Document:

Exhibit 4.5

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT 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 THE APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

 

WARRANT TO

PURCHASE COMMON STOCK

OF

BIT9, INC.

 

Issued on July 13, 2012

 

This certifies that for value received, SC US GF V Holdings, Ltd., or its registered assigns (the “Holder”) is entitled, subject to the terms and conditions of this Warrant, to purchase from Bit9, Inc., a Delaware corporation (or its successors and assigns) (the “Company”), on the Exercise Date, the Warrant Stock at a price per share equal to the Warrant Price, upon surrender of this Warrant at the principal offices of the Company, together with a duly executed subscription in the form attached hereto as Exhibit 1 and simultaneous payment of the full Warrant Price for the shares of Warrant Stock so purchased in lawful money of the United States or as otherwise provided herein.

 

ARTICLE 1  Definitions. The following definitions shall apply for purposes of this Warrant:

 

1.1                “Applicable Percentage” means 12.5%; provided that in the event that any portion of the purchase rights represented hereby are transferred to a third party in accordance with the terms hereof, the Applicable Percentage set forth in any Warrants issued in respect of any such transfer shall be proportionately reduced with it being understood that the aggregate Applicable Percentage represented by all such Warrants shall remain 12.5%.

 

1.2                “Applicable Shares” means the sum of (a) the number of shares of Common Stock into which the shares of Series A Redeemable Stock of the Company convert at the Initial Public Offering and (b) the Warrant Stock (as defined below).

 

1.3                “Common Stock” means shares of common stock, par value $0.001 per share, of the Company.

 

1.4                “Exercise Date” means the date of the Initial Public Offering (as defined below).

 

1.5                “Initial Public Offering” means the closing of the sale of shares of Common Stock to the public in a public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended.

 

 

1.6                “Subsidiary” means any corporation, partnership, trust or other entity of which the Company and/or any of its other subsidiaries directly or indirectly owns at the time a majority of the outstanding shares of every class of equity security of such corporation, partnership, trust or other entity.

 

1.7                “Warrant” means this Warrant and any warrant(s) delivered in substitution or exchange therefor, as provided herein.

 

1.8                “Warrant Price” means $0.001.

 

1.9                “Warrant Stock” means the number of shares of Common Stock at the Initial Public Offering equal to the product of (a) the Applicable Percentage and (b) the Applicable Shares.

 

ARTICLE 2  Exercise.

 

2.1                Method of Exercise. Subject to the terms and conditions of this Warrant, the Holder may only exercise this Warrant on the Exercise Date for all of the shares of Warrant Stock for which this Warrant is exercisable, by surrendering this Warrant at the principal offices of the Company, with the subscription form attached hereto as Exhibit 1 duly executed by the Holder, and payment of an amount equal to the product obtained by multiplying (a) the number of shares of Warrant Stock for which this Warrant is exercisable by (b) the Warrant Price, as determined in accordance with the terms hereof.

 

2.2                Form of Payment. Subject to Section 2.5 below, payment may be made by (a) a check payable to the Company’s order, (b) wire transfer of immediately available funds to the Company or (c) any combination of the foregoing.

 

2.3                No Fractional Shares. No fractional shares may be issued upon any exercise of this Warrant, and any fractions shall be rounded down to the nearest whole number of shares. If upon any exercise of this Warrant a fraction of a share results, the Company will pay the cash value of any such fractional share.

 

2.4                Restrictions on Exercise. This Warrant may not be exercised if the issuance of the Warrant Stock upon such exercise would constitute a violation of any applicable federal or state securities laws or other laws or regulations. As a condition to the exercise of this Warrant, the Holder shall execute the subscription form attached as Exhibit 1 hereto.

 

2.5                Net Exercise Election. The Holder may elect to convert this Warrant, without the payment by the Holder of any additional consideration, by the surrender of this Warrant or such portion to the Company, with the net exercise election selected in the subscription form attached hereto as Exhibit 1 duly executed by the Holder, into the number of shares of Warrant Stock that is obtained under the following formula:

 

X = Y (A-B)

     A

 

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where                                        X = the number of shares of Warrant Stock to be issued to the Holder pursuant to this Section 2.5.

 

Y = the number of shares of Warrant Stock for which this Warrant is exercisable.

