Document:

Exhibit 10.4

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND LAWS OR PURSUANT TO RULE 144 AND EXEMPTIONS UNDER APPLICABLE STATE SECURITIES LAWS, OR, SUBJECT TO SECTION 5.3 HEREOF, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

WARRANT TO PURCHASE SERIES A-1 CONVERTIBLE PREFERRED STOCK

 

Issuer:  Radius Health, Inc.
 Number of Shares:  818 
 Class of Stock: Series A-1 Convertible Preferred Stock, par value $.0001 per share 
 Exercise Price:  $81.42 per share, subject to adjustment
 Issue Date:  December 14, 2011
 Expiration Date: December 14, 2016

 

FOR THE AGREED UPON VALUE of $1.00, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, this Warrant is issued to LEERINK SWANN LLC (together with its successors and permitted assigns, “Holder”) by RADIUS HEALTH, INC., a Delaware corporation (the “Company”).

 

Subject to the terms and conditions hereinafter set forth, the Holder is entitled upon surrender of this Warrant and a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 (the “Notice of Exercise”), at the principal office of the Company, 201 Broadway, 6th Floor, Cambridge, Massachusetts 02139, or such other office as the Company shall notify the Holder of in writing, to purchase from the Company up to eight hundred eighteen (818) of fully paid and non-assessable shares (the “Shares”) of the Company’s Series A-1 Convertible Preferred Stock, $.0001 par value per share (the “Class”), at a purchase price per Share of eighty one dollars and 42/100 ($81.42) (the “Exercise Price”).  Subject to the terms and conditions hereinafter set forth, this Warrant may be exercised in whole or in part at any time and from time to time until 5:00 PM, Eastern time, on the Expiration Date set forth above, and shall be void thereafter.  Until such time as this Warrant is exercised in full or expires, the Exercise Price and the number of Shares are subject to adjustment from time to time as hereinafter provided.  This Warrant is issued in connection with that certain letter agreement dated September 24, 2010 by and between the Company and the Holder (the “Agreement”).  Capitalized terms used and not otherwise defined herein shall have the respective meanings set forth in the Agreement.

 

 

Notwithstanding the foregoing definition of Class, upon and after the automatic or voluntary conversion, redemption or retirement of all (but not less than all) of the outstanding shares of such Class, including without limitation the Company’s initial registered underwritten public offering and sale of its securities (“IPO”), then from and after the date upon which all such outstanding shares have been so converted, redeemed or retired, “Class” shall mean the Company’s common stock, $.0001 par value per share (“Common Stock”), and this Warrant shall be exercisable for such number of shares of Common Stock as shall equal the number of shares of Common Stock into which the Shares would have been converted pursuant to the Company’s Certificate of Incorporation, as amended from time to time, including without limitation the Certificate of Designations, if any, applicable to the same class or series of preferred stock as the Shares (the “Certificate”) had the Shares been issued and outstanding immediately prior to such conversion, redemption or retirement, and the Exercise Price shall be the Common Stock conversion price as determined pursuant to the Certificate immediately prior to such conversion, redemption or retirement (all subject to further adjustment as provided herein).

 

ARTICLE 1.  EXERCISE.

 

1.1           Method of Exercise.  The Holder may exercise this Warrant by delivering this Warrant together with a duly executed Notice of Exercise to the principal office of the Company.  Unless the Holder is exercising the conversion right set forth in Section 1.2, the Holder shall also deliver to the Company a check for the aggregate Exercise Price for the Shares being purchased.

 

1.2           Conversion Right.  In lieu of exercising this Warrant as specified in Section 1.1, the Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined as follows:

 

X = Y (A-B)/A

 

where:

 

X = the number of Shares to be issued to the Holder.

 

Y = the number of Shares with respect to which this Warrant is being exercised.

 

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

 

B = the Exercise Price.

