UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2023
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
(Address of principal executive office) (Zip Code)
(905 ) 812-0023
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On February 10, 2023, MedAvail Holdings, Inc. (the "Company") and its subsidiaries MedAvail Pharmacy, Inc., an Arizona corporation, MedAvail, Inc., a Delaware corporation, MedAvail Technologies (US) Inc., a Delaware corporation, and MedAvail Technologies, Inc., a corporation incorporated under the laws of Canada entered into the First Amendment, Consent and Default Waiver to Loan and Security Agreement (the “Loan Amendment and Consent”) with each of Silicon Valley Bank, a California corporation, and an authorized foreign bank under the Bank Act (Canada), and SVB Innovation Credit Fund VIII, L.P., a Delaware limited partnership (together, “SVB”) .
Among other matters, the Loan Amendment and Consent provides SVB’s consent to the sale of certain assets related to the Company’s pharmacy services business pursuant to the previously announced Asset Purchase and Sale Agreement, dated January 20, 2023, entered into by the Company with German Dobson CVS, L.L.C., Garfield Beach CVS, L.L.C., Longs Drug Stores California, L.L.C., Woodward Detroit CVS, L.L.C. and Holiday CVS, L.L.C. (the "Asset Sale"). The Loan Amendment and Consent also provides that upon the closing of the Asset Sale, the Company will pay to SVB a payment of $3,380,000, consisting of a portion of the Final Payment (as defined in the Loan Amendment and Consent) and prepayment of Term Loan Advances (as defined in the Loan Amendment and Consent), with SVB waiving the prepayment premium due on all Term Loan Advances prepaid by the Company prior to February 10, 2023. The Loan Amendment and Consent also provides a waiver of any legal action or enforcement of rights and remedies with respect to the specified defaults enumerated therein.
On February 10, 2023, in connection with the entry into the Loan Amendment and Consent, the Company also issued warrants (the “Warrants”) to SVB for the purchase of up to an aggregate of 200,366 shares of Common Stock at a per share exercise price of $0.3274, with an expiration date of February 10, 2035. The number of shares and the exercise price are subject to adjustment as set forth in the Warrants.
The foregoing description of the material terms of the Loan Amendment and Consent and the Warrants are qualified in their entireties by reference to the full texts of the terms and conditions of such agreements, which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits
Exhibit No. | Description | ||||
| 10.1 | |||||
| 10.2 | |||||
| 10.3 | |||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MEDAVAIL HOLDINGS, INC. | ||||||||
Date: February 16, 2023 | By: | /s/ Ramona Seabaugh | ||||||
Ramona Seabaugh Chief Financial Officer | ||||||||
Exhibit 10.1
FIRST AMENDMENT, CONSENT AND DEFAULT WAIVER TO LOAN AND SECURITY AGREEMENT
This FIRST AMENDMENT, CONSENT AND DEFAULT WAIVER to Loan and Security Agreement (this “Agreement”) is entered into as of February 10, 2023, by and between (a) SILICON VALLEY BANK, a California corporation, and an authorized foreign bank under the Bank Act (Canada) (“SVB”), in its capacity as administrative agent and collateral agent (“Agent”), (b) SVB, as a lender, (c) SVB INNOVATION CREDIT FUND VIII, L.P., a Delaware limited partnership (“SVB Capital”), as a lender (SVB and SVB Capital and each of the other “Lenders” from time to time a party hereto are referred to herein collectively as the “Lenders” and each individually as a “Lender”), (d) MEDAVAIL HOLDINGS, INC., a Delaware corporation (“Medavail Holdings”), (e) MEDAVAIL PHARMACY INC., an Arizona corporation (“Medavail Pharmacy”), (f) MEDAVAIL, INC., a Delaware corporation (“Medavail Inc.”), (g) MEDAVAIL TECHNOLOGIES (US) INC., a Delaware corporation (“Medavail Technologies US”), and (h) MEDAVAIL TECHNOLOGIES INC., a corporation incorporated under the laws of Canada (“Medavail Technologies Canada”, together with Medavail Holdings, Medavail Pharmacy, Medavail Inc. and Medavail Technologies US, individually, collectively, jointly and severally, each a “Borrower”).
Recitals
A. Agent, Lenders and Borrower have entered into that certain Loan and Security Agreement dated as of June 7, 2021 (as the same may from time to time be further amended, modified, supplemented or restated, collectively, the “Loan Agreement”). Lenders have extended credit to Borrower for the purposes permitted in the Loan Agreement.
B. Borrower has notified Agent and Lenders that Borrower intends to enter into that certain Asset Purchase and Sale Agreement (the “Asset Purchase Agreement”), a copy of which is attached hereto as Annex I, by and among, Medavail Pharmacy, German Dobson CVS, L.L.C. (“German Dobson CVS”), Garfield Beach CVS, L.L.C. (“Garfield Beach CVS”), Longs Drug Stores California, L.L.C. (“Longs Drug Stores”), Woodward Detroit CVS, L.L.C. (“Woodward Detroit CVS”) and Holiday CVS, L.L.C. (“Holiday CVS”, together with German Dobson CVS, Garfield Beach CVS, Longs Drug Stores, Woodward Detroit CVS and Holiday CVS, the “Buyer”), pursuant to which Borrower will transfer the Assets (as defined in the Asset Purchase Agreement) to Buyer (the “Asset Sale”). Borrower acknowledges that entry into the Asset Purchase Agreement and consummation of the Asset Sale are prohibited under the terms of the Loan Agreement, and Borrower has requested that (a) Agent and Lenders consent to Borrower’s entry into the Asset Purchase Agreement and consummation of the Asset Sale, and waive any Events of Default that may have occurred under the Loan Agreement in connection with Borrower’s entry into the Asset Purchase Agreement and consummation of the Asset Sale, and (b) Agent agree to release its Lien on the Assets.
C. Notwithstanding anything to the contrary contained in the Loan Agreement and the other Loan Documents, although Agent and Lenders are under no obligation to do so, Agent and Lenders have, agreed to consent to Borrower’s entry into the Asset Purchase Agreement, consummation of the Asset Sale and release of Agent’s Lien on the Assets on the terms and subject to the conditions set forth herein.
D. Borrower acknowledges that Borrower is currently in default under Section 7.2 of the Loan Agreement for failing, pursuant to Section 5.7(c) of the Loan Agreement, to (a) sweep funds in excess of Ten Thousand Dollars ($10,000) from the BofA Account to Borrower’s account at SVB or HSBC (covered by a Control Agreement in favor of Agent) on a daily basis, and (b) execute Control Agreements in favor of Agent for each of
Exhibit 10.1
Borrower’s accounts (A) numbers XXX-XX7933, XXX- XX7976, XXX-XX7925 and XXX-XXXX46-071 at HSBC Bank USA, National Association, and (B) numbers XXX16-19, XXX54-19, XXX94-17 and XXX621-17 at The Bank of Nova Scotia, each such failure to comply constitutes Events of Default (each of the defaults set forth, collectively, the “Existing Defaults”).
E. Borrower has requested that Agent and the Lenders waive their rights and remedies against Borrower, limited specifically to the Existing Defaults. Although Agent and the Lenders are under no obligation to do so, Agent and the Lenders are willing to not exercise their rights and remedies against Borrower related to the specific Existing Defaults on the terms and conditions set forth in this Agreement, so long as Borrower complies with the terms, covenants and conditions set forth in this Agreement.
Agreement
Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Loan Agreement.
2. Consent to Asset Sale. Notwithstanding any provision of the Loan Agreement to the contrary and subject to satisfaction of the conditions precedent set forth in Section 13 below, the Lenders hereby consent to (a) Borrower’s entry into the Asset Purchase Agreement and consummation of the Asset Sale on terms and subject to the conditions outlined in the Asset Purchase Agreement, and (b) Borrower’s use and application of the proceeds received in connection with the Asset Purchase Agreement in any matter that is not inconsistent with the terms of the Loan Agreement.
3. Amendments to Loan Agreement.
3.1 Section 1.3 (Fees and Expenses). Section 1.3(b) of the Loan Agreement hereby is amended and restated in its entirety to read as follows:
“(b) Prepayment Premium. The Prepayment Premium, when due hereunder, to be shared between the Lenders pursuant to their respective Term Loan Commitment Percentages, which shall be fully earned and non-refundable as of such date; provided, however, notwithstanding the foregoing, the Lenders hereby waive the Prepayment Premium on all Term Loan Advances prepaid by Borrower on or prior to February 10, 2023; and”
3.2 Section 5.7 (Operating Accounts). Section 5.7 of the Loan Agreement hereby is amended and restated in its entirety to read as follows:
“5.7 Operating Accounts.
