Document:

Exhibit 4.3

 

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE.  THIS NOTE AND ANY OF SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATING TO SUCH TRANSACTION UNDER THE ACT AND ALL OTHER APPLICABLE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE ACT AND OTHER APPLICABLE SECURITIES LAWS.

 

THIS UNSECURED CONVERTIBLE PROMISSORY NOTE (AND ALL PAYMENT AND ENFORCEMENT PROVISIONS HEREIN) IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT DATED AS OF JANUARY 3, 2014, BY AND AMONG THE HOLDER (AS DEFINED HEREIN), THE LENDERS THAT ARE PARTY TO THE AGREEMENT (AS DEFINED HEREIN), THE COMPANY (AS DEFINED HEREIN), SILICON VALLEY BANK AND OXFORD FINANCE LLC (THE “SUBORDINATION AGREEMENT”).  IN THE EVENT OF ANY INCONSISTENCY BETWEEN THIS NOTE AND THE SUBORDINATION AGREEMENT, THE TERMS OF THE SUBORDINATION AGREEMENT SHALL CONTROL.

 

UNSECURED CONVERTIBLE PROMISSORY NOTE

 

	
$              .00
    	
, 2014
    

 

FOR VALUE RECEIVED, Clarus Therapeutics, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of                      (the “Holder”) the sum of                                                  dollars ($                ) all as hereinafter provided with interest thereon from the date of issuance of this Unsecured Convertible Promissory Note (this “Note”) at the applicable rate set forth in Section 2 hereof.  All payments to be made by the Company in repayment of interest and principal or other amounts due hereunder shall be made in currency of the United States of America which at the time of payment shall be legal tender for the payment of public or private debts.

 

This Note is one of a series of notes (collectively, the “Notes”) being issued pursuant to, and is subject to the terms and conditions of, the Note Purchase Agreement by and among the Company, the Holder and the other parties thereto, dated as of January 3, 2014 (the “Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Agreement. This Note is subordinated to the obligations set forth in that certain Loan and Security Agreement, by and among Silicon Valley Bank, Oxford Finance LLC and the Company, dated as of April 9, 2013.

 

1.                                      PAYMENT.

 

1.1                               Maturity.  Subject to (i) conversion into the capital stock of the Company in accordance with Section 4 hereof, (ii) acceleration of the maturity of this Note in connection with

 

 

the occurrence of an Event of Default (as hereinafter defined), (iii) prepayment in accordance with Section 1.2 and (iv) repayment in an Acquisition Event in accordance with Section 1.4, the Holder of this Note shall have the right to demand repayment of the total amount of outstanding principal under this Note and all accrued and unpaid interest thereon in a single lump sum on or after July 31, 2015, or such later date mutually agreed to by the Company and the Purchasers (as defined in the Agreement) holding at least sixty percent (60%) of the principal of the Notes then outstanding (the “Requisite Holders”), (such date, the “Maturity Date”), by giving the Company fifteen (15) days prior written notice of such demand for repayment.

 

1.2                               Prepayment.  The Company may not prepay this Note without the consent of the Requisite Holders, and any such prepayment shall be pro-rata among the Purchasers based on the aggregate principal amount of the Notes then outstanding.  With the consent of the Requisite Holders, at any time prior to the Maturity Date, upon two (2) Business Days prior written notice and without penalty, the Company may prepay the then outstanding amounts under this Note in whole or in part.  Any such prepayment received with respect to this Note shall first be applied toward the repayment of the accrued but unpaid interest then outstanding, with the remainder, if any, applied toward the payment of the then outstanding principal.

 

1.3                               Form of Payment.  All payments of interest and principal or other amounts payable under this Note shall be payable in immediately available funds to the account of the Holder as the Holder may from time to time designate in writing to the Company.

