Contract
Exhibit 10.33
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
UROPLASTY, INC.
WARRANT
| Warrant No. 2006-___ | Original Issue Date: August 7, 2006 |
Uroplasty, Inc., a Minnesota corporation (the “Company”), hereby certifies that, for value
received, or its registered assigns (the “Holder”), is entitled to
purchase from the Company up to a total of
shares of Common Stock (each such share, a
“Warrant Share” and all such shares, the “Warrant Shares”), at any time and from time to time
commencing on the 181st day after the Original Issue Date and through and including August 6, 2011
(the “Expiration Date”), and subject to the following terms and conditions:
1. Definitions. As used in this Warrant, the following terms shall have the
respective definitions set forth in this Section 1. Capitalized terms that are used and not
defined in this Warrant that are defined in the Purchase Agreement (as defined below) shall have
the respective definitions set forth in the Purchase Agreement.
“Business Day” means any day except Saturday, Sunday and any day which is a Federal legal
holiday or a day on which banking institutions in the State of New York or Minnesota are authorized
or required by law or other governmental action to close.
“Common Stock” means the common stock of the Company, par value $.01 per share, and any
securities into which such common stock may hereafter be reclassified.
“Exercise Price” means the greater of (a) $2.50 or (b) $0.05 in excess of the closing price of
the Company’s Common Stock as reported on the American Stock Exchange on the Original Issue Date,
in each case subject to adjustment in accordance with Section 9.
“Fundamental Transaction” means any of the following: (1) the Company effects any merger or
consolidation of the Company with or into another Person, (2) the Company effects any sale of all
or substantially all of its assets in one or a series of related transactions, (3) any tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders
of Common Stock are permitted to tender or exchange their shares for other securities, cash or
property, or (4) the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property.
“Original Issue Date” means the Original Issue Date first set forth on the first page of this
Warrant.
“New York Courts” means the state and Federal courts sitting in the City of New York, Borough
of Manhattan.
“Purchase Agreement” means the Securities Purchase Agreement, dated August 7, 2006, to which
the Company and the original Holder are parties.
“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii)
if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the Pink Sheets, LLC (or any similar organization or
agency succeeding to its functions of reporting prices); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i) and (ii) hereof, then Trading Day shall
mean a Business Day.
2. Registration of Warrant. The Company shall register this Warrant upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.
3. Registration of Transfers. The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached hereto duly completed and signed, to the Company at its address specified
herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the
portion of this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the
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transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations of a holder of a
Warrant.
4. Exercise and Duration of Warrants.
(a) This Warrant shall be exercisable by the registered Holder at any time and from time to
time commencing on the 181st day after the Original Issue Date and through and including the
Expiration Date. At 6:30 p.m. (New York City time) on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value. Except as set forth
below in Section 4(b), the Company may not call or redeem any portion of this Warrant without the
prior written consent of the affected Holder.