 

A = the per share offering price to the public of the Company’s Common Stock pursuant to the Initial Public Offering.

 

B = the Warrant Price.

 

ARTICLE 3      Issuance of Stock. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Warrant Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date. As soon as practicable on or after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of whole shares of Warrant Stock issuable upon such exercise. Surrender of this Warrant in connection with the exercise thereof shall not be required if the Holder delivers an executed affidavit of loss, damage or mutilation, and an executed agreement to indemnify the Company (as reasonably requested by the Company).

 

ARTICLE 4           Reservation of Stock. If at any time the number of shares of Warrant Stock or other securities issuable upon exercise of this Warrant shall not be sufficient to effect the exercise of this Warrant, the Company will take such corporate action as may, in the opinion of the Holder’s counsel, be necessary to increase its authorized but unissued shares of Warrant Stock or other securities issuable upon exercise of this Warrant as shall be sufficient for such purpose.

 

ARTICLE 5      Treatment of Warrant on a Liquidation Event.

 

5.1                          Termination. In the event of any (a) consolidation, merger, or other reorganization of the Company into or with any other entity or entities (except a consolidation or merger into a Subsidiary or merger in which the Company is the surviving corporation and the holders of the Company’s voting stock outstanding immediately prior to the transaction constitute the holders of a majority of the voting stock outstanding immediately following the transaction), (b) dissolution of the Company, or (c) sale, abandonment, lease, license, transfer or other disposition by the Company of all or substantially all its properties or assets (each, a “Liquidation Event”), this Warrant shall terminate automatically upon the closing of the applicable Liquidation Event. In the event the Holder does not exercise this Warrant on the Exercise Date, this Warrant shall terminate on the day after the Initial Public Offering.

 

ARTICLE 6  Representations and Warranties.

 

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

 

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(a)              Due Authorization. All corporate action on the part of the Company’s directors necessary for the authorization, execution, delivery of, and the performance of all obligations of the Company under this Warrant has been taken, and this Warrant when executed and delivered, will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditor’s rights generally and (ii) the effect of rules of law governing the availability of equitable remedies.

 

(b)              Offer, Issuance and Sale. Based in part on the representations and warranties made by the Holder in Section 6.2 hereof, the offer, issuance, sale and delivery of the Warrant and Warrant Stock are or will be exempt from the registration requirements of the Act and the qualification or registration provisions of applicable state securities laws. Neither the Company nor its authorized agents will take any action that would cause the loss of such exemption.

 

(c)               Corporate Power. The Company has the corporate power and authority to issue, execute and deliver the Warrant and to carry out and perform all its obligations under the Warrant.

 

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

 

(a)              Due Authorization. All corporate action on the part of the Holder necessary for the authorization, execution, delivery of, and the performance of all obligations of the Holder under this Warrant has been taken, and this Warrant when executed and delivered, will constitute a valid and legally binding obligation of the Holder, enforceable in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditor’s rights generally and (ii) the effect of rules of law governing the availability of equitable remedies.

 

(b)              Purchase for Own Account. The Warrant and, if applicable, the Warrant Stock will be acquired for investment for the Holder’s own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof within the meaning of the Act, and the Holder has no present intention of selling, granting any participation in, or otherwise distributing the same.

 

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

 

ARTICLE 7    No Rights or Liabilities as Stockholder. This Warrant does not by itself entitle the Holder to any voting rights or other rights as a stockholder of the Company. In the absence of affirmative action by the Holder to purchase Warrant Stock by exercise of this Warrant, no provisions of this Warrant, and no enumeration herein of the rights or privileges of the Holder, shall cause the Holder to be a stockholder of the Company for any purpose.

 

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ARTICLE 8      No Impairment. The Company will not, by amendment of its Certificate of Incorporation or bylaws, each as amended to date, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, willfully avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against wrongful impairment. Without limiting the generality of the foregoing, the Company will take all such action as may be necessary or appropriate in order that the Company may duly and validly issue fully paid and nonassessable shares of Warrant Stock upon the exercise of this Warrant.

