EXHIBIT 4(d)
FORM OF WARRANT AGREEMENT
WARRANT AGREEMENT
AGREEMENT, dated as of September 1, 1999, by and between Oxboro Medical
International, Inc., a Minnesota corporation (the "Company"), and Norwest Bank
Minnesota, N.A., as Warrant Agent (the "Warrant Agent").
W I T N E S E T H
WHEREAS, in connection with a public offering pursuant to a
registration statement (the "Registration Statement") on Form S-3 declared
effective by the Securities and Exchange Commission on September 1, 1999, of
445,412 rights to purchase ("Rights"), each Right consisting of two shares of
the Company's Common Stock, $.01 par value ("Common Stock") and one Common
Stock Purchase Warrant (the "Warrants"), the Company will issue a minimum of
_______________ and a maximum of 445,412 Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants, the
issuance of certificates representing the Warrants, the exercise of the
Warrants, and the rights of the holders thereof;
NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the certificates representing the Warrants and the
respective rights and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
As used herein, the following terms shall have the following meanings,
unless the context shall otherwise require:
(a) "Common Stock" shall mean the authorized stock of the Company
of any class, whether now or hereafter authorized, which has the right
to participate in the distribution of earnings and assets of the
Company without limit as to amount or percentage, which at the date
hereof consists of 2,000,000 shares of Common Stock, $.01 par value,
(b) "Corporate Office" shall mean the office of the Warrant Agent
(or its successor) at which at any particular time its principal
business shall be administered, which office is located on the date
hereof at 000 Xxxxx Xxxxxxx Xxxxxxxx, Xxxxx Xx. Xxxx, XX 00000.
(c) "Exercise Date" shall mean, as to any Warrant, the date on
which the Warrant Agent shall have received both (i) the Warrant
Certificate representing such Warrant, with
the exercise form thereon duly executed by the Registered Holder
thereof or such Holder's attorney duly authorized in writing, and
(ii) payment in cash, official bank or certified check or wire
transfer made payable to the Company, of an amount in lawful money
of the United States of America equal to the applicable Purchase
Price.
(d) "Initial Warrant Exercise Date" shall mean, as to each
Warrant, the original issuance date of the Warrants.
(e) "Purchase Price" shall mean the price to be paid upon exercise
of each Warrant in accordance with the terms hereof, which price shall
be $2.75, subject to adjustment from time to time pursuant to the
provisions of Section 9 hereof, and subject to the Company's right to
reduce the Purchase Price upon notice to all Warrantholders.
(f) "Registered Holder" shall mean the person in whose name any
certificate representing a Warrant shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6.
(g) "Transfer Agent" shall mean Norwest Bank Minnesota, N.A., as
the Company's transfer agent, or its authorized successor, as such.
(h) "Warrant Expiration Date" shall mean 5:00 p.m. (Minneapolis
time) on either September 30, 2000, or October 31, 2000, depending
upon the date of issuance; provided that if such date shall in the
State of Minnesota be a holiday or a day on which banks are authorized
to close, then 5:00 p.m. (Minneapolis time) on the next following day
which in the State of Minnesota is not a holiday or a day on which
banks are authorized to close. Upon notice to all Warrantholders, the
Company shall have the right to extend the Warrant Expiration Date.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) Each Warrant shall initially entitle the Registered Holder of
the Warrant Certificate representing such Warrant to purchase one share
of Common Stock upon the exercise thereof, in accordance with the terms
hereof, subject to modification and adjustment as provided in Section
9.
(b) Upon execution of this Agreement and designation to the
Warrant Agent that the Company has sold the minimum number of Rights,
Warrant Certificates representing the number of Warrants sold shall be
executed by the Company and delivered to the Warrant Agent. Upon
written order of the Company signed by its President or a Vice
President and by its Secretary or an Assistant Secretary, the Warrant
Certificates shall be countersigned, issued and delivered by the
Warrant Agent as part of the Rights. Upon designation to the Warrant
Agent by the Company that it has sold additional Rights, additional
Warrants shall be executed by the Company and delivered by the Warrant
Agent. Upon written order of the Company signed by its President or a
Vice President and by its Secretary or an Assistant Secretary, the
Warrant Certificates shall be countersigned, issued and delivered by
the Warrant Agent as part of the Rights.
-2-
(c) From time to time, up to the Warrant Expiration Date, the
Transfer Agent shall countersign and deliver stock certificates in
required whole number denominations representing up to an aggregate of
890,824 shares of Common Stock, subject to adjustment as described
herein, upon the exercise of Warrants in accordance with this
Agreement.