(b) Subject to the provisions of this Section 4(b), if at any time following the one-year
anniversary of the Original Issue Date, (i) the average of the closing prices of the Common Stock
for each of the 30 consecutive Trading Days immediately prior to delivery of a Call Notice is
greater than $4.00 (subject to equitable adjustment as a result of the events set forth in Section
9), (ii) the average daily trading volume of the Common Stock during the entire 30 Trading Day
period referenced in clause (i) above through the expiration of the Call Date (as defined below) as
set forth in the Company’s notice pursuant to this Section (the “Call Condition Period”) shall be
at least 5,000 shares (subject to equitable adjustment as a result of intervening stock splits and
reverse stock splits), (iii) the Warrant Shares are either registered for resale pursuant to an
effective registration statement naming the Holder as a selling stockholder thereunder (and the
prospectus thereunder is available for use by the Holder as to all Warrant Shares) or freely
transferable without volume restrictions pursuant to Rule 144(k) promulgated under the Securities
Act, as determined by counsel to the Company pursuant to a written opinion letter addressed and in
form and substance reasonably acceptable to the Holder and the transfer agent for the Common Stock,
during the entire Call Condition Period, (iv) the Company shall have complied in all material
respects with its obligations under this Warrant and the Transaction Documents during the entire
Call Condition Period and (v) the Common Stock shall at all times be listed or quoted on a Trading
Market during the entire Call Condition Period, then the Company may in its sole discretion, elect
to require the exercise of all (but not less than all) of the then unexercised portion of this
Warrant at the Exercise Price, on the date that is the fifth (5th) day after written
notice thereof (a “Call Notice”) is received by the Holder (the “Call Date”) at the address last
shown on the records of the Company for the Holder or given by the Holder to the Company for the
purpose of notice; provided, that the conditions to giving such notice must be in effect at
all times during the Call Condition Period or any such Call Notice shall be null and void. The
Company and the Holder agree that, if and to the extent Section 11 of this Warrant would restrict
the ability of the Holder to exercise this Warrant in the event of a delivery of a Call Notice,
then notwithstanding anything to the contrary set forth in the Call Notice, the Call Notice shall
be deemed automatically amended to apply only to such portion of this Warrant as may be exercised
by the Holder by the Call Date in accordance with such Sections as are then in effect. The Holder
will promptly (and, in any event, prior to the Call Date) notify the Company in writing following
receipt of a Call Notice if Section 11 would
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restrict its exercise of the Warrant, specifying therein the number of Warrant Shares so
restricted. The Company covenants and agrees that it will honor all Exercise Notices tendered
through 6:30 p.m. (New York City time) on the Call Date.
5. Delivery of Warrant Shares.
(a) To effect exercises hereunder, the Holder shall not be required to physically surrender
this Warrant unless the aggregate Warrant Shares represented by this Warrant is being exercised.
Upon delivery of the Exercise Notice (in the form attached hereto) to the Company (with the
attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment
of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after
the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the
Warrant Shares issuable upon such exercise, which, unless otherwise required by the Purchase
Agreement, shall be free of restrictive legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of the Warrant Shares
has been declared effective by the Securities and Exchange Commission, use its reasonable best
efforts to deliver Warrant Shares hereunder electronically through the Depository Trust Corporation
or another established clearing corporation performing similar functions, if available,
provided, that, the Company may, but will not be required to change its transfer agent if
its current transfer agent cannot deliver Warrant Shares electronically through the Depository
Trust Corporation. A “Date of Exercise” means the date on which the Holder shall have delivered to
the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) if such Holder is not utilizing the cashless exercise provisions
set forth in this Warrant, payment of the Exercise Price for the number of Warrant Shares so
indicated by the Holder to be purchased.
(b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder
will have the right to rescind such exercise.
(c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant to Section 5(a), and if after
such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the exercise at issue by
(B) the closing bid price of the Common Stock on the Date of Exercise and (2) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored or deliver to the Holder the number of shares of Common Stock
that would have been issued had the
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Company timely complied with its exercise and delivery obligations hereunder. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In.
(d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to
enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Xxxxxx’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing Warrant
Shares upon exercise of the Warrant as required pursuant to the terms hereof.
6. Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise
of this Warrant shall be made without charge to the Holder for any issue or transfer tax,
withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance
of such certificates, all of which taxes and expenses shall be paid by the Company; provided,
however, that the Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a
name other than that of the Holder. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.
8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or
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any other contingent purchase rights of Persons other than the Holder (taking into account the
adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares
so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price
in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 9.
