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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 10, 1997
DIAMETRICS MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Minnesota 0-21982 41-1663185
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
2658 Patton Road, Roseville, MN 55113
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 639-8035
Not Applicable
(Former name or former address, if changed since last report.)
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Item 5. Other Events
On June 10, 1997, Diametrics Medical, Inc. (the "Company") completed
the sale in a private placement (the "Private Placement") of 1,422,222 shares of
Common Stock, par value $.01 per share (the "Shares"), at a price of $5.625 per
Share, the market price of the Common Stock on the last trading date immediately
preceeding the sale. Each purchaser of Shares also received a detachable
warrant to purchase one share of Common Stock for each four Shares purchased,
with an exercise price (subject to adjustment) equal to $6.75 per share, for an
aggregate of 355,556 shares. In addition, the Company paid to its placement
agent a commission in an aggregate amount of 71,110 shares of Common Stock,
together with warrants to purchase 17,778 shares of Common Stock at an exercise
price of $6.75 per share (equal to 5% of the total number of Shares and warrant
shares sold in the Private Placement). The foregoing information is a summary
only and is qualified in its entirety by the information contained in the
documents filed as exhibits to this Form 8-K.
The proceeds from the Private Placement of approximately $8,000,000
will be used by the Company for general corporate purposes.
Item 7. Financial Statements and Exhibits
(c) Exhibits
4.1 Stock Purchase Agreement, dated as of June 10, 1997 (the
"Purchase Agreement"), between Diametrics Medical, Inc. (the
"Company") and the Purchasers named therein (the "Purchasers")
4.2 Registration Rights Agreement, dated as of June 10, 1997, by and
between the Company and the Purchasers.
4.3 Form of Stock Purchase Warrant
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DIAMETRICS MEDICAL, INC.
Date: June 26, 1997
By /s/ Laurence L. Betterley
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Laurence L. Betterley
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Description of Exhibit
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4.1 Stock Purchase Agreement, dated as of June 10, 1997 (the "Purchase
Agreement"), between Diametrics Medical, Inc. (the "Company") and
the Purchasers named therein (the "Purchasers")
4.2 Registration Rights Agreement, dated as of June 10, 1997, by and
between the Company and the Purchasers.
4.3 Form of Stock Purchase Warrant
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Exhibit 4.1
STOCK PURCHASE AGREEMENT
AGREEMENT, made as of June 10, 1997, between DIAMETRICS MEDICAL, INC. a
Minnesota corporation (the "Company") and the purchasers (the "Purchasers")
listed on Schedule A hereto.
WHEREAS, the Company wishes to raise additional capital; and
WHEREAS, the Purchasers desire to purchase shares of the common stock, par
value $.01 per share, of the Company (the "Common Stock"), together with
detachable warrants to purchase additional shares of Common Stock.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Purchase of Common Stock. The Purchasers hereby agree to purchase
from the Company and the Company hereby agrees to sell to Purchasers the number
of shares of Common Stock set forth opposite the name of each Purchaser in
Schedule A (the "Shares") at a purchase price of $5.625 per share, together with
a detachable warrant in the form attached hereto as Exhibit A (the "Warrant").
Each Warrant will (subject to adjustment) have an exercise price equal to $6.75
per share, and will be exercisable (subject to adjustment) into a number of
shares of Common Stock equal to 1/4 of the number of Shares purchased by the
original holder of such Warrant pursuant to this Agreement. The Purchasers will
receive certain registration rights with respect to the Common Stock issuable
upon exercise of the Warrants pursuant to an agreement in substantially the form
attached hereto as Exhibit B (the "Registration Rights Agreement").
2. Closing Date. The closing of the purchase and sale of the Shares
hereunder (the "Closing") will be held at the offices of Dorsey & Whitney LLP,
220 South Sixth Street, Minneapolis, Minnesota 55402 at such time and date as
the Company and the Purchasers may agree (the "Closing Date").
3. Delivery. At the Closing, the Company will deliver to each Purchaser
a certificate dated the Closing Date registered in such Purchaser's name
representing the Shares purchased by such Purchaser, together with a Warrant
registered in such Purchaser's name representing the number of shares of Common
Stock purchasable upon the exercise of such Warrant. At the Closing each
Purchaser will pay to the Company the amount of the purchase price set forth
opposite the name of such Purchaser in Schedule A attached hereto by certified
check, wire transfer or any combination of the above.
4. Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Purchasers which
representations and warranties survive the purchase of the Shares and Warrants
by the Purchasers:
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4.1 Corporate Existence and Power. The Company is duly incorporated,
validly existing and in good standing under the laws of the State of Minnesota.
The Company's only subsidiary is Diametrics Medical, Ltd., a private limited
company incorporated in England and Wales (the "Subsidiary"). Each of the
Company and the Subsidiary has all corporate powers and authority and all
governmental licenses, authorizations, consents and approvals (collectively, the
"Permits") required to carry on its business as now conducted, except where the
failure to obtain such Permits, individually or in the aggregate, would not have
a Material Adverse Effect (as defined below) on the Company. Each of the
Company and the Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. For purposes of this Agreement, a "Material Adverse Effect"
means, with respect to any Person, a material adverse effect on the condition
(financial or otherwise), business, assets or properties of such Person and its
subsidiaries taken as a whole or on the ability of such Person to perform its
obligations hereunder. For purposes of this Agreement, any reference to any
event, change or effect being "material" with respect to any Person means an
event, change or effect, whether existing or prospective, which is material in
relation to the condition (financial or otherwise), business, assets or
properties of such Person and its subsidiaries taken as a whole or on the
ability of such Person to perform its obligations hereunder. For the purposes
of this Agreement, "Person" means any individual, partnership, firm,
corporation, limited liability company or partnership, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
4.2 Corporate Authorization. The execution, delivery and performance by
the Company of this Agreement, the Warrants, and the Registration Rights
Agreement and the consummation by the Company of the transactions contemplated
hereby and thereby are within the Company's corporate powers and have been duly
authorized by all necessary corporate action. Each of this Agreement, the
Warrants and the Registration Rights Agreement constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as such enforcement may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, (b) general principles of equity
(whether considered in a proceeding in equity or at law) and, (c) insofar as
they relate to indemnification provisions, the effect of federal and state
securities laws and public policy relating thereto.
4.3 Consents; Approvals. The execution, delivery and performance by the
Company of this Agreement, the Warrants and the Registration Rights Agreement
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and consummation of the transactions contemplated hereby and thereby by the
Company require no action, by or in respect of, notices to, or filing with, any
governmental body, agency, official or authority or any third party, other than
those that have been or will be taken or made in a timely manner.
4.4 Non-Contravention. The execution, delivery and performance by the
Company of this Agreement, the Warrants and the Registration Rights Agreement
and the consummation by the Company of the transactions contemplated hereby and
thereby do not and will not (except in the case of clauses (b), (c) and (d) of
this Section 4.4, for any such matters that, individually or in the aggregate,
have not had, and will not have, a Material Adverse Effect on the Company) (a)
contravene or conflict with the articles of incorporation or bylaws of the
Company, (b) contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company, the Subsidiary or any of their properties or
assets, (c) constitute a default under or give rise to a right of termination,
cancellation, restriction or acceleration of any right or obligation of the
Company or the Subsidiary or to a loss of any benefit to which the Company or
the Subsidiary is entitled under any provision of any agreement, contract or
other instrument binding upon or applicable to the Company or the Subsidiary or
any of its properties or assets or any license, franchise, permit or other
similar authorization held by or applicable to the Company or the Subsidiary, or
(d) result in the creation or imposition of any Lien on any asset of the Company
or the Subsidiary. For purposes of this Agreement, "Lien" means, with respect
to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
4.5 Capitalization. The authorized capital stock of the Company consists
of 40,000,000 shares of Common Stock and 5,000,000 shares of undesignated
preferred stock (the "Preferred Stock"). As of the date hereof (i) 18,257,833
shares of Common Stock are issued and outstanding and (ii) no shares of the
Preferred Stock are issued and outstanding. As of the date hereof 2,587,370
shares of Common Stock are reserved for issuance pursuant to the exercise of
outstanding stock options and 1,629,970 shares of Common Stock are reserved for
issuance pursuant to the exercise of outstanding warrants. All outstanding
shares of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable. Assuming in each case proper payment
is made therefor, each share of the Shares issued to the Purchasers pursuant
hereto will be, and upon the exercise of the Warrants, each share of Common
Stock issued in respect thereof will be, duly authorized, validly issued and
outstanding, fully paid and nonassessable, free from any liens or preemptive
rights and issued in compliance with all state and federal securities laws.
Except as set forth in this Section, there are outstanding (a) no other shares
of capital stock or other voting securities of the Company, (b) no securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company, and (c) no other options or, except as
described in
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Schedule B hereto, other rights to acquire from the Company, and no obligation
of the Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company (the items in clauses (a), (b) and (c) being referred to collectively as
the "Company Securities"). There are no outstanding obligations of the Company
to repurchase, redeem or otherwise acquire any Company Securities.