(a) Maintain all of Borrower’s, any of its Subsidiaries’, and any Guarantor’s operating accounts, depository accounts and excess cash with SVB or SVB’s Affiliates; provided, however, notwithstanding the foregoing, as long as Borrower has, on or prior to
2
Exhibit 10.1
February 10, 2023, transferred at least sixty percent (60.0%) of its cash and Cash Equivalent assets to its deposit accounts at SVB, (i) during the period of time from February 10, 2023 through April 11, 2023, Borrower may maintain up to forty percent (40.0%) of its cash and Cash Equivalent assets in its deposit accounts at HSBC Bank USA, National Association for which Borrower has delivered to Agent a satisfactory Control Agreement in favor of Agent over such accounts, (ii) during the period of time from February 10, 2023 through March 12, 2023, Borrower may maintain up to Ten Thousand Dollars ($10,000) in Borrower’s account no. xxxxxxxx1869 at Bank of America (the “BofA Account”), and (iii) Borrower may maintain up to Five Thousand Dollars ($5,000) in its account ending in 071 at HSBC Canada (the “Permitted HSBC Account”).
(b) In addition to the foregoing, Borrower, any Subsidiary of Borrower and any Guarantor, shall obtain any business credit card, letter of credit and cash management services exclusively from SVB.
(c) In addition to and without limiting the restrictions in (a), Borrower shall provide Agent five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than SVB or SVB’s Affiliates. For each Collateral Account (other than the BofA Account and the Permitted HSBC Account, in each case, subject to the requirements set forth in subsection (a)), that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than SVB) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Agent’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of the Lenders.”
3.3 Section 5.16 (Post-Closing Items). New Section 5.16(d) is hereby added to the Loan Agreement to read in its entirety as follows:
“(d) As soon as possible, but no later than June 10, 2023, Borrower and its Subsidiaries shall close all of its operating accounts and depository accounts not maintained with SVB and deliver to Agent evidence, satisfactory to Agent in its sole discretion, confirming such.”
3.4 Section 12.2 (Successors and Assigns). The first paragraph of Section 12.2 of the Loan Agreement hereby is amended and restated in its entirety to read as follows:
“12.2 Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign or transfer this Agreement or any rights or obligations under it without Agent and Lenders’ prior written consent (which may be granted or withheld in Agent’s and Lenders’ sole discretion) and any other attempted assignment or transfer by Borrower shall be null and void. Agent and each Lender has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, such Lender’s obligations, rights, and benefits under this Agreement and the other Loan Documents (other than the Warrant as to which assignment, transfer and other such actions are governed by the terms thereof).”
3
Exhibit 10.1
3.5 Section 13.2 (Definitions). The following defined terms and their respective definitions set forth in Section 13.2 of the Loan Agreement hereby are added or amended and restated in their entirety, as applicable, to read as follows:
“Excluded Property” means, collectively: (a) any “intent to use” trademarks at all times prior to the first use thereof, whether by the actual use thereof in commerce, the recording of a statement of use with the United States Patent and Trademark Office or otherwise, provided that upon submission and acceptance by the United States Patent and Trademark Office of an amendment to allege use of an intent-to-use trademark application pursuant to 15 U.S.C. Section 1060(a) (or any successor provision) such intent-to-use application shall constitute Collateral; (b) any interest of Borrower as a lessee or sublessee under a real property lease or an Equipment lease if Borrower is prohibited by the terms of such lease from granting a security interest in such lease or under which such an assignment or Lien would cause a default to occur under such lease (but only to the extent that such prohibition is enforceable under all Applicable Laws including, without limitation, the Code); provided, however, that upon termination of such prohibition, such interest shall immediately become Collateral without any action by Borrower or Agent; (c) motor vehicles with an aggregate value not to exceed One Hundred Thousand Dollars ($100,000); (d) rights held under a license that are not assignable by their terms without the consent of the licensor thereof (but only to the extent such restriction on assignment is enforceable under applicable law); and (e) all “Assets” as defined in, and sold by Borrower to CVS in accordance with the terms of, that certain Asset Purchase and Sale Agreement dated as of January 20, 2023, by and among, MedAvail Pharmacy, German Dobson CVS, L.L.C., Garfield Beach CVS, L.L.C., Longs Drug Stores California, L.L.C., Woodward Detroit CVS, L.L.C., and Holiday CVS, L.L.C.
“Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, fees, Lenders’ Expenses, the Final Payment, the Prepayment Premium, the Erroneous Payment Subrogation Rights, and other amounts Borrower owes Agent or any Lender now or later, whether under this Agreement, the other Loan Documents, or otherwise, including, without limitation, all obligations relating to Bank Services, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Agent and/or the Lenders, and to perform Borrower’s duties under the Loan Documents (other than the Warrant).
“Warrant” means, collectively, (a) that certain Warrant to Purchase Stock dated as of February 10, 2023 between MedAvail Holdings, Inc. and SVB, (b) that certain Warrant to Purchase Stock dated as of February 10, 2023 between MedAvail Holdings, Inc. and SVB Innovation Credit Fund VIII, L.P., and (c) any other Warrant to purchase Stock of any Borrower issued to Agent or any Lender theretofore or thereafter, in each case as amended, modified, supplemented and/or restated from time to time.
3.6 Section 13.2 (Definitions). The following defined terms and their respective definitions, whether set forth in Section 13.2 or elsewhere in the Loan Agreement hereby are deleted in their entirety from all references in the Loan Agreement:
“Banking Requirement Release Date”, “Excluded Accounts” and “Excluded Canadian Account”.
4. Waiver of Existing Defaults. Notwithstanding any provision of the Loan Agreement to the contrary and subject to satisfaction of the conditions precedent set forth in Section 13 below, Agent and Lenders hereby waive filing any legal action or instituting or enforcing any rights and remedies they may have against Borrower with respect to the Existing Defaults. This
Exhibit 10.1
waiver shall apply only with respect to Borrower’s failure to comply with Sections 5.7(c) of the Loan Agreement as of the date hereof.
Accordingly, after the date hereof, Borrower shall be in compliance with such sections. Agent and Lenders’ agreement to waive the Existing Defaults in no way shall be deemed an agreement by Agent and Lenders to waive Borrower’s compliance with the above-referenced sections as of all other dates, and shall not limit or impair Agent and Lenders’ right to demand strict performance of such sections as of all other dates.
5. Limitation of Amendments, Consent and Default Waiver.
5.1 This Agreement is effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Lenders and Agent may now have or may have in the future under or in connection with any Loan Document.
5.2 This Agreement shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents are hereby ratified and confirmed and shall remain in full force and effect.
6. Representations and Warranties. Borrower represents and warrants to Agent and Lenders as follows:
6.1 (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default other than the Existing Defaults has occurred and is continuing;
6.2 Borrower has the power and authority to execute and deliver this Agreement and to perform its obligations under the Loan Agreement;
6.3 The organizational documents of Borrower delivered to Agent on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
6.4 The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan Agreement have been duly authorized by all necessary action on the part of Borrower;
6.5 The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan Agreement do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;
6.6 The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan Agreement do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any
Exhibit 10.1
governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and
6.7 This Agreement has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
7. Prior Agreement. The Loan Documents are hereby ratified and reaffirmed and shall remain in full force and effect. This Agreement is not a novation and the terms and conditions of this Agreement shall be in addition to and supplemental to all terms and conditions set forth in the Loan Documents. In the event of any conflict or inconsistency between this Agreement and the terms of such documents, the terms of this Agreement shall be controlling, but such document shall not otherwise be affected or the rights therein impaired.
8. Release by Borrower.
8.1 FOR GOOD AND VALUABLE CONSIDERATION, Borrower hereby forever relieves, releases, and discharges Agent and each Lender and each of its present or former employees, officers, directors, agents, representatives, attorneys, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type, kind, nature, description or character whatsoever, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner whatsoever connected with or related to facts, circumstances, issues, controversies or claims existing or arising from the beginning of time through and including the date of execution of this Agreement (collectively “Released Claims”). Without limiting the foregoing, the Released Claims shall include any and all liabilities or claims arising out of or in any manner whatsoever connected with or related to the Loan Documents, the Recitals hereto, any instruments, agreements or documents executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing.
8.2 In furtherance of this release, Borrower expressly acknowledges and waives any and all rights under Section 1542 of the California Civil Code, which provides as follows:
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her would have materially affected his or her settlement with the debtor or released party.” (Emphasis added.)
8.3 By entering into this release, Borrower recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if Borrower should subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, Borrower shall not be entitled to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances whatsoever. Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made by Agent or any Lender with respect to the facts underlying this release or with regard to any of such party’s rights or asserted rights.
Exhibit 10.1
8.4 This release may be pleaded as a full and complete defense and/or as a cross- complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Borrower acknowledges that the release contained herein constitutes a material inducement to Agent and each Lender to enter into this Agreement, and that neither Agent nor the Lenders would not have done so but for their respective expectation that such release is valid and enforceable in all events.