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b) Fundamental Transactions. If, at any time while this Warrant is outstanding there
is a Fundamental Transaction, then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the same amount and kind of securities, cash or property as it would have
been entitled to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternate Consideration”). For purposes of
any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental Transaction. At the Holder’s
option and request, any successor to the Company or surviving entity in such Fundamental
Transaction shall, either (1) issue to the Holder a new warrant substantially in the form of this
Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase
the Alternate Consideration for the aggregate Exercise Price upon exercise thereof, or (2) purchase
the Warrant from the Holder for a purchase price, payable in cash within five Trading Days after
such request (or, if later, on the effective date of the Fundamental Transaction), equal to the
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Black Scholes value of the remaining unexercised portion of this Warrant on the date of such
request; provided, that the second choice is unavailable if the Fundamental Transaction is
a merger effected solely for the purpose of reincorporating the Company in a different
jurisdiction. The terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply with the provisions
of this paragraph (c) and insuring that the Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
(c) Subsequent Equity Sales. In the event that during the Anti-Dilution Testing
Period (referred to below), the Company proposes to engage in a transaction that, by giving effect
to this Section 9(c), would require the Company to recalculate the EP (as defined below), the
Company agrees that it will not engage in any such transaction unless it first receives
pre-approval to give effect to this Section 9(c) from the Company’s shareholders at a duly held
regular or special meeting thereof held in accordance with the Rules of the American Stock
Exchange. Accordingly, the Holder acknowledges and agrees that this Section 9(c) will only apply
to a transaction for which the Company’s shareholders have so given their pre-approval.
(i) If during the Anti-Dilution Testing Period, the Company issues (or agrees to issue) any
shares of Common Stock or if the Company or any Subsidiary issues (or agrees to issue) any Common
Stock Equivalents entitling any Person to acquire shares of Common Stock at a price per share less
than the Threshold Price (if the holder of the Common Stock or Common Stock Equivalent so issued
shall at any time during the Anti-Dilution Testing Period, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights issued in connection with such issuance, be entitled to receive
shares of Common Stock at a price less than the Threshold Price, such issuance shall be deemed to
have occurred for less than the Threshold Price), then, the Exercise Price (“EP”) shall be adjusted
as follows:
| AEP | = | EP | x | [(N+v)/(N+n)] | ||||||||
| where: | ||||||||||||
AEP = the Adjusted Exercise Price.
N = the number of shares of Common Stock outstanding immediately
prior to the issuance of such shares of Common Stock or such Common
Stock Equivalents.
v = the number of shares of Common Stock which the aggregate
consideration receivable by the Company (determined in accordance
with subsection 9(c)(ii) below) would purchase at the Per Share
Purchase Price.
n = the number of shares of Common Stock issuable in connection with
such subsequent issuance.
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Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.
The Company shall notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalent subject to this section, indicating therein
the applicable issuance price, or of applicable reset price, exchange price, conversion price and
other pricing terms. If during the Anti-Dilution Testing Period, the Company enters into any
understanding or agreement to issue or sell securities that would, if such issuance were to occur
during the Anti-Dilution Testing Period, trigger an adjustment to the Exercise Price, then
notwithstanding the fact that such actual issuance of Common Stock or Common Stock Equivalents
occurs after the Anti-Dilution Testing Period, such issuance will be treated as if it had occurred
during the Anti-Dilution Testing Period.
(ii) For purposes of this subsection 9(c), the following subsections (c)(ii)(l) to (c)(ii)(6)
shall also be applicable:
(1) Issuance of Rights or Options. If at any time the Company shall in any manner
grant (directly and not by assumption in a merger or otherwise) any warrants or other rights to
subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or
security convertible into or exchangeable for Common Stock (such warrants, rights or options being
called “Options” and such convertible or exchangeable stock or securities being called “Convertible
Securities”) whether or not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common Stock is issuable
upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of
(x) the total amount, if any, received or receivable by the Company as consideration for the
granting of such Options, plus (y) the aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus (z), in the case of such Options which relate
to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon
the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by
(ii) the total maximum number of shares of Common Stock issuable upon the exercise of such Options
or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Threshold Price in effect immediately prior to the time of the
granting of such Options, then the total number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to have been issued for such
price per share as of the date of granting of such Options or the issuance of such Convertible
Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise
Price. Except as otherwise provided in subsection 9(c)(ii)(3), no adjustment of the Exercise Price
shall be made upon the actual issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange
of such Convertible Securities.
