Document:

ex10-3.htm

Exhibit 10.3

 

SECOND AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

 

This Second Amendment to Loan and Security Agreement (the “Amendment”), is entered into as of May 14, 2015, by and between SQUARE 1 BANK (“Bank”) and VIVEVE, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of September 30, 2014 (as amended from time to time, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1)    Bank hereby waives Borrower’s violation of OUS Clinical Trial Milestones covenant, as more particularly described in Section 6.7(b)(ii) of the Agreement, for failing to receive by April 15, 2015 evidence of positive 3-month interim data in the OUS Clinical Trial.

 

2)    Bank hereby waives Borrower’s violation of the Minimum Equity Event covenant, as more particularly described in Section 6.7(c) of the Agreement, for failing to receive on May 1, 2015 an amount mutually acceptable to the Board of Directors of Borrower and Bank before Borrower had Remaining Months Cash of 1.5 or less. 

 

3)     Section 2.1(b)(iii) of the Agreement is hereby amended and restated, as follows:

 

(iii)     Tranche 3. Borrower may request a Term Loan or Term Loans under Tranche 3 in the principal amount of up to One Million Dollars ($1,000,000) at any time during the period 1) beginning on the date that Borrower has provided evidence acceptable to Bank of (a) positive interim 3-month results from the OUS Clinical Trial and 2) ending on July 15, 2015. The proceeds of the Tranche 3 Advances shall be used for general working capital purposes and for capital expenditures.

 

4)     Section 6.7(b)(ii) of the Agreement is hereby amended and restated, as follows:

 

(ii)     Receive by July 10, 2015 evidence of positive 3-month interim data in the OUS Clinical Trial.

 

5)     Section 6.7(d) of the Agreement is hereby deleted.

 

6)    Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

 

 

1

 

 

7)     Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment. 

 

8)    This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

 

9)     As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

 

a)     this Amendment, duly executed by Borrower;

 

b)    receipt by Borrower, after May 7, 2015 but on or before May 14, 2015, of at least $10,000,000 in net cash proceeds from the sale or issuance of equity securities of Borrower to investors acceptable to Bank;

 

c)     an amended and restated warrant to purchase stock, in form and substance satisfactory to Bank, duly executed by Parent;

 

d)     a second warrant to purchase stock, in form and substance satisfactory to Bank, duly executed by Parent;

 

e)    payment of all Bank Expenses, including Bank’s expenses for the documentation of this Amendment and any related documents, and any UCC, good standing or intellectual property search or filing fees, which may be debited from any of Borrower’s accounts; and 

 

f)     such other documents and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 

 

 

[Signature Page Follows]

 

 

2

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

 

	
VIVEVE, INC.   
	
SQUARE 1 BANK

	 	 
	
By:         /s/ Scott Durbin                                                                             
	
By:         /s/ Brian Kirkpatrick                                                                   

	
Name:   Scott C. Durbin                                                                                
	
Name:   Brian Kirkpatrick                                                                           

	Title:     Chief Financial Officer                                                                    	Title:     Vice President                                                                                

                       

    

 

[Signature Page to Second Amendment to Loan and Security Agreement]

 

 

 

3ex10-4.htm

Exhibit 10.4

 

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH APPLICABLE LAW.

 

SECOND WARRANT TO

PURCHASE STOCK

 

 

 

	
 
	
Corporation:    
	
VIVEVE MEDICAL, INC.

	
 
	
Number of Shares:   
	
25,000

	
 
	
Class of Stock:    
	
Common Stock

	
 
	
Initial Exercise Price:  
	
$0.37 per share 

	
 
	
Issue Date:
	
May 14, 2015

	
 
	
Expiration Date: 
	
May 14, 2025

 

THIS SECOND WARRANT CERTIFIES THAT, for good and valuable consideration, the receipt of which is hereby acknowledged, SQUARE 1 BANK or its assignee (“Holder”) is entitled to purchase the number of fully paid and nonassessable shares of the class of securities (the “Shares”) of the corporation (the “Company”) at the initial exercise price per Share (the “Warrant Price”) all as set forth above and as adjusted pursuant to Article 2 of this warrant, subject to the provisions and upon the terms and conditions set forth in this warrant. Reference is made to Section 4.4 of this warrant whereby Square 1 Bank shall transfer this warrant to its parent company, Square 1 Financial, Inc.

 

 

ARTICLE 1

 

EXERCISE

 

1.1     Method of Exercise. Holder may exercise this warrant by delivering this warrant and a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased.

 

1.2     Conversion Right. In lieu of exercising this warrant as specified in Section 1.1, Holder may from time to time convert this warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant to Section 1.3.

 

1.3     Fair Market Value. If the Shares are quoted on any over the counter market maintained by OTC Markets Group, Inc. or listed on any national stock exchange in the United States, the fair market value of the Shares shall be the closing price of the Shares (or the closing price of the Company’s stock into which the Shares are convertible) reported for the business day immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not regularly traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment.

 

 

 

 

 

1.4     Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this warrant has not been fully exercised or converted and has not expired, a new warrant representing the Shares not so acquired.

 

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

 

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

 

1.6.1     “Acquisition.” For the purpose of this warrant, “Acquisition” means (a) any sale, license, or other disposition of all or substantially all of the assets (including intellectual property) of the Company, or (b) any reorganization, consolidation, merger or sale of the voting securities of the Company or any other transaction where the holders of the Company’s securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction.

