Document:

EXHIBIT 4.5

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

WARRANT TO PURCHASE STOCK

 

Company:  INSPIRE MEDICAL SYSTEMS, INC.

Number of Shares:  38,168

Type/Series of Stock:  Series E Preferred

Warrant Price:  $2.62 per share

Issue Date:     June 27, 2014

Expiration Date:  June 27, 2021               See also Section 5.1(b).

Credit Facility:  This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Amended and Restated Loan and Security Agreement of even date herewith among Oxford Finance LLC (“Oxford”), as Lender and Collateral Agent, the Lenders from time to time party thereto, including Silicon Valley Bank and the Company (as modified, amended and/or restated from time to time, the “Loan Agreement”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and non-assessable shares (the “Shares”) of the above-stated Type/Series of Stock (the “Class”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.  Reference is made to Section 5.4 of this Warrant whereby Silicon Valley Bank shall transfer this Warrant to its parent company, SVB Financial Group.

 

SECTION 1. EXERCISE.

 

1.1                               Method of Exercise.  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

1.2                               Cashless Exercise.  On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

 

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 (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

 

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

 

B =                             the Warrant Price.

 

1.3                               Fair Market Value.  If the Company’s common stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”) and the Class is common stock, the fair market value of a Share shall be the closing price or last sale price of a share of common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If the Company’s common stock is then traded in a Trading Market and the Class is a series of the Company’s convertible preferred stock, the fair market value of a Share shall be the closing price or last sale price of a share of the Company’s common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company multiplied by the number of shares of the Company’s common stock into which a Share is then convertible.  If the Company’s common stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

 

1.4                               Delivery of Certificate and New Warrant.  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

 

1.5                               Replacement of Warrant.  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, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

 

1.6                               Treatment of Warrant Upon Acquisition of Company.

 

(a)                                 Acquisition.  For the purpose of this Warrant, “Acquisition” means any transaction or series of related transactions involving: (i) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization; or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.

 

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(b)                                 Treatment of Warrant at Acquisition.  In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either  (i) Holder shall exercise this Warrant pursuant to Section 1.1 and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately prior to the consummation of such Acquisition.

 

(c)                                  The Company shall provide Holder with written notice of its request relating to the Cash/Public Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be delivered to Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition.  In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon such exercise to the Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof.

 

(d)                                 Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

 

(e)                                  As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) Holder would be able to publicly re-sell, within six (6) months following the closing of such Acquisition, all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition.

 

SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.

 

2.1                               Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in common stock or other securities or property (other than cash), 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 and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a

 

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greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2                               Reclassification, Exchange, Combinations or Substitution.  Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events.

 

2.3                               Conversion of Preferred Stock.  If the Class is a class and series of the Company’s convertible preferred stock, in the event that all outstanding shares of the Class are converted, automatically or by action of the holders thereof, into common stock pursuant to the provisions of the Company’s Certificate of Incorporation, including, without limitation, in connection with the Company’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration statement under the Act (the “IPO”), then from and after the date on which all outstanding shares of the Class have been so converted, this Warrant shall be exercisable for such number of shares of common stock into which the Shares would have been converted had the Shares been outstanding on the date of such conversion, and the Warrant Price shall equal the Warrant Price in effect as of immediately prior to such conversion divided by the number of shares of common stock into which one Share would have been converted, all subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.

 

2.4                               Adjustments for Diluting Issuances.  Without duplication of any adjustment otherwise provided for in this Section 2, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s Articles or Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment.

 

2.5                               No Fractional Share.  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

 

2.6                               Notice/Certificate as to Adjustments.  Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.

 

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SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

3.1                               Representations and Warranties.  The Company represents and warrants to, and agrees with, the Holder as follows:

 

(a)                                 The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the Class were last sold and issued prior to the Issue Date hereof in an arms-length transaction in which at least $500,000 of such shares were sold.

 

(b)                                 All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise in full of this Warrant and the conversion of the Shares into common stock or such other securities.