(2) Issuance of Convertible Securities. If the Company shall in any manner issue
(directly and not by assumption in a merger or otherwise) or sell any
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Convertible Securities, whether or not the rights to exchange or convert any such Convertible
Securities are immediately exercisable, and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined by dividing (i) the sum (which sum shall constitute
the applicable consideration) of (x) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus (y) the aggregate amount
of additional consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities) shall be less than the Threshold Price in effect
immediately prior to the time of such issue or sale, then the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such Convertible Securities shall be
deemed to have been issued for such price per share as of the date of the issue or sale of such
Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting
the Exercise Price, provided that (a) except as otherwise provided in subsection 9(c)(ii)(3), no
adjustment of the Exercise Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) no further adjustment of the Exercise
Price shall be made by reason of the issue or sale of Convertible Securities upon exercise of any
Options to purchase any such Convertible Securities for which adjustments of the Exercise Price
have been made pursuant to the other provisions of subsection 9(c).
(3) Change in Option Price or Conversion Rate. Upon the happening of any of the
following events, namely, if the purchase price provided for in any Option referred to in
subsection 9(c)(ii)(l) hereof, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subsections 9(c)(ii)(l) or 9(c)(ii)(2), or
the rate at which Convertible Securities referred to in subsections 9(c)(ii)(l) or 9(c)(ii)(2) are
convertible into or exchangeable for Common Stock shall change at any time (including, but not
limited to, changes under or by reason of provisions designed to protect against dilution), the
Exercise Price in effect at the time of such event shall forthwith be readjusted to the Exercise
Price which would have been in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed purchase price, additional consideration or conversion rate,
as the case may be, at the time initially granted, issued or sold. On the termination of any
Option for which any adjustment was made pursuant to this subsection 9(c) or any right to convert
or exchange Convertible Securities for which any adjustment was made pursuant to this subsection
9(c) (including without limitation upon the redemption or purchase for consideration of such
Convertible Securities by the Company), the Exercise Price then in effect hereunder shall forthwith
be changed to the Exercise Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding immediately prior to such
termination, never been issued.
(4) Stock Dividends. Subject to the provisions of this Section 9(c), if the Company
shall declare a dividend or make any other distribution upon any stock of the Company (other than
the Common Stock) payable in Common Stock, Options or Convertible Securities, then any Common
Stock, Options or Convertible Securities, as the case may be,
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issuable in payment of such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(5) Consideration for Stock. If any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for cash, the consideration received therefor shall be deemed to
be the net amount received by the Company therefor, after deduction therefrom of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. If any shares of Common Stock, Options or Convertible Securities shall be
issued or sold for a consideration other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of such consideration as determined in
good faith by the Board of Directors of the Company, after deduction of any expenses incurred or
any underwriting commissions or concessions paid or allowed by the Company in connection therewith.
If any Options shall be issued in connection with the issue and sale of other securities of the
Company, together comprising one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be deemed to have been issued
for such consideration as determined in good faith by the Board of Directors of the Company. If
Common Stock, Options or Convertible Securities shall be issued or sold by the Company and, in
connection therewith, other Options or Convertible Securities (the “Additional Rights”) are issued,
then the consideration received or deemed to be received by the Company shall be reduced by the
fair market value of the Additional Rights (as determined using the Black-Scholes option pricing
model or another method mutually agreed to by the Company and the Holder). The Board of Directors
of the Company shall respond promptly, in writing, to an inquiry by the Holders as to the fair
market value of the Additional Rights. In the event that the Board of Directors of the Company and
the Holders are unable to agree upon the fair market value of the Additional Rights, the Company
and the Holders shall jointly select an appraiser, who is experienced in such matters. The
decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne evenly by the Company and the Holder.