(d) From time to time, up to the Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant Certificates in
required whole number denominations to the persons entitled thereto in
connection with any transfer or exchange permitted under this
Agreement; provided that no Warrant Certificates shall be issued except
(i) those initially issued hereunder or pursuant to Company
instructions; (ii) those issued on or after the Initial Warrant
Exercise Date, upon the exercise of fewer than all Warrants represented
by any Warrant Certificate, to evidence any unexercised Warrants held
by the exercising Registered Holder; (iii) those issued upon any
transfer or exchange pursuant to Section 6; (iv) those issued in
replacement of lost, stolen, destroyed or mutilated Warrant
Certificates pursuant to Section 7; and (v) at the option of the
Company, in such form as may be approved by its Board of Directors, to
reflect any adjustment or change in the Purchase Price, the number of
shares of Common Stock purchasable upon exercise of the Warrants
therefor made pursuant to Section 9 hereof.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) The Warrant Certificates shall be substantially in the form
annexed hereto as Exhibit A and may have such letters, numbers or other
marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the warrants may be listed, or to
conform to usage. The Warrant Certificates shall be dated the date of
issuance thereof (whether upon initial issuance, transfer, exchange or
in lieu of mutilated, lost, stolen, or destroyed Warrant Certificates)
and issued in registered form. Warrants shall be numbered serially with
the letter W on the Warrants.
(b) Warrant Certificates shall be executed on behalf of the
Company by its President or any Vice President and by its Secretary or
an Assistant Secretary, by manual signatures or by facsimile signature
printed thereon. Warrant Certificates shall be manually countersigned
by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed
any of the Warrant Certificates shall cease to be such officer of the
Company before the date of issuance of the Warrant Certificates or
before countersignature by the Warrant Agent and issue and delivery
thereof, such Warrant Certificates may nevertheless be countersigned by
the Warrant Agent, issued and delivered with the same force and effect
as though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company. After countersignature by the
Warrant Agent, Warrant Certificates shall be delivered by the Warrant
Agent to the Registered Holder without further action by the Company,
except as otherwise provided by Section 4(a) hereof.
-3-
SECTION 4. EXERCISE.
(a) Each Warrant may be exercised by the Registered Holder thereof
at any time on or after the Initial Warrant Exercise Date, but not
after the Warrant Expiration Date, upon the terms and subject to the
conditions set forth herein and in the applicable Warrant Certificate.
A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the Exercise Date and the person entitled to
receive the securities deliverable upon such exercise shall be treated
for all purposes as the holder upon exercise thereof as of the close of
business on the Exercise Date. As soon as practicable on or after the
Exercise Date the Warrant Agent shall deposit the proceeds received
from the exercise of a Warrant and shall notify the Company in writing
of the exercise of the Warrants. The Warrant Agent, on behalf of the
Company, shall cause to be issued and delivered by the Transfer Agent,
to the person or persons entitled to receive the same, a certificate or
certificates for the securities deliverable upon such exercise, plus a
Warrant Certificate for any remaining unexercised Warrants of the
Registered Holder, unless prior to the date of issuance of such
certificates the Company shall instruct the Warrant Agent to refrain
from causing such issuance of certificates pending clearance of checks
received in payment of the Purchase Price pursuant to such Warrants.
Notwithstanding the foregoing, in the case of payment made in the form
of a check drawn on an account of such investment banks and brokerage
houses as the Company shall approve in writing to the Warrant Agent,
certificates shall immediately be issued without prior notice to the
Company or any delay. Upon the exercise of any warrant and clearance of
the funds received, the Warrant Agent shall promptly remit the payment
received for the Warrant to the Company or as the Company may direct in
writing.
SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES;
ETC.
(a) The Company covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely for the
purpose of issue upon exercise of Warrants, such number of shares of
Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The Company covenants that all shares of Common
Stock which shall be issuable upon exercise of the Warrants shall, at
the time of delivery, be duly and validly issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect
to the issue thereof (other than those which the Company shall promptly
pay or discharge) and that upon issuance such shares shall be listed on
each national securities exchange or trading system, if any, on which
the other shares of outstanding Common Stock of the Company are then
listed.
(b) The Company covenants that if any securities to be reserved
for the purpose of exercise of Warrants hereunder require registration
with, or approval of, any governmental authority under any federal
securities law before such securities may be validly issued or
delivered upon such exercise, then the Company will in good faith and
as expeditiously as reasonably possible, endeavor to secure such
registration or approval. The Company will use reasonable efforts to
obtain appropriate approvals or registrations under state "blue sky"
securities laws with respect to any such securities. The Company
reserves the right not to accept exercise of warrants in any state in
which such exercise would be unlawful.