 

ARTICLE 9      Transfer; Exchange; Replacement. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, without charge to the Holder, upon surrender of this Warrant with a properly executed assignment document at the principal office of the Company. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant of like tenor representing in the aggregate the purchase rights hereunder, and each of such new Warrant shall represent such portion of such rights as is designated by the Holder at the time of such surrender. The date the Company initially issues this Warrant shall be deemed to be the “Date of Issuance” hereof regardless of the number of times new certificates representing the unexpired and unexercised rights formerly represented by this Warrant shall be issued. All Warrants representing portions of the rights hereunder are referred to herein as the “Warrant.” Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the Holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing this Warrant, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company (provided that if the holder is a financial institution or other institutional investor its own agreement shall be satisfactory), or, in the case of any such mutilation upon surrender of such certificate, the Company shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the same rights represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate. The rights and obligations of the Company and the Holder under this Warrant shall be binding upon and benefit their respective permitted successors, assigns, heirs, administrators and transferees.

 

ARTICLE 10         “Market Stand-Off” Agreement. The Holder hereby acknowledges and agrees that the Warrant Stock shall be subject to the restrictions described in Section 2.14 of the Sixth Amended and Restated Investor Rights Agreement dated on or about the date hereof by and among the Company, the Investors and the Key Holders (each as defined therein), as the same may be amended from time to time.

 

ARTICLE 11         Nature of Stock. The shares of Warrant Stock issuable upon exercise of the Warrant are “restricted securities” within the meaning of the Act and are subject to restrictions on transfer. Accordingly, the certificates representing the shares of Warrant Stock will bear a legend evidencing their restricted nature substantially as follows:

 

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THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES, REASONABLY SATISFACTORY TO THE ISSUER, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

The shares of Warrant Stock reserved pursuant to this Warrant are not, and at the time of exercise of the Warrant will not be, registered under the Act because the sale of the shares thereunder is exempt from registration. To enable the Company to satisfy the requirements of the exemption, the Holder has represented to the Company that it is an “accredited investor” within the meaning of the Act, and that it is acquiring this Warrant for its own account for investment purposes and not with a view toward the public resale or other distribution thereof.

 

ARTICLE 12         Governing Law. This Warrant shall be governed by and construed under the internal laws of the State of Delaware, without reference to principles of conflict of laws or choice of laws.

 

ARTICLE 13         Headings. The headings and captions used in this Warrant are used only for convenience and are not to be considered in construing or interpreting this Warrant. All references in this Warrant to sections and exhibits shall, unless otherwise provided, refer to sections hereof and exhibits attached hereto, all of which exhibits are incorporated herein by this reference.

 

ARTICLE 14         Notices. Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given (a) when faxed (with transmission acknowledgment received); provided, however, that any faxes sent on a day other than a business day shall be deemed received on the following business day; (b) when delivered personally; (c) five (5) days after being sent by certified or registered mail (return receipt requested); (d) two (2) days after being sent by overnight delivery providing receipt of delivery; or (e) when sent by electronic mail (with receipt acknowledge by electronic mail reply) when addressed to the party to be notified at the address indicated for such party on the signature page hereto, or at such other address as any party or the Company may designate by giving ten (10) days’ prior written notice to all other parties.

 

ARTICLE 15         Amendment; Waiver. This Warrant may only be amended with the prior written consent of the Holder and the Company. No waiver of, or exception to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

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ARTICLE 16         Severability. If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

 

ARTICLE 17         Terms Binding. By acceptance of this Warrant, the Holder accepts and agrees to be bound by all the terms and conditions of this Warrant.

 

[Remainder of this Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its name as of the date first above written.

 

	
 
    	
THE   COMPANY:
    
	
 
    	
 
    
	
 
    	
BIT9, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Patrick   Morley
    
	
 
    	
Name:
    	
Patrick Morley
    
	
 
    	
Title:
    	
President and   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
266 Second Ave.
    
	
 
    	
Waltham, MA   02451
    

 

THE HOLDER:

 

SC US GF V HOLDINGS, LTD.

a Cayman Islands exempted company

 

By: SEQUOIA CAPITAL U.S. GROWTH FUND V, L.P.

 

SEQUOIA CAPITAL USGF PRINCIPALS FUND V, L.P.