 

(c)                                  The Company’s capitalization table attached hereto as Schedule 1 is true and complete, in all material respects, as of the Issue Date.

 

3.2                               Notice of Certain Events.  If the Company proposes at any time to:

 

(a)                           declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)                           offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

 

(c)                            effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class;

 

(d)                           effect an Acquisition or liquidate, dissolve or wind up; or

 

(e)                            effect an IPO;

 

then, in connection with each such event, the Company shall give Holder:

 

(1) at least seven (7) Business 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 of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above;

 

(2) in the case of the matters referred to in (c) and (d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event); and

 

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(3) with respect to the IPO, at least seven (7) Business Days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith.

 

Reference is made to Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof.  Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.

 

SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.

 

The Holder represents and warrants to the Company as follows:

 

4.1                               Purchase for Own Account.  This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

 

4.2                                     Disclosure of Information.  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

4.3                                     Investment Experience.  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4                                     Accredited Investor Status.  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

4.5                                     The Act.  Holder understands that this Warrant and the Shares issuable upon exercise hereof have 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.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

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4.6                                       Market Stand-off Agreement.  The Holder agrees that the Shares shall be subject to the Market Standoff provisions in Section 1.3(c) of the Amended and Restated Investor Rights Agreement of the Company or the corresponding provision of any similar or successor agreement.

 

4.7                                       No Voting Rights.  Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant.

 

SECTION 5. MISCELLANEOUS.

 

5.1                               Term and Automatic Conversion Upon Expiration.

 

(a)                                 Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.

 

(b)                                 Automatic Cashless Exercise 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 Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder.

 

5.2                               Legends.                                                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:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SILICON VALLEY BANK DATED JUNE   , 2014, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

5.3                               Compliance with Securities Laws on Transfer.  This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in 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 SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act.  Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act.

 

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5.4 Transfer Procedure.  After receipt by Silicon Valley Bank of the executed Warrant, Silicon Valley Bank will transfer all of this Warrant to its parent company, SVB Financial Group.  By its acceptance of this Warrant, SVB Financial Group hereby makes to the Company each of the representations and warranties set forth in Section 4 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if the original Holder hereof.  Subject to the provisions of Section 5.3 and upon providing the Company with written notice, SVB Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable directly or indirectly, upon conversion of the Shares, if any) to any transferee, provided, however, in connection with any such transfer, SVB Financial Group or any subsequent 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 Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any subsequent transferee other than SVB Financial Group shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.  Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any exercise hereof, or any shares or other securities issued upon any conversion of any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by such a direct competitor.

 

5.5                               Notices.  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

SVB Financial Group

Attn:  Treasury Department

3003 Tasman Drive, HC 215

Santa Clara, CA 95054

Telephone:  (###) ###-####

Facsimile:  (###) ###-####

Email address:  #########@###.###

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

Inspire Medical Systems, Inc.

Attn:  Tim Herbert

9700 63rd Avenue North, Suite 200

Maple Grove, MN 55369

Telephone:  (###) ###-####

Facsimile:  (###) ###-####

Email:  ##########@############.###

 

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5.6                               Waiver.  This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

5.7                               Attorney’s 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.

 

5.8                               Counterparts; Facsimile/Electronic Signatures.  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 

5.9                               Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

5.10                        Headings.  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

 

5.11                        Business Days.  “Business Day” is any day that is not a Saturday, Sunday or a day on which Silicon Valley Bank is closed.

 

[Remainder of page left blank intentionally]

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

 

	
“COMPANY”
    	
 
    
	
 
    	
 
    
	
INSPIRE MEDICAL SYSTEMS, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Timothy P. Herbert
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Timothy P. Herbert
    	
 
    
	
 
    	
(Print)
    	
 
    
	
Title:
    	
President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
“HOLDER”
    	
 
    
	
 
    	
 
    
	
SILICON VALLEY BANK
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Nick Honigman
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Nick Honigman
    	
 
    
	
 
    	
(Print)
    	
 
    
	
Title:
    	
Vice President
    	
 
    

 