 

1.4                               Repayment.  In the event of an Acquisition Event (as defined herein) and this Note has not previously been converted, then (i) 1.5 times the outstanding principal balance of this Note and (ii) any interest accrued and unpaid to date, shall be due and payable upon the closing of the Acquisition Event.  “Acquisition Event” means (i) a consolidation or merger of the Company with or into one or more other corporations or other business organizations, (ii) the sale, lease, exclusive license, transfer or other disposition of all or substantially all of the assets of the Company, or (iii) any other form of corporate reorganization in which outstanding shares of the Company are exchanged for or converted into cash, securities of another corporation or business organization, or other property (including the issuance and sale of a controlling interest in the Company), unless, in each case, the Company’s stockholders of record immediately prior to such event shall (by virtue of the securities issued as a part of such event) hold at least 50% of the voting power of the surviving or acquiring entity immediately following such event.  The Company shall give the Holder notice of a proposed Acquisition Event no less than fifteen (15) days prior to the closing of the Acquisition Event.

 

2.                                      INTEREST.

 

This Note shall accrue interest from the date hereof on the unpaid outstanding principal balance hereof at a rate (the “Base Rate”) per annum equal to eight percent (8%), compounded daily, calculated on the basis of a 365-day year and the actual days elapsed in the period in which such interest is payable hereunder; provided, however, that upon and at all times during the continuation of any Event of Default, such Base Rate of interest shall be increased by two percent (2%) (the Base Rate, as so increased, the “Default Rate”); provided, further, that in the

 

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event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment toward and applied against the then outstanding principal under this Note.

 

3.                                      EXPENSES.

 

The Company shall pay to the Holder all reasonable out-of-pocket costs and expenses incurred by such Holder in any effort to collect any amounts due under this Note, including, without limitation, all reasonable attorneys’ fees and expenses for services rendered in connection therewith, and shall pay interest on such costs and expenses to the extent not paid when due hereunder demanded at the Default Rate.

 

4.                                      CONVERSION OF NOTE.

 

4.1                               Mandatory Conversion of Note upon Financing.  If this Note has not been repaid in accordance with Section 1 above or previously converted in accordance with this Section 4, upon the closing of a Financing (as defined below), the total outstanding amount of principal and accrued and unpaid interest of this Note shall automatically be converted into the number of fully paid and non-assessable shares of Financing Stock (as defined below) as is equal to (i) the aggregate amount of such principal and accrued and unpaid interest then outstanding under this Note, divided by (ii) the Financing Purchase Price (as defined below).  For purposes of this Note, the term “Financing” shall mean (i) the Company’s issuance and sale of shares of Common Stock in a firmly underwritten public offering registered pursuant to the Securities Act of 1933, as amended, in connection with which the Company’s Common Stock is listed on a nationally recognized securities exchange or trading system, or (ii) the Company’s issuance and sale of shares of Preferred Stock to one or more investors in one or more private transactions following the date hereof in connection with which the Company receives aggregate gross proceeds in all such financings of at least $10,000,000 (excluding the Notes), the term “Financing Stock” shall mean the shares of Common Stock or Preferred Stock issued in the Financing, and the term “Financing Purchase Price” shall mean the per share purchase price paid for the Financing Stock in the Financing.

 

4.2                               Optional Conversion.  If this Note has not been repaid in accordance with Section 1 above or previously converted in accordance with this Section 4, at any time following the Maturity Date, at the option of the Requisite Holders, the total outstanding amount of principal and accrued and unpaid interest of this Note shall be converted into the number of fully paid and non-assessable shares of the Company’s Series D Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”) equal to (i) the aggregate amount of such principal and/or accrued and unpaid interest to be so converted by the Holder, divided by (ii) the Series D Preferred Stock Conversion Price (as defined in the Company’s certificate of incorporation, as it may be amended and/or restated from time to time).

 

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4.3                               Manner of Exercise of Conversion Privilege.

 

(a)                                 In order to exercise the conversion privilege under Section 4.2 above, the Holder of this Note shall give written notice to the Company that the Holder elects to convert all or a portion of this Note which notice shall also specify the amount of principal and/or accrued and unpaid interest to which such conversion relates.  Any such notice of conversion shall supersede any obligation to pay principal or interest under this Note if such notice is received by the Company prior to the actual receipt by the Holder of the payment.