4.6 SEC Filings.
(a) The Company has filed all required reports, schedules, forms,
statements and other documents filed or required to be filed by the Company
with the Securities and Exchange Commission (the "SEC") since January 1,
1996. The Company has delivered to Purchasers (i) the annual reports on
Form 10-K for its fiscal year ended December 31, 1996 (ii) its quarterly
report on Form 10-Q for its fiscal quarter ended March 31, 1997, (iii) its
proxy or information statements relating to meetings of, or actions taken
without a meeting by, the shareholders of the Company held since January 1,
1997, and (iv) all of its current and periodic reports filed by the Company
with the SEC since January 1, 1997 (collectively, "SEC Reports").
(b) Except to the extent that information contained in any SEC Report
has been revised or superseded by a later-filed SEC Report, filed and
publicly available prior to the date of this Agreement, as of the date of
this Agreement, none of the SEC Reports contains any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4.7 Financial Statements.
(a) Except to the extent that information contained in any SEC Report
has been revised or superseded by a later-filed SEC Report, filed and
publicly available prior to the date of this Agreement, the audited
financial statements and unaudited interim financial statements of the
Company included in its annual reports on Form 10-K and the quarterly
reports on Form 10-Q referred to in Section 4.6 are true and correct and
fairly present, in conformity with generally accepted accounting
principles, applied on a consistent basis (except as may be indicated in
the notes thereto), the financial position of the Company as of the dates
thereof and results of operations and changes in financial position for the
periods then ended (subject to non-material normal year-end adjustments in
the case of any unaudited interim financial statements). For purposes of
this Agreement "Balance Sheet" means the Company's balance sheet as of
March 31, 1997, including the notes
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thereto, as set forth in the Company's 10-Q referred to in Section 4.6 and
"Balance Sheet Date" means the date of the Balance Sheet.
(b) Except and to the extent set forth in the Balance Sheet, the
Company does not have any liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise), except for liabilities and
obligations incurred after the Balance Sheet Date in the ordinary course of
business which would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
4.8 Disclosure Documents.
(a) Each document required to be filed by the Company with the SEC in
connection with the transactions contemplated by this Agreement (the
"Company Disclosure Documents"), will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act.
(b) The Company Disclosure Documents will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 4.8 will not apply
to statements or omissions included in the Company Disclosure Documents
based upon information furnished to the Company in writing by Purchasers
specifically for use therein.
5. Representations and Warranties of the Purchasers. Each Purchaser
hereby makes the following representations and warranties to the Company which
representations and warranties survive the issuance of the Shares and Warrants
by the Company:
5.1 Availability of Information. Purchaser has been given access to full
and complete information regarding the Company (including the opportunity to
meet with officers of the Company and review such documents as it may have
requested in writing) and has utilized such access to its satisfaction for the
purpose of obtaining information.
5.2 Risk of Investment. Purchaser:
(a) realizes that the purchase of the Shares and Warrants represents
a speculative investment involving a high degree of risk;
(b) can bear the economic risk of an investment in the Shares and
Warrants for an indefinite period of time, can afford to sustain
a
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complete loss of such investment, has no need for liquidity in
connection with an investment in the Shares and Warrants; and can
afford to hold the Shares and Warrants indefinitely;
(c) realizes that the Shares and Warrants have not been registered
for sale under the Securities Act or applicable state securities
laws (the "State Laws"), and may be sold only pursuant to
registration under the Securities Act and State Laws, or an
opinion of counsel that such registration is not required; and
(d) is experienced and knowledgeable in financial and business
matters, capable of evaluating the merits and risks of investing
in the Shares and Warrants, and does not need or desire the
assistance of a knowledgeable representative to aid in the
evaluation of such risks.
5.3 Investment Intent.
(a) Purchaser acknowledges that it has been advised that the Shares
and Warrants are being offered and sold pursuant to exemptions
from the Securities Act and applicable State Laws, and the
Company's reliance upon such exemptions is predicated in part on
Purchaser's representations contained herein.
(b) The Shares and Warrants are being purchased for Purchaser's own
account and for investment and without the current intention of
reselling or redistributing the Shares.
(c) Purchaser has made no agreement with others regarding any of the
Shares or Warrants.
(d) Purchaser acknowledges that the Shares and the shares of Common
Stock issuable upon exercise of the Warrants will be further
restricted by a legend placed on the certificate representing the
Shares and/or such Common Stock containing substantially the
following language:
"The securities represented by this certificate have not been
registered under either the Securities Act of 1933 or applicable
state securities laws and may not be sold, transferred, assigned,
offered, pledged or otherwise distributed for value unless there
is an effective registration statement under such Act and such
laws covering such securities, or the Company receives an opinion
of counsel acceptable to the Company stating that such
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sale, transfer, assignment, offer, pledge or other distribution
for value is exempt from the registration and prospectus delivery
requirements of such Act and such laws."
5.4 Residence. The principal office or residence of each Purchaser is
located at the address set forth in Schedule A.
5.5 Accredited Status. Each Purchaser is an "accredited investor" as
that term is defined under Regulation D promulgated pursuant to the Securities
Act.
6. Covenant of Purchasers. Each Purchaser agrees that if such Purchaser
should later desire to dispose of or transfer any of the Shares or Warrants in
any manner, Purchaser shall not do so without first obtaining (i) an opinion of
counsel satisfactory to the Company that such proposed disposition or transfer
may be made lawfully without the registration of such the Shares pursuant to the
Securities Act and applicable State Laws, or (ii) registration of such the
Shares pursuant to the Securities Act and applicable State Laws.
7. Affirmative Covenant of the Company. The Company covenants to each of
the Purchasers as follows:
7.1 Reservation of Capital Stock. The Company shall reserve and
maintain, free from preemptive rights, the maximum number of shares of Common
Stock deliverable upon exercise of all Warrants.
7.2 Transfer of Registered Stock. Following effectiveness of a
registration statement filed with the SEC pursuant to Section 3 of the
Registration Rights Agreement, upon attempted transfer of securities registered
under such registration statement pursuant to the terms of the Registration
Rights Agreement and in accordance with applicable laws, rules and regulations,
the Company will, as promptly as practicable following receipt of all
documentation reasonably requested by the Company from the transferor, take all
action necessary to cause its transfer agent to permit transfer of such
securities without restrictive legend.
8. Conditions to Closing.
8.1 Conditions to Purchasers' Obligations at the Closing. The
obligations of each Purchaser to purchase the Shares and Warrants at the Closing
are subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against any Purchaser who
does not consent in writing thereto:
(a) The representations and warranties made by the Company in Section
4 hereof shall be true and correct in all material respects
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as of the Closing Date with the same force and effect as if they
had been made as of the Closing Date, and the Company shall have
performed all obligations and conditions herein required to be
performed or observed by it on or prior to the Closing.
(b) On the Closing Date, the sale and issuance of the Shares and
Warrants and the proposed issuance of the Company's Common Stock
upon exercise of the Warrants shall be legally permitted by all
laws and regulations to which Purchasers and the Company are
subject.
(c) The Registration Rights Agreement shall have been executed and
delivered by the parties thereto.
(d) The Purchasers shall have received on the Closing Date, a
certificate or certificates of the chief executive officer and
the chief financial officer of the Company to the effect that, as
of such Closing Date, each of them severally represents that the
representations and warranties of the Company set forth in
Section 4 of this Agreement are true and correct in all material
respects as of the Closing Date and the Company has performed all
of its obligations under this Agreement to be performed at or
prior to such Closing Date.
8.2 Conditions to Obligations of the Company. The obligations of the
Company to each Purchaser under this Agreement are subject to the fulfillment on
or before the Closing of each of the following conditions by each Purchaser:
(a) The representations and warranties made by the Purchasers in
Section 5 hereof shall be true and correct in all material
respect at the Closing Date with the same force and effect as if
they had been made on and as of said date.
(b) The Purchasers shall have performed and complied with all
agreements and conditions herein required to be performed or
complied with by the Purchasers on or before the Closing.
9. Entire Agreement. This Agreement and the other documents referenced
herein contain the entire agreement between the parties with respect to the
subject matter hereof and supersede any and all prior arrangements and
understandings, both written and oral, with respect thereto.
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10. Severability. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would be
held in any jurisdictions to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
11. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without obtaining
the prior written consent of the other party hereto.
12. Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of Minnesota, without giving effect to the
principles of conflict of laws thereof.
13. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereof and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
14. Notice. All notices under this Agreement shall be in writing and
shall be delivered by personal service or telecopy or certified mail return
receipt requested (if such service is not available, then by first class mail),
postage prepaid, to such address as may be designated from time to time by the
relevant party. The address for notices given hereunder shall be: if to a
Purchaser, at the address set forth on Schedule A hereto, and if to the Company,
at 2658 Patton Road, Roseville, Minnesota 55113, Attention: President
(telecopy: (612) 639-8549), or at such other address as the parties designate
to each by giving notice hereunder. Any notice sent by certified mail shall
be deemed to have been given three (3) days after the date on which it is
mailed. All other notices shall be deemed given when received. No objection
may be made to the manner of delivery of any notice actually received in writing
by an authorized agent of a party.
15. Expenses. Except as otherwise specified in this Agreement, all costs
and expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
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and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DIAMETRICS MEDICAL, INC.
By /s/ Laurence L. Betterley
---------------------------
Its Chief Financial Officer
PURCHASERS:
[Signatures of Purchasers]
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
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SCHEDULE A
PURCHASERS
Name/ Number of Number of Shares Aggregate
Address Shares Purchased Covered by Warrants Purchase Price
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[Master List Omitted]
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Schedule B
[Description of Purchase Rights
Referred to in Section 4.5]
Purchasers of the Series I Junior Participating Convertible Preferred Stock
of the Company (all of which was converted into shares of Common Stock of the
Company in April 1997) each currently have the right, pursuant to the Stock
Purchase Agreement dated as of January 30, 1997 between the Company and such
purchasers, to participate in any proposed sale of securities of the Company,
including the Common Stock offered hereby. Under the terms of the Purchase
Agreement, they are entitled to 30 days' advance notice of certain sales of
securities of the Company and have the right to invest in such sales, on the
same terms offered to any third party, in a percentage amount based on their
respective pro rata participations in the January 1997 private placement.
Notice of this offering was delivered to such investors on or about June 9,
1997.
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Exhibit A
[Form of Warrant]
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Exhibit B
[Registration Rights Agreement]
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Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the "Agreement"), dated as of June 10, 1997,
by and between Diametrics Medical, Inc., a Minnesota corporation (the
"Company"), and the Persons whose signatures appear on the signature pages
hereto as of the date hereof or hereafter.
WHEREAS:
A. This Agreement is made pursuant to the Stock Purchase Agreement dated
as of the date hereof (the "Purchase Agreement") between the Company and the
purchasers signatories thereto (the "Purchasers"). Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Purchase
Agreement.
B. The Purchase Agreement provides, among other things, for the sale and
issuance by the Company to the Purchasers of (i) shares of the Company's common
stock, par value $0.01 per share (the "Common Stock") purchased pursuant to the
Purchase Agreement, and (ii) detachable warrants to purchase one share of Common
Stock for each four shares so purchased (the "Warrants").
C. In order to induce the Purchasers to enter into and perform its
obligations under the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions.
In addition to terms defined elsewhere in this Agreement, as used in
this Agreement, the following capitalized terms shall have the following
meanings:
"Common Stock" means the common stock of the Company, $0.01 per share.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar or successor federal statute and the rules and regulations of the
SEC promulgated thereunder, all as the same shall be in effect at the time.
"Holder" means any Person who executes a counterpart of this Agreement
on or after the date hereof and any Person who becomes a Holder after the date
of this Agreement pursuant to Paragraph 13(a).
"Indemnified Party" has the meaning set forth in Paragraph 7(c).
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"Indemnifying Party" has the meaning set forth in Paragraph 7(c).
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof, or any other entity of any kind.
"Registered Securities" means Registrable Securities which have been
registered under the Securities Act pursuant to a registration statement filed
with and declared effective by the SEC.
"Registrable Securities" means (i) the Shares; (ii) the shares of
Common Stock issued or issuable as dividends on, or other distributions with
respect to the Shares; and (iii) any other security issued or issuable in
exchange for, or in replacement of, any of the Shares, in each case until any
such security ceases to be a Registrable Security in accordance with Paragraph 2
hereof.
"Registration Expenses" means all expenses (excluding Selling
Expenses) incident to the Company's performance of or compliance with Paragraphs
3, 4 and 5 of this Agreement, including without limitation all registration and
filing fees, including fees with respect to filings required to be made with any
stock exchange or the NASD, fees and expenses of compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), messenger, telephone and delivery expenses, and the fees and
expenses of counsel for the underwriter, costs of printing prospectuses, and
fees and disbursements of counsel for the Company and of all independent
certified public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance).
"Registration Statement" means any registration statement of the
Company which includes any of the Registrable Securities pursuant to the
provisions of this Agreement, including the prospectus included or deemed
included in the Registration Statement and all amendments and supplements to the
Registration Statement or the prospectus, including post-effective amendments,
and all exhibits to, and all materials incorporated by reference in, the
Registration Statement.
"SEC" means the United States Securities and Exchange Commission or
any similar agency then having the authority to enforce the Exchange Act or the
Securities Act.
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"Securities Act" means the Securities Act of 1933, as amended, or any
similar or successor statute, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means (i) all fees and expenses of counsel and
accountants for the Holder(s), (ii) all discounts, commissions or fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Registrable Securities, (iii)
transfer taxes and (iv) any other expenses of the Holder(s) incident to this
Agreement (excluding Registration Expenses).
"Selling Holders" has the meaning set forth in Paragraph 5(b).
"Shares" means the shares of Common Stock purchased pursuant to the
Purchase Agreement and the shares of Common Stock that may be acquired upon
exercise of the Warrants.
2. Securities Subject to this Agreement. The securities entitled to the
benefits of this Agreement are the Registrable Securities, but such benefits
shall continue with respect to each such security only so long as such security
continues to be a Registrable Security. A security ceases to be a Registrable
Security when (a) a Registration Statement covering the sale of such Registrable
Security has been declared effective under the Securities Act and the
Registrable Security has been sold in accordance with the Registration
Statement; (b) it is distributed to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act; (c) a new certificate
representing such security has been delivered (to the original Holder or any
subsequent transferee) by the Company free from any restrictive legend and
without issuance of stop transfer or other instructions to the Company's
transfer agent and the Holder of such security has been advised by counsel
reasonably acceptable to it that subsequent disposition of such security will
not require registration or qualification under the Securities Act then in
effect; or (d) the security has ceased to be outstanding.
3. Shelf Registration.
(a) The Company shall file within 60 days following the date hereof
with the SEC, and shall use commercially reasonable efforts to cause the SEC to
promptly declare effective, a Registration Statement relating to the Registrable
Securities, which Registration Statement shall provide for the sale by the
holders thereof of the Registrable Securities from time to time on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (the "Shelf
Registration").
(b) The foregoing notwithstanding, the Company shall have the right
in order to avoid the disclosure of any corporate development that the
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Company is not otherwise obligated to disclose to delay the filing of the
Registration Statement with respect to the Shelf Registration for a reasonable
length of time (a "Delay Period"); provided, that the aggregate number of days
in the Delay Period shall not exceed 30. The Company shall provide written
notice to each holder of Registrable Securities to be covered by the Shelf
Registration of the beginning and end of the Delay Period.
(c) Failure to file a Registration Statement or cause such
Registration Statement to become effective pursuant to the provisions of this
Section 3 by reason of delays caused by any of the Holders in connection with
their rights set forth in Section 5(l) of this Agreement shall not result in a
breach of this Section 3.
(d) To the extent that the holders of Registrable Securities would
not be adversely effected, the Company may include other securities in such
Shelf Registration (whether for the account of the Company or otherwise,
including without limitation any securities of the Company held by security
holders, if any, who have piggyback registration rights with respect thereto) or
otherwise combine the offering of the Registrable Securities with any offering
of other securities of the Company (whether for the account of the Company or
otherwise).
4. Registration under the Securities Act: Piggy-Back Registration.
(a) Piggy-Back Registration. If at any time the Company proposes to
register for itself or any of its shareholders any of its capital stock under
the Securities Act in connection with the public offering of such securities on
a form and in a manner that would permit registration of Registrable Securities
for sale to the public under the Securities Act, then:
(i) the Company in each case will notify in writing each Holder
of the filing or intended filing of a Registration Statement in connection
therewith prior to the proposed effective date thereof;
(ii) the Company will offer each Holder the opportunity to
include in such registration all or such lesser amount of Registrable Securities
as each Holder may request. Upon the request of one or more Holders given in
writing within 20 days after receipt of the notice described under clause (i)
above, the Company, subject to the provisions of Paragraph 5(b), shall cause any
of the Registrable Securities specified by such Holder to be included in the
Registration Statement; and
(iii) if the registration of which the Company gives written
notice under clause (i) above involves an underwriting, the Company shall use
its best efforts to cause the managing underwriter(s) of the proposed
underwritten
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offering to permit Holders to include their Registrable Securities in the
underwriting on the same terms and conditions as similar terms of the Company
included therein.