 

1.6.2     Assumption of Warrant. In the case of a reincorporation of the Company, this warrant shall be assumed by the successor entity. If upon the closing of any other Acquisition, the successor entity assumes the obligations of this warrant, then this warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly. The Company shall use reasonable efforts to cause the surviving corporation to assume the obligations of this warrant.

 

1.6.3     Nonassumption. If upon the closing of any Acquisition the successor entity does not assume the obligations of this warrant and Holder has not otherwise exercised this warrant in full, then this warrant shall automatically convert pursuant to Section 1.2 and thereafter Holder shall participate in the Acquisition on the same terms as other holders of the same class of securities of the Company.

 

ARTICLE 2 

 

ADJUSTMENTS TO THE SHARES

 

2.1     Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its common stock payable in common stock, or other securities, or subdivides the outstanding common stock into a greater amount of common stock, then upon exercise of this warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred.

 

 

 

 

 

2.2     Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this warrant, Holder shall be entitled to receive, upon exercise or conversion of this warrant, the number and kind of securities and property that Holder would have received for the Shares if this warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Company’s Articles of Incorporation upon the closing of a registered public offering of the Company’s common stock. The Company or its successor shall promptly issue to Holder a new warrant for such new securities or other property. The new warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.

 

2.3     Adjustments for Combinations, Etc. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased. If the outstanding Shares are split or multiplied, by reclassification or otherwise, into a greater number of shares, the Warrant Price shall be proportionately decreased.

 

2.4     Intentionally Omitted.

 

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

 

2.6     Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price.

 

2.7     Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the Number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder an amount computed by multiplying the fractional interest by the fair market value of a full Share.

 

 

 

 

 

ARTICLE 3

 

REPRESENTATIONS AND COVENANTS OF THE COMPANY

 

3.1     Representations and Warranties. The Company hereby represents and warrants to the Holder as follows:

 

(a)     The initial Warrant Price referenced on the first page of this warrant is not greater than the fair market value of the Shares as of the date of this warrant.

 

(b)     All Shares which may be issued upon the exercise of the purchase right represented by this warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

 

(c)     The Company’s capitalization table attached to this warrant is true and complete as of the Issue Date.

 

3.2     Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; or (d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up, then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above; and (2) in the case of the matters referred to in (c) and (d) above at least 20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon the occurrence of such event).

 

3.3     Information Rights. So long as the Holder holds this warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all communiques to the shareholders of the Company, (b) within ninety (90) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company’s quarterly, unaudited financial statements; provided, however, that so long as the Company is subject to the reporting obligations of Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and files all such required reports on a timely basis (including pursuant to Rule 12b-25 promulgated under the Exchange Act), the Company shall be required only to notify the Holder that the filing has been made to satisfy the requirements of subsections (b) and (c) herein.

 

	 	
3.4
	
Intentionally Omitted.

 

 

 

 

 

 

ARTICLE 4 

 

MISCELLANEOUS

 

4.1     Term: Exercise Upon Expiration. This warrant is exercisable in whole or in part, at any time and from time to time on or before the Expiration Date set forth above. If this warrant has not been exercised prior to the Expiration Date, this warrant shall be deemed to have been automatically exercised on the Expiration Date by “cashless” conversion pursuant to Section 1.2.

 

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

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH APPLICABLE LAW.

 

4.3     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 without compliance with applicable federal and state securities laws by the transferor and the transferee and an opinion of legal counsel reasonably acceptable to the Company.

 

4.4     Transfer Procedure. After receipt by Square 1 Bank of this warrant, Square 1 Bank will transfer all of this warrant to its parent company, Square 1 Financial, Inc. Subject to the provisions of Section 4.3, 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) by giving the Company notice of the portion of the warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this warrant to the Company for reissuance to the transferee(s) (and Holder, if applicable). No surrender or reissuance shall be required for the transfer to Square 1 Financial, Inc. or a transfer to any other affiliate of Holder.

 

4.5     Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first- class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such Holder from time to time. All notices to the Holder shall be addressed as follows:

 

Square 1 Financial, Inc.

Attn: Warrant Administrator 

406 Blackwell Street, Suite 240

Durham, NC 27701

 

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

 

 

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

 

 

 

 

 

4.8     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.

 

 

VIVEVE MEDICAL, INC.

 

 

By:        /s/ Scott Durbin                                                                             

 

Name:   Scott C. Durbin                                                                              

 

Title:     Chief Financial Officer                                                                 

 

 

 

 

 

 

APPENDIX 1 

 

NOTICE OF EXERCISE

 

 

1.     The undersigned hereby elects to purchase                                      shares of the                              stock of VIVEVE MEDICAL, INC. pursuant to the terms of the attached warrant, and tenders herewith payment of the purchase price of such shares in full.

 

2.     The undersigned hereby elects to convert the attached warrant into shares in the manner specified in the warrant. This conversion is exercised with respect to       of the shares covered by the warrant.

 

[Strike paragraph that does not apply.]

 

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

 

                                                                                            

(Holder’s Name)

 

 

                                                                                                                                                                                                                                                                     

(Address)

 

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

 

 

SQUARE 1 FINANCIAL, INC. or Registered Assignee

 

 

                                                                                         

(Signature)

 

 

                                                                                         

(Date)

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