 

both Cayman Islands exempted limited partnerships, its Members

 

By:                            SCGF V MANAGEMENT, L.P.,

a Cayman Islands exempted limited partnership, its General Partner

 

By:                            SC GF V TT, LTD.,

a Cayman Islands exempted company, its General Partner

 

	
By:
    	
 
    
	
 
    	
 
    
	
/s/ Scott Carter
    	
 
    
	
Name:
    	
Scott Carter
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    

 

[Signature Page to Warrant]

 

 

Exhibit 1

FORM OF SUBSCRIPTION

(To be signed only upon exercise of Warrant)

 

To:                             BIT9, INC.

 

(1)                 The undersigned Holder hereby elects to purchase              shares of Common Stock of BIT9, INC. (the “Warrant Stock”), pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full.

 

(2)                 Net Exercise Election. The undersigned Holder elects to convert the Warrant into shares of Warrant Stock by net exercise election pursuant to Section 2.5 of the Warrant.

 

[STRIKE PARAGRAPH ABOVE THAT DOES NOT APPLY]

 

(3)                 Please issue a certificate or certificates representing such shares of Warrant Stock in the names specified below:

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Name)
    	
 
    	
(Name)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Address)
    	
 
    	
(Address)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(City, State,   Zip Code)
    	
 
    	
(City, State,   Zip Code)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Federal Tax   identification Number)
    	
 
    	
(Federal Tax   identification Number)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Date                    )
    	
 
    	
(Signature of   Holder)Exhibit 4.6

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH RESPECT THERETO.

 

THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION (EACH A “TRANSFER”) OF THE SECURITIES OBTAINABLE UPON EXERCISE HEREOF AND THE VOTING OF SUCH SECURITIES ARE RESTRICTED BY THE TERMS OF THE THIRD AMENDED AND RESTATED VOTING AGREEMENT (THE “AGREEMENT”), DATED AS OF MAY 21, 2010, AS MAY BE AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY NAMED THEREIN, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY, THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE AGREEMENT. IN ADDITION, THIS WARRANT AND THE SECURITIES OBTAINABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS WARRANT.

 

PREFERRED STOCK PURCHASE WARRANT

 

	
Warrant No. B             
    	
Number of Shares:          
    
	
 
    	
Series B Preferred Stock
    

 

BIT9, INC.

 

Issued on                

 

Void after                 

 

1.             Issuance. This Preferred Stock Purchase Warrant (the “Warrant”) is issued to                                                                                                                      by BIT9, INC., a Delaware corporation (hereinafter with its successors called the “Company”).

 

2.             Purchase Price; Number of Shares.

 

The registered holder of this Warrant (the “Holder”), commencing on the date hereof, is entitled upon surrender of this Warrant with the subscription form annexed hereto duly executed, at the principal office of the Company, to purchase from the Company, at a price per share of $         ( the “Purchase Price”),          fully paid and nonassessable shares of the Company’s Series B Preferred Stock (the “Exercise Quantity”), $0.001 par value (the “Preferred Stock”).

 

Any term not defined herein shall have the meaning as set forth in the Loan Agreement.

 

Until such time as this Warrant is exercised in full or expires, the Purchase Price and the securities issuable upon exercise of this Warrant are subject to adjustment as hereinafter provided. The person or persons in whose name or names any certificate representing shares of Preferred Stock is issued hereunder shall be deemed to have become the holder of record of the shares represented thereby as at the close of business on the date this Warrant is exercised with respect to such shares, whether or not the transfer books of the Company shall be closed.

 

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3.             Payment of Purchase Price. The Purchase Price may be paid (i) in cash or by check, (ii) by the surrender by the Holder to the Company of any promissory notes or other obligations issued by the Company, with all such notes and obligations so surrendered being credited against the Purchase Price in an amount equal to the principal amount thereof plus accrued interest to the date of surrender, or (iii) by any combination of the foregoing.

 

4.             Net Issue Election. The Holder may elect to receive, without the payment by the Holder of any additional consideration, shares of Preferred Stock equal to the value of this Warrant or any portion hereof by the surrender of this Warrant or such portion to the Company, with the net issue election notice annexed hereto duly executed, at the principal office of the Company. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable shares of Preferred Stock as is computed using the following formula:

 

X= Y(A-B)

A

 

	
where:
    	
X =
    	
the number of shares of Preferred Stock to be issued to the   Holder pursuant to this Section 4.
    