(6) Record Date. If the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them (i) to receive a dividend or other distribution payable in
Common Stock, Options or Convertible Securities or (ii) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date shall be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the granting of such right
of subscription or purchase, as the case may be.
(iii) Notwithstanding the foregoing, no adjustment will be made under this paragraph (c) in
respect of: (i) the issuance of Warrant Shares, (ii) to the extent consistent with past practice,
the grant of options or warrants, or the issuance of additional securities, under any duly
authorized Company stock option, restricted stock plan or stock purchase plan whether now existing
or approved by the Company and its shareholders in the future (but not as to any amendments or
other modifications to the number of Common Stock issuable thereunder, the terms set forth therein,
or the exercise price set forth therein, unless such amendments or other
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modifications are approved by the Company’s shareholders), (iii) the issuance and sale by the
Company of shares of Common Stock or Common Stock Equivalents issued as consideration for the
acquisition of another company or business (including the grant of up to 100,000 options or
warrants to officers, employees and directors in connection with such an acquisition) if no
executive officer, director or 10% beneficial shareholder of the Company is an executive officer,
director or 10% beneficial shareholder of such other company or business, and if the acquisition
has been approved by the Board of Directors of the Company, (iv) the issuance of up to 200,000
shares of Common Stock or Common Stock Equivalents to a financial institution or leasing company
primarily in connection with any debt or lease financing transaction or the establishment or
maintenance of any line of credit (other than equity lines or similar transactions) or (v) the
issuance of any Common Stock or Common Stock Equivalents upon the exercise, conversion or exchange
of Options or Convertible Securities (as those terms are defined in Section 9(c)(ii)(1) above)
outstanding on the date hereof.
(d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to this Section 9, the number of Warrant Shares that may be purchased upon exercise
of this Warrant shall be increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to such adjustment.
(e) Calculations. All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issue or sale
of Common Stock.
(f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will promptly compute such adjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s Transfer Agent.
(g) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including
without limitation any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes
the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Holder a notice describing the material terms and conditions of such
transaction (but only to the extent such disclosure would not result in the
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dissemination of material, non-public information to the Holder) at least 10 calendar days
prior to the applicable record or effective date on which a Person would need to hold Common Stock
in order to participate in or vote with respect to such transaction, and the Company will take all
steps reasonably necessary in order to insure that the Holder is given the practical opportunity to
exercise this Warrant prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the failure to deliver such notice or any defect therein shall
not affect the validity of the corporate action required to be described in such notice.
10. Payment of Exercise Price. The Holder may pay the Exercise Price in one of the
following manners:
(a) Cash Exercise. The Holder may deliver immediately available funds; or
(b) Cashless Exercise. If an Exercise Notice is delivered at a time when a
registration statement permitting the Holder to resell the Warrant Shares is not then effective or
the prospectus forming a part thereof is not then available to the Holder for the resale of the
Warrant Shares, then the Holder may notify the Company in an Exercise Notice of its election to
utilize cashless exercise, in which event the Company shall issue to the Holder the number of
Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with respect to which this Warrant
is being exercised.
A = the average of the closing prices for the five Trading Days
immediately prior to (but not including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued.
11. Limitations on Exercise.
(a) Notwithstanding anything to the contrary contained herein, the number of Warrant Shares
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially
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owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of
Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange
Act, does not exceed 4.9% of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This provision shall not restrict the
number of shares of Common Stock which a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may receive in the event
of a Fundamental Transaction as contemplated in Section 9 of this Warrant. By written notice to
the Company, an Investor may waive the provisions of this Section 11(a) as to itself but any such
waiver will not be effective until the 61st day after delivery thereof and such waiver
shall have no effect on any other Investor.
(b) Notwithstanding anything to the contrary contained herein, the number of Warrant Shares
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Holder and
its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.9% of the
total number of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. This provision shall not restrict the number of shares of Common Stock
which a Holder may receive or beneficially own in order to determine the amount of securities or
other consideration that such Holder may receive in the event of a Fundamental Transaction as
contemplated in Section 9 of this Warrant. This restriction may not be waived.