 

1.3           Fair Market Value.

 

1.3.1        If the Company’s Common Stock is traded in a public market on a nationally recognized securities exchange or over the counter market and the Shares are

 

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Common Stock, the fair market value of each Share shall be the closing price of a Share reported for the business day immediately preceding the date of Holder’s Notice of Exercise to the Company (or in the instance where the Warrant is exercised immediately prior to the effectiveness of the Company’s initial public offering, the “price to public” per share price specified in the final prospectus relating to such offering).  If the Company’s Common Stock is traded in a public market on a nationally recognized securities exchange or over the counter market and the Shares are preferred stock, the fair market value of a Share shall be the closing price of a share of the Company’s Common Stock reported for the business day immediately  preceding the date of Holder’s Notice of Exercise to the Company (or in the instance where the Warrant is exercised immediately prior to the effectiveness of the Company’s initial public offering, the initial “price to public” per share price specified in a final prospectus relating to such offering), in both cases, multiplied by the number of shares of the Company’s Common Stock into which a Share is convertible.

 

1.3.2        If shares of the Class (or shares of the Company’s stock into which shares of the Class are convertible or exchangeable) are not traded on a nationally recognized securities exchange or over the counter 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 at its sole expense shall promptly deliver to Holder (i) certificates for the Shares acquired upon such exercise, and (ii) if this Warrant has not been fully exercised or converted and has not expired, a new warrant of like tenor representing the Shares for which this Warrant is still exercisable.

 

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           Assumption/Repurchase on Sale, Merger, or Consolidation of the Company.

 

1.6.1        “Acquisition”.  For the purpose of this Warrant, “Acquisition” means any sale, assignment, transfer, exclusive license, or other disposition of all or substantially all of the assets of the Company, or any acquisition, reorganization, consolidation, or merger of the Company where the holders of the Company’s outstanding voting equity securities immediately prior to the transaction (i) receive cash, stock, securities or other property in respect of or in exchange for such voting equity securities pursuant to any of the transactions referred to in the foregoing provisions of this Section 1.6.1, and (ii) in the event that such transaction consists of any acquisition, reorganization, consolidation or merger of the Company, beneficially own less than a majority of the outstanding voting equity securities of the surviving or successor entity immediately following the transaction.

 

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1.6.2        Assumption of Warrant.  Upon the closing of any Acquisition (other than an Acquisition in which the consideration received by the Company’s stockholders consists solely of cash, debt securities or a combination of cash and debt securities), and as a condition precedent thereto, the successor or surviving entity shall assume the obligations of this Warrant, and this Warrant shall be exercisable for the same securities 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 Exercise Price shall be adjusted accordingly, and the Exercise Price and number and class of Shares shall continue to be subject to adjustment from time to time in accordance with the provisions hereof.

 

1.6.3        Purchase Right.  Notwithstanding the foregoing, upon the closing of any Acquisition in which the consideration paid to the Company or stockholders is cash or cash equivalents, at the election of Holder, the Company shall purchase the unexercised portion of this Warrant for cash for an amount equal to (a) the fair market value of any consideration that would have been received by Holder in consideration for the Shares had Holder exercised the unexercised portion of this Warrant immediately before the record date for determining the shareholders entitled to participate in the proceeds of the Acquisition, less (b) the aggregate Exercise Price of the Shares, but in no event less than zero.

 

ARTICLE 2.  ADJUSTMENTS TO THE SHARES.

 

2.1           Dividends, Splits, Etc.   If the Company declares or pays a dividend on the outstanding shares of the Class, payable in Common Stock, other securities or any type of property, or subdivides the outstanding shares of the Class into a greater number of shares of the Class, or subdivides the shares of the Class in a transaction that increases the amount of Common Stock into which such shares are convertible, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities or property 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, reorganization 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, reorganization or other event.  The Company or its successor shall promptly issue to Holder a new warrant of like tenor 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 Exercise 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, reorganizations or other events.

 

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2.3           Adjustments for Combinations, Etc.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Exercise Price shall be proportionately increased and the number of Shares issuable upon exercise or conversion of this Warrant shall be proportionately decreased.

 

2.4           No Impairment.  The Company shall not, by amendment of the Certificate or its by-laws 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 of 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.

 

2.5           Adjustments for Dilutive Issuances.  The Conversion Price (as defined in the Certificate) with respect to the Class is subject to adjustment for Dilutive Issuances (as defined in the Certificate) in accordance with Section 7(e)(i) of Part A of Article III of the Certificate.

 

2.6           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 this Warrant, the Company shall eliminate such fractional Share interest by paying Holder an amount computed by multiplying such fractional interest by the Fair Market Value (determined in accordance with Section 1.3 above) of one Share.