8.5 Borrower hereby represents and warrants to Agent and each Lender, and Agent and each Lender is relying thereon, as follows:
(a) Except as expressly stated in this Agreement, neither Agent nor any Lender nor any agent, employee or representative of Agent or any Lender has made any statement or representation to Borrower regarding any fact relied upon by Borrower in entering into this Agreement.
(b) Borrower has made such investigation of the facts pertaining to this Agreement and all of the matters appertaining thereto, as it deems necessary.
(c) The terms of this Agreement are contractual and not a mere recital.
(d) This Agreement has been carefully read by Borrower, the contents hereof are known and understood by Borrower, and this Agreement is signed freely, and without duress, by Borrower.
(e) Borrower represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released. Borrower shall indemnify Agent and each Lender, defend and hold it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein.
9. Ratification of Perfection Certificate. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated on or prior to the Effective Date and acknowledges, confirms and agrees that the disclosures and information Borrower provided to Agent in such Perfection Certificate have not changed, as of the date hereof.
10. Integration. This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.
11. Counterparts. This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
12. Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of California.
13. Effectiveness. This Agreement shall be deemed effective upon the satisfaction of each of the following conditions precedent, each in form and substance satisfactory to Agent and Lenders:
Exhibit 10.1
13.1 the due execution and delivery to Agent of (i) this Agreement by each party hereto, (ii) the Asset Purchase Agreement by each party thereto, (iii) the Warrant to Purchase Stock issued by MedAvail Holdings in favor of SVB dated as of the date hereof, together with MedAvail Holdings current capitalization table, (iv) the Warrant to Purchase Stock issued by MedAvail Holdings’ in favor of SVB Capital dated as of the date hereof, together with MedAvail Holdings’ current capitalization table, and (v) a Control Agreement in favor of Agent for the benefit of the Lenders covering all of Borrower’s accounts at HSBC Bank USA, National Association;
13.2 Borrowers’ payment to Agent of (i) all Lenders’ Expenses due and owing as of the date hereof, and (ii) a portion of the Final Payment in an amount equal to Three Hundred Eighty Thousand Dollars ($380,000) contemporaneously with the consummation of the Asset Sale, each of which may be debited from any of Borrowers’ accounts at SVB;
13.3 prepayment of the Term Loan Advances advanced by the Lenders under the Loan Agreement in an amount equal to Three Million Dollars ($3,000,000) substantially contemporaneously with the consummation of the Asset Sale;
13.4 receipt by Agent and Lenders of evidence confirming consummation of the Asset Sale; and
13.5 such other documents as Agent and Lenders may reasonably request to effectuate the terms of this Agreement.
[Signature page follows.]
Exhibit 10.1
In Witness Whereof, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.
AGENT: | BORROWER: | ||||
SILICON VALLEY BANK, as Agent By:/s/ Milo Bissin Name: Milo Bissin Title: Managing Director | MEDAVAIL HOLDINGS, INC. By:/s/ Mark Doerr Name: Mark Doerr Title: Chief Executive Officer | ||||
MEDAVAIL PHARMACY INC. By:/s/ Mark Doerr Name: Mark Doerr Title: Chief Executive Officer | |||||
LENDERS: | |||||
SILICON VALLEY BANK, as Lender By:/s/ Milo Bissin Name: Milo Bissin Title: Managing Director | MEDAVAIL, INC. By:/s/ Mark Doerr Name: Mark Doerr Title: Chief Executive Officer | ||||
SVB INNOVATION CREDIT FUND VIII, L.P., as Lender By: SVB Innovation Credit Partners VIII, LLC, a Delaware limited liability company, its General Partner By:/s/ Ryan Grammer Name: Ryan Grammer Title: Senior Managing Director | MEDAVAIL TECHNOLOGIES (US) INC. By:/s/ Mark Doerr Name: Mark Doerr Title: Chief Executive Officer | ||||
Exhibit 10.1
MEDAVAIL TECHNOLOGIES INC. By:/s/ Mark Doerr Name: Mark Doerr Title: Chief Executive Officer | |||||
[Signature Page to First Amendment, Consent and Waiver to Loan and Security Agreement]
Exhibit 10.2
Execution Version
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 6.3 AND 6.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
WARRANT TO PURCHASE STOCK
This WARRANT TO PURCHASE STOCK (as amended and in effect from time to time, this “Warrant”) is issued as of the issue date set forth on Schedule I hereto (the “Issue Date”) by the company set forth on Schedule I hereto (the “Company”) to SILICON VALLEY BANK in connection with that certain Loan and Security Agreement dated as of June 7, 2021, by and among, the Company, the Borrowers (a defined therein), Silicon Valley Bank as Agent and the Lenders from time to time party thereto (as may from time to time be further amended, modified, supplemented or restated, collectively, the “Loan Agreement”), and shall be transferred to SVB FINANCIAL GROUP pursuant to Section 6.4 below. The parties agree as follows:
SCHEDULE I. WARRANT PROVISIONS.
Warrant Section | Warrant Provision | ||||
Recitals - "Issue Date" | February 10, 2023. | ||||
Recitals - "Company" | MEDAVAIL HOLDINGS, INC., a Delaware corporation. | ||||
1.1 - "Class" | Common Stock. | ||||
1.1 - "Exercise Price" | $0.3274 per Share, subject to adjustment as set forth in Section 1.3. | ||||
1.2 - "Shares" | 100,183, subject to adjustment as set forth in Section 1.3. | ||||
6.l(a)- "Expiration Date" | February 10, 2035. | ||||
SECTION 1. RIGHT TO PURCHASE SHARES.
1.1 Grant of Right. For good and valuable consideration, the Company hereby grants to SILICON VALLEY BANK (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) the right, and Holder is entitled, to purchase from the Company up to the number of fully paid and non-assessable shares (as determined pursuant to Section 1.2 below) of the class set forth on Schedule I hereto (the “Class”), at a purchase price per Share set forth on Schedule I hereto (the “Exercise Price”), subject to the provisions and upon the terms and conditions set forth in this Warrant.
1.2 Number of Shares. This Warrant shall be exercisable for the number of shares of the Class as set forth on Schedule I hereto (as may be adjusted from time to time in accordance with the provisions of this Warrant, the “Shares”).
1.3 Special Adjustment for Warrant Shares. As of immediately following the closing (or, if there shall be more than one closing, the last such closing) of the Next Equity Financing, (a) the number of Shares for which this Warrant shall be exercisable shall be adjusted to equal 0.125% of the Closing Date Fully-Diluted Shares Outstanding, and (b) the Exercise Price shall be an amount equal to the lesser of (i) the initial Exercise Price first set forth above in Schedule I, (ii) the Next Equity Financing Price, and (iii) the closing price of a share of Common Stock reported on the Trading Market as of April 30, 2023, in each case subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. As used herein:
Exhibit 10.2
“Closing Date Fully-Diluted Shares Outstanding” means, with respect to the closing (or, if there shall be more than one closing, the last such closing) of the Next Equity Financing, the Company’s Fully-Diluted Shares Outstanding determined as of immediately following such closing.
“Fully-Diluted Shares Outstanding” means, as of any date, the Company’s total issued and outstanding shares of capital stock, calculated on and as of such date on a fully-diluted, common stock-equivalent basis (but without excluding shares of capital stock that are not convertible into shares of common stock) assuming (i) the conversion into common stock of all outstanding securities and instruments (including, without limitation, securities deemed to be outstanding pursuant to clause (ii)) convertible by their terms into shares of common stock (regardless of whether such securities or instruments are by their terms then so convertible), (ii) the exercise in full of all outstanding options, warrants (including, without limitation, this Warrant) and other rights to purchase or acquire shares of common stock or securities exercisable for or convertible into shares of common stock (regardless of whether such options, warrants or other rights to purchase or acquire are by their terms then exercisable); and (iii) the inclusion of all shares of common stock then reserved for issuance under all of the Company’s incentive stock and stock option plans and not then subject to outstanding grants or options.
“Next Equity Financing” means the first sale or issuance by the Company after the Issue Date of this Warrant, in a single transaction or series of related transactions, of shares of its convertible preferred stock or other equity securities to one or more investors for cash in a bona fide equity financing of the Company.
“Next Equity Financing Series” means the series of convertible preferred stock or the class, series, type or other designation of any other equity security sold or issued by the Company in the Next Equity Financing.
“Next Equity Financing Price” means the lowest effective price per share for which shares of the Next Equity Financing Series are sold or issued by the Company in the Next Equity Financing. For purposes of this definition:
(i) if warrants and/or other rights to acquire shares of the Next Equity Financing Series are issued to the purchasers of shares of the Next Equity Financing Series in the Next Equity Financing, whether as part of an investment unit or otherwise, then the lowest effective price per share shall equal (A) the sum of (x) the total aggregate gross cash proceeds received by the Company from the sale and issuance of all shares of the Next Equity Financing Series and all such warrants and/or other rights, and (y) the total aggregate exercise price or other purchase price payable under all such warrants and/or other rights, divided by (B) the sum of (x) the total aggregate number of shares of the Next Equity Financing Series issued by the Company in the Next Equity Financing, and (y) the total aggregate number of shares of Next Equity Financing Series issuable on exercise of all such warrants and/or other rights; and
(ii) if warrants and/or other rights to acquire shares of the Company’s common stock are issued to the purchasers of shares of the Next Equity Financing Series in the Next Equity Financing, whether as part of an investment unit or otherwise, then the lowest effective price per share shall equal (A) the sum of (x) the total aggregate gross cash proceeds received by the Company from the sale and issuance of all shares of the Next Equity Financing Series and all such warrants and/or other rights, and (y) the total aggregate exercise price or other purchase price payable under all such warrants and/or other rights, divided by (B) the sum of (x) the total aggregate number of shares of common stock issuable on conversion of the shares of the Next Equity Financing Series issued by the Company in the Next Equity Financing, and (y) the total aggregate number of shares of common stock issuable on exercise of all such warrants and/or other rights.
SECTION 2. EXERCISE.
2.1 Method of Exercise. Holder may exercise this Warrant in whole or in part at any time and from time to time prior to the expiration or earlier termination of this Warrant, 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 2.2 below, 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 Exercise Price for the Shares being purchased. Notwithstanding any contrary provision
Exhibit 10.2
herein, to the extent that the original of this Warrant is an electronic original, in no event shall an original ink-signed paper copy of this Warrant be required for any exercise of a Holder’s rights hereunder, nor shall this Warrant or any physical copy hereof be required to be physically surrendered at the time of any exercise hereof.
2.2 Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Exercise Price in the manner specified in Section 2.1 above, Holder may elect to surrender to the Company Shares having an aggregate value equal to the aggregate Exercise Price. If Holder makes such election, the Company shall issue to Holder such number of fully paid and non-assessable Shares determined by the following formula:
X = Y(A-B)/A
where:
X = the number of Shares to be issued to 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 Exercise Price);
A = the fair market value (as determined pursuant to Section 2.3 below) of one Share; and
B = the Exercise Price.
2.3 Fair Market Value. If shares of the Company’s common stock are 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 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. If shares of the Company’s common stock are not then 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.
2.4 Delivery of Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in Sections 2.1 or 2.2 above, the Company shall deliver to Holder a certificate (or, in the case of uncertificated securities, provide notice of book entry) 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 (or surrendered in payment of the aggregate Exercise Price).
2.5 Replacement of Warrant.
(a) Paper Original Warrant. To the extent that the original of this Warrant is a paper original, 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.
(b) Electronic Original Warrant. To the extent that the original of this Warrant is an electronic original, if at any time this Warrant is rejected by any person (including, but not limited to, paying or escrow agents) or any such person fails to comply with the terms of this Warrant based on this Warrant being presented to such person as an electronic record or a printout hereof, or any signature hereto being in electronic form, the Company shall, promptly upon Holder’s request and without indemnity, execute and deliver to Holder, in lieu of electronic original versions of this Warrant, a new warrant of like tenor and amount in paper form with original ink signatures.
2.6 Treatment of Warrant Upon Acquisition of Company.
(a) Acquisition. “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
Exhibit 10.2
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. For the avoidance of doubt, “Acquisition” shall not include any sale and issuance by the Company of shares of its capital stock or of securities or instruments exercisable for or convertible into, or otherwise representing the right to acquire, shares of its capital stock to one or more investors for cash in a transaction or series of related transactions the primary purpose of which is a bona fide equity financing of the Company.
(b) Treatment of Warrant in Cash/Public Acquisition. In the event of an Acquisition in which the consideration to be received by the holders of the outstanding shares of the Class (in their capacity as such) consists solely of cash, solely of Marketable Securities (as hereinafter defined) or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), and the fair market value of one Share as determined in accordance with Section 2.3 above would be greater than the Exercise Price in effect as of immediately prior to the closing of such Cash/Public Acquisition, and Holder has not previously exercised this Warrant in full, then, in lieu of Holder’s exercise of the unexercised portion of this Warrant, this Warrant shall, as of immediately prior to such closing (but subject to the occurrence thereof) automatically cease to represent the right to purchase Shares and shall, from and after such closing, represent solely the right to receive the aggregate consideration that would have been payable in such Acquisition on and in respect of all Shares for which this Warrant was exercisable as of immediately prior to the closing thereof, net of the aggregate Exercise Price therefor, as if such Shares had been issued and outstanding to Holder as of immediately prior to such closing, as and when such consideration is paid to the holders of the outstanding shares of the Class. In the event of a Cash/Public Acquisition in which the fair market value of one Share as determined in accordance with Section 2.3 above would be equal to or less than the Exercise Price in effect as of immediately prior to the closing of such Cash/Public Acquisition, then this Warrant will automatically and without further action of any party terminate as of immediately prior to such closing.
(c) Treatment of Warrant in non-Cash/Public Acquisition. Upon the closing of any Acquisition other than a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume this Warrant and the Company’s obligations hereunder, 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, at an aggregate Exercise Price equal to the aggregate Exercise Price in effect as of immediately prior to such closing, all subject to further adjustment from time to time thereafter in accordance with the provisions of this Warrant.
(d) Marketable Securities. “Marketable Securities” means securities meeting all of the following requirements (determined as of immediately prior to the closing of the Acquisition): (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 a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling 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, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition. Notwithstanding the foregoing provisions of this Section 2.6(d), securities held in escrow or subject to holdback to cover indemnification-related claims shall be deemed to be Marketable Securities if they would otherwise be Marketable Securities but for the fact that they are held in escrow or subject to holdback to cover indemnification-related claims.
SECTION 3. CERTAIN ADJUSTMENTS TO THE SHARES, CLASS AND EXERCISE PRICE.
3.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in additional shares of the Class (including fractional shares) 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
Exhibit 10.2
subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased, even if such number would include fractional shares, and the Exercise 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 Exercise Price shall be proportionately increased and the number of Shares shall be proportionately decreased, even if such number would include fractional shares.
3.2 Reclassification, Exchange, Combination 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, “Class” shall mean such securities and this Warrant will be exercisable for the number of such securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, at an aggregate Exercise Price equal to the aggregate Exercise Price in effect as of immediately prior to such event, all subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. The provisions of this Section 3.2 shall similarly apply to successive reclassifications, exchanges, combinations, substitutions, replacements or other similar events.
3.3 Adjustment to Exercise Price on Cash Dividend. In the event that the Company at any time or from time to time prior to the exercise in full of this Warrant pays any cash dividend on the outstanding shares of the Class or makes any cash distribution on or in respect of all outstanding shares of the Class (other than a distribution of cash proceeds received by the Company in connection with an Acquisition described in Section 2.6(a)(i) above), then on and as of the date of each such dividend payment and/or distribution, the Exercise Price shall be reduced by an amount equal to the amount paid or distributed upon or in respect of each outstanding share of the Class; provided that in no event shall the Exercise Price be reduced below the then-par value, if any, of a share of the Class.
3.4 No Fractional Share. No fractional Share shall be issued 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 this Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash an amount equal to (a) such fractional interest, multiplied by (b)(i) the fair market value (as determined in accordance with Section 2.3 above) of a full Share, less (ii) the then-effective Exercise Price (the “Fractional Share Value”), unless Holder otherwise elects, in its sole discretion, to waive such payment. Notwithstanding any contrary provision herein, if this Warrant becomes exercisable for a fractional Share interest at any time or from time to time prior to the exercise in full of this Warrant, and the Company eliminates such fractional Share interest prior to any exercise of this Warrant, then the then-effective Exercise Price shall be reduced by an amount equal to the Fractional Share Value, unless Holder otherwise elects, in its sole discretion, to waive such reduction.
3.5 Certificate as to Adjustments. Within a reasonable time following each adjustment of the Exercise Price, Class and/or number of Shares pursuant to the terms of this Warrant, the Company, at its expense, shall deliver a certificate of its Chief Financial Officer or other authorized officer to Holder setting forth the adjustments to the Exercise Price, Class and/or number of Shares and the facts upon which such adjustments are based. The Company shall, at any time and from time to time within a reasonable time following Holder’s written request and at the Company’s expense, furnish Holder with a certificate of its Chief Financial Officer or other authorized officer setting forth the then-current Exercise Price, Class and number of Shares and the computations or other determinations thereof.
SECTION 4. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
4.1 Representations and Warranties. The Company represents and warrants to, and agrees with, Holder as follows:
(a) The initial Exercise Price first set forth in Schedule I above is not greater than the lowest closing price of a share of Common Stock reported on the Trading Market for 20 consecutive trading days ending immediately prior to the Issue Date.
(b) The Shares for which this Warrant is exercisable on and as of the Issue Date hereof represents not less 0.125% of the Fully-Diluted Share Outstanding (as defined in Section 1.3 hereof) on and as of the Issue Date.
Exhibit 10.2
(c) All Shares which may be issued upon the exercise of this Warrant, 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 the Company’s Certificate of Incorporation or Bylaws, each as amended and in effect from time to time (the “Charter Documents”) or 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 and other securities as will be sufficient to permit the exercise in full of this Warrant.
4.2 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, whether in cash, stock or other securities or property and whether or not a regular cash dividend;
(b) offer for subscription or sale pro rata to all holders of the outstanding shares of the Class any additional securities of the Company (other than pursuant to contractual pre-emptive or first refusal rights);
(c) effect any redemption, reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class; or
(d) effect an Acquisition, or to liquidate, dissolve or wind up the Company;
then, in connection with each such event, the Company shall give Holder (pursuant to Section 6.5 below):
(1) in the case of the matters referred to in (a) and (b) above, at least seven (7) Business Days prior written notice of the earlier to occur of the effective date thereof or 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; and
(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 such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice).
4.3 Certain Company Information. The Company will provide such information requested by Holder from time to time, within a reasonable time following each such request, that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.
SECTION 5. REPRESENTATIONS AND COVENANTS OF HOLDER.
Holder represents and warrants to, and agrees with, the Company as follows:
5.1 Investment Representations.
(a) Purchase for Own Account. Except for the one-time transfer of this Warrant from Silicon Valley Bank to its parent SVB Financial Group described in Section 6.4 below, this Warrant and the Shares to be acquired upon exercise hereof 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.
(b) 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 of 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
Exhibit 10.2
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.
(c) 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 for an indefinite period of time, 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.
(d) Accredited Investor Status. Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.
(e) The Act. Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act or registered or qualified under the securities laws of any state, and are issued in reliance upon specific exemptions therefrom, which exemptions depend upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder understands that the Company is under no obligation to so register or qualify this Warrant, the Shares or such other securities. Holder understands that this Warrant and the Shares issued upon any exercise hereof are “restricted securities” under applicable federal and state securities laws and must be held indefinitely unless subsequently registered under the Act and registered or qualified under applicable state securities laws, or unless exemptions from such registration and qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act.
5.2 No Stockholder Rights. Without limiting any provision of this Warrant, Holder agrees that as a Holder of this Warrant it will not have any rights (including, but not limited to, voting rights) as a stockholder of the Company with respect to the Shares issuable hereunder unless and until the exercise of this Warrant and then only with respect to the Shares issued on such exercise.
5.3 Confidential Information. Holder agrees to treat and hold all information provided by the Company pursuant to this Warrant in confidence in accordance with the provisions of Section 12.8 of the Loan Agreement (regardless of whether the Loan Agreement shall then be in effect).
SECTION 6. MISCELLANEOUS.
6.1 Term; Automatic Cashless Exercise Upon Expiration.
(a) Term. Subject to the provisions of Section 2.6 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 set forth on Schedule I hereto (the “Expiration Date”) and shall be void thereafter; provided that if the Company does not deliver to Holder written confirmation of the fair market value of a Share pursuant to Section 6.1(b) below, then the Expiration Date shall automatically be extended until the earlier to occur of (i) such date as the Company delivers such written confirmation and (ii) one (1) year after the Expiration Date.
(b) Automatic Cashless Exercise upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share as determined in accordance with Section 2.3 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 exercised pursuant to Section 2.2 above as to all Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time following Holder’s written request, deliver a certificate (or, in the case of uncertificated securities, provide notice of book entry) representing the Shares issued to Holder upon such exercise. If shares of the Company’s common stock are not then traded in a Trading Market, the Company shall deliver to Holder, prior to the Expiration Date, written confirmation of the fair market value of a Share (as determined pursuant to Section 2.3 above) to be used in determining whether this Warrant shall automatically exercise on the Expiration Date pursuant to this Section 6.1(b).
Exhibit 10.2
6.2 Legends. Each certificate or notice of book entry evidencing Shares shall be imprinted with a legend in substantially the following form (together with such additional legends as may be required by the Charter Documents):
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 FEBRUARY 10, 2023, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
And, if then applicable, a legend in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SILICON VALLEY BANK DATED FEBRUARY 10, 2023, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SECURITIES.
6.2 Compliance with Securities Laws on Transfer. This Warrant and the Shares issued upon exercise hereof 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.
6.3 Transfer Procedure. After receipt by Silicon Valley Bank of the executed Warrant, Silicon Valley Bank will transfer, for value received, all of its rights, title and interest in and to this Warrant to its parent company, SVB Financial Group, without any separate assignment agreement. By its acceptance of this Warrant, SVB Financial Group, on and as of the date of such assignment, hereby makes to the Company each of the representations and warranties set forth in Section 5.1 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if it were the original Holder hereof. Subject to the provisions of Section 6.3 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 issued upon exercise of this Warrant to any transferee; provided that in connection with any such transfer, SVB Financial Group or any subsequent Holder will give the Company notice of the portion of the Warrant and/or Shares being transferred with the name, address and taxpayer identification number of the transferee, and Holder will surrender this Warrant, or the certificates or other evidence of such Shares or other securities, to the Company for reissuance to the transferee(s) (and to Holder if applicable); and provided further, that any subsequent transferee other than SVB Financial Group shall make substantially the representations set forth in Section 5.1 above and shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.
6.4 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 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 6.5. 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:
Exhibit 10.2
SVB Financial Group Attn: Warrants
80 East Rio Salado Parkway, Suite 600 Tempe, AZ 85281
Telephone: (480) 557-4900
Email: SVBFGWarrants@svb.com
All notices to the Company shall be addressed as follows until Holder receives notice of a change in address:
MedAvail Holdings, Inc.
Attn: Chief Executive Officer
2196 East Camelback Road, Suite 200
Phoenix, AZ 85016
Telephone: (647) 484-1001 Email: ekilroy@medavail.com
With a copy (which shall not constitute notice) to:
Wilson Sonsini Goodrich & Rosati P.C.
Attn: Eric Hsu, Esq.
650 Page Mill Road
Palo Alto, CA 94304
Telephone: (650) 849-3305
Email: ehsu@wsgr.com
6.6 Amendment and Waiver. Notwithstanding any contrary provision herein or in the Loan Agreement, this Warrant may be amended and any provision hereof waived (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by Holder and any party against which enforcement of such amendment or waiver is sought.
6.7 Counterparts; Electronic Signatures; Status as Certificated Security. This Warrant may be executed by one or more of the parties hereto in any number of separate counterparts, all of which together shall constitute one and the same instrument. The Company, Holder and any other party hereto may execute this Warrant by electronic means and each party hereto recognizes and accepts the use of electronic signatures and the keeping of records in electronic form by any other party hereto in connection with the execution and storage hereof. To the extent that this Warrant or any agreement subject to the terms hereof or any amendment hereto is executed, recorded or delivered electronically, it shall be binding to the same extent as though it had been executed on paper with an original ink signature, as provided under applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act. The fact that this Warrant is executed, signed, stored or delivered electronically shall not prevent the transfer by any Holder of this Warrant pursuant to Section 6.4 or the enforcement of the terms hereof. To the extent that the original of this Warrant is an electronic original, this Warrant, and any copies hereof, shall NOT be deemed to be a “certificated security” within the meaning of Section 8102(a)(4) of the California Commercial Code. Physical possession of the original of this Warrant or any paper copy thereof shall confer no special status to the bearer thereof.
6.8 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.
6.9 Business Days. “Business Day” means any day that is not a Saturday, Sunday or a day on which banks in California are closed.
SECTION 7. GOVERNING LAW, VENUE AND JURY TRIAL WAIVER; JUDICIAL REFERENCE.
7.1 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.
7.2 Jurisdiction and Venue. The Company and Holder each irrevocably and unconditionally submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Warrant shall be deemed to operate to preclude Holder from bringing suit or taking other legal action in any other jurisdiction to enforce a judgment or other court order in favor of Holder. The Company expressly,
Exhibit 10.2
irrevocably and unconditionally submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and the Company hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby irrevocably and unconditionally consents to the granting of such legal or equitable relief as is deemed appropriate by such court. The Company hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to the Company in accordance with Section 6.5 of this Warrant and that service so made shall be deemed completed upon the earlier to occur of the Company’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.
7.3 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AND HOLDER EACH WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS WARRANT, THE LOAN AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES’ AGREEMENT TO THIS WARRANT. EACH PARTY HERETO HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
7.4 Judicial Reference. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the waiver of the right to a trial by jury in Section 7.3 above is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure Sections 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure Section 644(a). Nothing in this Section 7.4 shall limit the right of any party at any time to exercise self-help remedies or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this Section 7.4.
7.5 Survival. This Section 7 shall survive the termination of this Warrant.
[Signature page follows]
Exhibit 10.2
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:
MEDAVAIL HOLDINGS, INC.
By: /s/Mark Doerr
Name: Mark Doerr
Title: Chief Executive Officer
HOLDER:
SILICON VALLEY BANK
By: /s/Milo Bissin
Name: Milo Bissin
Title: Managing Director
Exhibit 10.2
APPENDIX 1
Form of Notice of Exercise of Warrant
1. The undersigned Holder hereby exercises its right to purchase shares of the Common Stock of MEDAVAIL HOLDINGS, INC., a Delaware corporation (the “Company”) in accordance with the attached Warrant to Purchase Stock, and tenders payment of the aggregate Exercise Price for such shares as follows:
| [ | ] | Check in the amount of $ payable to the order of the Company enclosed herewith | ||||||
| [ | ] | Wire transfer of immediately available funds to the Company’s account | ||||||
| [ | ] | Cashless exercise pursuant to Section 2.2 of the Warrant, resulting in the issuance of _________ shares of the Common Stock of the Company | ||||||
| [ | ] | Other [Describe]_____________________________________________ | ||||||
2. Please issue a certificate or certificates (or evidence of book entry) 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 makes each of the representations and warranties set forth in Section 5.1 of the Warrant to Purchase Stock as of the date hereof.
HOLDER:
___________________________________
By:________________________________
Name:________________________
Title:_________________________
(Date):______________________________
Exhibit 10.3
Execution Version
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 6.3 AND 6.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
WARRANT TO PURCHASE STOCK
This WARRANT TO PURCHASE STOCK (as amended and in effect from time to time, this "Warrant") is issued as of the issue date set forth on Schedule I hereto (the "Issue Date") by the company set forth on Schedule I hereto (the "Company") to SVB INNOVATION CREDIT FUND VIII,L.P. in connection with that certain Loan and Security Agreement dated as of June 7, 2021, by and among, the Company, the Borrowers (a defined therein), Silicon Valley Bank as Agent and the Lenders from time to time party thereto (as may from time to time be further amended, modified, supplemented or restated, collectively, the "Loan Agreement"), and shall be transferred to SVB FINANCIAL GROUP pursuant to Section 6.4 below. The parties agree as follows:
SCHEDULE I. WARRANT PROVISIONS.
Warrant Section | Warrant Provision | ||||
Recitals - "Issue Date" | February 10, 2023. | ||||
Recitals - "Company" | MEDAVAIL HOLDINGS, INC., a Delaware corporation. | ||||
1.1 - "Class" | Common Stock. | ||||
1.1 - "Exercise Price" | $0.3274 per Share, subject to adjustment as set forth in Section 1.3. | ||||
1.2 - "Shares" | 100,183, subject to adjustment as set forth in Section 1.3. | ||||
6.l(a)- "Expiration Date" | February 10, 2035. | ||||
SECTION 1. RIGHT TO PURCHASE SHARES.
1.1Grant of Right. For good and valuable consideration, the Company hereby grants to SVB INNOVATION CREDIT FUND VIII, L.P. (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, "Holder") the right, and Holder is entitled, to purchase from the Company up to the number of fully paid and non-assessable shares (as determined pursuant to Section 1.2 below) of the class set forth on Schedule I hereto (the "Class"), at a purchase price per Share set forth on Schedule I hereto (the "Exercise Price"), subject to the provisions and upon the terms and conditions set forth in this Warrant.
1.2Number of Shares. This Warrant shall be exercisable for the number of shares of the Class as set forth on Schedule I hereto (as may be adjusted from time to time in accordance with the provisions of this Warrant, the "Shares").
1.3Special Adjustment for Warrant Shares. As of immediately following the closing (or, if there shall be more than one closing, the last such closing) of the Next Equity Financing, (a) the number of Shares for which this Warrant shall be exercisable shall be adjusted to equal 0.125% of the Closing Date Fully-Diluted Shares Outstanding, and (b) the Exercise Price shall be an amount equal to the lesser of (i) the initial Exercise Price first set forth above in Schedule I, (ii) the Next Equity Financing Price, and (iii) the closing price of a share of Common Stock reported on the Trading Market as of April 30, 2023, in each case subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. As used herein:
"Closing Date Fully-Diluted Shares Outstanding" means, with respect to the closing (or, if there shall be more than one closing, the last such closing) of the Next Equity Financing, the Company's Fully-Diluted Shares Outstanding determined as of immediately following such closing.
1
Exhibit 10.3
"Fully-Diluted Shares Outstanding" means, as of any date, the Company's total issued and outstanding shares of capital stock, calculated on and as of such date on a fully-diluted, common stock-equivalent basis (but without excluding shares of capital stock that are not convertible into shares of common stock) assuming
(i) the conversion into common stock of all outstanding securities and instruments (including, without limitation, securities deemed to be outstanding pursuant to clause (ii)) convertible by their terms into shares of common stock (regardless of whether such securities or instruments are by their terms then so convertible), (ii) the exercise in full of all outstanding options, warrants (including, without limitation, this Warrant) and other rights to purchase or acquire shares of common stock or securities exercisable for or convertible into shares of common stock (regardless of whether such options, warrants or other rights to purchase or acquire are by their terms then exercisable); and (iii) the inclusion of all shares of common stock then reserved for issuance under all of the Company's incentive stock and stock option plans and not then subject to outstanding grants or options.
"Next Equity Financing" means the first sale or issuance by the Company after the Issue Date of this Warrant, in a single transaction or series of related transactions, of shares of its convertible preferred stock or other equity securities to one or more investors for cash in a bona fide equity financing of the Company.
"Next Equity Financing Series" means the series of convertible preferred stock or the class, series, type or other designation of any other equity security sold or issued by the Company in the Next Equity Financing.
"Next Equity Financing Price" means the lowest effective price per share for which shares of the Next Equity Financing Series are sold or issued by the Company in the Next Equity Financing. For purposes of this definition:
(i)if warrants and/or other rights to acquire shares of the Next Equity Financing Series are issued to the purchasers of shares of the Next Equity Financing Series in the Next Equity Financing, whether as part of an investment unit or otherwise, then the lowest effective price per share shall equal (A) the sum of (x) the total aggregate gross cash proceeds received by the Company from the sale and issuance of all shares of the Next Equity Financing Series and all such warrants and/or other rights, and (y) the total aggregate exercise price or other purchase price payable under all such warrants and/or other rights, divided by (B) the sum of (x) the total aggregate number of shares of the Next Equity Financing Series issued by the Company in the Next Equity Financing, and (y) the total aggregate number of shares of Next Equity Financing Series issuable on exercise of all such warrants and/or other rights; and
(ii)if warrants and/or other rights to acquire shares of the Company's common stock are issued to the purchasers of shares of the Next Equity Financing Series in the Next Equity Financing, whether as part of an investment unit or otherwise, then the lowest effective price per share shall equal (A) the sum of (x) the total aggregate gross cash proceeds received by the Company from the sale and issuance of all shares of the Next Equity Financing Series and all such warrants and/or other rights, and (y) the total aggregate exercise price or other purchase price payable under all such warrants and/or other rights, divided by (B) the sum of (x) the total aggregate number of shares of common stock issuable on conversion of the shares of the Next Equity Financing Series issued by the Company in the Next Equity Financing, and (y) the total aggregate number of shares of common stock issuable on exercise of all such warrants and/or other rights.
SECTION 2. EXERCISE.
2.1Method of Exercise. Holder may exercise this Warrant in whole or in part at any time and from time to time prior to the expiration or earlier termination of this Warrant, 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 land, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 2.2 below, 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 Exercise Price for the Shares being purchased. Notwithstanding any contrary provision
herein, to the extent that the original of this Warrant is an electronic original, in no event shall an original ink-signed paper copy of this Warrant be required for any exercise of a Holder's rights hereunder, nor shall this Warrant or any physical copy hereof be required to be physically surrendered at the time of any exercise hereof.
2.2Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Exercise Price in the manner specified in Section 2.1 above, Holder may elect to surrender to the Company Shares having an
2
Exhibit 10.3
aggregate value equal to the aggregate Exercise Price. If Holder makes such election, the Company shall issue to Holder such number of fully paid and non-assessable Shares determined by the following formula:
X = Y(A-B)/A
where:
X = the number of Shares to be issued to 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 Exercise Price);
A = the fair market value (as determined pursuant to Section 2.3 below) of one Share; and
B = the Exercise Price.
2.3Fair Market Value. If shares of the Company's common stock are 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 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. If shares of the Company's common stock are not then 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.
2.4Delivery of Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in Sections 2.1 or 2.2 above, the Company shall deliver to Holder a certificate (or, in the case of uncertificated securities, provide notice of book entry) 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 oflike tenor representing the Shares not so acquired (or surrendered in payment of the aggregate Exercise Price).
2.5Replacement of Warrant.
(a)Paper Original Warrant. To the extent that the original of this Warrant is a paper original, 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.
(b)Electronic Original Warrant. To the extent that the original of this Warrant is an electronic original, if at any time this Warrant is rejected by any person (including, but not limited to, paying or escrow agents) or any such person fails to comply with the terms of this Warrant based on this Warrant being presented to such person as an electronic record or a printout hereof, or any signature hereto being in electronic form, the Company shall, promptly upon Holder's request and without indemnity, execute and deliver to Holder, in lieu of electronic original versions of this Warrant, a new warrant of like tenor and amount in paper form with original ink signatures.
2.6Treatment of Warrant Upon Acquisition of Company.
(a)Acquisition. "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. For the avoidance of
3
Exhibit 10.3
doubt, "Acquisition" shall not include any sale and issuance by the Company of shares of its capital stock or of securities or instruments exercisable for or convertible into, or otherwise representing the right to acquire, shares of its capital stock to one or more investors for cash in a transaction or series of related transactions the primary purpose of which is a bona fide equity financing of the Company.
(b)Treatment of Warrant in Cash/Public Acquisition. In the event of an Acquisition in which the consideration to be received by the holders of the outstanding shares of the Class (in their capacity as such) consists solely of cash, solely of Marketable Securities (as hereinafter defined) or a combination of cash and Marketable Securities (a "Cash/Public Acquisition"), and the fair market value of one Share as determined in accordance with Section 2.3 above would be greater than the Exercise Price in effect as of immediately prior to the closing of such Cash/Public Acquisition, and Holder has not previously exercised this Warrant in full, then, in lieu of Holder's exercise of the unexercised portion of this Warrant, this Warrant shall, as of immediately prior to such closing (but subject to the occurrence thereof) automatically cease to represent the right to purchase Shares and shall, from and after such closing, represent solely the right to receive the aggregate consideration that would have been payable in such Acquisition on and in respect of all Shares for which this Warrant was exercisable as of immediately prior to the closing thereof, net of the aggregate Exercise Price therefor, as if such Shares had been issued and outstanding to Holder as of immediately prior to such closing, as and when such consideration is paid to the holders of the outstanding shares of the Class. In the event of a Cash/Public Acquisition in which the fair market value of one Share as determined in accordance with Section 2.3 above would be equal to or less than the Exercise Price in effect as of immediately prior to the closing of such Cash/Public Acquisition, then this Warrant will automatically and without further action of any party terminate as of immediately prior to such closing.
(c)Treatment of Warrant in non-Cash/Public Acquisition. Upon the closing of any Acquisition other than a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume this Warrant and the Company's obligations hereunder, 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, at an aggregate Exercise Price equal to the aggregate Exercise Price in effect as of immediately prior to such closing, all subject to further adjustment from time to time thereafter in accordance with the provisions of this Warrant.
(d)Marketable Securities. "Marketable Securities" means securities meeting all of the following requirements (determined as of immediately prior to the closing of the Acquisition): (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section l5(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 a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling 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, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition. Notwithstanding the foregoing provisions of this Section 2.6(d), securities held in escrow or subject to holdback to cover indemnification-related claims shall be deemed to be Marketable Securities if they would otherwise be Marketable Securities but for the fact that they are held in escrow or subject to holdback to cover indemnification-related claims.
SECTION 3. CERTAIN ADJUSTMENTS TO THE SHARES, CLASS AND EXERCISE PRICE.
3.1Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in additional shares of the Class (including fractional shares) 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 greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased, even if such number would include fractional shares, and the Exercise Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by
4
Exhibit 10.3
reclassification or otherwise, into a lesser number of shares, the Exercise Price shall be proportionately increased and the number of Shares shall be proportionately decreased, even if such number would include fractional shares.
3.2Reclassification, Exchange, Combination 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, "Class" shall mean such securities and this Warrant will be exercisable for the number of such securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, at an aggregate Exercise Price equal to the aggregate Exercise Price in effect as of immediately prior to such event, all subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. The provisions of this Section 3.2 shall similarly apply to successive reclassifications, exchanges, combinations, substitutions, replacements or other similar events.
3.3Adjustment to Exercise Price on Cash Dividend. In the event that the Company at any time or from time to time prior to the exercise in full of this Warrant pays any cash dividend on the outstanding shares of the Class or makes any cash distribution on or in respect of all outstanding shares of the Class (other than a distribution of cash proceeds received by the Company in connection with an Acquisition described in Section 2.6(a)(i) above), then on and as of the date of each such dividend payment and/or distribution, the Exercise Price shall be reduced by an amount equal to the amount paid or distributed upon or in respect of each outstanding share of the Class; provided that in no event shall the Exercise Price be reduced below the then-par value, if any, of a share of the Class.
3.4No Fractional Share. No fractional Share shall be issued 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 this Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash an amount equal to (a) such fractional interest, multiplied by (b)(i) the fair market value (as determined in accordance with Section 2.3 above) of a full Share, less (ii) the then-effective Exercise Price (the "Fractional Share Value"), unless Holder otherwise elects, in its sole discretion, to waive such payment. Notwithstanding any contrary provision herein, if this Warrant becomes exercisable for a fractional Share interest at any time or from time to time prior to the exercise in full of this Warrant, and the Company eliminates such fractional Share interest prior to any exercise of this Warrant, then the then-effective Exercise Price shall be reduced by an amount equal to the Fractional Share Value, unless Holder otherwise elects, in its sole discretion, to waive such reduction.
3.5Certificate as to Adjustments. Within a reasonable time following each adjustment of the Exercise Price, Class and/or number of Shares pursuant to the terms of this Warrant, the Company, at its expense, shall deliver a certificate of its Chief Financial Officer or other authorized officer to Holder setting forth the adjustments to the Exercise Price, Class and/or number of Shares and the facts upon which such adjustments are based. The Company shall, at any time and from time to time within a reasonable time following Holder's written request and at the Company's expense, furnish Holder with a certificate of its Chief Financial Officer or other authorized officer setting forth the then-current Exercise Price, Class and number of Shares and the computations or other determinations thereof.
SECTION 4. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
4.1Representations and Warranties. The Company represents and warrants to, and agrees with, Holder as follows:
(a)The initial Exercise Price first set forth in Schedule I above is not greater than the lowest closing price of a share of Common Stock reported on the Trading Market for 20 consecutive trading days ending immediately prior to the Issue Date.
(b)The Shares for which this Warrant is exercisable on and as of the Issue Date hereof represents not less 0.125% of the Fully-Diluted Share Outstanding (as defined in Section 1.3 hereof) on and as of the Issue Date.
(c)All Shares which may be issued upon the exercise of this Warrant, 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 the Company's Certificate of Incorporation or Bylaws, each as amended and in effect from time to time (the "Charter Documents") or 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 and other securities as will be sufficient to permit the exercise in full of this Warrant.
5
Exhibit 10.3
4.2Notice of Certain Events. If the Company proposes at any time to:
(a)declare any dividend or distribution upon the outstanding shares of the Class, whether in cash, stock or other securities or property and whether or not a regular cash dividend;
(b)offer for subscription or sale pro rata to all holders of the outstanding shares of the Class any additional securities of the Company (other than pursuant to contractual pre-emptive or first refusal rights);
(c)effect any redemption, reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class; or
(d)effect an Acquisition, or to liquidate, dissolve or wind up the Company;
then, in connection with each such event, the Company shall give Holder (pursuant to Section 6.5 below):
(1)in the case of the matters referred to in (a) and (b) above, at least seven (7) Business Days prior written notice of the earlier to occur of the effective date thereof or 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; and
(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 such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice).
4.3 Certain Company Information. The Company will provide such information requested by Holder from time to time, within a reasonable time following each such request, that is reasonably necessary to enable Holder to comply with Holder's accounting or reporting requirements.
SECTION 5. REPRESENTATIONS AND COVENANTS OF HOLDER.
Holder represents and warrants to, and agrees with, the Company as follows:
5.1Investment Representations.
(a)Purchase for Own Account. This Warrant and the Shares to be acquired upon exercise hereof 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.
(b)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 of 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.
6
Exhibit 10.3
(c)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 for an indefinite period of time, 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.
(d)Accredited Investor Status. Holder is an "accredited investor" within the meaning of Regulation D promulgated under the Act.
(e)The Act. Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act or registered or qualified under the securities laws of any state, and are issued in reliance upon specific exemptions therefrom, which exemptions depend upon, among other things, the bona fide nature of the Holder's investment intent as expressed herein. Holder understands that the Company is under no obligation to so register or qualify this Warrant, the Shares or such other securities. Holder understands that this Warrant and the Shares issued upon any exercise hereof are "restricted securities" under applicable federal and state securities laws and must be held indefinitely unless subsequently registered under the Act and registered or qualified under applicable state securities laws, or unless exemptions from such registration and qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act.
5.2No Stockholder Rights. Without limiting any provision of this Warrant, Holder agrees that as a Holder of this Warrant it will not have any rights (including, but not limited to, voting rights) as a stockholder of the Company with respect to the Shares issuable hereunder unless and until the exercise of this Warrant and then only with respect to the Shares issued on such exercise.
5.3Confidential Information. Holder agrees to treat and hold all information provided by the Company pursuant to this Warrant in confidence in accordance with the provisions of Section 12.8 of the Loan Agreement (regardless of whether the Loan Agreement shall then be in effect).
SECTION 6. MISCELLANEOUS.
6.1Term; Automatic Cashless Exercise Upon Expiration.
(a)Term. Subject to the provisions of Section 2.6 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 set forth on Schedule I hereto (the "Expiration Date") and shall be void thereafter; provided that if the Company does not deliver to Holder written confirmation of the fair market value of a Share pursuant to Section 6.l(b) below, then the Expiration Date shall automatically be extended until the earlier to occur of (i) such date as the Company delivers such written confirmation and (ii) one (1) year after the Expiration Date.
(b)Automatic Cashless Exercise upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share as determined in accordance with Section 2.3 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 exercised pursuant to Section 2.2 above as to all Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time following Holder's written request, deliver a certificate (or, in the case of uncertificated securities, provide notice of book entry) representing the Shares issued to Holder upon such exercise. If shares of the Company's common stock are not then traded in a Trading Market, the Company shall deliver to Holder, prior to the Expiration Date, written confirmation of the fair market value of a Share (as determined pursuant to Section 2.3 above) to be used in determining whether this Warrant shall automatically exercise on the Expiration Date pursuant to this Section 6.1(b).
6.2Legends. Each certificate or notice of book entry evidencing Shares shall be imprinted with a legend in substantially the following form (together with such additional legends as may be required by the Charter Documents):
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
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Exhibit 10.3
SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SVB INNOVATION CREDIT FUND VIII, L.P. DATED FEBRUARY 10, 2023, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
And, if then applicable, a legend in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER'S REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SVB INNOVATION CREDIT FUND VIII, L.P. DATED FEBRUARY 10, 2023, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER'S PRINCIPAL OFFICE. SUCH RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SECURITIES.
6.3Compliance with Securities Laws on Transfer. This Warrant and the Shares issued upon exercise hereof 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 any affiliate of Holder; provided that any such transferee is an "accredited investor" as defined in Regulation D promulgated under the Act.
6.4Transfer Procedure. Subject to the provisions of Section 6.3 and upon providing the Company with written notice, Holder and any subsequent Holder may transfer all or part of this Warrant or the Shares issued upon exercise of this Warrant to any transferee; provided that in connection with any such transfer, Holder or any subsequent Holder will give the Company notice of the portion of the Warrant and/or Shares being transferred with the name, address and taxpayer identification number of the transferee, and Holder will surrender this Warrant, or the certificates or other evidence of such Shares or other securities, to the Company for reissuance to the transferee(s) (and to Holder if applicable); and provided further, that any subsequent transferee other than Holder shall make substantially the representations set forth in Section 5.1 above and shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.
6.5Notices. 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 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 6.5. 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 Innovation Credit Fund VIII, L.P. c/o SVB Capital
2770 Sand Hill Road
Menlo Park, California 94025
Attn: SVB Capital Finance and Operations
Email: SVBCapitalCredit@svb.com; and SVBCapitalCreditFinance@svb.com
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Exhibit 10.3
All notices to the Company shall be addressed as follows until Holder receives notice of a change in address:
MedAvail Holdings, Inc. Attn: Chief Executive Officer
2196 East Camelback Road, Suite 200
Phoenix, AZ 85016
Telephone: (647) 484-1001 Email: ekilroy@medavail.com
With a copy (which shall not constitute notice) to:
Wilson Sonsini Goodrich & Rosati P.C. Attn: Eric Hsu, Esq.
650 Page Mill Road Palo Alto, CA 94304
Telephone: (650) 849-3305 Email: ehsu@wsgr.com
6.6Amendment and Waiver. Notwithstanding any contrary provision herein or in the Loan Agreement, this Warrant may be amended and any provision hereof waived (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by Holder and any party against which enforcement of such amendment or waiver is sought.
6.7Counterparts; Electronic Signatures; Status as Certificated Security. This Warrant may be executed by one or more of the parties hereto in any number of separate counterparts, all of which together shall constitute one and the same instrument. The Company, Holder and any other party hereto may execute this Warrant by electronic means and each party hereto recognizes and accepts the use of electronic signatures and the keeping of records in electronic form by any other party hereto in connection with the execution and storage hereof. To the extent that this Warrant or any agreement subject to the terms hereof or any amendment hereto is executed, recorded or delivered electronically, it shall be binding to the same extent as though it had been executed on paper with an original ink signature, as provided under applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act. The fact that this Warrant is executed, signed, stored or delivered electronically shall not prevent the transfer by any Holder of this Warrant pursuant to Section 6.4 or the enforcement of the terms hereof. To the extent that the original of this Warrant is an electronic original, this Warrant, and any copies hereof, shall NOT be deemed to be a "certificated security" within the meaning of Section 8102(a)(4) of the California Commercial Code. Physical possession of the original of this Warrant or any paper copy thereof shall confer no special status to the bearer thereof.
6.8Headings. 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.
6.9Business Days. "Business Day" means any day that is not a Saturday, Sunday or a day on which banks in California are closed.
SECTION 7. GOVERNING LAW, VENUE AND JURY TRIAL WAIVER; JUDICIAL REFERENCE.
7.1Governing 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.
7.2Jurisdiction and Venue. The Company and Holder each irrevocably and unconditionally submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Warrant shall be deemed to operate to preclude Holder from bringing suit or taking other legal action in any other jurisdiction to enforce a judgment or other court order in favor of Holder. The Company expressly, irrevocably and unconditionally submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and the Company hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby irrevocably and unconditionally consents to the granting of such legal or equitable relief as is deemed appropriate by such court. The Company hereby waives personal service of the summons, complaints, and other process issued in such action
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Exhibit 10.3
or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to the Company in accordance with Section 6.5 of this Warrant and that service so made shall be deemed completed upon the earlier to occur of the Company's actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.
7.3Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AND HOLDER EACH WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS WARRANT, THE LOAN AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES' AGREEMENT TO THIS WARRANT. EACH PARTY HERETO HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
7.4Judicial Reference. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES' AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the waiver of the right
to a trial by jury in Section 7.3 above is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure Sections 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure Section 644(a). Nothing in this Section 7.4 shall limit the right of any party at any time to exercise self-help remedies or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this Section 7.4.
7.5Survival. This Section 7 shall survive the termination of this Warrant.
[Signature page follows]
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Exhibit 10.3
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: | |||||
| MEDAVAIL HOLDINGS, INC. | |||||
| By: /s/ Mark Doerr | |||||
| Name: Mark Doerr | |||||
| Title: Chief Executive Officer | |||||
| HOLDER: | |||||
| SVB INNOVATION CREDIT FUND VIII, L.P. | |||||
| By: SVB Innovation Credit Partners VIII, LLC, a Delaware limited liability company, its General Partner | |||||
| By: /s/ Ryan Grammer | |||||
| Name: Ryan Grammer | |||||
| Title: Senior Managing Director | |||||
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Exhibit 10.3
APPENDIX 1
Form of Notice of Exercise of Warrant
1.The undersigned Holder hereby exercises its right to purchase shares of the Common Stock of MEDAVAIL HOLDINGS, INC., a Delaware corporation (the "Company") in accordance with the attached Warrant to Purchase Stock, and tenders payment of the aggregate Exercise Price for such shares as follows:
Check in the amount of $ payable to the order of the Company enclosed herewith Wire transfer of immediately available funds to the Company's account
Cashless exercise pursuant to Section 2.2 of the Warrant, resulting in the issuance of
shares of the Common Stock of the Company Other [Describe]
2.Please issue a certificate or certificates (or evidence of book entry) 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 makes each of the representations and warranties set forth in Section 5.1 of the Warrant to Purchase Stock as of the date hereof.
HOLDER:
By: Name: Title:
(Date):
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