 

(b)                                 As promptly as practicable after receipt of such notice, or the closing of the Financing, as the case may be, and upon satisfaction of the conditions of Section 4.4 below, the Company shall issue or shall cause to be issued to the Holder or such person or persons designated by the Holder a certificate or certificates representing the number of full shares of Common Stock, Preferred Stock or other equity securities, as applicable, issuable upon such conversion of principal and/or interest in accordance with the provisions hereof and any cash adjustment payable pursuant to Section 4.4 hereof, without charge to the Holder for any issuance tax in respect thereof or other cost incurred by the Company in connection with such conversion and the related issuance of the equity securities.  The conversion shall become effective on the date the notice of conversion is received by the Company, or the closing of the Financing, as the case may be, and the person or persons in whose name or names any certificate for the capital stock shall be issuable upon such conversion shall be deemed to have become on said date the holder or holders of record of the Common Stock, Preferred Stock or other equity securities represented by that certificate.  The Company will not close its books against the transfer of capital stock issued or issuable upon conversion of this Note, or portion thereof, in any manner which would interfere with the timely conversion of this Note, or portion thereof.

 

(c)                                  Splits, Subdivisions or Combinations of Shares and Stock Dividends.  If the Company at any time while this Note remains outstanding shall split, subdivide or combine its Common Stock, Preferred Stock, or other equity securities into which this Note is convertible or declare a stock dividend, the applicable conversion price shall be proportionately decreased, in the case of a split or subdivision or share dividend, or proportionately increased, in the case of a combination.  Any adjustment under this Section 4.3(c) shall become effective when the split, subdivision or combination becomes effective or the dividend is paid (as the case may be).

 

(d)                                 No Impairment.  The Company will not, by amendment of its certificate of incorporation or Bylaws or through any 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 hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the exercise and conversion rights of the Holder against impairment.

 

(e)                                  Notice of Adjustments. Upon the occurrence of each event establishing or adjusting the applicable conversion price, the Company at its expense shall promptly furnish to the Holder written notice setting forth such established or adjusted conversion price.

 

4.4                               Fractional Shares.  No fractional shares of Common Stock, Preferred Stock or

 

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other equity securities, as applicable, shall be issued upon conversion of this Note. Instead of any fractional share which would otherwise be issuable upon conversion of this Note, the Company shall pay to the Holder of this Note a cash adjustment in respect of such fractional interest in an amount equal to the portion of the then applicable conversion price for each share.

 

4.5                               Other Agreements.  By converting this Note into shares of Common Stock, Preferred Stock, or other equity securities, as applicable, the Holder shall be deemed to have accepted, and shall be bound by, the terms of the applicable financing documents, and to the extent not already a party to such financing documents, as a condition precedent to the receipt of shares of Common Stock, Preferred Stock, or other equity securities, as applicable, issuable upon conversion of this Note, shall become a party to such agreements.  Upon any conversion of this Note, the Holder agrees to submit the original Note to the Company for cancellation in exchange for stock certificates representing such shares of Common Stock, Preferred Stock, or other equity securities, as applicable, into which this Note was converted and to the extent applicable, a new Note issuable in connection with conversion hereof.

 

4.8                               The Company covenants that all shares of Common Stock, Preferred Stock, or other equity securities, when issued on conversion of this Note and any equity securities issuable upon conversion thereof, shall be duly and validly issued and fully paid and nonassessable and free from all taxes, liens, charges and other encumbrances.

 

5.                                      EVENTS OF DEFAULT.

 

5.1                               Events of Default Defined.  Without limiting the provisions of Section 2 hereof, including, without limitation, the Company’s obligation thereunder to pay the Default Rate, all principal, accrued and unpaid interest and other amounts outstanding under this Note shall become immediately due and payable upon the occurrence of an Event of Default and such Event of Default has not been waived by the Requisite Holders. An “Event of Default” shall occur if (a) the Company voluntarily files of a petition under any provision of applicable bankruptcy or similar laws, (b) the Company makes a general assignment for the benefit of its creditors, (c) an involuntary petition is filed against the Company under any provision of applicable bankruptcy or similar laws, which petition is not dismissed within sixty (60) days after the date it is filed, or (d) the Company fails to pay when due hereunder any principal, interest or any other amount, or otherwise breaches any of its obligations, under this Note.