 

2.7           Certificate as to Adjustments.  Upon each adjustment of the Exercise Price, number or class of Shares or number of shares of Common Stock or other securities for which the Shares are convertible or exchangeable, 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 at any time and from time to time, upon written request, furnish Holder with a certificate setting forth the Exercise Price, number and class of Shares and conversion ratio in effect upon the date thereof and the series of adjustments leading to such Exercise Price, number and class of Shares and conversion ratio.

 

ARTICLE 3.  COVENANTS OF THE COMPANY.

 

3.1           Notice of Certain Events.  If the Company proposes at any time (a) to declare any dividend or distribution upon any of  its capital 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 any of its securities; (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; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the

 

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Company’s securities for cash, 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 securities of the Company shall be entitled to receive such dividend, distribution or rights) or for determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above; (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 securities of the Company will be entitled to exchange their securities of the Company for securities or other property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights.

 

ARTICLE 4.  REPRESENTATIONS OF THE HOLDER

 

4.1           Purchase for Investment.  The Holder represents and warrants that it is acquiring the Warrant, and upon exercise will hold the Shares, solely for its account for investment and not with a view to or for sale or distribution of said Warrant or Shares in violation of the Securities Act.  The Holder also represents that the entire legal and beneficial interests of the Warrant and Shares the Holder is acquiring is being acquired for, and will be held for, its account only.

 

4.2           Securities Not Registered.  The Holder understands that the Warrant has not been registered under the Securities Act on the basis that no distribution or public offering of the stock of the Company is to be effected.  The Holder realizes that the basis for the exemption may not be present if, notwithstanding its representations, it has in mind merely acquiring the securities for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise.  The Holder has no such intention.

 

4.3           Securities to be Held Indefinitely.  The Holder recognizes that the Warrant and Shares being acquired by it must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available.  The Holder recognizes that except as expressly set forth herein, the Company has no obligation to register the Warrant or to comply with any exemption from such registration.

 

4.4           Rule 144.  The Holder is aware that neither the Warrant nor the Shares may be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met and until the Holder has held the Shares for at least one year.

 

ARTICLE 5.  MISCELLANEOUS.

 

5.1           Automatic Conversion upon Expiration.  In the event that, upon the Expiration  Date, the Fair Market Value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Exercise Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be converted pursuant to Section 1.2 above as to all Shares (or such other securities) for which it

 

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shall not previously have been exercised or converted, and the Company shall promptly deliver a certificate representing the Shares (or such other securities) issued upon such conversion to the Holder.

 

5.2           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, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND LAWS OR PURSUANT TO RULE 144 AND EXEMPTIONS UNDER APPLICABLE STATE SECURITIES LAW, OR, SUBJECT TO SECTION 5.3 OF THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE COMPANY TO LEERINK SWAN LLC DATED AS OF MAY 17, 2011, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

5.3           Compliance with Securities Laws on Transfer.  This Warrant and the Shares (and the securities, if any, issued and issuable, 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 (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder, or if (a) there is no material question as to the availability of current information as referenced in Rule 144(c), (b) Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, (c) the selling broker represents that it has complied with Rule 144(f), and (d) the Company is provided with a copy of Holder’s notice of proposed sale.

 

5.4           Transfer Procedure.  Following its receipt of this executed Warrant, Holder may, subject to Section 5.3 above and the last sentence of this Section 5.4, transfer all or part of this Warrant and/or the Shares (or the securities, if any, issued and issuable upon conversion of the Shares) at any time and from time to time by giving the Company notice of the portion of the Warrant and/or Shares (or the securities, if any, issued and issuable upon conversion of the Shares) 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); provided, that at all times prior to the Company’s IPO, Holder shall not, without the prior written consent of the Company, transfer this Warrant (or any part hereof), any Shares, or any securities issued or issuable upon conversion of the Shares, to any person who directly competes with the Company, unless such transfer is in connection with an Acquisition of

 

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the Company by any such person or the stock of the transferee is publicly traded.  Any transferee (including, without limitation, any affiliate of Holder) shall execute and deliver an Instrument of Adherence, in the form attached as Appendix 2 hereto (an “Instrument of Adherence”), to that certain Amended and Restated Stockholders’ Agreement, dated as of May 17, 2011, by and among the Company and the stockholder parties thereto, as amended from time to time.