(b) Limitations on the Company's Obligations to Effect Piggy-Back
Registration. Notwithstanding the provisions of Paragraph 4(a) above:
(i) if and to the extent that the managing underwriter(s) advise
the Company in writing that, in its good faith determination, inclusion of the
number of Registrable Securities held by Holders requesting inclusion in the
Registration Statement would materially interfere with the underwriter's ability
to effectuate the registration and sale of securities proposed to be offered and
sold pursuant to the Registration Statement, the managing underwriter(s) shall
select the permissible quantity of Registrable Securities to be sold by the
Holders (which may be none) by reducing the total number of securities to be
sold by the holders of securities other than Registrable Securities and the
Holders on a pro rata basis; provided, however, that no such reduction may
reduce the securities being offered by the Company for its own account. For
purposes of apportionment pursuant to this Paragraph 4(b), for any selling
holder that is a partnership or a corporation, the affiliates of such
partnership or corporation shall collectively, with such holder be deemed to be
one "selling holder," and any pro rata reduction with respect to such "selling
holder" shall be based upon the aggregate amount of shares carrying registration
rights owned by entities and individuals included in such "selling holder"; and
(ii) if, at any time after giving such written notice of its
intention to register any of its securities and prior to the effective date of
the applicable Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to register such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and thereupon shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration.
(c) Underwritten Offer. If the registration of which the Company
gives written notice under Paragraph 4(a)(i) above involves an underwriting, the
Company shall so advise in such written notice. In such event the right of any
Holder to registration pursuant to Paragraph 4(a) shall be conditioned upon such
Holders's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in such underwriting. All Holders proposing to
distribute their Registrable Securities through such underwriting shall
(together with the Company and the other holders distributing their Registrable
Securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. If any Holder disapproves of the terms of any such
underwriting, such Holder may
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elect to withdraw from the underwriting by prompt written notice to the Company
and the underwriter.
5. Registration Obligations of the Company. In connection with the
filing of a Registration Statement pursuant to Paragraphs 3 and 4 the Company
shall:
(a) Use commercially reasonable efforts to cause such Registration
Statement to remain in effect until the earlier of (i) the completion of the
distribution of the Registrable Securities included in the Registration
Statement, and (ii) one year after the date on which the Registration Statement
is declared effective.
(b) Notify the Holders whose Registrable Securities are included in
such Registration Statement (the "Selling Holders") as to the filing of the
Registration Statement and of all amendments or supplements thereto filed prior
to the effective date of such Registration Statement;
(c) Notify the Selling Holders, promptly after the company shall
receive notice thereof, of the time when such Registration Statement became
effective or when any amendment or supplement to any prospectus forming a part
of said Registration Statement has been filed;
(d) Notify the Selling Holders promptly of any request by the SEC for
the amending or supplementing of such Registration Statement or prospectus or
for additional information;
(e) During the period and under the circumstances in which the Company
is obligated to keep a Registration Statement effective pursuant to this
Paragraph 5, prepare and promptly file with the SEC and promptly notify the
Selling Holders of the filing of any amendments or supplements to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the Securities Act, any
event with respect to the Company shall have occurred as a result of which any
such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading; and, in addition, during such
period, prepare and file with the SEC, promptly upon the Selling Holders'
written request, any amendments or supplements to such Registration Statement or
prospectus which may be reasonably necessary or advisable in connection with the
distribution of the Registrable Securities;
(f) Prepare promptly upon request of the Selling Holders or any
underwriters for the Selling Holders made during the period in which the Company
is obligated to use its best efforts to keep a Registration Statement effective,
such amendment or amendments to such Registration Statement and such prospectus
or
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<PAGE>
prospectuses as may be reasonably necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act;
(g) Advise the Selling Holders promptly after the Company shall
receive notice or obtain knowledge of the issuance of any stop order by the SEC
suspending the effectiveness of any such Registration Statement or amendment
thereto or of the initiation or threatening of any proceeding for that purpose,
and promptly use its reasonable best efforts to prevent the issue of any stop
order or obtain its withdrawal promptly if such stop order should be issued;
(h) Use its best efforts to qualify as soon as reasonably practicable
the Registrable Securities for sale under the securities or blue sky laws of
such states and jurisdictions within the United States as shall be reasonably
requested by the Selling Holders; provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business, to become subject to taxation or to file a consent to service of
process generally in any of the aforesaid states or jurisdictions;
(i) Furnish the Selling Holders, as soon as available, copies of any
Registration Statement and each preliminary or final prospectus, or supplement
or amendment required to be prepared pursuant hereto, all in such quantities as
the Selling Holders may from time to time reasonably request;
(j) Furnish each Selling Holder with copies of such opinions of
counsel and accountants' "comfort" letters as it reasonably may request with
respect to the registration of its Registrable Securities, the Registration
Statement covering such Registrable Securities and the financial statements
included therein;
(k) Apply for listing and use its best efforts to list the Registrable
Securities, if any, being registered on any national securities exchange on
which a class of the Company's equity securities is listed (and to maintain such
listing during the pendency of the relevant registration period) or, if the
Company does not have a class of equity securities listed on a national
securities exchange, apply for qualification and use its reasonable best efforts
to qualify the Registrable Securities, if any, being registered for inclusion on
the automated quotation system of the NASD (and to maintain such qualification
during the pendency of the relevant registration period);
(l) In connection with the preparation and filing of each Registration
Statement registering Registrable Securities under the Securities Act, give the
holders of Registrable Securities on whose behalf such Registrable Securities
are to be so registered and their underwriters, if any, and their respective
counsel and accountants, notice of and the opportunity to participate in the
preparation of such Registration Statement, each prospectus included therein or
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<PAGE>
filed with the SEC, and each amendment thereof or supplement thereto, and
accordingly, as far in advance as practical before filing such Registration
Statement or any amendment thereto, the Company will deliver to the Holders
electing to so participate copies of all such documents proposed to be filed and
any such Holder shall have a reasonable opportunity to object to any information
pertaining solely to such Holder that is contained therein and the Company will
make the corrections reasonably requested by such Holder with respect to such
information prior to filing any such Registration Statement or amendment. The
Company shall also give each of them such access to its books and records and
such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified its financial statements
as shall be necessary, in the opinion of such holders and such underwriters, or
their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act; and
(m) Make senior executives of the Company reasonably available to
assist the underwriters with respect to, and accompanying the underwriters on
the so-called "road show", in connection with marketing efforts for, and the
distribution and sale of Registrable Securities pursuant to a Registration
Statement in connection with an underwritten public offering.
6. Expenses. The Company will pay all Registration Expenses in
connection with registrations of Registrable Securities effected pursuant to
Paragraphs 3 and 4. All Selling Expenses in connection with any registration
effected pursuant to this Agreement shall be borne by the Holder(s).
7. Indemnification.
(a) To the extent permitted by applicable law, the Company will
indemnify each Holder of the Registrable Securities requesting or joining in a
registration, each Person who controls such Holder within the meaning of Section
15 of the Securities Act, and each underwriter of the securities so registered
and each person who controls such underwriter, and their respective officers,
directors, partners, agents, employees and successors (each a "Section 8(a)
Indemnitee"), against all costs, expenses, demands, claims, losses, damages,
liabilities, fines and penalties (or actions in respect thereof), to which such
Section 8(a) Indemnitee may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such claims, losses, damages, liabilities,
fines and penalties arise out of or are based on any untrue statement (or
alleged untrue statement) of a material fact contained in any Registration
Statement or prospectus, or arise out of or are based upon any omission (or
alleged omission) to state therein a fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law and will reimburse each such
Section 8(a)
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Indemnitee for (and will make periodic advances to cover) any legal and any
other expenses reasonably incurred in connection with investigating or defending
any such demand, claim, loss, damage, liability or action promptly after
submission of supporting materials with respect to such expenses; provided,
however, that the Company shall not be required to indemnify any Section 7(a)
Indemnitee for any cost, expense, demand, claim, loss, damage, liability, fine
or penalty which arises out of or is based upon (i) any written information
provided by any such Section 8(a) Indemnitee, respectively, expressly for
inclusion in the Registration Statement or (ii) the circumstances set forth in
clause (y) of paragraph (b) below.
(b) To the extent permitted by applicable law, each Holder requesting
or joining in a registration, severally and not jointly, will indemnify the
Company, each of its officers, directors, employees, agents, successors and
controlling persons (within the meaning of Section 15 of the Exchange Act)
(each, a "Section 7(b) Indemnitee"), against all costs, expenses, demands,
claims, losses, damages, liabilities, fines and penalties (or actions in respect
thereof) to which such Section 7(b) Indemnitee may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities, fines and penalties arise out of or are based upon an
untrue statement (or alleged untrue statement) of a material fact contained in
any Registration Statement or prospectus, or arise out of or are based upon (x)
the omission (or alleged omission) to state therein a fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement (or alleged
untrue statement or omission (or alleged omission) was made in any Registration
Statement or prospectus in reliance upon and in conformity with information
furnished to the Company by such Holder requesting or joining in a registration
specifically for use in the preparation thereof, or (y) any untrue statement or
alleged untrue statement of a material fact contained in, or any omission or
alleged omission of a material fact from, a prospectus if (i) a later prospectus
corrected the untrue statement or alleged untrue statement, or omission or
alleged omission, (ii) at such time the Company had advised the Holder of the
availability of the revised prospectus, and (iii) there would have been no such
liability had such later prospectus actually been delivered to the purchaser at
or prior to confirmation of sale; provided, however, that the obligations of
such Holders hereunder shall be limited to an amount equal to the proceeds to
each Holder of the Registrable Securities sold in connection with such
registration.