 

5.2                               Notification.  If an Event of Default shall occur, the Company shall promptly notify the Holder thereof in a writing describing such Event of Default in reasonable detail, including a statement of the nature and length of existence thereof, and what action (if any) the Company has taken and proposes to take with respect thereto.

 

6.                                      SUITS FOR ENFORCEMENT UPON DEFAULT.

 

In case any Event of Default shall occur, the Holder may proceed to protect and enforce its rights hereunder by a suit in equity, action at law or any other appropriate proceeding or remedy available to the Holder at law or in equity.  The Company covenants that if default be

 

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made in any payment of any principal of or interest on this Note, it will pay to the Holder of this Note to the extent permitted under applicable law such further reasonable amount as shall be sufficient to cover the cost and expenses of collection, including reasonable compensation to the attorneys which the Holder retains and any court costs incurred for all services rendered in that connection.  No course of dealing and no delay on the part of the Holder in exercising any rights shall operate as a waiver thereof or otherwise prejudice their rights and no consent or waiver shall extend beyond the particular case involved.

 

7.                                      UNITED STATES TAX COVENANT.

 

The parties hereto hereby acknowledge and agree that, notwithstanding that the Notes are titled as “Unsecured Convertible Promissory Notes,” for United States federal and state income tax purposes the Notes are, and at all times have been, more properly characterized as equity. Accordingly, the parties agree to treat the Notes as equity for all United States federal and state income tax purposes (including, without limitation, on their respective tax returns or other informational statements).  For the avoidance of doubt, the Company hereby agrees that, with regard specifically to the rule set forth in Section 385 of the Internal Revenue Code of 1986, as amended, the Company will treat the Notes as equity as of the time of issuance.

 

8.                                      NOTICES.

 

Any request, demand, authorization, direction, notice, consent, waiver or other document permitted by this Note to be made upon, given or furnished to, or filed with the Company or the Holder shall be sufficient for every purpose hereunder if in writing and mailed to the Company, addressed to it at 555 Skokie Boulevard, Suite 340, Northbrook, Illinois 60062 (or such other address as the Company shall advise the Holder hereof in writing) and if to the Holder at the address for the Holder reflected in the Company’s records (or at such other address as the Holder hereof shall advise the Company in writing).  All notices required hereunder shall be deemed to have been given or made when actually delivered to or received by the party to which the notice is addressed at its respective address.

 

9.                                      MUTILATION, DESTRUCTION, LOSS, OR REISSUANCE.

 

Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of a Note or any note issued in exchange therefor and, if requested in the case of any such loss, theft or destruction, upon delivery of an indemnity bond or other agreement or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of such note, the Company will issue a new note, of like tenor and amount and dated the date to which interest hereunder has been paid, in lieu of such lost, stolen, destroyed or mutilated note, provided, however, if any note of which the Holder, its nominee, or any of its partners or affiliates is the registered holder is lost, stolen or destroyed, the affidavit of the registered holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof, and no indemnification bond or other security shall be required as a condition to the execution and delivery by the Company of a new note in replacement of such lost, stolen or destroyed note

 

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other than the registered holder’s written agreement to indemnify the Company.

 

10.                               SUCCESSORS.

 

All of the covenants, stipulations, promises and agreement in this Note contained by or on behalf of the Company shall bind and inure to the benefit of its successors whether so expressed or not and also to the benefit of the Holder and its successors.

 

11.                               PRESENTMENT.

 

The Company hereby waives diligence, presentment, demand and protest of every kind whatsoever.  The failure of the Holder hereof to exercise any of its rights hereunder in any particular instance shall not constitute a waiver of the same or of any other right in that or any subsequent instance.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Company has caused this Unsecured Convertible Promissory Note to be duly executed in its corporate name as of the date first above written.