 

5.5           Effect of Violation of Transfer Restrictions; Preventive Measures.  Any offer, sale, assignment, transfer, endorsement, pledge, mortgage, hypothecation, or other conveyance or disposition of all or any portion of this Warrant or any Shares issued from time to time upon exercise of this Warrant, or of any interest in this Warrant or any of such Shares, in violation of this Section 5 shall be null and void.  The Company may make a notation on its records or give instructions to any of its transfer agents in order to implement the restrictions on transfer set forth in this Section 5.

 

5.6           Warrant Binding Upon Assignee or Successor.  The terms and conditions of this Warrant shall be binding upon any permitted assignee and successor of the Holder.  Any such successor or assignee shall be obligated to and shall immediately execute an instrument which provides that such party is bound under the terms of this Warrant.  Any transfer, assignment or other disposition without such execution by the proposed transferee, assignee or successor shall be null and void.

 

5.7           No Rights as Stockholder.  The Holder shall not be entitled to vote or to receive dividends or to be deemed the holder of shares of the Company’s capital stock that may at any time be issuable upon exercise of this Warrant for any purpose whatsoever, nor shall anything contained herein be construed to confer upon the Holder any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance or reclassification of stock, change of par value or change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive notice of meetings, or to receive dividends or subscription rights, until the Holder shall have exercised the Warrant and shall have been issued Shares in accordance with the provisions hereof.

 

5.8           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, or sent via reputable overnight courier service, fee 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, but in all cases, unless instructed in writing otherwise, the Company shall deliver a copy of all notices to Holder to Leerink Swann LLC, One Federal Street, 37th Floor, Boston, Massachusetts 02110, Attention Donald D. Notman, Jr.

 

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5.9           Waiver.  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.

 

5.10         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.

 

5.11         Survival of Representations, Warranties and Agreements.  All representations and warranties of the Company contained herein shall survive the date of this Warrant, the exercise or conversion of this Warrant (or any part hereof) and/or the termination or expiration of rights hereunder.  All agreements of the Company contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.  The obligations of the Holder (and/or of any transferee of the Warrant or any Shares issued from time to time upon exercise of this Warrant) shall, with respect to any Shares issued upon exercise of this Warrant, survive the exercise, expiration or other termination, or transfer, of this Warrant indefinitely.

 

5.12         Counterparts.  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.

 

5.13         Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts, without giving effect to its principles regarding conflicts of law.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Series A-1 Convertible Preferred Stock to be executed as an instrument under seal by its duly authorized representative as of the date first above written.

 

	
 
    	
“COMPANY”   
    
	
 
    	
 
    
	
 
    	
RADIUS   HEALTH, INC. 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:   
    	
/s/   B. Nicholas Harvey
    
	
 
    	
Name:   B. Nicholas Harvey 
    
	
 
    	
 
    	
 
    	
Title:   Chief Financial Officer
    
						

 

S-1

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.             The undersigned hereby elects to purchase               shares of the                          stock of                                      pursuant to Section 1.1 of the attached Warrant, and tenders herewith payment of the Exercise Price of such shares in full.

 

1.             The undersigned hereby elects to convert the attached Warrant into Shares in the manner specified in Section 1.2 of the attached Warrant.  This conversion is exercised with respect to                          of shares of the                                                  Stock of                                       .

 

[Strike paragraph that does not apply.]

 

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

 

	
 
    
	
(Name)
    
	
 
    
	
 
    
	
 
    
	
 
    
	
(Address)
    
	
 
    

 

3.             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.

 

	
 
    	
 
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Date)
    	
 
    	
 
    

 

 

APPENDIX 2

 

Instrument of Adherence to
 Amended and Restated
 Stockholders’ Agreement
 dated May 17, 2011

 

                            , 20     

 

Reference is hereby made to that certain AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, dated the 17th day of May, 2011, entered into by and among Radius Health, Inc., a Delaware corporation (the “Corporation”), and the Stockholder parties thereto, as amended from time to time (the “Agreement”). Capitalized terms used herein without definition shall have the respective meanings ascribed thereto in the Agreement.