(c) Each party entitled to indemnification under this Paragraph 7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has received written notice of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided such counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the
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Indemnified Party (whose approval shall not be unreasonably withheld or
delayed). The Indemnified Party may participate in such defense at such party's
expense; provided, however, that the Indemnifying Party shall bear the expense
of such defense of the Indemnified Party if (i) the Indemnifying Party has
agreed in writing to pay such expenses, (ii) the Indemnifying Party shall have
failed to assume the defense of such claim or employ counsel reasonably
satisfactory to the Indemnified Party, or (iii) in the reasonable judgment of
the Indemnified Party, based upon the written advice of such Indemnified Party's
counsel, representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest. In the event
that the Indemnifying Party properly does not assume such defense, the
Indemnifying Party shall not be subject to any liability for any settlement made
without its prior written consent, which consent shall not be unreasonably
withheld or delayed. The failure of any Indemnified Party to give notice as
provided herein shall relieve the Indemnifying Party of its obligations under
this Paragraph 7 only to the extent that such failure to give notice shall
materially adversely prejudice the Indemnifying Party in the defense of any such
claim or any such litigation. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the prior written consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation in form and substance reasonably
satisfactory to such Indemnified Party.
8. Contribution.
(a) If the indemnification provided for in Paragraph 7 from the
Indemnifying Party is unavailable to or unenforceable by the Indemnified Party
in respect to any losses, claims, damages, liabilities or expenses referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Paragraph 8, any legal or other fees or
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expenses reasonably incurred by such party in connection with any investigation
or proceeding.
(b) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Paragraph 8 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(c) If Indemnification is available under Paragraph 7, the
Indemnifying Parties shall indemnify each Indemnified Party to the full extent
provided in Paragraph 7 without regard to the relative fault of the Indemnifying
Party or Indemnified Party or any other equitable consideration provided for in
this Paragraph 8.
9. Holdback Agreements.
(a) Restrictions on Public Sale by Holder of Registrable Securities.
To the extent requested by the Company and the managing underwriter with respect
to the applicable Registration Statement, each Holder whose Registrable
Securities are included in a Registration Statement filed pursuant to Paragraphs
3 and 4 hereof agrees not to effect any public sale or distribution of the
issue being registered or any similar security of the Company, including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act, during the seven
(7)-day period prior to, and during the 90-day period beginning on, the
effective date of such Registration Statement, to the extent such sales may
prevent the Company from being in compliance with the Exchange Act; provided,
however, that all officers and directors of the Company enter into similar
agreements. Such agreement shall be in writing reasonably satisfactory to the
Company and such managing underwriter.
(b) Restrictions on Public Sale by the Company and Others. The
Company shall not make any public or nonpublic sale or distribution of any
securities of the same class as those being registered, or any securities
convertible into or exchangeable or exercisable for any such securities, during
the seven day period prior to, and during the 60-day period beginning on, the
effective date of any Registration Statement in which holders of Registrable
Securities are participating or the commencement of a public distribution of
Registrable Securities pursuant to any such Registration Statement (except (i)
as part of such registration or pursuant to registrations on SEC Forms S-4 or
S-8 or any similar or successor form, or on any form filed in connection with an
exchange offer or an offering of securities solely to the existing shareholders
or employees of the Company or (ii) for sales or other
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issuances of securities pursuant to outstanding options, warrants, rights or
similar obligations).
10. Rule 144 and Stock Exchange Listings.
-------------------------------------
To the extent that the Company is subject to the filing and reporting
requirements of the Securities Act and the Exchange Act, and so long as there
are Registrable Securities outstanding:
(a) The Company will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, and will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 or Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any holder of Registrable Securities,
the Company will deliver to such holder a written statement as to whether it has
complied with such information and requirements
(b) The Company will use its best efforts to avoid taking any action
which would cause the Common Stock to cease to be eligible for inclusion on
either of the NASD Automated Quotation System or for listing on any securities
exchange on which it may become listed.
11. Obligations of Holder.
----------------------
(a) Each Holder of Registrable Securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder, and shall otherwise use reasonable best
efforts to cooperate with the Company and any underwriter(s), as the Company may
reasonably request and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
(b) Each Holder of the Registrable Securities agrees by acquisition of
such Registered Securities that upon receipt of any notice from the Company
pursuant to Paragraph 5(g), such Holder will forthwith discontinue such Holder's
disposition of Registered Securities pursuant to the Registration Statement
relating to such Registered Securities under such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Paragraph 5(g) and if
so directed by the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the prospectus relating to such Registered Securities at the time
of receipt of such notice.
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12. Mergers, etc.
-------------
The Company shall not, directly or indirectly, enter into any merger,
consolidation or reorganization in which the Company shall not be the surviving
corporation unless the surviving corporation shall, prior to such merger,
consolidation or reorganization, agree in writing to assume the obligations of
the Company under this Agreement, and for that purpose references hereunder to
"Registrable Securities" shall be deemed to include the securities which the
Holders would be entitled to receive in exchange for Common Stock under any such
merger, consolidation or reorganization, provided that to the extent such
securities to be received are convertible into shares of common stock of the
issuer thereof, then any such shares of common stock or other securities as are
issued or issuable upon conversion of said convertible securities shall also be
included within the definition of "Registrable Securities."
13. Miscellaneous
-------------
(a) Transfer of Certain Rights. The rights granted to the Holders
under this Agreement may be transferred only to a transferee who delivers to the
Company, within a reasonable time after such transfer, a written instrument by
which such transferee agrees to be bound by the applicable terms of this
Agreement. Notwithstanding the foregoing, nothing herein shall prohibit: (i)
any Holder from transferring any of its rights under this Agreement to any
wholly-owned subsidiary of such Holder or to any entity which merges or
consolidates with or acquires all or substantially all of the equity securities
or assets of such Holder, (ii) any Holder which is a partnership from
transferring any of its rights under this Agreement to a partner of such
partnership where such partner receives Registrable Securities in a distribution
from such partnership, (iii) any Holder who is an individual from transferring
any of its rights under this Agreement to such Holder's spouse or to other
relatives, or to a trust for the benefit of the Holder, or his or her spouse or
other relatives; or (iv) any trustee of a trust which holds Registerable
Securities from distributing such Registrable Securities to the beneficiaries of
such trusts; provided that any such transferee under subparagraphs (i), (ii),
(iii) or (iv) above will hold the Registrable Securities subject to the terms
and conditions of this Agreement. Upon any transfer of the rights of a Holder
permitted by and completed in compliance with the terms of this Agreement, the
transferee shall become a "Holder" for purposes of this Agreement.
(b) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this
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Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written consent of the
Company and Holders of at least a majority of the Registrable Securities
affected by such amendment, modification, supplementation, waiver or consent.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter which relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and which does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by the
Holders of a majority of the Registrable Securities being sold by such Holders,
provided that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(d) Notices. All notices under this Agreement shall be in writing and
shall be delivered by personal service or telecopy or certified mail return
receipt requested (if such service is not available, then by first class mail),
postage prepaid, to such address as may be designated from time to time by the
relevant party. The address for notices given hereunder shall be: if to a
Holder, at the address set forth on Schedule A to the Purchase Agreement, and if
to the Company, at 2658 Patton Road, Roseville, Minnesota 55113, Attention:
President (telecopy: (612) 639-8549), or at such other address as the parties
designate to each by giving notice hereunder. Any notice sent by certified mail
shall be deemed to have been given three (3) days after the date on which it is
mailed. All other notices shall be deemed given when received. No objection
may be made to the manner of delivery of any notice actually received in writing
by an authorized agent of a party.
(e) No Inconsistent Agreements. The Company shall not on or after the
date of this Agreement enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
To the extent the Company on or after the date of this Agreement grants any
superior or more favorable rights or terms to any Person with respect to its
securities, any such superior or more favorable rights or terms shall also be
deemed to have been granted simultaneously to the holders of Registrable
Securities. The Company agrees to deliver to representatives of the initial
Holders hereunder, upon the request of such initial Holders, copies of all
agreements which it has previously entered into or become a party to, or by
which it is bound, with respect to its securities granting any registration
rights to any Person which is inconsistent with
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the rights granted to the holders of the securities of the Company under any
other agreements.