 

 

	
 
    	
CLARUS THERAPEUTICS, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:  Robert E. Dudley
    
	
 
    	
 
    	
Title:  Chief Executive Officer
    

 

[SIGNATURE PAGE TO NOTE]Exhibit 4.4

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS.

 

WARRANT TO PURCHASE STOCK

 

	
NO. W-
    	
, 2011
    

 

THIS CERTIFIES THAT, for value received,                                              , or its assigns (the “Holder”), is entitled to subscribe for and purchase from CLARUS THERAPEUTICS, INC., a Delaware corporation (the “Company”), up to that number of shares of Financing Stock (as defined below) as is equal to $[30% of the principal amount of Notes purchased] divided by the Financing Purchase Price (as defined below) at an exercise price equal to 80% of the Financing Purchase Price (the “Financing Exercise Price”), provided, however, in the event a Financing does not occur by September 30, 2011, then, this Warrant shall be exercisable for [            ] shares of the Company’s Series C Preferred Stock, at an exercise price of $0.825 per share (the “Series C Exercise Price”).  For purposes of this Warrant, “Financing” shall mean (i) the Company’s issuance and sale of shares of Common Stock in the Company’s initial public offering, or (ii) the Company’s issuance and sale of shares of Preferred Stock to one or more investors in a private transaction following the date hereof; provided that in either case, the Company receives aggregate gross proceeds of at least $5,000,000 (excluding the Notes), the term “Financing Stock” shall mean the shares of Common Stock or Preferred Stock issued in the Financing, “Financing Purchase Price” shall mean the per share purchase price paid for the Financing Stock in the Financing, “Exercise Price” shall mean the Financing Exercise Price or the Series C Exercise Price, as applicable and “Stock” shall mean the Financing Stock or Series C Preferred Stock, as applicable.

 

This Warrant is being issued as one of a series of warrants pursuant to, and is subject to, the terms and conditions of the Note and Warrant Purchase Agreement, dated as of November 19, 2010 (the “Warrant Issuance Date”), as amended, by and among the Company, the Holder and the other parties thereto (the “Purchase Agreement”).  Capitalized terms not otherwise defined herein shall have the meaning given to such terms in the Purchase Agreement. 

 

 

1.             EXERCISE OF WARRANT.  The rights represented by this Warrant may be exercised in whole or in part from the Warrant Issuance Date to the third anniversary of the Warrant Issuance Date by delivery of the following to the Company at its address set forth in the Purchase Agreement (or at such other address as it may designate in writing to the Holder):

 

(a)           an executed Notice of Exercise in the form attached hereto;

 

(b)           payment of the aggregate Exercise Price for the shares of Stock being purchased either in cash or by check, or by wire transfer of immediately available funds to an account designated by the Company; and

 

(c)           this Warrant.

 

Upon the exercise of the rights represented by this Warrant, a certificate or certificates for the shares of Stock so purchased, registered in the name of the Holder or persons affiliated with the Holder, if the Holder so designates, shall be issued and delivered to the Holder within a reasonable time after the rights represented by this Warrant shall have been so exercised.

 

The person in whose name any certificate or certificates for shares of Stock are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Exercise Price for such shares was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

1.1          Net Exercise.  Notwithstanding any provisions herein to the contrary, if the fair market value of one share of Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue or cause to be issued to the Holder a number of shares of Stock computed using the following formula:

 

	
 
    	
 
    	
X = Y (A-B)
    
	
 
    	
 
    	
A
    
	
 
    	
 
    	
 
    
	
Where X = 
    	
 
    	
the number of shares of Stock to be issued to the Holder
    
	
 
    	
 
    	
 
    
	
Y =
    	
 
    	
the number of shares of Stock purchasable under the Warrant or, if   only a portion of the Warrant is being exercised, the portion of the Warrant   being canceled (at the date of such calculation)
    
	
 
    	
 
    	
 
    
	
A =
    	
 
    	
the fair market value of one share of Stock purchasable under the   Warrant (at the date of such calculation)
    

 

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B =
    	
 
    	
Exercise Price (as adjusted to the date of such calculation)
    

 

For purposes of the above calculation, the fair market value of one share of Stock shall be:

 

(i) If exercised in connection with a public offering, the fair market value of the Stock shall be the offering price to the public in connection with the public offering;

 

(ii) If traded on a securities exchange, the fair market value of the Stock shall be deemed to be the average of the closing prices of the Stock on such exchange over the five trading days immediately prior to exercise date; and

 

(ii) If there is no public market for the Stock, the fair market value shall be the price per share of Stock as determined in good faith by the Company’s Board of Directors.