	
 
    	
 
    	
 
    
	
 
    	
Y =
    	
the number of shares of Preferred Stock covered by this Warrant   in respect of which the net issue election is made pursuant to this Section 4.
    
	
 
    	
 
    	
 
    
	
 
    	
A =
    	
the Fair Market Value (defined below) of one share of Preferred   Stock, as determined at the time the net issue election is made pursuant to   this Section 4.
    
	
 
    	
 
    	
 
    
	
 
    	
B =
    	
the Purchase Price in effect under this Warrant at the time the   net issue election is made pursuant to this Section 4.
    

 

“Fair Market Value” of a share of Preferred Stock (or fully paid and nonassessable shares of the Company’s common stock, $ 0.001 par value (the “Common Stock”) if the Preferred Stock has been automatically converted into Common Stock) as of the date that the net issue election is made (the “Determination Date”) shall mean:

 

(i)            If the net issue election is made in connection with and contingent upon the closing of the sale of the Company’s Common Stock to the public in a public offering pursuant to a Registration Statement under the 1933 Act (a “Public Offering”), and if the Company’s Registration Statement relating to such Public Offering (“Registration Statement”) has been declared effective by the Securities and Exchange Commission, then the initial “Price to Public” specified in the final prospectus with respect to such offering multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then convertible.

 

(ii)           If the net issue election is not made in connection with and contingent upon a Public Offering, then as follows:

 

(a)           If traded on a securities exchange or the Nasdaq National Market, the fair market value of the Common Stock shall be deemed to be the average of the closing or last reported sale prices of the Common Stock on such exchange or market over the five day period ending five trading days prior to the Determination Date, and the fair market value of the Preferred Stock shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then convertible;

 

(b)           If otherwise traded in an over-the-counter market, the fair market value of the Common Stock shall be deemed to be the average of the closing ask prices of the Common Stock over the five day period ending five trading days prior to the Determination Date, and the fair market value of the Preferred Stock shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then convertible; and

 

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(c)           If there is no public market for the Common Stock, then fair market value shall be determined in good faith by the Company’s Board of Directors.

 

5.             Partial Exercise. This Warrant may be exercised in part, and the Holder shall be entitled to receive a new warrant, which shall be dated as of the date of this Warrant, covering the number of shares in respect of which this Warrant shall not have been exercised.

 

6.             Fractional Shares. In no event shall any fractional share of Preferred Stock be issued upon any exercise of this Warrant. If, upon exercise of this Warrant in its entirety, the Holder would, except as provided in this Section 6, be entitled to receive a fractional share of Preferred Stock, then the Company shall issue cash in an amount equal to the Fair Market Value of such fractional share.

 

7.             Expiration Date; Automatic Exercise. This Warrant shall expire at the earlier to occur of (i) the close of business on June 1, 2017, or (ii) the effective date of Company’s Public Offering on NASDAQ or other stock exchange in the United States or (iii) upon the consummation of a Merger, and shall be void thereafter (the “Expiration Date”). Notwithstanding the term of this Warrant fixed pursuant to this Section 7, and provided Holder has received advance written notice of at least twenty (20) days and has not earlier exercised this Warrant, and provided this Warrant has not been assumed by the successor entity (or parent thereof), upon the consummation of a Merger (as defined below), this Warrant shall automatically be exercised pursuant to Section 4 hereof, without any action by Holder.

 

“Merger” means: (i) a sale of all or substantially all of the Company’s assets to an Unaffiliated Entity (as defined below), or (ii) the merger, consolidation or acquisition of the Company with, into or by an Unaffiliated Entity (other than a merger or consolidation for the principal purpose of changing the domicile of the Company or a bona fide round of preferred stock equity financing), that results in the transfer of fifty percent (50%) or more of the outstanding voting power of the Company. “Unaffiliated Entity” means any entity that is owned or controlled by parties who own less than twenty percent (20%) of the combined voting power of the voting securities of the Company immediately prior to such merger, consolidation or acquisition. Notwithstanding the foregoing, in the event that any outstanding warrants to purchase equity securities of the Company are assumed by the successor entity of a Merger (or parent thereof), this Warrant shall also be similarly assumed. The Company agrees to promptly give the Holder written notice of any proposed Merger and written notice of termination of any proposed Merger. Notwithstanding anything to the contrary in this Warrant, the Holder may rescind any exercise of its purchase rights after a notice of termination of the proposed Merger if the exercise of this Warrant occurred after the Company notified the Holder that the Merger was proposed or if the exercise was otherwise precipitated by such proposed Merger, provided, however that such rescission right must be exercised within thirty (30) days of receipt of such written notice of termination of the proposed Merger. In the event of such rescission, this Warrant will continue to be exercisable on the same terms and conditions.