[Signature page to Warrant (Term B) (SVB)]

 

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.                                      The undersigned Holder hereby exercises its right purchase             shares of the Common/Series      Preferred [circle one] Stock of INSPIRE MEDICAL SYSTEMS, INC.  (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

 

[    ]                                                                            check in the amount of $         payable to order of the Company enclosed herewith

 

[    ]                                                                            Wire transfer of immediately available funds to the Company’s account

 

[    ]                                                                            Cashless Exercise pursuant to Section 1.2 of the Warrant

 

[    ]                                                                            Other [Describe]                                                                                                  

 

2.                                      Please issue a certificate or certificates representing the Shares in the name specified below:

 

	
 
    	
 
    	
 
    
	
 
    	
Holder’s   Name
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Address)
    	
 
    

 

3.   By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof.

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Date):Exhibit 4.3

 

PRANA
BIOTECHNOLOGY LIMITED ABN 37 080 699 065

2018 AMERICAN DEPOSITARY SHARE
(ADS) OPTION PLAN

 

Prana Biotechnology Limited, a corporation formed under the
laws of the Commonwealth of Australia (the "Company"), hereby establishes and adopts the following 2018 American Depository
Share (ADS) Option Plan (the "Plan"), effective November 16, 2018 (the “Effective Date”), subject to the
approval of the Plan by the majority of the shares entitled to vote at a duly constituted meeting of the shareholders of the Company.

 

1.
Purpose.

 

The purpose of the Plan is to
promote the interests of the Company, its Subsidiaries and shareholders by enabling the Company and its Subsidiaries to attract
and retain outstanding employees, officers, consultants, independent contractors and directors ("Eligible Persons") and
align the interests of Eligible Persons with those of the Company and its shareholders through the incentive inherent in the ownership
of ordinary shares of the Company ("Shares"). For purposes of the Plan, the term "Subsidiary" shall mean "subsidiary
corporation," as such term is defined in Section 424(f) of the Internal Revenue Code of 1986, as amended (the "Code").
For purposes of the Plan, the term “Award” shall mean a grant of an option to purchase American Depositary Shares (“ADSs”)
representing Shares.

 

2.
Shares Subject to Awards.

 

(a) Awards under the Plan (“Awards”) may be granted in the following forms:

 

(i) incentive stock options (“Incentive Stock Options”) as provided in Section 422 of the Code; provided, however,
that no Award of Incentive Stock Options shall be made hereunder after the date that is the tenth anniversary of the Effective
Date; and

 

(ii)
non-qualified stock options (“Non-qualified Options”) (the term “Options” includes incentive stock
options and non-qualified options).

 

(b)  
Subject to the adjustment provisions of Section 11 hereof, the aggregate number of ADSs which may be issued under options
under the Plan shall not exceed 1,000,000 (the equivalent of 60,000,000 Shares. ADSs delivered under the Plan may be authorized
and unissued ADSs or issued ADSs reacquired by the Company, or both. The ADSs that are forfeited under the terms of the Plan and
ADSs that are the subject of Options that expire unexercised or which are otherwise surrendered by the holder of such Option (the
“Optionee”) without receiving any payment or other benefit with respect thereto may again become available for new
Awards under the Plan.

 

3.
Administration of the Plan.

 

The Plan shall be administered
by a committee (the “Committee”) comprised of members of the Board of Directors of the Company (the “Board”)
selected by the Board. The Board may remove from, add members to, or fill vacancies in the Committee. The Committee shall consist
of a compensation committee of the Board comprised solely of two or more "outside directors " within the meaning of Section
162(m)(4)(C)(i) of the Code, unless the Board determines that there is no need to comply with the requirements of Section 162(m)
of the Code.

