Document:

Blueprint

 

Exhibit 10.1

 

STOCK REPURCHASE AGREEMENT

 

THIS
STOCK REPURCHASE AGREEMENT (this “Agreement”) is entered
into as of November 28, 2018 by and between Issuer Direct
Corporation, a Delaware corporation, with a principal address of
500 Perimeter Park Drive, Suite D, Morrisville, NC 27560 (the
“Company”), and EQS Group
AG, a German Stock Corporation, with a principal address of
Karlstrasse 47, Munich, Germany 80333 (the “Stockholder”).

 

BACKGROUND

 

WHEREAS, the
Stockholder is the holder of 215,118 shares of the Company’s
common stock, par value $0.001 (the “Purchased Shares”), which
the Stockholder has previously purchased on the open market;
and

 

WHEREAS, the
Stockholder desires to sell, and the Company desires to repurchase,
all of the shares of the Purchased Shares on the terms and subject
to the conditions set forth in this Agreement (the
“Repurchase”).

 

NOW,
THEREFORE, in consideration of the promises, covenants and
agreements herein contained, the parties agree as
follows:

 

AGREEMENT

 

SECTION
1.    REPURCHASE OF SHARES.

 

1.1                  Repurchase.
At the Closing (as defined below), the Company hereby agrees to
repurchase from the Stockholder, and the Stockholder hereby agrees
to sell, assign and transfer to the Company, all of the
Stockholder’s right, title and interest in and to the
Purchased Shares at the per share price of $12.25, for an aggregate
repurchase price of $2,635,195.50 (the “Repurchase Amount”). The
Company shall place the Repurchase Amount in the escrow account of
its outside legal counsel and instruct such counsel to provide
written notification to the Stockholder that the Repurchase Amount
has been received. Upon the Company’s confirmation that the
Purchased Shares have been returned to the Company in accordance
with the Company’s written instructions, the Company shall
immediately instruct its outside counsel to wire transfer to the
Stockholder the Repurchase Amount in accordance with the
Stockholder’s written wire transfer instruction.

 

1.2                  Closing.
The closing of the Repurchase (the “Closing”) shall take
place on the date hereof, or at such other time and place as the
parties hereto shall mutually agree.

 

1.3                  Termination
of Rights as the Stockholder. Upon payment of the Repurchase
Amount, the Purchased Shares shall cease to be outstanding for any
and all purposes, and the Stockholder shall no longer have any
rights whatsoever as a holder of the Purchased Shares, including any rights that
the Stockholder may have had under the Company’s Certificate
of Incorporation (as amended), Amended and Restated Bylaws, or
otherwise. The Company shall treat the
Purchased Shares as either having been returned to the
Company’s authorized but unissued common stock or as treasury
stock, in the Company’s sole discretion.

 

 

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SECTION
2.    REPRESENTATIONS AND WARRANTIES.

 

In
connection with the transactions provided for hereby, the
Stockholder represents and warrants to the Company as
follows:

 

2.1
Ownership of Purchased
Shares. The Stockholder has good and marketable right, title
and interest (legal and beneficial) in and to all of the Purchased
Shares, free and clear of all liens, pledges, security interests,
charges, claims, equity or encumbrances of any kind. Upon paying
for the Purchased Shares in accordance with this Agreement, the
Company will acquire good and marketable title to the Purchased
Shares, free and clear of all liens, pledges, security interests,
charges, claims, equity or encumbrances of any kind.

 

2.2
Authorization. The
Stockholder has all necessary power and authority to execute,
deliver and perform the Stockholder’s obligations under this
Agreement and all agreements, instruments and documents
contemplated hereby and to sell and deliver the Purchased Shares
being sold hereunder, and this Agreement constitutes a valid and
binding obligation of the Stockholder.

 

2.3
No Conflict. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in a breach by the
Stockholder of, or constitute a default by the Stockholder under,
any agreement, instrument, decree, judgment or order to which the
Stockholder is a party or by which the Stockholder may be
bound.

 

2.4
Experience and Evaluation.
By reason of the Stockholder’s business or financial
experience or the business or financial experience of the
Stockholder’s professional advisers who are unaffiliated with
the Company and who are not compensated by the Company, the
Stockholder has the capacity to protect the Stockholder’s own
interests in connection with the sale of the Purchased Shares to
the Company. The Stockholder is capable of evaluating the potential
risks and benefits of the sale hereunder of the Purchased
Shares.

 

2.5
Access to Information. The
Stockholder has received all of the information that the
Stockholder considers necessary or appropriate for deciding whether
to sell the Purchased Shares hereunder and perform the other
transactions contemplated hereby. The Stockholder further
represents that the Stockholder has had an opportunity to review
all publicly available information regarding the business,
properties, prospects and financial condition of the
Company.

 

2.6
No Future Participation. The
Stockholder acknowledges that the Stockholder will have no future
participation in any Company gains, losses, profits, dividends or
distributions with respect to the Purchased Shares. If the
Purchased Shares increase in value by any means, the Stockholder
acknowledges that the Stockholder is voluntarily forfeiting and
waiving any opportunity to share in any resulting increase in value
from the Purchased Shares.

 

 

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2.7
No Other Equity. As of the
Closing, the Stockholder represents and warrants that it does not
own, either directly or indirectly, any other equity of the Company
(including but not limited to any contingent rights to acquire
equity of the Company).