 

8.             Reserved Shares; Valid Issuance. The Company covenants that it will at all times from and after the date hereof reserve and keep available such number of its authorized shares of Preferred Stock and Common Stock free from all preemptive or similar rights therein, as will be sufficient to permit, respectively, the exercise of this Warrant in full and the conversion into shares of Common Stock of all shares of Preferred Stock receivable upon such exercise. The Company further covenants that such shares as may be issued pursuant to such exercise and/or conversion will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.

 

9.             Stock Splits and Dividends. If after the date hereof the Company shall subdivide the Preferred Stock, by split-up or otherwise, or combine the Preferred Stock, or issue additional shares of Preferred Stock in payment of a stock dividend on the Preferred Stock, the number of shares of Preferred Stock issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination, and the Purchase Price shall forthwith be proportionately decreased in the case of a subdivision or stock dividend, or proportionately increased in the case of a combination.

 

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10.          Adjustments for Diluting Issuances. The other antidilution rights applicable to the Preferred Stock of the Company are set forth in the Fourth Amended and Restated Certificate of Incorporation, as amended from time to time (the “Certificate”), a true and complete copy in its current form which is attached hereto as Exhibit A. The Company shall provide the Holder hereof with any restatement, amendment or modification to the Certificate promptly after the same has been made.

 

11.          Reclassifications. If after the date hereof the Company shall enter into any Reorganization (as hereinafter defined), then, as a condition of such Reorganization, lawful provisions shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall thereafter have the right to purchase, at a total price not to exceed that payable upon the exercise of this Warrant in full, the kind and amount of shares of stock and other securities and property receivable upon such Reorganization by a holder of the number of shares of Preferred Stock which might have been purchased by the Holder immediately prior to such Reorganization, and in any such case appropriate provisions shall be made with respect to the rights and interest of the Holder to the end that the provisions hereof (including without limitation, provisions for the adjustment of the Purchase Price and the number of shares issuable hereunder and the provisions relating to the net issue election) shall thereafter be applicable in relation to any shares of stock or other securities and property thereafter deliverable upon exercise hereof. For the purposes of this Section 11, the term “Reorganization” shall include without limitation any reclassification, capital reorganization or change of the Preferred Stock (other than as a result of a subdivision, combination or stock dividend provided for in Section 9 hereof), or any consolidation of the Company with, or merger of the Company into, another corporation or other business organization (other than (i) a merger in which the Company is the surviving corporation and which does not result in any reclassification or change of the outstanding Preferred Stock or (ii) a Merger as provided in Section 7 hereof).

 

12.          Certificate of Adjustment. Whenever the Purchase Price is adjusted, as herein provided, the Company shall promptly deliver to the Holder a certificate of the Company’s chief financial officer or treasurer setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

13.          Notices of Record Date, Etc. In the event of:

 

(a)           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 or other distribution, or any right to subscribe for, purchase, sell or otherwise acquire or dispose of any shares of stock of any class or any other securities or property, or to receive any other right;

 

(b)           any reclassification of the capital stock of the Company, capital reorganization of the Company, consolidation or merger involving the Company, or sale or conveyance of all or substantially all of its assets; or

 

(c)           any voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

then in each such event the Company will provide or cause to be provided to the Holder a written notice thereof. Such notice shall be provided at least twenty (10) business days prior to the date specified in such notice on which any such action is to be taken.

 

14.          Representations, Warranties and Covenants. This Warrant is issued and delivered by the Company and accepted by each Holder on the basis of the following representations, warranties and covenants made by the Company:

 

(a)           The Company has all necessary authority to issue, execute and deliver this Warrant and to perform its obligations hereunder. This Warrant has been duly authorized issued, executed and delivered by the Company and is the valid and binding obligation of the Company, enforceable in accordance with its terms.