 

The Committee is authorized,
subject to the provisions of the Plan, to establish such rules and regulations as it may deem appropriate for the conduct of meetings
and proper administration of the Plan. All actions of the Committee shall be taken by majority vote of its members, except that
the members thereof may authorize any one or more of their number or any officer of the Company to execute and deliver documents
on behalf of the Committee. Subject to the provisions of the Plan, the Committee shall have authority, in its sole discretion,
to grant Awards under the Plan, to interpret the provisions of the Plan and to prescribe, amend, and rescind rules and regulations
relating to the Plan or any Award thereunder as it may deem necessary or advisable. All decisions made by the Committee pursuant
to the provisions of the Plan shall be final, conclusive and binding on all persons. No member of the Committee shall be liable
for anything done or omitted to be done by him or by any other member of the Committee in connection with the Plan, except for
his own willful misconduct or as expressly provided by statute.

 

     

     

    

 

4.
Eligibility.

 

Awards shall be made to such
Eligible Persons of the Company or any of its Subsidiaries as the Committee shall select from time to time; provided, however,
that Incentive Stock Options may only be granted to employees of the Company and its Subsidiaries (including, without limitation,
officers and directors who are also employees of the Company and its Subsidiaries) and shall not be granted to any owner of 10%
or more of the total combined voting power of all classes of stock of the Company and its Subsidiaries, as determined under Section
422(b)(6) of the Code. The Committee’s designation of an Optionee in any year shall not require the Committee to designate
such person to receive Awards or grants in any other year.

 

5. Stock Option Agreements. All Options granted pursuant to the Plan shall be evidenced in writing by option
agreements ("Option Agreements") in such form and containing such terms and conditions as the Committee shall determine
which are not inconsistent with the provisions of the Plan, including the following:

 

(a) Type of Option; Number of ADSs. Each Option shall be designated as either an Incentive Stock Option or a Non-qualified
Option. Each Option Agreement shall state the total number of ADSs to which it pertains. To the extent that the aggregate Fair
Market Value, as defined below and determined on the date that an Option is granted, of ADSs with respect to which Incentive Stock
Option are exercisable for the first time by an Optionee during any calendar year (under all plans of the Company and its Subsidiaries)
exceeds U.S.$100,000, such Option shall be treated as a Non-qualified Option.

 

(b) Option Price. The Option exercise price per each ADS shall be determined by the Committee at the time any Option
is granted and stated in the Option Agreement; provided, that the exercise price per ADS of an Incentive Stock Option and an Option
that needs to satisfy the requirements of Section 162(m) of the Code shall not be less than 100% of the Fair Market Value of such
ADS on the date of the Award. Notwithstanding the preceding sentence, the price per ADS of an Incentive Stock Option awarded to
an Optionee who, at the time such Option is granted, owns stock representing more than 10% of the total combined voting power of
all classes of stock of the Company or its Subsidiaries, shall not be less than 110% of the Fair Market Value of such ADS on the
date of the Award.

 

For all purposes under the Plan,
Fair Market Value shall mean the per ADS closing price of the ADSs for the day immediately preceding the date as of which Fair
Market Value is being determined (or if there was no reported closing price on such date, on the last preceding date on which the
closing price was reported) reported on the National Association of Securities Dealers Automated Quotations (NASDAQ) system, or
other national securities exchange on which the ADSs are then principally traded, and reported in the trading tables of The
Wall Street Journal .

 

(c) Option Term. The period for which the Option is granted shall be determined by the Committee and set forth in the
Option Agreement; provided, however, that no Option shall be exercisable after the expiration of ten years from the date of its
Award. Notwithstanding the preceding sentence, in the case of an Incentive Stock Option granted to an Optionee who, at the time
such Option is granted, owns stock representing more than 10% of the combined voting power of all classes of stock of the Company
or its Subsidiaries, the term of the Option shall be five years from the date of the Award or such shorter term as may be provided
in the Option Agreement. No Option may be exercised after the expiration of its term.

 

(d) Vesting Period. Except as otherwise provided in the Plan or by the Committee in an Option Agreement, Options shall
become vested and exercisable in accordance with the following vesting schedule:

 

	less than one year after date of Award.	0% of the total Award 
	one year after date of Award	25% of the total Award 
	two years after date of Award	50% of the total Award 
	three years after date of Award	75% of the total Award 
	four years after date of Award	100% of the total Award

 

Options shall automatically
cease to vest in accordance with the above schedule and, except as provided in Sections 7, 8, 9 and 10, shall become null and void
upon the termination of employment for any reason.