 

The undersigned (the “New Stockholder Party”), in order to become the owner or holder of up to 818 shares of Series A-1 Preferred Stock issuable upon exercise of that certain Warrant to Purchase Series A-1 Convertible Preferred Stock, dated December 14, 2011, held by the undersigned as of the date hereof (the “Warrant”) and all other shares of the Corporation’s capital stock hereinafter acquired, hereby agrees that, from and after the date of exercise of the Warrant and the resulting issuance by the Corporation of any shares of Series A-1 Preferred Stock (or shares of Common Stock issuable upon conversion of such shares of Series A-1 Preferred Stock) to the New Stockholder Party, the undersigned has become a Stockholder party to the Agreement in the capacity of a Stockholder, and is entitled to all of the benefits under, and is subject to all of the obligations, restrictions and limitations set forth in, the Agreement that are applicable to such Stockholder parties and shall be deemed to have made all of the representations and warranties made by such Stockholder parties thereunder.  This Instrument of Adherence shall take effect and shall become a part of the Agreement on the latest date of execution by both the New Stockholder Party and the Corporation.

 

Executed as of the date set forth above.

 

 

	
 
    	
 
    	
Print
   Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature:
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted:
    	
 
    	
 
    
	
RADIUS   HEALTH, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:premierbevexh10_6.htm

Exhibit 10.6

 

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER THIS NOTE NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF THIS NOTE, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THIS NOTE MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

 

PREMIER BEVERAGE GROUP CORP.

Senior Secured Promissory Note

	
$100,000.00

	
December 9, 2011

New York, New York

PREMIER BEVERAGE GROUP CORP., a Nevada corporation (the “Company”), for value received, hereby promises to pay to [                               ], a [                    ] limited liability company with an address at [                                                                   ], or registered assigns (the “Holder”), the principal amount of ONE HUNDRED THOUSAND United States Dollars   (US$100,000.00) (as decreased through repayment or increased as provided herein,  the “Principal Amount”) on the Maturity Date (as defined below). without interest.

1.             Payments.

(a)           Upon the execution hereof (such date, the “Issue Date”), the Holder shall fund $80,000 to the Company.  On the Maturity Date or such earlier date as provided herein, the Company shall repay the Principal Amount.  Upon the payment in full of the Principal Amount of this Note,  and any other amounts owing hereunder, the Holder shall surrender this Note to the Company for cancellation.  The “Maturity Date” shall be March 31, 2012. The difference between $80,000 and the Principal Amount shall be reported by the Company as original issue discount.

(b)           If the Maturity Date falls on a day that is not a Business Day (as defined below), the payment due on the Maturity Date will be made on the next succeeding Business Day with the same force and effect as if made on the Maturity Date. “Business Day” means any day which is not a Saturday or Sunday and is not a day on which banking institutions are generally authorized or obligated to close in the City of New York, New York.

(c)           (i)           The Company may, at its option on three business days advance written notice, prepay all or any part of the Principal Amount of this Note, without payment of any premium or penalty.

 

 

 

 

  

  

  

  

 

 

(ii)           Notwithstanding anything herein to the contrary, the Company shall repay the Principal Amount to the Holder within five Business Days following the earlier to occur of the (i) receipt by the Company of the $200,000 remaining to be paid to the Company pursuant to a Note Purchase Agreement between the Company and Prestwick Circle Service Corp. dated October 24, 2011, and (ii) receipt by the Company of no less than $200,000 from a private placement of its equity securities expected to commence on or about December 15, 2011.

(d)           Payment of the Principal Amount on this Note shall be made by check sent to the Holder's address set forth above or to such other address as the Holder may designate for such purpose from time to time by written notice to the Company, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.  Alternatively, payment of the Principal Amount of this Note may be made by electronic wire transfer in accordance with instructions provided by the Holder to the Company with at least ten Business Days’ prior notice.

(e)           The obligations to make the payments provided for in this Note are absolute and unconditional and not subject to any defense, set-off, counterclaim, rescission, recoupment, or adjustment whatsoever.  The Company hereby expressly waives demand and presentment for payment, notice of non-payment, notice of dishonor, protest, notice of protest, bringing of suit, and diligence in taking any action to collect any amount called for hereunder, and shall be directly and primarily liable for the payment of all sums owing and to be owing hereon, regardless of and without any notice, diligence, act, or omission with respect to the collection of any amount called for hereunder.