 

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(b)           The shares of Preferred Stock issuable upon the exercise of this Warrant have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable.

 

(c)           The issuance, execution and delivery of this Warrant do not, and the issuance of the shares of Preferred Stock upon the exercise of this Warrant in accordance with the terms hereof will not, (i) violate or contravene the Company’s Articles or by-laws, or any law, statute, regulation, rule, judgment or order applicable to the Company, (ii) violate, contravene or result in a breach or default under any contract, agreement or instrument to which the Company is a party or by which the Company or any of its assets are bound or (iii) require the consent or approval of or the filing of any notice or registration with any person or entity except as may be required under federal and state securities laws.

 

(d)           As long as this Warrant is, or any shares of Preferred Stock issued upon exercise of this Warrant or any shares of Common Stock issued upon conversion of such shares of Preferred Stock are held by                   or any of its affiliates, the Company will provide to                   or such affiliate the financial and other information described in the Loan and Security Agreement No.        dated                      , as amended.

 

(e)           As of the date hereof, the authorized capital stock of the Company consists of (i)        shares of Common Stock, of which        shares are issued and outstanding and up to         shares are reserved for issuance upon the exercise of this Warrant with respect to Common Stock and the conversion of the Preferred Stock into Common Stock if this Warrant is exercised with respect to Preferred Stock, (ii)        shares of Series A Redeemable Preferred Stock, none of which are issued and outstanding, and (iii)        shares of Series B Convertible Preferred Stock, of which        shares are issued and outstanding and up to        shares are reserved for issuance upon exercise of this Warrant. Attached hereto as Exhibit B is a capitalization table summarizing the capitalization of the Company. At the request of Holder, not more than once per calendar quarter, the Company will provide Holder with a current capitalization table indicating changes, if any, to the number of outstanding shares of common stock and preferred stock.

 

15.          Series B Agreements. The Holder will become a party to the Company’s Third Amended and Restated Voting Agreement, Third Amended and Restated Right of First Refusal and Co-Sale Agreement, and Fourth Amended and Restated Investor Rights Agreement, each dated as of May 21, 2010 (collectively, the “Series B Agreements”) by executing a counterpart signature page thereto on the date hereof, whereupon the Holder shall be an “Investor” for all purposes of the Series B Agreements.

 

16.          Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Holder and the Company.

 

17.          Representations and Covenants of the Holder. This Warrant has been entered into by the Company in reliance upon the following representations and covenants of the Holder, which by its execution hereof the Holder hereby confirms:

 

(a)           Investment Purpose. The right to acquire Preferred Stock or the Preferred Stock issuable upon exercise of the Holder’s rights contained herein will be acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)           Accredited Investor. Holder is an “accredited investor” within the meaning of the Rule 501 of Regulation D under the 1933 Act, as presently in effect.

 

(c)           Private Issue. The Holder understands (i) that the Preferred Stock issuable upon exercise of the Holder’s rights contained herein is not registered under the 1933 Act or qualified under applicable state securities laws on the ground that the issuance contemplated by this Warrant will be exempt from the registration and qualifications requirements thereof, and (ii) that the Company’s reliance on such exemption is predicated on the representations set forth in this Section 17.

 

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(d)           Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment.

 

18.          Notices, Transfers, Etc.

 

(a)           Any notice or written communication required or permitted to be given to the Holder may be given by certified mail or delivered to the Holder at the address most recently provided by the Holder to the Company.

 

(b)           Subject to compliance with applicable federal and state securities laws, this Warrant may not be transferred by the Holder with respect to any or all of the shares purchasable hereunder unless (i) they are registered under the 1933 Act, or (ii) the Holder provides the Company with an opinion of counsel that the sale or transfer is exempt from the requirements of the 1933 Act, or (iii) permitted pursuant to the Series B Agreements. Subject to the foregoing, upon surrender of this Warrant to the Company, together with the assignment notice annexed hereto duly executed for transfer of this Warrant (i) as an entirety by the Holder, the Company shall issue a new warrant of the same denomination to the assignee, or (ii) with respect to a portion of the shares of Preferred Stock purchasable hereunder, the Company shall issue a new warrant to the assignee, in such denomination as shall be requested by the Holder hereof, and shall issue to such Holder a new warrant covering the number of shares in respect of which this Warrant shall not have been transferred.