-4-
(c) The Company shall pay all documentary, stamp or similar taxes
and other governmental charges that may be imposed with respect to the
issuance of Warrants, or the issuance or delivery of any shares upon
exercise of the Warrants; provided, however, that if the shares of
Common Stock are to be delivered in a name other than the name of the
Registered Holder of the Warrant Certificate representing any Warrant
being exercised, then no such delivery shall be made unless the person
requesting the same has paid to the Warrant Agent the amount of
transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to
requisition the Company's Transfer Agent from time to time for
certificates representing shares of Common Stock required upon exercise
of the Warrants, and the Company will authorize the Transfer Agent to
comply with all such proper requisitions. The Company will file with
the Warrant Agent a statement setting forth the name and address of the
Transfer Agent of the Company for shares of Common Stock issuable upon
exercise of the Warrants, unless the Warrant Agent and the Transfer
Agent are the same entity.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants of the
same class or may be transferred in whole or in part. Warrant
Certificates to be exchanged shall be surrendered to the Warrant Agent
at its Corporate Office, and upon satisfaction of the terms and
provisions hereof, the Company shall execute and the Warrant Agent
shall countersign, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the
exchange shall be entitled to receive.
(b) The Warrant Agent shall keep at its office books in which,
subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and the transfer thereof in accordance
with its regular practice. Upon due presentment for registration of
transfer of any Warrant Certificate at such office, the Company shall
execute and the Warrant Agent shall issue and deliver to the transferee
or transferees a new Warrant Certificate or Certificates representing
an equal aggregate number of Warrants of the same class.
(c) With respect to all Warrant Certificates presented for
registration or transfer, or for exchange or exercise, the subscription
form or the assignment form on the reverse thereof shall be duly
endorsed, or be accompanied by a written instrument or instruments of
transfer and subscription, in form satisfactory to the Company and the
Warrant Agent, duly executed by the Registered Holder or his
attorney-in-fact duly authorized in writing.
(d) A service charge may be imposed by the Warrant Agent for any
exchange or registration of transfer of Warrant Certificates. In
addition, the Company may require payment by such holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
-5-
(e) All Warrant Certificates surrendered for exercise or for
exchange in case of mutilated Warrant Certificates shall be promptly
canceled by the Warrant Agent and thereafter retained by the Warrant
Agent until termination of this Agreement or resignation as Warrant
Agent, or, at the direction of the Company.
(f) Prior to due presentment for registration of transfer thereof,
the Company and the Warrant Agent may deem and treat the Registered
Holder of any Warrant Certificate as the absolute owner thereof and of
each Warrant represented thereby (notwithstanding any notations of
ownership or writing thereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary. The
Warrants, which are being publicly offered as Rights together with two
shares of Common Stock, will be immediately detachable from the Common
Stock and transferable separately therefrom.
SECTION 7. LOSS OR MUTILATION. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and loss,
theft, destruction or mutilation of any Warrant Certificate and (in case of
loss, theft or destruction) of indemnity satisfactory to them, and (in the case
of mutilation) upon surrender and cancellation thereof, the Company shall
execute and the Warrant Agent shall (in the absence of notice to the Company
and/or Warrant Agent that the Warrant Certificate has been acquired by a bona
fide purchaser) countersign and deliver to the Registered Holder in lieu thereof
a new Warrant Certificate of like tenor representing an equal aggregate number
of Warrants. Applicants for a substitute Warrant Certificate shall comply with
such other reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe.
SECTION 8. REDEMPTION. The Warrants to be issued pursuant to the terms
of this Agreement shall not be redeemable.
SECTION 9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES OF COMMON
STOCK WARRANTS.
(a) Subject to the exceptions referred to in Section 9 (g) below,
in the event the Company shall, at any time or from time to time after
the date hereof, issue any shares of Common Stock as stock dividend to
the holders of Common Stock, or subdivide or combine the outstanding
shares of Common Stock into a greater or lesser number of shares (any
such sale, issuance, subdivision or combination being herein called a
"Change of Shares"), then, and thereafter upon each further Change of
Shares, the applicable Purchase Price in effect immediately prior to
such Change of Shares shall be changed to a price (including any
applicable fraction of a cent) determined by multiplying the Purchase
Price in effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of (a) the total number of shares of Common
Stock outstanding immediately prior to such Change of Shares and (b)
the number of shares of Common Stock which the aggregate consideration
received by the Company upon such sale, issuance, subdivision or
combination (determined in accordance with subsection (f) below) could
have purchased at the then current Purchase Price, and the denominator
of which shall be the total number of shares of Common Stock
outstanding immediately after such Change of Shares.
-6-
Upon each adjustment of the applicable Purchase Price pursuant to
this Section 9, the total number of shares of Common Stock
purchasable upon the exercise of each Warrant shall (subject to the
provisions contained in Section 9(b) hereof) be such number of
shares (calculated to the nearest tenth) purchasable at the
applicable Purchase Price immediately prior to such adjustment
multiplied by a fraction, the numerator of which shall be the
applicable Purchase Price in effect immediately prior to such
adjustment and the denominator of which shall be the applicable
Purchase Price in effect immediately after such adjustment.
(b) The Company may elect, upon any adjustment of the
applicable Purchase Price hereunder, to adjust the number of
Warrants outstanding, in lieu of adjusting the number of shares of
Common Stock purchasable upon the exercise of each Warrant as
hereinabove provided, so that each Warrant outstanding after such
adjustment shall represent the right to purchase one share of Common
Stock. Each Warrant held of record prior to such adjustment of the
number of Warrants shall become that number of Warrants (calculated
to the nearest tenth) determined by multiplying the number by a
fraction, the numerator of which shall be the applicable Purchase
Price in effect immediately prior to such adjustment and the
denominator of which shall be the applicable Purchase Price in
effect immediately after such adjustment. Upon each such adjustment
of the number of Warrants, the Redemption Price in effect
immediately prior to such adjustment also shall be adjusted by
multiplying such Redemption Price by a fraction, the numerator of
which shall be the Purchase Price in effect immediately after such
adjustment and the denominator of which shall be the Purchase Price
in effect immediately prior to such adjustment. Upon each adjustment
of the number of Warrants pursuant to this Section 9, the Company
shall, as promptly as practicable, cause to be distributed to each
Registered Holder of Warrant Certificates on the date of such
adjustment, Warrant Certificates evidencing, subject to Section 10
hereof, the number of additional Warrants, if any, to which such
Holder shall be entitled as a result of such adjustment or, at the
option of the Company, cause to be distributed to such Holder in
substitution and replacement for the Warrant Certificates held by
him prior to the date of adjustment (and upon surrender thereof, if
required by the Company) new Warrant Certificates evidencing the
number of Warrants to which such Holder shall be entitled after such
adjustment.
(c) In case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock, or in case of
any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in
any reclassification, capital reorganization or other change of
outstanding shares of Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as,
or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause
effective provision to be made so that each holder of a Warrant then
outstanding shall have the right thereafter, by exercising such
Warrant, to purchase the kind and number of shares of stock or other
securities or property (including cash) receivable upon such
reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance by a holder of the number
of shares of Common Stock that might have been purchased upon
exercise of such Warrant,
-7-
immediately prior to such reclassification, capital reorganization or
other change, consolidation, merger, sale or conveyance. Any such
provision shall include provision for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided
for in this Section 9. The foregoing provisions shall similarly
apply to successive reclassification, capital reorganizations and
other changes of outstanding shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
(d) After each adjustment of the Purchase Price pursuant to this
Section 9, the Company will promptly prepare a certificate signed by
the President, and by the Secretary or an Assistant Secretary, of the
Company setting forth: (i) the applicable Purchase Price as so
adjusted, (ii) the number of shares of Common Stock purchasable upon
exercise of each Warrant after such adjustment, and, if the Company
shall have elected to adjust the number of Warrants, the number of
Warrants to which the registered holder of each Warrant shall then be
entitled, and the adjustment in Redemption Price resulting therefrom,
and (iii) a brief statement of the facts accounting for such
adjustment. The Company will promptly file such certificate with the
Warrant Agent and cause a brief summary thereof to be sent by ordinary
first class mail to Norwest and to each registered holder of Warrants
at his last address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect therein or
in the mailing thereof shall affect the validity thereof except as to
the holder to whom the Company failed to mail such notice, or except as
to the holder whose notice was defective. The affidavit of an officer
of the Warrant Agent or the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
(e) For purposes of Section 9(a) and 9(b) hereof, the following
provisions (A) to (F) shall also be applicable:
(A) The number of shares of Common Stock outstanding at
any given time shall include shares of Common Stock owned or held by or
for the account of the Company and the sale or issuance of such
treasury shares or the distribution of any such treasury shares shall
not be considered a Change of Shares for purposes of said sections.
(B) No adjustment of the Purchase Price shall be made
unless such adjustment would require an increase or decrease of at
least $.05 in such price; provided that any adjustments which by reason
of this clause (B) are not required to be made shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment(s) so carried forward,
shall require an increase or decrease of at least $.05 in the Purchase
Price then in effect hereunder.
(C) In case of (1) the sale by the Company solely for
cash of any rights or warrants to subscribe for or purchase, or any
options for the purchase of, Common Stock or any securities convertible
into or exchangeable for Common Stock without the payment of any
further consideration other than cash, if any (such convertible or
exchangeable securities being herein called "Convertible Securities"),
or (2) the issuance by the Company, without the receipt by the Company
of any consideration therefor, of any rights or warrants to subscribe
for or purchase, or any options for the purchase of,
-8-
Common Stock or Convertible Securities, in each case, if (and only
if) the consideration payable to the Company upon the exercise of
such rights, warrants or options shall consist solely of cash,
whether or not such rights, warrants or options, or the right to
convert or exchange such Convertible Securities, are immediately
exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such rights, warrants or options or
upon the conversion or exchange of such Convertible Securities
(determined by dividing (x) the minimum aggregate consideration
payable to the Company upon the exercise of such rights, warrants or
options, plus the consideration received by the Company for the
issuance or sale of such rights, warrants or options, plus, in the
case of such Convertible Securities, the minimum aggregate amount of
additional consideration, if any, other than such Convertible
Securities, payable upon the conversion or exchange thereof, by (y)
the total maximum number of shares of Common Stock issuable upon the
exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities issuable upon the
exercise of such rights, warrants or options) is less than the then
Purchase Price immediately prior to the date of the issuance or sale
of such rights, warrants or options, then the total maximum number
of shares of Common Stock issuable upon the exercise of such rights,
warrants or options or upon the conversion or exchange of such
Convertible Securities (as of the date of the issuance or sale of
such rights, warrants or options) shall be deemed to be outstanding
shares of Common Stock for purposes of Sections 9(a) and 9(b) hereof
and shall be deemed to have been sold for cash in an amount equal to
such price per share.
(D) In case of the sale by the Company solely for cash of
any Convertible Securities, whether or not the right of conversion or
exchange thereunder is immediately exercisable, and the price per share
for which Common Stock is issuable upon the conversion or exchange of
such Convertible Securities (determined by dividing (x) the total
amount of consideration received by the Company for the sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, other than such Convertible Securities, payable
upon the conversion or exchange thereof, by (y) the total maximum
number of shares of Common Stock issuable upon the conversion or
exchange of such Convertible Securities) is less than the then Purchase
Price immediately prior to the date of the sale of such Convertible
Securities, then the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of such Convertible Securities
(as of the date of the sale of such Convertible Securities) shall be
deemed to be outstanding shares of Common Stock for purposes of
Sections 9(a) and 9(b) hereof and shall be deemed to have been sold for
cash in an amount equal to such price per share.
(E) If the exercise or purchase price provided for in any
right, warrant or option referred to in (c) above, or the rate at which
any Convertible Securities referred to in (c) or (D) above are
convertible into or exchangeable for Common Stock, shall change at any
time (other than under or by reason of provisions designed to protect
against dilution), the Purchase Price then in effect hereunder shall
forthwith be readjusted to such Purchase Price as would have been
obtained (1) had the adjustments made upon the issuance or sale of such
rights, warrants, options or Convertible Securities been made upon the
basis of the issuance of only the number of shares of Common Stock
theretofore
-9-
actually delivered (and the total consideration received therefor) upon
the exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities, (2) had adjustments been
made on the basis of the Purchase Price as adjusted under clause (1)
for all transactions (which would have affected such adjusted Purchase
Price) made after the issuance or sale of such rights, warrants,
options or Convertible Securities, and (3) had any such rights,
warrants, options or Convertible Securities then still outstanding been
originally issued or sold at the time of such change on the expiration
of any such right, warrant or option or the termination of any such
right to convert or exchange any such Convertible Securities, the
Purchase Price then in effect hereunder shall forthwith be readjusted
to such Purchase Price as would have been obtained (a) had the
adjustments made upon the issuance or sale of such rights, warrants,
options or Convertible Securities been made upon the basis of the
issuance of only the number of shares of Common Stock theretofore
actually delivered (and the total consideration received therefor) upon
the exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities and (b) had adjustments been
made on the basis of the Purchase Price as adjusted under clause (a)
for all transactions (which would have affected such adjusted Purchase
Price) made after the issuance or sale of such rights, warrants,
options or Convertible Securities.
(F) In case of the sale for cash of any shares of Common
Stock, any Convertible Securities, any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Common Stock or
Convertible Securities, the consideration received by the Company
therefore shall be deemed to be the gross sales price therefor without
deducting therefrom any expense paid or incurred by the Company or any
underwriting discounts or commissions or concessions paid or allowed by
the Company in connection therewith.
(f) No adjustment to the Purchase Price of the Warrants or to the
number of shares of Common Stock purchasable upon the exercise of each
Warrant will be made, however,
(i) upon the grant or exercise of any other options which
may hereafter be granted or exercised under any employee benefit plan
of the Company as described in the Registration Statement; or
(ii) upon the sale or exercise of the Warrants; or
(iii) upon the issuance or sale of Common Stock or
Convertible Securities upon the exercise of any rights or warrants to
subscribe for or purchase, or any options for the purchase of, Common
Stock or Convertible Securities, whether or not such rights, warrants
or options were outstanding on the date of the original sale of the
Warrants or were thereafter issued or sold; or
(iv) upon the issuance or sale of Common Stock upon
conversion or exchange of any Convertible Securities, whether or not
any adjustment in the Purchase Price was made or required to be made
upon the issuance or sale of such Convertible
-10-
Securities and whether or not such Convertible Securities were
outstanding on the date of the original sale of the Warrants or were
thereafter issued or sold; or
(v) upon any amendment to or change in the terms of any
rights or warrants to subscribe for or purchase, or options for the
purchase of, Common Stock or Convertible Securities or in the terms of
any Convertible Securities, including, but not limited to, any
extension of any expiration date of any such right, warrant or option,
any change in any exercise or purchase price provided for in any such
right, warrant or option, any extension of any date through which any
Convertible Securities are convertible into or exchangeable for Common
Stock or any change in the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock (other than rights,
warrants, options or Convertible Securities issued or sold after the
close of business on the date of the original issuance of the Rights
(i) for which an adjustment in the Purchase Price then in effect was
theretofore made or required to be made, upon the issuance or sale
thereof, or (ii) for which such an adjustment would have been required
had the exercise or purchase price of such rights, warrants or options
at the time of the issuance or sale thereof or the rate of conversion
or exchange of such Convertible Securities, at the time of the sale of
such Convertible Securities, or the issuance or sale of rights or
warrants to subscribe for or purchase, or options for the purchase of,
such Convertible Securities, been the price or rate as changed, in
which case the provisions of Section 9(f)(E) hereof shall be applicable
if, but only if, the exercise or purchase price thereof, as changed or
the rate of conversion or exchange thereof, as changed, consists solely
of cash or requires the payment of additional consideration, if any,
consisting solely of cash and the Company did not receive any
consideration other than cash, if any, in connection with such change).
(g) As used in this Section 9, the term "Common Stock" shall mean
and include the Company's Common Stock authorized on the date of the
original issue of the Rights and shall also include any capital stock
of any class of the Company thereafter authorized which shall not be
limited to a fixed sum or percentage in respect of the rights of the
holders thereof to participate in dividends and in the distribution of
assets upon the voluntary liquidation, dissolution or winding up of the
Company; provided, however, that the shares issuable upon exercise of
the Warrants shall include only shares of such class designated in the
Company's Articles of Incorporation as Common Stock on the date of the
original issue of the Rights or (i), in the case of any
reclassification, change, consolidation, merger, sale or conveyance of
the character referred to in Section 9(c) hereof, the stock, securities
or property provided for in such section or (ii), in the case of any
reclassification or change in the outstanding shares of Common Stock
issuable upon exercise of the Warrants as a result of a subdivision or
combination or consisting of a change in par value, or from par value
to no par value, or from no par value to par value, such shares of
Common Stock as so reclassified or changed.
(h) Any determination as to whether an adjustment in the Purchase
Price in effect hereunder is required pursuant to Section 9, or as to
the amount of any such adjustment, if required, shall be binding upon
the holders of the Warrants and the Company if made in good faith by
the Board of Directors of the Company.
-11-
(i) If and whenever the Company shall grant to the holders of
Common Stock, as such, rights or warrants to subscribe for or to
purchase, or any options for the purchase of, Common Stock or
securities convertible into or exchangeable for or carrying a right,
warrant or option to purchase Common Stock, the Company shall
concurrently therewith grant to each of the then Registered Holders of
the Warrants all of such rights, warrants or options to which each such
holder would have been entitled if, on the date of determination of
stockholders entitled to the rights, warrants or options being granted
by the Company, such holder were the holder of record of the number of
whole shares of Common Stock then issuable upon exercise (assuming, for
purposes of this Section 9(i), that exercise of Warrants is permissible
during periods prior to the Initial Warrant Exercise Date) of his
Warrants. Such grant by the Company to the holders of the Warrants
shall be in lieu of any adjustment which otherwise might be called for
pursuant to this Section 9.
SECTION 10. FRACTIONAL WARRANTS AND SHARES.
(a) If the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 9 hereof, the
Company shall nevertheless not be required to issue fractions of
shares, upon exercise of the Warrants or otherwise, or to distribute
certificates that evidence fractional shares. With respect to any
fraction of a share called for upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction
multiplied by the market price of such fractional share, determined as
follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on the Nasdaq National Market or
SmallCap Market, the market price shall be the last reported sale price
of the Common Stock on such exchange on the last business day prior to
the date of exercise of the Warrant or if no such sale is made on such
day, the average of the closing bid and asked prices for such day on
such exchange; or
(2) If the Common Stock is not listed or admitted to
unlisted trading privileges or traded on the Nasdaq system, the market
price shall be the mean of the last reported bid and asked prices
reported by the Nasdaq Bulletin Board on the last business day prior to
the date of the exercise of the Warrant; or
(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the market price shall be an amount determined in such
reasonable manner as may be prescribed by the Board of Directors of the
Company.
SECTION 11. WARRANT HOLDERS NOT DEEMED STOCKHOLDERS. No holder of
Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of such Warrants for any purpose whatsoever, nor shall anything contained herein
be construed to confer upon the holder of Warrants, as such, any of the rights
of a stockholder of the Company or any right to vote for the
-12-
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such Holder shall have exercised such Warrants and
been issued shares of Common Stock in accordance with the provisions hereof.
SECTION 12. RIGHTS OF ACTION. All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Warrants, and
any Registered Holder of a Warrant, without consent of the Warrant Agent or of
the holder of any other Warrant, may, in his own behalf and for his own benefit,
enforce against the Company his right to exercise his Warrants for the purchase
of shares of Common Stock in the manner provided in the Warrant Certificates and
this Agreement.
SECTION 13. AGREEMENT OF WARRANT HOLDERS. Every holder of a Warrant, by
his acceptance thereof, consents and agrees with the Company, the Warrant Agent
and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of
the Warrant Agent by the Registered Holder thereof in person or by his
attorney duly authorized in writing and only if the Warrant
Certificates representing such Warrants are surrendered at the office
of the Warrant Agent, duly endorsed or accompanied by a proper
instrument of transfer satisfactory to the Warrant Agent and the
Company in their sole discretion, together with payment of any
applicable transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as the
holder and as the absolute, true and lawful owner of the Warrants
represented thereby for all purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice or knowledge to the
contrary, except as otherwise expressly provided in Section 7 hereof.
SECTION 14. CANCELLATION OF WARRANT CERTIFICATES. If the Company shall
purchase or acquire any Warrant or Warrants, the Warrant Certificate or Warrant
Certificates evidencing the same shall thereupon be delivered to the Warrant
Agent and canceled by it and retired. The Warrant Agent shall also cancel Common
Stock following exercise of any or all of the Warrants represented thereby or
delivered to it for transfer, split-up, combination or exchange.
SECTION 15. CONCERNING THE WARRANT AGENT. The Warrant Agent acts
hereunder as agent and in a ministerial capacity for the Company, and its duties
shall be determined solely by the provisions hereof. The Warrant Agent shall
not, by issuing and delivering Warrant Certificates or by any other act
hereunder be deemed to make any representations as to the validity, value or
authorization of the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
-13-
The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase Price or the Redemption Price provided in this
Agreement, or to determine whether any fact exists which may require any such
adjustments, or with respect to the nature or extent of any such adjustment,
when made, or with respect to the method employed in making the same. It shall
not (i) be liable for any recital or statement of facts contained herein or for
any action taken, suffered or omitted by it in reliance on any Warrant
Certificate or other document or instrument believed by it in good faith to be
genuine and to have been signed or presented by the proper party or parties,
(ii) be responsible for any failure on the part of the Company to comply with
any of its covenants and obligations contained in this Agreement or in any
Warrant Certificate, or (iii) be liable for any act or omission in connection
with this Agreement except for its own negligence or willful misconduct.
The Warrant Agent may at any time consult with counsel satisfactory to it
(who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
Any notice, statement, instruction, request, direction, order or demand
of the Company shall be sufficiently evidenced by an instrument signed by the
President, any Vice President, its Secretary, or Assistant Secretary, (unless
other evidence in respect thereof is herein specifically prescribed). The
Warrant Agent shall not be liable for any action taken, suffered or omitted by
it in accordance with such notice, statement, instruction, request, direction,
order or demand believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable compensation for
its services hereunder and to reimburse it for its reasonable expenses
hereunder; it further agrees to indemnify the Warrant Agent and save it harmless
against any and all losses, expenses and liabilities, including judgments, costs
and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of its duties and powers hereunder except losses, expenses and
liabilities arising as a result of the Warrant Agent's negligence or willful
misconduct.
The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or wilful misconduct), after giving 30
days' prior written notice to the Company. At least 15 days prior to the date
such resignation is to become effective, the Warrant Agent shall cause a copy of
such notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation, or any inability of
the Warrant Agent to act as such hereunder, the Company shall appoint a new
warrant agent in writing. If the Company shall fail to make such appointment
within a period of 15 days after it has been notified in writing of such
resignation by the resigning warrant Agent, then the Registered Holder of any
Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court shall be a bank or trust company having a capital
and surplus as shown by its last published report to its stockholders, of not
less than $10,000,000, or a stock transfer company. After acceptance in writing
of such appointment by the new warrant agent is received by the Company, such
new warrant agent shall be vested with the same powers, rights, duties and
responsibilities
-14-
as if it had been originally named herein as the Warrant Agent, without any
further assurance, conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning
warrant Agent. Not later than the effective date of any such appointment the
Company shall file notice thereof with the resigning Warrant Agent and shall
forthwith cause a copy of such notice to be mailed to the Registered Holder
of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new warrant agent may
be converted or merged or any corporation resulting from any consolidation to
which the Warrant Agent or any new warrant agent shall be a party or any
corporation succeeding to the trust business of the Warrant Agent shall be a
successor warrant agent under this Agreement without any further act, provided
that such corporation is eligible for appointment as successor to the Warrant
Agent under the provisions of the preceding paragraph. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent to
be mailed to the Company and to the Registered Holder of each Warrant
Certificate.
The Warrant Agent, its subsidiaries and affiliates, and any of its or
their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effects as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
SECTION 16. MODIFICATION OF AGREEMENT. Subject to the provisions of
Section 4(b), the Warrant Agent and the Company may by supplemental agreement
make any changes or corrections in this Agreement (i) that they shall deem
appropriate to cure any ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained; or (ii) that they may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of Warrant Certificates provided, however, that this Agreement
shall not otherwise be modified, supplemented or altered in any respect except
with the consent in writing of the Registered Holders of Warrant Certificates
representing not less than 50% of the Warrants then outstanding; and provided,
further, that no change in the number or nature of the securities purchasable
upon the exercise of any Warrant, or the Purchase Price therefor, or the
acceleration of the Warrant Expiration Date, shall be made without the consent
in writing of the Registered Holder of the Warrant Certificate representing such
Warrant, other than such changes as are specifically prescribed by this
Agreement as originally executed.
SECTION 17. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified mail, postage
prepaid as follows: if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company, at 00000 Xxxxxxx Xxxxxx XX, Xxx Xxxx, Xxxxxxxxx 00000,
Attention: President, or at such other address as may have been furnished to the
Warrant Agent in writing by the Company; if to the Warrant Agent, at 000 Xxxxx
Xxxxxxx Xxxxxxxx, Xxxxx Xx. Xxxx, Xxxxxxxxx 00000.
-15-
SECTION 18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota, without
reference to principles of conflict of laws.
SECTION 19. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Company and, the Warrant Agent and their respective
successors and assigns, and the holders from time to time of Warrant
Certificates. Nothing in this Agreement is intended or shall be construed to
confer upon any other person any right, remedy or claim, in equity or at law, or
to impose upon any other person any duty, liability or obligation.
SECTION 20. TERMINATION. This Agreement shall terminate at the close of
business on the Expiration Date of all the Warrants or such earlier date upon
which all Warrants have been exercised, except that the Warrant Agent shall
account to the Company for cash held by it and the provisions of Section, 15
hereof shall survive such termination.
SECTION 21. COUNTERPARTS. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
OXBORO MEDICAL INTERNATIONAL, INC.
By:
--------------------------------
Xxxxxxx X. Xxxxxx, President
NORWEST BANK MINNESOTA, N.A.
By:
--------------------------------
-16-