2.             Ranking of Note.

This Note constitutes senior secured indebtedness of the Company and is entitled to the benefits of the Security Agreement, dated as of December 7, 2011, between the Company and the Holder (the “Security Agreement”).

3.             Covenants.

The Company covenants and agrees with the Holder that, so long as any amount remains unpaid on the Note, unless the consent of the Holder is obtained or except as otherwise provided herein, the Company:

(a)           Shall not pay any dividend or make any distribution on, or purchase, redeem, or retire, any shares of its capital stock or any warrants, options, or other rights to reacquire any such shares, except that the Company may pay dividends payable solely in shares of its capital stock.

(b)           Shall deliver to the Holder:

(i)           as soon as available, and in any event within 30 days after the end of each quarter of each fiscal year of the Company, consolidated statements of income and cash flow of the Company for such period and for the period from the beginning of the respective fiscal year to the end of such period, the related consolidated balance sheet of the Company and its subsidiaries as at the end of such period;

 

 

 

 

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(ii)           as soon as available and in any event within 90 days after the end of each fiscal year of the Company, consolidated statements of income and cash flow of the Company for such fiscal year, and the related consolidated balance sheet of the Company and its subsidiaries as at the end of such fiscal year;

(iii)           promptly after the Company shall obtain knowledge of such, written notice of all legal or arbitral proceedings, and of all proceedings by or before any governmental or regulatory authority or agency, and each material development in respect of such legal or other proceedings, affecting the Company and its subsidiaries, except proceedings which, if adversely determined, would not have a material adverse effect on the Company and its subsidiaries taken as a whole;

(iv)           promptly after the Company shall obtain knowledge of the occurrence of any Event of Default (as hereinafter defined) or any event which with notice or lapse of time or both would become an Event of Default (an Event of Default or such other event being a “Default”), a notice specifying that such notice is a “Notice of Default” and describing such Default in reasonable detail, and, in such Notice of Default or as soon thereafter as practicable, a description of the action the Company has taken or proposes to take with respect thereto; and

(v)           promptly when available, a copy of the Company’s private placement memorandum for the sale of its securities.

(c)           The Company shall utilize the proceeds of the loan evidenced by this Note for production financing and for working capital purposes.

(d)           The Company shall not incur any further debt, other than the amounts contemplated under this Note, that is either senior or pari passu to the debt evidenced by this Note.

4.             Events of Default.

The occurrence of any of the following events shall constitute an event of default (each, an “Event of Default”):

(a)           A default in the payment of the principal amount of the Note, when and as the same shall become due and payable.

(b)           A default in the payment of on the Principal Amount of the Note, when and as the same shall become due and payable, which default shall continue for two business days after the date fixed for the making of such interest payment.

(c)           A default in the performance, or a breach, of any of the covenants of the Company contained in Sections 1 or 3 of this Note or contained in the Security Agreement.

(d)           A default in the performance, or a breach, of any other covenant or agreement of the Company in (i) this Note and continuance of such default or breach for a period of 30 days after receipt of notice from the Holder as to such default or breach or after the Company had or should have had knowledge of such default or breach or (ii) the Security Agreement.

 

 

 

 

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(e)           Any representation, warranty, or certification made by the Company in or pursuant to this Note or the Security Agreement shall prove to have been false or misleading as of the date made in any material respect.

(f)           A final judgment or judgments for the payment of money in excess of  $100,000 in the aggregate shall be rendered by one or more courts, administrative or arbitral tribunals or other bodies having jurisdiction against the Company and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 60 days from the date of entry thereof, and the Company shall not, within such 60-day period, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal.

(g)           The entry of a decree or order by a court having jurisdiction adjudging the Company bankrupt or insolvent, or approving a petition seeking reorganization, arrangement, adjustment, or composition of or in respect of the Company, under federal bankruptcy law, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency, or other similar law, and the continuance of any such decree or order unstayed and in effect for a period of 60 days; or the commencement by the Company of a voluntary case under federal bankruptcy law, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency, or other similar law, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under federal bankruptcy law or any other applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action.