 

2.8
Tax Matters. The Stockholder
has had an opportunity to review with the Stockholder’s tax
advisers the federal, state, local and foreign tax consequences of
the Repurchase and the transactions contemplated by this Agreement.
The Stockholder is relying solely on such advisers and not on any
statements or representations of the Company or any of its agents.
The Stockholder understands that the Stockholder (and not the
Company) shall be responsible for the Stockholder’s tax
liability and any related interest and penalties that may arise as
a result of the transactions contemplated by this
Agreement.

 

SECTION
3. SUCCESSORS AND ASSIGNS.

 

Except
as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties (including
transferees of any Purchased Shares). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this
Agreement.

 

SECTION
4. GOVERNING LAW.

 

This
Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, except the choice-of-law provisions
thereof.

 

SECTION 5. ENTIRE AGREEMENT.

 

This
Agreement contains the entire understanding of the parties, and
there are no further or other agreements or understandings, written
or oral, in effect between the parties relating to the subject
matter hereof, except as expressly referred to herein.

 

SECTION 6. AMENDMENTS AND WAIVERS.

 

Any
term of this Agreement may be amended, and the observance of any
term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively),
only with the written consent of the Stockholder and the
Company.

 

SECTION 7. FURTHER ACTION.

 

Each
party hereto agrees to execute any additional documents and to take
any further action as may be necessary or desirable in order to
implement the transactions contemplated by this
Agreement.

 

 

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SECTION 8. SURVIVAL.

 

The
representations and warranties herein shall survive the
Closing.

 

SECTION 9. SEVERABILITY.

 

Whenever possible,
each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if
any provision of this Agreement shall be held to be prohibited by
or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

SECTION 10. PUBLIC ANNOUNCEMENT.

 

The
Company shall within four (4) trading days immediately following
the Closing file a Current Report on Form 8-K with the Securities
and Exchange Commission and issue a press release disclosing the
material terms of the transactions contemplated
hereby.

 

SECTION 11. NOTICES.

 

All
notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed effectively given
(a) upon personal delivery to the party to be notified,
(b) when sent by confirmed facsimile, if sent during normal
business hours of the recipient or, if not, then on the next
business day, (c) five days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid, or (d) one day after deposit with a nationally
recognized overnight courier, specifying next-day delivery, with
written verification of receipt. All communications shall be sent
to the respective parties at the addresses set forth in the
preamble hereto (or at such other addresses as shall be specified
by notice given in accordance with this
Section 11).

 

SECTION 12. COUNTERPARTS.

 

This
Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

 

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IN WITNESS WHEREOF, each of the parties
has executed this Stock Repurchase Agreement as of the day and year
first above written.

 

	

 

	
COMPANY:

	

 

	

 

	
 

	

 

	

 

	

ISSUER
DIRECT CORPORATION

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ Brian R.
Balbirnie 

	

 

	

 

	

 

	
Name: Brian R.
Balbirnie

	

 

	

 

	

 

	

Title: Chief
Executive Officer

	

 

 

	

 

	

STOCKHOLDER:

	

 

	

 

	
 

	

 

	

 

	

EQS
GROUP AG

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ Andre Silverio
Marques   

	

 

	

 

	

 

	

Name:
Andre Silverio Marques

	

 

	

 

	

 

	

Title:
Chief Financial Officer

	

 

 

 

 

 

5EXHIBIT 4.4

 

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

 

WARRANT TO PURCHASE STOCK

 

Company:  INSPIRE MEDICAL SYSTEMS, INC.

Number of Shares:  38,168

Type/Series of Stock:  Series E Preferred

Warrant Price:  $2.62 per share

Issue Date:     June 27, 2014

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

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

 

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

 

SECTION 1. EXERCISE.

 

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

 

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

 

X = Y(A-B)/A

 

where:

 

 

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

 

Y =                             the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

 

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

 

B =                             the Warrant Price.

 

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

 

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

 

1.5                               Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

 

1.6                               Treatment of Warrant Upon Acquisition of Company.

 

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

 

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

 

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

 

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

 

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

 

SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.

 

2.1                               Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a

 

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

 

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

 

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

 

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

 

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

 

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

 

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SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(e)                            effect an IPO;

 

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

 

(1) at least seven (7) Business Days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above;

 

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

 

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

 

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

 

SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.

 

The Holder represents and warrants to the Company as follows:

 

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

 

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

 

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

 

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

 

4.5                                     The Act.  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

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

 

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

 

SECTION 5. MISCELLANEOUS.

 

5.1                               Term and Automatic Conversion Upon Expiration.

 

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

 

(b)                                 Automatic Cashless Exercise upon Expiration.  In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder.

 

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

 

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

 

5.3                               Compliance with Securities Laws on Transfer.  This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act.  Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act.

 

7

 

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

 

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

 

SVB Financial Group

Attn:  Treasury Department

3003 Tasman Drive, HC 215

Santa Clara, CA 95054

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

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

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

 

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

 

Inspire Medical Systems, Inc.

Attn:  Tim Herbert

9700 63rd Avenue North, Suite 200

Maple Grove, MN 55369

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

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

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

[Remainder of page left blank intentionally]

 

[Signature page follows]

 

9

 

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

 

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

 

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

 

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

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

 

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

 

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

 

[    ]                                                                            Cashless Exercise pursuant to Section 1.2 of the Warrant

 

[    ]                                                                            Other [Describe]                                                                                                  

 

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

 

	
 
    	
 
    	
 
    
	
 
    	
Holder’s   Name
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Address)
    	
 
    

 

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

 

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

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