 

(e) Time and Manner of Payment. Each Option Agreement shall provide that Options granted under the Plan shall be exercised
by the Optionee (or by his executors, administrators, guardian or legal representative) as to all or any portion of the ADSs covered
thereby, by the giving of written notice of exercise to the Company, specifying the number of ADSs to be purchased. Full payment
of such purchase price shall be made within ten business days following the receipt of such notice by the Company and shall be
made (i) in cash, by certified check or bank check, or (ii) in any other manner permitted in the discretion of the Committee. Such
notice of exercise and full payment, shall be delivered to the Company at its principal business office or such other office as
the Committee may direct, and shall be in such form, containing such further provisions consistent with the provisions of the Plan,
as the Committee may prescribe. In no event may any Option granted hereunder be exercised for a fraction of an ADS. The Company
shall issue or cause to be issued to the Optionee ADSs or American Depositary Receipts (“ADRs”) evidencing the ADSs
as soon as practicable after an Option is exercised, and, within a reasonable time thereafter, such issuance shall be evidenced
on the books of the Company. No person exercising an Option shall have any of the rights of a holder of ADSs prior to the date
that such ADSs are issued following the exercise of such Option. No adjustment shall be made for cash dividends or other rights
for which the record date is prior to the date of such issuance.

 

     

     

    

 

(f) Other Provisions. An Option Agreement may contain any other terms and conditions that the Committee, in its sole
discretion, deems appropriate; provided, however, that no such term or condition shall be inconsistent with the terms of the Plan
or, in the case of an Incentive Stock Option, Section 422 of the Code. Each Option Agreement may condition the exercise of any
Option upon the attainment of specified productivity goals by a Company group or division or an individual Optionee.

 

6.
Non-Transferability of Options

 

No Option shall be assignable
or transferable by the Optionee, other than by will or the laws of descent and distribution, and may be exercised during the lifetime
of the Optionee only by the Optionee or his guardian or legal representative.

 

7.
Termination of Employment.

 

(a) Except as otherwise determined by the Committee or provided in an Option Agreement, in the event of the termination of employment
or service of an Optionee with the Company and its Subsidiaries for any reason (other than termination for cause, death, disability
or Change of Control of the Company as provided below), Options granted to him that have not previously expired or been exercised
shall, to the extent vested on the date of such termination, be exercisable by the Optionee within 30 days after the date of such
termination, unless such Option is earlier terminated pursuant to its terms. All Options that are not exercisable as of the date
of such termination or which are not exercised within 30 days thereafter, shall be deemed cancelled and terminated as of such date.

 

(b) Except as otherwise determined by the Committee or provided in an Option Agreement, in the event an Optionee retires from
employment or service with the Company and its Subsidiaries, Options granted to him shall become 100% vested as of the effective
date of the Optionee’s retirement. Whether an Optionee has terminated employment on account of retirement shall be determined
by the Committee in its sole discretion.

 

(c) Except as otherwise determined by the Committee or provided in an Option Agreement, in the event that an Optionee’s
employment or service is terminated by the Company or any of its Subsidiaries for “cause,” all Options, whether or
not exercisable as of the date of such termination, shall be canceled and terminated as of such date. For these purposes,
termination for “cause” shall mean the following: the Optionee’s violation of copyright, trademark and/or patent
protection maintained by the Company or a Subsidiary; the Optionee’s engaging or assisting in any business in competition
with the Company or a Subsidiary as employee, owner, partner, director, officer, stockholder, consultant or agent (ownership of
minority interests in publicly-traded corporations, partnerships or companies or of 5% or less of the equity of privately-held
corporations, partnerships or companies shall not be considered competition for purposes of this Plan); the Optionee’s dishonesty,
or acting in any manner inconsistent with the utmost good faith and loyalty in the performance of the Optionee’s duties;
conviction of the Optionee by a court of law of competent jurisdiction for fraud, misappropriation, embezzlement, or any felony;
failure of the Optionee to perform his duties to the reasonable satisfaction of the Company or its Subsidiaries.

