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall be as effective as original signatures.

 

[Signature Page Follows]

 

 

 

9

 

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IN WITNESS WHEREOF, the Company and the Holder have caused this Warrant to be
executed.

 

 

 

 

Dated:

 

March 22, 2019

VAPOTHERM, INC.

 

 

 

By:

 

/s/John Landry

 

 

 

Name:

 

John Landry

Title:

 

Chief Financial Officer

 

 

 

HOLDER

 

PERCEPTIVE CREDIT HOLDINGS II, LP

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company and the Holder have caused this Warrant to be
executed.

 

 

 

 

Dated:

 

March 22, 2019

VAPOTHERM, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

HOLDER

 

PERCEPTIVE CREDIT HOLDINGS II, LP

 

 

By:

 

/s/Sandeep Dixit

Name:

 

Sandeep Dixit

Title:

 

 

 

 

By:

 

/s/Sam Chawla

Name:

 

Sam Chawla

Title:

 

Portfolio Manager

 

 

 

 

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EXHIBIT A

NOTICE OF EXERCISE

 

To: Vapotherm, Inc. (the “Company”)

 

(1)Reference is made to the Warrant issued by the Company to the undersigned on
March , 2019, a copy of which is attached hereto.

 

(2)The undersigned hereby elects to purchase [ ] shares of Common Stock of the
Company, pursuant to the terms of the attached Warrant, and tenders herewith
payment of the purchase price for such shares in full.

 

(3)[The undersigned hereby elects to pay the Exercise Price in cash/cancellation
of indebtedness pursuant to Section 5.1 of the Warrant.] OR [The undersigned
hereby elects to receive shares equal to the value of the Warrant as calculated
by the formula set forth in Section 5.2 of the Warrant.]

 

(4)In exercising the Warrant, the undersigned hereby confirms and acknowledges
that the securities are being acquired solely for the account of the undersigned
and not as a nominee for any other party, and for investment, and that the
undersigned shall not offer, sell, or otherwise dispose of any such securities
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws, and at the time of such
exercise the undersigned shall make all such representations and enter into such
other agreements as Vapotherm, Inc. shall deem reasonably necessary to be in
compliance with federal and applicable state securities laws.

 

(5)Please issue a certificate or certificates representing said securities in
the name of the undersigned or in such other name as is specified below:

 

 

 

 

 

 

 

 

Name

 

 

(6)Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:

 

 

 

 

 

 

Date

 

Name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature