AMENDMENT TO DEBENTRUES AND WARRANTS, ETC.
Published on January 15, 2010
Exhibit 4.1.6
AMENDMENT
TO DEBENTURES AND WARRANTS, AGREEMENT AND WAIVER
THIS
AGREEMENT AND WAIVER (this “Amendment”) is entered into on
January 12, 2010 (the “Effective Date”) by and among
Cryoport, Inc., a Nevada
corporation (the “Company”), on the one hand,
and Enable Growth Partners LP
(“EGP”), Enable Opportunity Partners LP (“EOP”), Pierce Diversified
Strategy Master Fund LLC, Ena (“Pierce”, together with EGP, EOP and
Pierce, the “Enable
Funds”), and BridgePointe Master Fund Ltd. (“BridgePointe,” together with
the Enable Funds, each individually referred to as a “Holder” and collectively as the
“Holders” or the
“Investors”), on the other hand. Capitalized terms not defined
in this Amendment shall have the meanings ascribed to such terms in each of the
Securities Purchase Agreements (each as defined in documents referred to in the
recitals incorporated by reference below) and, in each of the Debentures (each
as defined in documents referred to in the recitals incorporated by reference
below).
WHEREAS, the Company and the
Holders are parties to that certain Amendment to Debentures and Warrants,
Agreement and Waiver entered into on September 1, 2009 (the “September
2009 Amendment
Agreement”);
WHEREAS, the Company and the
Holders are parties to that certain Amendment to Debentures and Warrants,
Agreement and Waiver entered into on February 19, 2009, and effective as of
January 27, 2009 (the “February
2009 Amendment
Agreement”);
WHEREAS, all recitals
contained in the September 2009 Amendment Agreement and February 2009 Amendment
Agreement are hereby incorporated into this Amendment by this
reference;
WHEREAS, by letter dated
December 23, 2009, the Holders agreed to extend the Monthly Redemption Date from
January 1, 2010, to January 11, 2010;
WHEREAS, the Company has filed
with the Securities and Exchange Commission (“SEC”) a registration
statement on Form S-1 relating to a contemplated firm commitment underwritten
public offering of shares of the Company’s common stock and warrants to purchase
shares of common stock; and
WHEREAS, the Company and the
Holders now desire that the terms of the Debentures, Warrants and other
Transaction Documents, as such have been modified by the mutual agreement of the
parties as of the date hereof, be modified and have entered into this Amendment
to document their agreement regarding such modifications.
NOW THEREFORE, in
consideration of the mutual promises and agreements contained herein, and
intending to be legally bound hereby, the undersigned parties hereby agree as
follows:
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Incorporation of Preliminary
Statements. The Recitals set forth above by this reference hereto are
hereby incorporated into this Amendment.
1. Deferral of Payment of the
Monthly Redemption Amount. The parties hereby agree that the
Company’s obligation to pay the Monthly Redemption Amount on the Monthly
Redemption Dates of January 11, 2010 (which was previously extended from January
1, 2010 pursuant to the Waiver Letter) and February 1, 2010 are deferred until
the Monthly Redemption Date of March 1, 2010, at which time the Company shall
pay to the Holders, pro rata in the manner provided in the September Amendment,
the aggregate sum of Six Hundred Thousand Dollars ($600,000)(the “March 1 Redemption
Payment”).
2. Approval of Public
Offering. Provided it is closed by the earlier of (i) the date that is
five (5) trading days after the date that the Company first meets the stock
price requirements for the listing of its common stock on the Nasdaq Capital
Market or (ii) March 1, 2010 (the “Public Offering Deadline”),
the Holders hereby approve and consent, solely to the extent required under the
Transaction Documents, to an underwritten public offering through Rodman &
Renshaw LLC of the Company’s units (each unit consisting of one share of common
stock and one warrant to purchase one share of common stock), having an Issuance
Price (as defined below) of $0.40 (subject to adjustment for the Reverse Stock
Split) or greater, and with gross proceeds between Ten Million Dollars
($10,000,000) and Twenty Five Million Dollars ($25,000,000) (an “Approved Public
Offering”). For purposes hereof, “Issuance Price” shall mean
the lesser of the price per share of the common stock or the exercise price per
share of any accompanying warrants issued in the public offering.
3. Consent to Reverse Stock
Split. Provided that the Company shall have first met all
requirements, other than stock price and other than those that would be
satisfied by virtue of the completion of the Approved Public Offering, for the
listing of its common stock and warrants on the Nasdaq Capital Market (or other
national stock exchange in the United States), the Holders hereby consent to and
approve the Company effecting a reverse stock split of its outstanding common
stock at a ratio not to exceed fifteen (15) to one (1) (the “Reverse Stock
Split”). The Company shall use all commercially reasonable
efforts to obtain the listing of its common stock and warrants on the Nasdaq
Capital Market as soon as possible following the completion of the Reverse Stock
Split.
4. Conversion and Payment of
Debentures. Concurrently with the closing of the Approved
Public Offering, (i) the Enable Funds, collectively, shall convert $1,357,215 in
principal amount of its then outstanding principal balance of their Debentures
(the "Required Conversion
Amount") in exchange for a number of shares of common stock (“Conversion Shares”)) that,
when aggregated with the shares of common stock that are then beneficially owned
by the Enable Funds, collectively, at the time of such conversion (excluding
shares underlying warrants that have a 4.99% or 9.99% beneficial ownership
exercise limitation), is equal to 9.99% of the issued and outstanding shares of
the Company’s common stock (as determined in accordance with Section 13(d) of
the Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder) after giving effect to the closing of the Approved Public Offering
(it being understood that such conversion shall be deemed effective immediately
following the closing of the Approved Public Offering) and (ii) BridgePointe
shall convert an amount of its outstanding Debentures equal to the Required
Conversion Amount in exchange for
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a number
of shares of common stock (also “Conversion Shares”) that,
when aggregated with the shares of common stock that are then beneficially owned
by BridgePointe at the time of such conversion (excluding shares underlying
warrants that have a 4.99% or 9.99% beneficial ownership exercise limitation),
is equal to 9.9% of the issued and outstanding shares of the Company’s common
stock after giving effect to the closing of the Approved Public Offering (such
conversions are collectively referred to herein as the “Required Conversions”).
The conversion price per share in the Required Conversions shall be the amount
determined by dividing the Required Conversion Amount of the Enable Funds and
Bridgepointe, respectively, by the number of Conversion Shares that are issued
to the Enable Funds and Bridgepointe, respectively, pursuant to this Section
4. Within five (5) business days following the closing of the
Approved Public Offering the Company (the “Payment Deadline”) shall pay
to each Holder the unpaid portion of such Holder’s Debenture(s) without penalty
or premium (the “Payoff
Amount”). For purposes of clarification, the Payoff Amount for
BridgePointe and the Enable Funds, respectively, as of the date hereof are set
forth in the table below:
|
Investor
Name
|
Outstanding
Principal
Amount
as
of 01/12/2010
|
Required
Conversion
Amount
|
"Payoff
Amount"*
(Outstanding
Principal
Amount
as
of 1/12/10 less
Required
Conversion
Amount)
|
|
BridgePointe
Master Fund Ltd.
|
$3,166,994.71
|
$1,357,215.00
|
$1,809,779.71
|
|
Enable
Funds
|
$2,714,430.00
|
$1,357,215.00
|
$1,129,054.88
|
* subject
to (i) the subtraction of any conversions other than the Required Conversion
that occur after January 12, 2010 and (ii) the subtraction of the March 1
Redemption Payment if and to the extent that it has been paid prior to the
payoff.
The
Conversion Shares shall be free of restrictive legends and trading restrictions
(other than the lock-up contemplated in Section 6 below) and shall be delivered
electronically and otherwise in accordance with the terms of the
Debentures. Upon receipt of the Conversion Shares by each Holder and
such Payoff Amount to each Holder by the Payment Deadline and the satisfaction
of all of the terms and conditions of this Amendment, each Holder acknowledges
and agrees that its Debenture(s) shall be paid in full and the Company shall
have no further obligation thereunder.
5. Release of Security Interest
and Termination of Covenants. The Holders hereby agree that
upon the close of the Approved Public Offering and the consummation of the
conversions and payments contemplated by Section 4 above, (i) all covenants and
obligations of the Company under the Transaction Documents and all amendments
and modifications thereto that relate solely to holding a Debenture shall be
terminated and of no further force and effect (including the Fully Minimum
Diluted Amount requirement and financial covenants), excluding, however,
obligations of the Company relating to indemnification, reservation of shares,
delivery of notices, compliance with laws and regulations, and similar
obligations that are independent of a Holder’s holding of a Debenture shall
continue to survive until their expiration under the applicable Transaction
Document or applicable law and (ii) the Holders hereby agree to execute and
file all documents required under the Transaction Documents to terminate and
release all security interests held by the Holders in the Company's and its
subsidiary's assets (including, without limitation, all intellectual
property).
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6. Agreement to
Lock-Up. Each of the Holders agrees that, if
an Approved Offering in an amount of at least Ten Million Dollars
($10,000,000) closes by the Public Offering Deadline, then each of the Holders
shall execute a lock-up agreement, in a customary form reasonably acceptable to
such Holder, that is reasonably required by Rodman & Renshaw LLC in
connection with the Approve Public Offering, which lock-up agreement may cover a
period of up to six months following the date the SEC declares the registration
statement for the Approved Public Offering effective.
7. Adjustment to Warrant
Exercise Price, Deletion of Full-Ratchet Antidilution Protection and Extension
of Term of Warrants. The Termination Date of each Warrant is
hereby extended to January 15, 2015. Effective upon the close of the
Approved Public Offering, (i) the Exercise Price (as defined in each of the
Warrants) of each of the Warrants (as “Warrants” is defined in the 2007
Securities Purchase Agreement and the May 2008 Securities Purchase Agreement,
respectively) will be decreased to an amount (the “Warrant Reset Price”) equal
to $0.40,
subject to adjustment for the Reverse Stock Split or as otherwise provided
therein, without any change in the number of shares of common stock that then
may be purchased thereunder, (ii) Section 3(b) and the last sentence of Section
3(e) of each Warrant (relating to dilution protection on subsequent equity sales
afforded to the Holders not otherwise available to all other holders of the
Company’s outstanding common stock and fundamental transactions, respectively)
shall be deleted in their entirety, and (iii) the Termination Date of each
Warrant shall be further extended to the date which if five (5) years following
the date of closing of the Approved Public Offering.
8. Composition of Company’s
Board of Directors. As a further condition to the
effectiveness of this Amendment, from the date hereof until the later of (i)
January 12, 2012 or (ii) the date that is two (2) years after the close of the
Approved Public Offering, the Company’s Board of Directors shall consist of a
majority of independent directors (as determined under Nasdaq’s marketplace
rules)(“Independent
Directors”). For avoidance of doubt, the BridgePointe hereby
approves of Carlton M. Johnson and Adam Michelin as independent directors and
agrees to promptly approve or disapprove of the Company’s third proposed
independent director in order to enable the Company to satisfy the initial
listing requirements of the Nasdaq Capital Market prior to the effective date of
the registration statement covering the Approved Public Offering.
9. Effect on Transaction
Documents. Subject to the waivers
and amendments provided herein, all of the terms and conditions of the
Transaction Documents shall continue in full force and effect after the
execution of this Amendment and shall not be in any way changed, modified or
superseded by the terms set forth herein, including but not limited to, any
other obligations the Company may have to the Investors under the Transaction
Documents provided however that references to
Securities, Debentures, Warrants and Underlying Shares in the Transaction
Documents shall include such securities, as amended hereby, and the shares
underlying such Securities, respectively. Except as expressly
set forth herein, this Amendment shall not be deemed to be a waiver, amendment
or modification of any provisions of the Transaction Documents or of any right,
power or remedy of the Investors, or constitute a waiver of any provision of the
Transaction Documents (except to the extent herein set forth), or any other
document, instrument and/or agreement executed or delivered in connection
therewith, in each case whether arising before or after the date hereof or as a
result of performance hereunder or thereunder. The Investors reserve
all rights, remedies, powers, or privileges available under the Transaction
Documents, at law or otherwise. This Amendment shall not constitute a
novation or satisfaction and accord of the Transaction Documents or any other
document, instrument and/or agreement executed or delivered in connection
therewith, including, without limitation, the Security Agreement.
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10. Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the applicable Transaction
Document.
11. Successors and
Assigns. This Amendment shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties and shall inure to
the benefit of the Investors. The Company may not assign (except by merger) its
rights or obligations hereunder without the prior written consent of the
Investors. The Investors may assign their respective rights hereunder
in the manner and to the Persons as permitted under the applicable Transaction
Document.
12. Execution and
Counterparts. This Amendment may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
13. Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Amendment shall be determined in
accordance with the provisions of the Transaction Documents.
14. Severability. If any
term, provision, covenant or restriction of this Amendment is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
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15. Headings. The
headings in this Amendment are for convenience only, do not constitute a part of
this Amendment and shall not be deemed to limit or affect any of the provisions
hereof.
16. Representations and
Warranties; Corporate Authority. The Company hereby makes the
representations and warranties set forth below to the Holders that as of the
date of its execution of this Amendment:
(a) The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Amendment and otherwise to
carry out its obligations hereunder and thereunder. The execution and
delivery of this Amendment by the Company and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of such Company and no further action is required by such
Company, its board of directors or its stockholders in connection
therewith. This Amendment has been duly executed by the Company and,
when delivered in accordance with the terms hereof will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
(b) The
execution, delivery and performance of this Amendment by the Company and the
consummation by the Company of the transactions contemplated hereby do not and
will not: (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any lien upon any of the properties or assets of the Company,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any material
agreement, credit facility, debt or other material instrument (evidencing
Company debt or otherwise) or other material understanding to which the Company
is a party or by which any property or asset of the Company is bound or
affected, or (iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected.
(c) No
consideration has been offered or paid to any person to amend or consent to a
waiver, modification, forbearance or otherwise of any provision of any of the
Transaction Documents.
(d) All of
the Company’s warranties and representations contained in this Amendment shall
survive the execution, delivery and acceptance of this Amendment by the parties
hereto.
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17. Amendments and
Waivers. No provision of this Amendment may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Holders or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Amendment shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such
right.
18. Joint
Preparation. Each of the parties hereto acknowledges that this
Amendment has been prepared jointly by the parties hereto, and shall not be
strictly construed against either party.
19. Amendments Not Effective
Until All Parties Agree. In addition to any other conditions
provided for herein, the amendments herein shall not be effective unless and
until the Company, its undersigned subsidiaries and all of the Holders of the
Debentures shall have agreed to the terms and conditions hereunder.
20. Disclosure and Filing of
8-K. Except with respect to the
material terms and conditions of the transactions contemplated by this
Amendment, the Company confirms that neither it nor any other Person acting on
its behalf has provided any of the Investors or their agents or counsel with any
information that it believes constitutes or might constitute material, nonpublic
information. On or before the second (2nd) Trading Day immediately following the date hereof, the
Company shall file a Current Report on Form 8-K, reasonably acceptable to each
Investor disclosing the material terms of the transaction contemplated hereby,
which shall include this Amendment as an attachment hereto.
21. INDEPENDENT NATURE OF
INVESTORS’ OBLIGATIONS AND RIGHTS. THE COMPANY HAS ELECTED TO
PROVIDE ALL INVESTORS WITH THE SAME TERMS AND FORM OF THIS AMENDMENT FOR THE
CONVENIENCE OF THE COMPANY AND NOT BECAUSE IT WAS REQUIRED OR REQUESTED TO DO SO
BY THE INVESTORS. THE OBLIGATIONS OF EACH INVESTOR UNDER THIS
AMENDMENT, AND ANY TRANSACTION DOCUMENT ARE SEVERAL AND NOT JOINT WITH THE
OBLIGATIONS OF ANY OTHER INVESTOR, AND NO INVESTOR SHALL BE RESPONSIBLE IN ANY
WAY FOR THE PERFORMANCE OR NON-PERFORMANCE OF THE OBLIGATIONS OF ANY OTHER
INVESTOR UNDER THIS AMENDMENT OR ANY TRANSACTION DOCUMENT. NOTHING CONTAINED
HEREIN OR IN ANY TRANSACTION DOCUMENT, AND NO ACTION TAKEN BY ANY INVESTOR
PURSUANT THERETO, SHALL BE DEEMED TO CONSTITUTE THE INVESTORS AS A PARTNERSHIP,
AN ASSOCIATION, A JOINT VENTURE OR ANY OTHER KIND OF ENTITY, OR CREATE A
PRESUMPTION THAT THE INVESTORS ARE IN ANY WAY ACTING IN CONCERT OR AS A GROUP
WITH RESPECT TO SUCH OBLIGATIONS OR THE TRANSACTIONS CONTEMPLATED BY THIS
AMENDMENT OR THE TRANSACTION DOCUMENTS. EACH INVESTOR SHALL BE
ENTITLED TO INDEPENDENTLY PROTECT AND ENFORCE ITS RIGHTS, INCLUDING WITHOUT
LIMITATION, THE RIGHTS ARISING OUT OF THIS AMENDMENT OR OUT OF THE OTHER
TRANSACTION DOCUMENTS, AND IT SHALL NOT BE NECESSARY FOR ANY OTHER INVESTOR TO
BE JOINED AS AN ADDITIONAL PARTY IN ANY PROCEEDING FOR SUCH PURPOSE. EACH
INVESTOR HAS BEEN REPRESENTED BY ITS OWN SEPARATE LEGAL COUNSEL IN THEIR REVIEW
AND NEGOTIATION OF THIS AMENDMENT AND THE TRANSACTION DOCUMENTS.
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IN WITNESS WHEREOF, the
parties have duly executed this Amendment to Debentures and Warrants, Agreement
and Waiver as of the date first written above.
CRYOPORT,
INC.
By: /s/ Catherine Doll, CFO for
Larry G. Stambaugh
Name:
Larry G. Stambaugh
Title:
Chief Executive Officer
[signature page Holders/Investors
follows]
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Convertible
Debenture Holders’ Signature Page
BRIDGEPOINTE MASTER FUND
LTD.
By: /s/ Eric S. Swartz
Name:
Eric S. Swartz
Title:
Director
ENABLE GROWTH PARTNERS
LP
By: /s/ Mitch Levine
Name:
Mitch Levine
Title:
CEO
ENABLE OPPORTUNITY PARTNERS
LP
By: /s/ Mitch Levine
Name:
Mitch Levine
Title:
CEO
PIERCE DIVERSIFIED STRATEGY MASTER
FUND LLC, ENA
By: /s/ Mitch Levine
Name:
Mitch Levine
Title:
CEO
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