5.            Remedies Upon Default.

(a)           Upon the occurrence of an Event of Default referred to in Section 4(g), the Principal Amount then outstanding ofthis Note shall automatically become immediately due and payable without presentment, demand, protest, or other formalities of any kind, all of which are hereby expressly waived by the Company.  Upon the occurrence of an Event of Default referred to in Section 4(a) or (b), the Holder, by notice in writing given to the Company, may declare the entire Principal Amount then outstanding ofthis Note to be due and payable immediately, and upon any such declaration the same shall become and be due and payable immediately, without presentation, demand, protest, or other formalities of any kind, all of which are expressly waived by the Company.  Upon the occurrence of an Event of Default other than one referred to in Sections 4(a), (b) or (g), the Holder may declare the Principal Amount then outstanding of the Note to be due and payable immediately, and upon such declaration the same shall become due and payable immediately, without presentation, demand, protest, or other formalities of any kind, all of which are expressly waived by the Company.

 

 

 

 

 

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(b)           The Holder may institute such actions or proceedings in law or equity as it shall deem expedient for the protection of its rights and may prosecute and enforce its claims against all assets of the Company, and in connection with any such action or proceeding shall be entitled to receive from the Company payment of the principal amount of this Note plus accrued interest to the date of payment plus reasonable expenses of collection, including, without limitation, attorneys' fees and expenses.

	
  

	
6.

	
Penalties.

In the event that the Principal Amount of the Note then outstanding is not repaid in full on the Maturity Date, the Principal Amount shall be increased by an amount equal to 0.1% of the Principal Amount per day for the period April 1, 2012 through April 30, 2012.  Beginning May 1, 2012 and continuing through May 31, 2012, the rate shall increase to 0.15% per day.  For each subsequent calendar month, the penalty rate shall be increased by 0.05% of the Principal Amount per day of such calendar month. By way of illustration, the penalty rate shall be 0.2% per day for June, 0.25% per day for July, and so forth.

	
  

	
7.

	
Convertibility.

At any time at the election of the Holder before the Principal Amount of the Note is repaid in full, the Holder may convert the then unpaid Principal Amount into restricted shares of the Company’s common stock, par value $.00015 per share, at a conversion price of $0.20 per share.

	
  

	
8.

	
Common Stock Purchase Warrant.

In connection with the issuance of this Note, the Company is issuing to the Holder a three year warrant to purchase on a cashless basis with piggyback registration rights 200,000 restricted shares of its Common Stock at a per share exercise price of $0.20.

	
  

	
9.

	
Transfer.

(a)           Any Notes issued upon the transfer of this Note shall be numbered and shall be registered in a note register as they are issued.  The Company shall be entitled to treat the registered holder of the Note on the note register as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Note on the part of any other person, and shall not be liable for any registration or transfer of Notes which are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration or transfer, or with the knowledge of such facts that its participation therein amounts to bad faith.  This Note shall be transferable only on the books of the Company upon delivery thereof duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment, or authority to transfer.  In all cases of transfer by an attorney, executor, administrator, guardian, or other legal 

 

 

 

 

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representative, duly authenticated evidence of his or its authority shall be produced.  Upon any registration of transfer, the Company shall deliver a new Note or Notes to the person entitled thereto. This Note may be exchanged, at the option of the Holder thereof, for another Note, or other Notes of different denominations, of like tenor and representing in the aggregate a like principal amount, upon surrender to the Company or its duly authorized agent.  Notwithstanding the foregoing, the Company shall have no obligation to cause Notes to be transferred on its books to any person if, in the opinion of counsel to the Company, such transfer does not comply with the provisions of the Securities Act and the rules and regulations thereunder.

(b)           The Holder acknowledges that he has been advised by the Company that this Note has not been registered under the Securities Act, that this Note is being issued on the basis of the statutory exemption provided by Section 4(2) of the Securities Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering.  The Holder acknowledges that it has been informed by the Company of, or is otherwise familiar with, the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the transfer of securities.  In particular, the Holder agrees that no sale, assignment or transfer of this Note shall be valid or effective, and the Company shall not be required to give any effect to any such sale, assignment or transfer, unless (i) the sale, assignment, or transfer of this Note is registered under the Securities Act, it being understood that this Note is not currently registered for sale and that the Company has no obligation or intention to so register the Note, or (ii) this Note is sold, assigned, or transferred in accordance with all the requirements and limitations of Rule 144 under the Securities Act, it being understood that Rule 144 is not available at the time of the original issuance of this Note for the sale of this Note and that there can be no assurance that Rule 144 sales will be available at any subsequent time, or (iii) such sale, assignment, or transfer is otherwise exempt from registration under the Securities Act.