 

8.
Death.

 

Except as otherwise determined
by the Committee or provided in an Option Agreement, in the event an Optionee dies while employed by or providing service to the
Company or any of its Subsidiaries, all unvested Options shall become 100% vested and any Option granted to him that has not previously
expired or been exercised shall be exercisable by the estate of such Optionee or by any person who acquired such Option by bequest
or inheritance, at any time within one year after the date of death of the Optionee, unless such Option is earlier terminated pursuant
to its terms. All Options not exercised within such one- year period shall be deemed canceled and terminated on the first anniversary
of the Optionee’s death.

 

 9. Disability.

 

Except as otherwise determined
by the Committee or provided in an Option Agreement, in the event of the termination of employment of an Optionee due to total
disability, the Optionee or his guardian or legal representative, shall have the right to exercise any Option which has not been
previously exercised or expired and which the Optionee was eligible to exercise as of the first date of total disability, at any
time within one year after such termination, unless such Option is earlier terminated pursuant to its terms. All Options that are
not exercisable as of the date of the Optionee’s termination or which are not exercised within one year thereafter shall
be deemed canceled and terminated as of such applicable date. The term "total disability" shall, for purposes of this
Plan, be defined in the same manner as such term is defined in Section 22(e)(3) of the Code and shall be determined by the Committee
in its sole discretion.

  

10.
Change of Control.

 

(a) In the event of a proposed sale or conveyance of all or substantially all of the assets of the Company, or the merger or
consolidation of the Company and/or its Subsidiaries with or into another corporation, each outstanding Option shall be assumed
or an equivalent option shall be substituted by the successor corporation or a parent or subsidiary of the successor corporation.
In the event that such successor corporation refuses to assume such Option or to substitute an equivalent option, such Option may,
at the discretion of the Committee, become 100% vested upon the consummation of the merger or sale of assets.

 

     

     

    

 

(b) Except as otherwise determined by the Committee or provided in an Option Agreement, in the event of the involuntary termination
of employment or service of an Optionee from the Company and its Subsidiaries on account of and within six months of a Change of
Control of the Company, as determined by the Committee, Options granted to such Optionee that have not previously expired or been
exercised shall become 100% vested as of the date of such termination of employment and shall be exercisable by the Optionee within
30 days after such date, unless such Option is earlier terminated pursuant to its terms. A Change of Control shall be deemed to
have occurred when:

 

(i) any person (as such term is used in Section 13 of the Exchange Act and the rules and regulations thereunder), and any person
acting in concert with such person, directly or indirectly, acquires or otherwise becomes entitled to vote more than 50% of the
voting power entitled to be cast at elections for directors of the Company; or

 

(ii) there occurs any merger or consolidation of the Company, or any sale, lease or exchange of all or any substantial part of
the consolidated assets of the Company and its Subsidiaries to any other person, and (A) in the case of a merger or consolidation,
the holders of outstanding stock of the Company entitled to vote in elections of directors of the Company immediately before such
merger or consolidation (excluding for this purpose any person that directly or indirectly owns or is entitled to vote 20% or more
of the voting power of the Company) hold less than 50% of the voting power of the survivor of such merger or consolidation or its
parent, or (B) in the case of any such sale, lease or exchange, the Company does not own at least 50% of the voting power of the
other person; or

 

(iii) one or more new directors of the Company are elected and at such time five or more directors (or, if less, a majority of
the directors) then holding office were not nominated as candidates by a majority of the directors in office immediately before
such election.