 

(c)           In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue a new warrant of like tenor and denomination and deliver the same (i) in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen or destroyed, upon receipt of an affidavit of the Holder and appropriate indemnification agreement in favor of the Company.

 

19.          No Impairment. The Company will not, by amendment of its Articles or through any reclassification, capital reorganization, consolidation, merger, sale or conveyance of assets, dissolution, liquidation, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance of performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder.

 

20.          Governing Law. The provisions and terms of this Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to its principles regarding conflicts of laws.

 

21.          Successors and Assigns. This Warrant shall be binding upon the Company’s successors and assigns and shall inure to the benefit of the Holder’s successors, legal representatives and permitted assigns.

 

22.          Business Days. If the last or appointed day for the taking of any action required or the expiration of any rights granted herein shall be a Saturday or Sunday or a legal holiday in Delaware, then such action may be taken or right may be exercised on the next succeeding day which is not a Saturday or Sunday or such a legal holiday.

 

23.          Qualifying Public Offering. If the Company shall effect a firm commitment underwritten public offering of shares of Common Stock which results in the conversion of the Preferred Stock into Common Stock pursuant to the Company’s Certificate in effect immediately prior to such offering, then, effective upon such conversion, this Warrant shall change from the right to purchase shares of Preferred Stock to the right to purchase shares of Common Stock, and the Holder shall thereupon have the right to purchase, at a total price equal to that payable upon the exercise of this Warrant in full, the number of shares of Common Stock which would have been receivable by the Holder upon the exercise of this Warrant for shares of Preferred Stock immediately prior to such conversion of such shares of Preferred Stock into shares of Common Stock, and in such event appropriate provisions shall be made with respect to the rights and interest of the Holder to the end that the provisions hereof (including, without limitation, the provisions for the adjustment of the Purchase Price and of the number of shares purchasable

 

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upon exercise of this Warrant and the provisions relating to the net issue election) shall thereafter be applicable to any shares of Common Stock deliverable upon the exercise hereof.

 

24.          Restrictive Legends. Each certificate representing shares of the Company’s capital stock received by the Holder upon exercise of this Warrant shall bear a legend substantially in the following form, in addition to the legends required pursuant to the Series B Agreements.

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be offered, sold or otherwise transferred, pledged or hypothecated unless and until such securities are registered under such Act or an opinion of counsel satisfactory to the Company is obtained to the effect that such registration is not required.”

 

The foregoing legend shall be removed from the certificate(s) at the request of the holder thereof, at such time as they become eligible for resale pursuant to Rule 144(k) under the Act.

 

25.          Agreement in Connection with Public Offering. The Holder agrees, in connection with Public Offering, (i) not to sell, make short sale of, loan, grant, any options for the purchase of, or otherwise dispose of any shares held by the Holder (other than any shares included in the offering) without the prior written consent of the Company of the underwriters managing such Public Offering of the Company’s securities for a period of 180 days from the effective date of such registration statement, and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering and shall only be applicable to Holder if all founders, officers, directors and greater than 2% of stockholders of the Company enter into similar agreements.

 

26.          Value. The Company and the Holder agree that the value of this Warrant on the date of grant is     .

 

	
 
    	
Bit9, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

7

 

Subscription

 

To:                 

 

Date:                

 

The undersigned hereby subscribes for                     shares of Preferred Stock covered by this Warrant. The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below:

 

	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name for Registration
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Mailing Address
    	
 
    

 

1

 

Net Issue Election Notice

 

	
To:
    	
 
    	
Date:
    	
 
    

 

The undersigned hereby elects under Section 4 to surrender the right to purchase shares of Preferred Stock pursuant to this Warrant. The certificate(s) for such shares issuable upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below:

 

	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name for Registration
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Mailing Address
    	
 
    

 

1

 

Assignment

 

For value received                     hereby sells, assigns and transfers unto

 

 

[Please print or typewrite name and address of Assignee]

 

the within Warrant, and does hereby irrevocably constitute and appoint                            its attorney to transfer the within Warrant on the books of the within named Company with full power of substitution on the premises.

 

 

	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name for Registration
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
In the Presence of:
    	
 
    
	
 
    	
 
    
				

                 

 

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