12. No Fractional Shares. No fractional shares of Warrant Shares will be issued in
connection with any exercise of this Warrant. In lieu of any fractional shares which would,
otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied
by the closing price of one Warrant Share as reported by the applicable Trading Market on the date
of exercise.
13. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New
York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required
to be given. The addresses for such communications shall be: (i) if to the
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Company, to Uroplasty, Inc., 0000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, Attn: Xxxxx X.
Xxxxxx, President and Chief Executive Officer, or to Facsimile No.: (000) 000-0000 (or such other
address as the Company shall indicate in writing in accordance with this Section), or (ii) if to
the Holder, to the address or facsimile number appearing on the Warrant Register or such other
address or facsimile number as the Holder may provide to the Company in accordance with this
Section.
14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this Warrant without any
further act. Any such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s
last address as shown on the Warrant Register.
15. Miscellaneous.
(a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder and their successors and assigns.
(b) All questions concerning the construction, validity, enforcement and interpretation of
this Warrant shall be governed by and construed and enforced in accordance with the internal laws
of the State of New York (except for matters governed by corporate law in the State of Minnesota),
without regard to the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of this Warrant and the
transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts.
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York
Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to process being served
in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Warrant and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law.
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Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to
enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.
(c) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.
(d) If any one or more of the provisions of this Warrant shall be invalid or unenforceable in
any respect, the validity and enforceability of the remaining terms and provisions of this Warrant
shall not in any way be affected or impaired thereby and the parties will attempt in good faith to
agree upon a valid and enforceable provision which shall be a commercially reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
(e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.
| UROPLASTY, INC. | ||||||||
| By: | ||||||||
| Name: | Xxxxx X. Xxxxxx | |||||||
| Title: | President and Chief Executive Officer | |||||||
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EXERCISE NOTICE
UROPLASTY, INC.
WARRANT NO. 2006-___DATED AUGUST 7, 2006
UROPLASTY, INC.
WARRANT NO. 2006-___DATED AUGUST 7, 2006
The
undersigned Holder hereby irrevocably elects to purchase shares of Common Stock
pursuant to the above referenced Warrant. Capitalized terms used herein and not otherwise defined
have the respective meanings set forth in the Warrant.
(1) The undersigned Holder hereby exercises its right to purchase Warrant Shares
pursuant to the Warrant.
(2) The Holder intends that payment of the Exercise Price shall be made as (check one):
| “Cash Exercise” under Section 10 | ||||||
| “Cashless Exercise” under Section 10 |
(3) If
the holder has elected a Cash Exercise, the holder shall pay the sum of $ to the
Company in accordance with the terms of the Warrant.
(4) Pursuant to this Exercise Notice, the Company shall deliver to the holder
Warrant Shares in accordance with the terms of the Warrant.
(5) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company
that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in
excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant to which
this notice relates.
| Dated: , | Name of Holder: | |||||||
| (Print) | ||||||||
|
By: |
||||||||
|
|
||||||||
| Name: | ||||||||
| Title: | ||||||||
| (Signature must conform in all respects to name of holder as specified on the face of the Warrant) | ||||||||
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Warrant Shares Exercise Log
| Number of | ||||||
| Number of Warrant | Warrant Shares | |||||
| Shares Available to be | Number of Warrant Shares | Remaining to | ||||
| Date | Exercised | Exercised | be Exercised | |||
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UROPLASTY, INC.
WARRANT ORIGINALLY ISSUED AUGUST 7, 2006
WARRANT NO. 2006-___
WARRANT ORIGINALLY ISSUED AUGUST 7, 2006
WARRANT NO. 2006-___
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
the right represented by the above-captioned Warrant to purchase
shares of Common Stock to which such Warrant relates and appoints
attorney to transfer said right on the books of the Company with full power of substitution in the
premises.
Dated: , ____
In the presence of: |
||||||
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