 

11.
Adjustments.

 

Except in the case of a Change
of Control of the Company as provided in Section 10, in the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, ADSs, other securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of ADSs or other securities,
the issuance of warrants or other rights to purchase ADSs or other securities, or other similar corporate transaction or event
affects the ADSs with respect to which Options have been or may be issued under the Plan, such that an adjustment is determined
by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to
be made available under the Plan, then the Committee shall, in such manner as the Committee may deem equitable, adjust any or all
of (i) the number and type of shares that thereafter may be made the subject of Options, (ii) the number and type of shares subject
to outstanding Options, and (iii) the exercise price with respect to any Option, or, if deemed appropriate, make provision for
a cash payment to the holder of any outstanding Option; provided, however, that the number of ADSs subject to any Option denominated
in ADSs shall always be a whole number.

 

12.
Tax Withholding.

 

The Company shall notify an
Optionee of any income tax withholding requirements arising as a result of the grant of any Award or exercise of an Option. The
Company shall have the right to withhold from the Optionee such withholding taxes as may be required by law, or to otherwise require
the Optionee to pay such withholding taxes. If the Optionee shall fail to make such tax payments as are required, the Company or
its Subsidiaries shall, to the extent permitted by law, have the right to retain and withhold a number of ADSs, otherwise due to
such Optionee, having a market value not less than the amount of such taxes required to be withheld by the Company to reimburse
the Company for any such taxes and cancel (in whole or in part) any such ADSs so withheld.

 

13.
Right of Discharge Reserved.

 

Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any employee, officer, director, consultant, independent contractor or other individual
the right to continue in the employment of or service with the Company or any of its Subsidiaries or affect any right that the
Company or any Subsidiary may have to terminate the employment or service of (or to demote or to exclude from future Options under
the Plan) any such employee, officer, director, consultant, independent contractor or other individual at any time for any reason.
Except as specifically provided by the Committee, the Company shall not be liable for the loss of existing or potential profit
from an Award granted in the event of termination of an employment or service or other relationship even if the termination is
in violation of an obligation of the Company or any Subsidiary of the Company to the employee, officer, director, consultant or
independent contractor.

 

14.
Severability.

 

If any provision of the Plan
shall be held unlawful or otherwise invalid or unenforceable in whole or in part, such unlawfulness, invalidity or unenforceability
shall not affect any other provision of the Plan or part thereof, each of which remain in full force and effect. If the making
of any payment or the provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid or unenforceable,
such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under
the Plan, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would
not be unlawful, invalid or unenforceable shall be made or provided under the Plan.

 

     

     

    

 

15.
Amendment and Termination of the Plan.

 

The Board may, from time to time, alter, amend, suspend
or terminate the Plan with respect to Options that have not been granted, subject to any requirement for stockholder approval imposed
by applicable law or any rule of any stock exchange or quotation system on which ADSs are listed or quoted; provided, however,
that the Board may not amend the Plan in any manner that would result in non-compliance with any applicable law. Neither the Board
nor the Committee may, without the consent of the Optionee, alter or in any way impair the rights of such Optionee under any Award
previously granted. Neither the termination of the Plan nor the Change of Control of the Company shall affect any Option previously
granted.

 

If the approval of the Plan by
the stockholders is not obtained within 12 months of the Effective Date, the Plan shall be null and void and each Award of an Option
hereunder shall be null and void.

 

16.
Conditions Upon Issuance of ADSs.

 

ADSs shall not be issued pursuant to the exercise
of an Option unless the exercise of such Option and the issuance and delivery of such ADSs or the ADRs evidencing such ADSs shall
comply with applicable laws and the securities trading policy and other applicable governance policies (as applying at the time)
and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to exercise
of an Option, the Committee may require the person exercising the Option to represent and warrant at the time of exercise that
the exercise complies with the applicable laws, the securities trading policy and other applicable governance policies of the Company
and that the ADSs are being purchased only for investment and without any present intention to sell or distributed such ADSs.

 

17.
Gender and Number.

 

Any masculine terminology used
in this Plan document shall also include the feminine, and the definition of any term herein in the singular shall also include
the plural except when otherwise indicated by the context.

 

18.
Governing Law.

 

The Plan and all determinations
made and actions taken thereunder, to the extent not otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the State of New York and construed accordingly.

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