10.           Miscellaneous.

(a)           Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or by FedEx, Express Mail or similar overnight delivery or courier service or delivered (in person or by telecopy or similar telecommunications equipment) against receipt to the party to whom it is to be given, (i) if to the Company, at its address, Premier Beverage Group Corp., 501 Madison Avenue, Suite 501, New York, New York 10022, Attention: Fouad Kallamni, (ii) if to the Holder, at its address set forth on the first page hereof, or (iii) in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 10(a).  Notice to the estate of any party shall be sufficient if addressed to the party as provided in this Section 10(a).  Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing a party's address, which shall be deemed given at the time of receipt thereof.  Any notice given by other means permitted by this Section 10(a) shall be deemed given at the time of receipt thereof.

(b)           Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of this Note (and upon surrender of this Note if mutilated), the Company shall execute and deliver to the Holder a new Note of like date, tenor, and denomination.

(c)           No course of dealing and no delay or omission on the part of the Holder in exercising any right or remedy shall operate as a waiver thereof or otherwise prejudice the Holder's rights, powers or remedies.  No right, power, or remedy conferred by this Note upon the Holder shall be exclusive of any other right, power, or remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise, and all such remedies may be exercised singly or concurrently.

 

 

 

 

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(d)           This Note may be amended only by a written instrument executed by the Company and the Holder hereof. Any amendment shall be endorsed upon this Note, and all future Holders shall be bound thereby.

(e)           (i)           This Note has been negotiated and consummated in the State of New York and shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to principles governing conflicts of law.

(ii)           THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE FEDERAL COURTS SITTING IN THE STATE OF NEW YORK.  THE COMPANY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY MUST BE LITIGATED EXCLUSIVELY IN ANY SUCH STATE OR FEDERAL COURT THAT SITS IN THE CITY OF NEW YORK, AND ACCORDINGLY, THE COMPANY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH LITIGATION IN ANY SUCH COURT.

(iii)           THE COMPANY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.  THE COMPANY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE HOLDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE HOLDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE HOLDER HAS BEEN INDUCED TO ENTER INTO THIS NOTE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(e)(iii).

(iv)           In the event that any suit or action is instituted to enforce any provision in this Note, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Note, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

[Signature Page Follows]

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the Company has caused this Note to be executed and dated the day and year first above written.

 

 

	 	PREMIER BEVERAGE GROUP CORP.	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: Fouad Kallamni	 
	 	 	Title: President	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

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NOTICE OF CONVERSION

(To be Executed by the Holder in order to Convert the

Note))

The undersigned hereby irrevocably elects to convert its Senior Secured Promissory Note (“Note”) into ______shares of Common Stock of Premier Beverage Group Corp. according to the conditions hereof as of the date written below.

The undersigned represents and warrants that:

	
  

	
(a)

	
That all offers and sales by the undersigned of the shares of Common Stock issuable to the undersigned upon conversion of the Note shall be made pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Act”);

	
  

	
(b)

	
The undersigned has not engaged in any transaction or series of transaction that is a part of or a plan or scheme to evade the registration requirements of the Act; and

 

 

	
 

	 	
 

	 
	
Date of Conversion

	 	
Applicable Conversion Price

	 
	  	 	  	 
	
 

	 	
 

	 
	
Number of Common Shares upon Conversion

	 	
$ Amount of Conversion

	 
	  	 	  	 
	
 

	 	
 

	 
	
Signature

	 	
Name

	 

 

 

Deliver Shares to Holder’s address set forth in the Note or to the address set forth below:

 

	
 

	 	
 

	 
	
 

	 	
 

	 
	  	 	  	 
	
 

	 	
 

	 
	
 

	 	
 

	 
	  	 	  	 
	
 

	 	
 

	 
	
 

	 	
 

	 

 

 

Premier Beverage Group Corp. Secured Promissory Note     Page 9

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