(f) Governing Law; Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota without
regarding to the conflict of laws provisions thereof. The parties irrevocably
agree that all actions arising directly or indirectly as a result or in
consequence of this Agreement and the transactions contemplated hereby, shall be
instituted and litigated only on federal, state or local courts sitting in the
City of Minneapolis, Minnesota and each of the parties hereby consents to the
exclusive jurisdiction and venue of any such court, and waives any objection
based on forum nonconveniens.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provisions in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement and the Purchase Agreement (and
all exhibits and/or schedules attached hereto and thereto) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the securities now or hereafter owned by the Holders.
(k) Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the prevailing party shall be entitled to recover reasonable
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attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it may be entitled.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
DIAMETRICS MEDICAL, INC.
By /s/ Laurence L. Betterley
---------------------------
Its Chief Financial Officer
HOLDERS:
[Signatures of Holders]
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
<PAGE>
Exhibit 4.3
DIAMETRICS MEDICAL, INC.
STOCK PURCHASE WARRANT
THE WARRANTS EVIDENCED HEREBY AND THE SHARES OF STOCK
ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED OR SOLD WITHOUT REGISTRATION UNLESS AN EXEMPTION
FROM REGISTRATION IS AVAILABLE UNDER SUCH ACT OR THE RULES OR
REGULATIONS PROMULGATED THEREUNDER.
WARRANT TO PURCHASE _____ SHARES OF COMMON STOCK
AS DESCRIBED HEREIN
Issue Date: June 10, 1997
Expiration Date: June 10, 2002
This certifies that, for value received, ______________, and permitted
successors and assigns ("Holder") is entitled to purchase from Diametrics
Medical, Inc. a Minnesota corporation (the "Company") up to and including
_______________ ( ______ ) fully paid and nonassessable shares (the "Number of
Shares") of the common stock of the Company, $.01 par value (the "Common
Stock"), on the terms set forth herein at an exercise price per share equal to
$6.75 (the "Purchase Price"). The Number of Shares and the Purchase Price may
be adjusted from time to time as described in this Warrant.
1. Exercise.
--------
1.1 Time for Exercise. This Warrant may be exercised in whole or in part
at any time, and from time to time, during the period commencing on the date of
this Warrant and expiring on the Expiration Date set forth above.
1.2. Manner of Exercise. This Warrant shall be exercised by delivering it
to the Company with the exercise form duly completed and signed, specifying the
number of shares as to which the Warrant is being exercised at that time (the
"Exercise Number"). The Holder shall simultaneously deliver to the Company cash
or a certified check or wire transfer in an amount equal to the Exercise Number
multiplied by the Purchase Price, and the Holder shall be entitled to receive
the full Exercise Number of shares of Common Stock.
1.3 Effective Date of Exercise. Promptly (but in any case within ten (10)
business days) after any exercise, the Company shall deliver to the Holder
(a) duly executed certificates in the name or names specified in the exercise
notice representing the aggregate number of shares issuable upon such exercise,
and (b) if this Warrant is exercised only in part, a new Warrant of like tenor
exercisable for the balance of the Number of Shares. Such certificates shall be
deemed to have been
<PAGE>
issued, and the person receiving them shall be deemed to be a holder of record
of such shares, as of the close of business on the date the actions required in
Section 1.2 shall have been completed or, if on that date the stock transfer
books of the Company are closed, as of the next business day.
2. Transfer of Warrants and Stock.
------------------------------
2.1 Transfer Restrictions. This Warrant shall be freely transferable by
the Holder in accordance with the terms hereof; provided, however, that neither
this Warrant nor the securities issuable upon its exercise may be sold,
transferred or pledged unless the Company shall have been supplied with
reasonably satisfactory evidence that such transfer is not in violation of the
Securities Act of 1933, as amended (the "Securities Act"), and any applicable
state securities laws. The Company may place a legend to that effect on this
Warrant, any replacement Warrant and each certificate representing shares
issuable upon exercise of this Warrant. Subject to the satisfaction of this
condition only, this Warrant shall be freely transferable by the Holder.
2.2 Manner of Transfer. Upon delivery of this Warrant to the Company with
the assignment form duly completed and signed, the Company will promptly (but in
any case within five (5) business days) execute and deliver to each transferee
and, if applicable, the Holder, Warrants of like tenor evidencing the rights
(a) of the transferee(s) to purchase the Number of Shares specified for each in
the assignment forms, and (b) of the Holder to purchase any untransferred
portion, which in the aggregate shall equal the number of Shares of the original
Warrant. If this Warrant is properly assigned in compliance with Section 2, it
may be exercised by an assignee without having a new Warrant issued.
2.3 Loss, Destruction of Warrant Certificates. Upon receipt of
(a) evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any Warrant and (b) except in the case of
mutilation, an indemnity or security reasonably satisfactory to the Company, the
Company will promptly (but in any case within five (5) business days) execute
and deliver a replacement Warrant of like tenor representing the right to
purchase the same Number of Shares.
3. Cost of Issuances. The Company shall pay all expenses, transfer taxes and
other charges payable in connection with the preparation, issuance and delivery
of stock certificates or replacement Warrants, except for any transfer tax or
other charge imposed as a result of (a) any issuance of certificates in any name
other than the name of the Holder, or (b) any transfer of the Warrant. The
Company shall not be required to issue or deliver any Stock certificate or
Warrant until it receives reasonably satisfactory evidence that any such tax or
other charge has been paid by the Holder.
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4. Anti-Dilution Provisions. If any of the following events occur at any time
hereafter during the life of this Warrant, then the Purchase Price and the
Number of Shares immediately prior to such event shall be changed as described
in order to prevent dilution:
4.1 Dividends; Stock Splits Etc. In case the Company shall (a) pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock, (b) subdivide or reclassify its outstanding shares of Common Stock into a
greater number of shares, (c) combine or reclassify its outstanding shares of
Common Stock into a smaller number of shares, the Number of Shares purchasable
upon the exercise of this Warrant immediately prior thereto shall be adjusted so
that the Number of Shares purchasable upon exercise of this Warrant shall be
determined by multiplying the Number of Shares theretofore purchasable upon the
exercise of this Warrant by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately following such action
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately prior thereto. Such adjustment shall be made whenever
any event listed above shall occur and shall become effective immediately after
the record date in the case of a dividend and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification. If the Company declares a dividend in money on its Common
Stock and at substantially the same time offers its Stockholders a right to
purchase new shares of Common Stock from the proceeds of such dividend, or for
an amount substantially equal to such dividend, all shares of Common Stock so
issued shall for purposes hereof be deemed issued as a Common Stock dividend.
4.2 Issuance of Rights or Warrants to Holders. In case the Company shall
issue rights, options or warrants to all holders of its shares of Common Stock
entitling them (for a period expiring within 45 days after the record date
therefor) to subscribe for or purchase shares of Common Stock at a price per
share which is lower at the record date mentioned below than the then Current
Market Price per share of Common Stock (as hereinafter defined), the Number of
Shares thereafter purchasable upon the exercise of this Warrant shall be
determined by multiplying the Number of Shares theretofore purchasable upon
exercise of this Warrant by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares which the aggregate
offering price of the total number shares of Common Stock so offered would
purchase at the then Current Market Price per share of Common Stock.
4.3 Merger; Consolidation; Sale of Assets. In case of (a) the
consolidation or the merger of the Company or (b) the sale of all or
substantially all of the
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<PAGE>
properties and assets of the Company to any Person, this Warrant shall, after
such consolidation, merger or sale, entitle the Holder to receive upon exercise
the number of shares of Stock or other securities or property (including cash)
of the Person resulting from such consolidation or surviving such merger or to
which such sale shall be made, or of the parent of such Person, as the case may
be, which the holder of securities deliverable upon exercise of this Warrant (at
the time of such consolidation, merger or sale) would have been entitled to
receive upon such consolidation, merger or sale; and in any such case the
provisions of Section 4 with respect to the rights and interests thereafter of
the holders of Warrants shall be appropriately adjusted so as to be applicable,
as nearly as practicable, to any shares of Stock or other securities or any
property (including cash) thereafter deliverable upon exercise of this Warrant.