 

2.             COVENANTS OF THE COMPANY.

 

2.1          Covenants as to Financing Stock.  The Company covenants and agrees that all shares of Stock that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof.

 

2.2          No Impairment.  Except and to the extent as waived or consented to by the Holder, the Company will not, by amendment of its certificate of incorporation or through any 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 hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holder against impairment.

 

2.3          Notices of Record Date.  In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Company shall mail to the Holder, at least ten (10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

 

3.             ADJUSTMENT OF EXERCISE PRICE.  In the event of changes in the outstanding Stock by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the number of shares of Stock available under this Warrant in the aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same aggregate Exercise Price, the total number of shares of Stock as the Holder would have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment. The form of this Warrant need not be changed because of any adjustment in the number of shares of Stock subject to this Warrant.

 

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4.             FRACTIONAL SHARES.  No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto.  All shares of Stock (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share.  If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of a share of Stock by such fraction.

 

5.             NO STOCKHOLDER RIGHTS.  This Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.

 

6.             TRANSFER OF WARRANT.  Subject to applicable laws and the restriction on transfer set forth on the first page of this Warrant and the Purchase Agreement, this Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto to any transferee designated by Holder.

 

7.             LOST, STOLEN, MUTILATED OR DESTROYED WARRANT.  If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.  Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

8.             ACCEPTANCE.  Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

 

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

 

 

	
 
    	
CLARUS THERAPEUTICS, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

SIGNATURE PAGE TO

WARRANT TO PURCHASE PREFERRED STOCK

 

 

NOTICE OF EXERCISE

 

1.a.         o            The undersigned hereby elects to purchase                  shares of Stock (the “Securities”) of Clarus Therapeutics, Inc. (the “Company”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

1.b.         o            The undersigned hereby elects to purchase                  shares of Stock of Clarus Therapeutics, Inc. (the “Company”) pursuant to the terms of the net exercise provisions set forth in Section 1.1 of the attached Warrant, and shall tender payment of all applicable transfer taxes, if any.

 

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

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Name)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Address)
    	
 
    

 

(3)           If this Warrant is exercised in accordance with Section 1.a. above, the undersigned represents that: (a) the undersigned was not organized for the specific purpose of acquiring the Securities; (b) the undersigned has sufficient knowledge and experience in investing in companies similar to the Company in terms of the Company’s stage of development so as to be able to evaluate the risks and merits of its investment in the Company and it is able financially to bear the risks thereof; (c) the undersigned has made an investigation of the Company and its business as it deemed necessary and has had an opportunity to discuss and review the Company’s business, management and financial affairs with the Company’s management as it deemed necessary; (d) the Securities being purchased by the undersigned are being acquired for the undersigned’s own account for the purpose of investment and not with a view to the public resale or distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”); (e) the undersigned understands that (i) the Securities have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 504, 505 or 506 promulgated under the Securities Act, (ii) under the Securities Act and applicable regulations thereunder the Securities may be resold without registration under the Securities Act only in certain limited circumstances, (iii) the certificates evidencing the Securities will bear a legend substantially similar to that set forth below:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES 

 

 

LAWS, PURSUANT TO REGISTRATION UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS.

 

and (iv) the Company will make a notation on its transfer books to such effect; and (f) the undersigned is an “accredited investor” as that term is defined in Rule 501 promulgated under the Securities Act.

 

	
 
    	
 
    	
 
    
	
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ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
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Address:
    	
 
    
	
 
    	
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Dated:
    	
                             ,   20
    
	
 
    	
 
    
	
Holder’s   Signature:
    	
 
    
	
 
    	
 
    
	
Holder’s   Address:
    	
 
    

 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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