The Person resulting from such sale or consolidation or surviving such merger or
to which such sale shall be made shall execute and deliver to the Holder a
supplemental agreement as provided in Section 6.5 below. Any adjustment pursuant
to this Section 4.3 which shall be approved in good faith by the Board of
Directors of the Company pursuant to a resolution delivered to the Holder shall
be conclusive for all purposes hereof. For the purposes of this Agreement
"person" means any individual, partnership, firm, corporation, limited liability
company or partnership, association, trust, unincorporated organization or other
entity, as well as any syndicate or group that would be deemed to be a person
under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
4.4 Other Distributions. In case the Company shall distribute to all
holders of its shares of Common Stock shares of Stock other than Common Stock or
evidences of its indebtedness or assets (excluding cash dividends or
distributions payable out of consolidated earnings or retained earnings and
dividends or distributions referred to in Section 4.1 above) or rights, options
or warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (excluding those referred to in
Section 4.2 above), then in each case the Number of Shares thereafter
purchasable upon the exercise of this Warrant shall be determined by multiplying
the Number of Shares theretofore purchasable upon the exercise of this Warrant,
by a fraction of which the numerator shall be the Current Market Price per share
of Common Stock on the record date mentioned below in this Section 4.4 plus the
then fair value (as reasonably determined by the Board of Directors of the
Company in good faith, whose determination shall be conclusive absent manifest
error, irrespective of the accounting treatment thereof) of the portion of the
shares of Stock other than Common Stock or assets or evidences of indebtedness
so distributed or of such subscription rights, options or warrants, or of such
convertible or exchangeable securities applicable to one share of Common Stock,
and of which the denominator shall be the Current Market Price per share of
Common Stock on such record date. Such adjustment shall be made whenever any
such distribution is made, and shall become effective immediately after the
record date for the determination of Stockholders entitled to receive such
distribution.
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<PAGE>
4.5 Additional Adjustment of Purchase Price. Whenever the Number of
Shares purchasable upon the exercise of this Warrant is adjusted, as provided
herein, the Purchase Price payable upon exercise of this Warrant shall be
adjusted by multiplying such Purchase Price immediately prior to such adjustment
by a fraction, of which the numerator shall be the Number of Shares purchasable
upon the exercise of this Warrant immediately prior to such adjustment, and of
which the denominator shall be the Number of Shares so purchasable immediately
thereafter.
4.6 No De Minimis Adjustments. No adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which by reason
of this Section 4.6 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 4.6 shall be made to the nearest one-twentieth of a cent or to the
nearest one-hundredth of a share, as the case may be.
4.7 Treasury Shares. For the purpose of Section 4, shares of Common Stock
or other securities held in the treasury of the Company shall not be deemed to
be outstanding, and the sale or other deposition of any shares of Common Stock
or other securities held in the treasury of the Company shall be deemed an
issuance thereof.
4.8 Corporate Action. Before taking any action which would cause an
adjustment reducing the Purchase Price below the then par value, if any, of the
shares of Common Stock issuable upon exercise of this Warrant, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Purchase Price.
4.9 Independent Public Accountants. The certificate of a "Big Six" firm
of independent public accountants selected by the Board of Directors of the
Company shall be conclusive evidence of the correctness of any computation made
under Section 4.
4.10 Notice of Certain Events. In case at any time prior to the expiration
date of this Warrant:
(i) the Company shall authorize the granting to all the holders of
Common Stock of rights to subscribe for or purchase any shares of
stock of any class or of any other rights;
(ii) there shall be any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its
outstanding Common Stock);
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<PAGE>
(iii) there shall be any capital reorganization by the Company;
(iv) there shall be a consolidation or merger involving the Company
or sale of all or substantially all of the Company's property
and assets (except a merger or other reorganization in which the
Company shall be the surviving corporation or a consolidation,
merger or sale with a wholly-owned subsidiary); or
(v) there shall be voluntary or involuntary dissolution, liquidation
and winding up by the Company or dividend or distribution to
holders of Common Stock (other than the Company's customary cash
and stock dividends);
then in any one or more of said cases, the Company shall cause to be delivered
to the Holder, at the earliest practicable time (and, in any event, not less
than 25 days before any record date or other date set for definitive action),
notice of the date on which the books of the Company shall close or a record
shall be taken for such dividend, distribution or subscription rights or such
reorganization, sale, consolidation, merger, dissolution, liquidation or winding
up shall take place, as the case may be. Such notice shall also set forth such
facts as shall indicate the effect of such action (to the extent such effect may
be known at the date of such notice) on the Purchase Price and the kind and
amount of the shares of stock and other securities and property deliverable upon
exercise of the Warrants. Such notice shall also specify the date, if known, as
of which the holders of record of the Common Stock shall participate in said
dividend, distribution or subscription rights or shall be entitled to exchange
their shares of the Common Stock for securities or other property (including
cash) deliverable upon such reorganization, sale, consolidation, merger,
dissolution, liquidation or winding up, as the case may be (on which date, in
the event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, other than dissolution, liquidation or winding up following a
consolidation or merger of the Company with or into, or sale of substantially
all of its assets to, another corporation, the rights to exercise this Warrant
shall terminate).
4.11 Other Securities Adjustments. If as a result of Section 4, a Holder
is entitled to receive any securities other than Common Stock upon exercise of
this Warrant, the number and purchase price of such securities shall thereafter
be adjusted from time to time in the same manner as provided pursuant to Section
4 for Common Stock. The allocation of purchase price between various securities
shall be made in writing by the Board of Directors of the Company in good faith
at the time of the event by which the holder became entitled to receive new
securities, and a copy sent to the Holder.
4.12 Notices of Adjustments. When any adjustment is required to be made
under Section 4, the Company shall promptly (a) determine such adjustments, (b)
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prepare and retain on file a statement describing in reasonable detail the
method used in arriving at the adjustment; and (c) cause copy of such statement,
together with any agreement required by Section 6.5, to be mailed to the Holder
within 10 days after the date on which the circumstances giving rise to such
adjustment occurred.
4.13 Computations and Adjustments. Upon each computation of an adjustment
under this Section 4, the Purchase Price shall be computed to the nearest cent
and the Number of Shares shall be calculated to the next highest whole share.
However, the fractional amount shall be used in calculating any future
adjustments. No fractional shares of Common Stock shall be issued in connection
with the exercise of this Warrant, but the Company shall, in the case of the
final exercise under this Warrant, make a cash payment for any fractional shares
based on the Current Market Price of the Common Stock on the date of exercise.
Notwithstanding any changes in the Purchase Price or the Number of Shares, this
Warrant, and any Warrants issued in replacement or upon transfer thereof, may
continue to state the initial Purchase Price and the Number of Shares.
Alternatively, the Company may elect to issue a new Warrant or Warrants of like
tenor for the additional shares of Common Stock purchasable hereunder or, upon
surrender of the existing Warrant, to issue a replacement Warrant evidencing all
the Warrants to which the Holder is entitled after such adjustments.
4.14 Exercise Before Payment Date. In the event that this Warrant is
exercised after the record date for any event requiring an adjustment, but prior
to the actual event, the Company may elect to defer payment of the adjusted
amount to the Holder until the actual event occurs; provided, however, that the
Company shall deliver a due bill or other appropriate instrument to the Holder
transferrable to the same extent as the other Securities issuable on exercise
evidencing the Holder's right to receive such additional amount upon the
occurrence of the event requiring such adjustment.
4.15 Current Market Price. "Current Market Price" for the Common Stock on
any given date means (a) the closing price on the previous trading day for the
Common Stock on the principal stock exchange on which the Common Stock is traded
(or, in the case of issuances of stock options with an exercise price equal to
fair market value on the date of grant pursuant to the terms of a plan, such
date) or (b) if not so traded, the closing price (or, if no closing price is
available, the average of the bid and asked prices) for such date on the NASDAQ
if the Common Stock is listed on the NASDAQ or (c) if not listed on any exchange
or quoted on the NASDAQ, such value as may be determined in good faith by the
Company's Board of Directors, which determination shall be conclusively binding
on the parties.
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5. Redemption.
----------
5.1 Redemption at Company's Option. At any time following the Issue Date
set forth above, if and to the extent that the Common Stock underlying the
Warrants is covered by an effective registration statement under the Securities
Act, the Company may, upon 30 days prior written notice (the "Redemption
Notice") to the Holder, redeem all, but not less than all of the Warrants
granted hereunder at a redemption price of $0.05 per Warrant (the "Redemption
Price"), so long as the Current Market Price (as defined in Section 4.15(a) and
4.15(b) above) is greater than the following prices (the "Target Prices") for
any period of 20 consecutive trading days preceding the date the Redemption
Notice is given:
Time Period Minimum Current Market Price
----------- ----------------------------
First consecutive 12 month period
following the Issue Date $8.75/share
Second consecutive 12 month period
following the Issue Date $9.25 /share
Third consecutive 12 month period
following the Issue Date $9.75/share
Fourth consecutive 12 month period
following the Issue Date $10.25 /share
Fifth consecutive 12 month period
following the Issue Date $10.75 /share
All warrants issued to the Purchasers in connection with the transactions
contemplated by the Purchase Agreement must be redeemed if any such warrants are
redeemed. The date fixed for redemption of the Warrant is referred to herein as
the "Redemption Date."
5.2 Redemption Notice. The Redemption Notice shall specify (a) the
Redemption Price, (b) the Redemption Date, (c) the place where this Warrant
shall be delivered and the Redemption Price paid, and (d) that the right to
exercise the Warrant shall terminate at 5:00 p.m. (Minneapolis time) on the
business day immediately preceding the Redemption Date. No failure to mail such
notice nor any defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption except as to a Holder (i) to
whom notice was not mailed (ii) whose notice was defective.
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5.3 Failure to Exercise. Any right to exercise this Warrant shall
terminate at 5:00 p.m. (Minneapolis time) on the business day immediately
preceding the Redemption Date. On and after the Redemption Date, the Holder
shall have no further rights except to receive, upon surrender of this Warrant,
the Redemption Price.
5.4 Surrender of Warrant. From and after the Redemption Date, the Company
shall, at the place specified in the Redemption Notice, upon presentation and
surrender to the Company by or on behalf of the Holder of the Warrant to be
redeemed, deliver or cause to be delivered to or upon the written order of the
Holder a sum in cash equal to the Redemption Price of the Warrant. From and
after the Redemption Date and upon the deposit or setting aside by the Company
of a sum sufficient to redeem all the warrants issued pursuant to the Purchase
Agreement called for redemption, such warrants shall expire and become void and
all rights hereunder, except the right to receive payment of the Redemption
Price, shall cease.
5.5 Adjustments. If the shares of Common Stock are subdivided or combined
into a greater or smaller number of shares of Common Stock, the Target Prices
shall be proportionally adjusted by the ratio which the total number of shares
of Common Stock outstanding immediately prior to such event bears to the total
number of shares of Common Stock to be outstanding immediately after such event.
6. Covenants. The Company agrees that:
---------
6.1 Reservation of Stock. During the period in which this Warrant may be
exercised, the Company will reserve sufficient authorized but unissued
securities to enable it to satisfy its obligations on exercise of this Warrant
and shall use its reasonable best efforts to cause all shares of Common Stock
issued upon the exercise of this Warrant to be listed on any exchanges on which
the Common Stock is then listed. If at any time the Company's authorized
securities shall not be sufficient to allow the exercise of this Warrant, the
Company shall take such corporate action as may be necessary to increase its
authorized but unissued securities to be sufficient for such purpose;
6.2 No Liens, etc. All securities that may be issued upon exercise of
this Warrant will, upon issuance, be duly authorized, validly issued, fully
paid, nonassessable and free from all taxes, liens, charges, claims or other
encumbrances or preemptive rights with respect to the issue thereof, and shall
be listed on any exchanges on which that class of securities is listed;
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6.3 Furnish Information. During the term of this Warrant, the Company
will promptly deliver to the Holder copies of all financial statements, reports
and proxy statements which the Company shall have sent to its stockholders
generally;
6.4 Stock and Warrant Transfer Books. Except upon dissolution,
liquidation or winding up or for ordinary holidays and weekends, the Company
will not at any time close its stock or warrant transfer books so as to result
in preventing or delaying the exercise or transfer of this Warrant; and
6.5 Merger; Consolidation or Sale of Assets of the Company. Except in the
case of a merger or consolidation where the consideration is payable entirely in
cash or obligations, the Company will not merge or consolidate with or into any
Person, or sell or otherwise transfer its property, assets and business
substantially as an entirety to a successor Person, unless the Person resulting
from such merger or consolidation (if not the Company), or such successor
Person, shall expressly assume, by supplemental agreement reasonably
satisfactory in form to the then Majority Holders (as defined below) and
executed and delivered to the Holders, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company. "Majority Holders", as of any date,
shall mean holders of warrants issued pursuant to the Stock Purchase Agreement
dated as of the date hereof (the "Purchase Agreement"), between the Company and
the purchasers signatories thereto (the "Purchasers") (pursuant to which this
Warrant was issued) which are exercisable for a majority of the shares then
purchasable under all warrants issued pursuant to the Stock Purchase Agreement.
7. Status of Holder.
----------------
7.1 Not a Stockholder. Unless the Holder exercises this Warrant in
writing, the Holder shall not be entitled to any rights (a) as a stockholder of
the Company with respect to the shares as to which the Warrant is exercisable
including, without limitation, the right to vote or receive dividends or other
distributions, or (b) to receive any notice of any proceedings of the Company
except as otherwise provided in this Warrant.
7.2 Limitation of Liability. Unless the Holder exercises this Warrant in
writing, the Holder's rights and privileges hereunder shall not give rise to any
liability for the Purchase Price or as a stockholder of the Company, whether to
the Company or its creditors.
8. Registration Rights. The shares purchasable upon exercisable of this
Warrant shall be Registerable Securities as defined in that certain Registration
Rights Agreement between the Company and the Purchasers dated as of even date
herewith (the "Registration Rights Agreement").
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9. General Provisions.
------------------
9.1 Complete Agreement; Modifications. This Warrant and any documents
referred to herein or executed contemporaneously herewith constitute the
parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. The Warrant may not be amended, altered or modified except by a writing
signed by the parties.
9.2 Cooperation. Each party hereto agrees to execute any and all further
documents and writings and to perform such other reasonable actions which may be
or become necessary or expedient to effectuate and carry out this Warrant.
9.3 Notices. All notices under this Warrant shall be in writing and shall
be delivered by personal service or telecopy or certified mail return receipt
requested (if such service is not available, then by first class mail), postage
prepaid, to such address as may be designated from time to time by the relevant
party, and which shall initially be:
(a) If to the Company:
Diametrics Medical, Inc.
2658 Patton Road
Roseville, Minnesota 55113
Attention: Chief Financial Officer
Telecopy: (612) 639-8459
With a copy to:
Dorsey & Whitney LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402
Attention: Kenneth Cutler
Telecopy: (612) 340-8738
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(b) If to Holder:
Registered in the name:
--------------------------------
Registered address:
------------------------------
Any notice sent by certified mail shall be deemed to have been given three
(3) days after the date on which it is mailed. All other notices shall be deemed
given when received. No objection may be made to the manner of delivery of any
notice actually received in writing by an authorized agent of a party.
9.4 No Third-Party Benefits; Successors and Assigns. None of the
provisions of this Warrant shall be for the benefit of, or enforceable by, any
third-party beneficiary. Except as provided herein to the contrary, this Warrant
shall be binding upon and inure to the benefit of the parties, their respective
successors and permitted assigns.
9.5 Governing Law. This Warrant concerns a Minnesota corporation, and all
questions with respect to the Warrant and the rights and liabilities of the
parties will be governed by the laws of Minnesota regardless of the choice of
law provisions of Minnesota or any other jurisdiction. Any and all disputes
between the parties which may arise pursuant to this Warrant not covered by
arbitration will be heard and determined before an appropriate federal or state
court located in Minneapolis, Minnesota. The parties hereto acknowledge that
such courts have the jurisdiction to interpret and enforce the provisions of
this Warrant and the parties waive any and all objections that they may have as
to personal jurisdiction or venue in any of the above courts.
9.6 Waivers Strictly Construed. With regard to any power, remedy or right
provided herein or otherwise available to any party hereunder (a) no waiver or
extension of time shall be effective unless expressly contained in a writing
signed by the waiving party; and (b) no alteration, modification or impairment
shall be implied by reason of any previous waiver, extension of time, delay or
omission in exercise, or other indulgence.
9.7 Severability. The validity, legality or enforceability of the
remainder of this Warrant shall not be affected even if one or more of its
provisions shall be held to be invalid, illegal or unenforceable in any respect.
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9.8 Attorneys' Fees. Should any litigation or arbitration be commenced
(including any proceedings in a bankruptcy court) between the parties hereto or
their representatives concerning any provisions of this Warrant or the rights
and duties of any person or entity hereunder the party or parties prevailing in
such proceeding shall be entitled, in addition to such other relief as may be
granted, to the attorneys' fees and court costs incurred by reason of such
litigation.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
effective as of the Issue Date set forth above.
DIAMETRICS MEDICAL, INC.
By:______________________________
Title:________________________
-13-
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ________________________ hereby sells, assigns and
transfers to the transferee named below the rights to purchase __________ of the
Number of Shares under this Warrant, together with all rights, title and
interest therein. The rights to purchase the remaining Number of Shares shall
remain the property of the undersigned.
Dated: ___________________________
[NAME OF HOLDER]
By ______________________________
Signature
Name: ___________________________
(Please Print)
Address: ________________________
_________________________________
_________________________________
Employer Identification Number,
Social Security Number or other
identifying number:
_________________________________
TRANSFEREE:
Name:____________________________
(Please Print)
Address:_________________________
_________________________________
_________________________________
Employer Identification Number,
Social Security Number or other
identifying number:
_________________________________
-14-
<PAGE>
EXERCISE FORM
-------------
To Be Executed
Upon Exercise of Warrant
The undersigned hereby exercises the Warrant with regard to
________________ shares of Common Stock and herewith makes payment of the
purchase price in full. The undersigned requests that certificate(s) for such
shares and the Warrant for any unexercised portion of this Warrant be issued to
the Holder.
Dated:___________________________
[NAME OF HOLDER]
By ______________________________
Signature
Name: ___________________________
(Please Print)
Address: _________________________
__________________________________
__________________________________
Employer Identification Number,
Social Security Number or other
identifying number:
__________________________________
-15-
