Exhibit 4.7
THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES
STATUTE, OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE THEREUNDER AS
EVIDENCED BY AN OPINION OF COUNSEL OR NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION, IN EITHER CASE IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY
COMMON STOCK WARRANT
To Purchase 100,000
Shares of Common Stock of
Vascular Solutions, Inc.
June 10, 1999
THIS CERTIFIES THAT, for value received, Jones Pharma Incorporated, a
Delaware corporation, or its registered assigns (the "Holder"), is entitled to
subscribe for and purchase from Vascular Solutions, Inc. (the Company) at any
time after the date hereof to and including June 10, 2004, up to One Hundred
Thousand (100,000) fully paid and nonassessable shares (the "Shares") of the
Company's Common Stock, $.01 par value, at a price of $5.00 per Share (the
"Warrant Price"), subject to the provisions and upon the terms and conditions
hereinafter set forth.
1. Term; Transferability. The rights represented by this Warrant may be
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exercised by the holder hereof, in whole or in part (but not as to a fractional
share of Common Stock), at any time and from time to time, by written notice of
exercise delivered to the Company and by the surrender of this Warrant at the
principal office of the Company. This Warrant may be transferred by the Holder
subject to the restrictions contained in Section 7 hereof.
2. Issuance of Shares. The rights evidenced by this Warrant shall be
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deemed to be exercised as of the close of business on the date upon which this
Warrant, together with notice of exercise and any applicable payment of any
consideration due the Company, shall have been received by the Company.
Certificates for Shares of stock acquired by the Holder upon exercise of this
Warrant shall be delivered to or as directed by the Holder within a reasonable
time, not exceeding ten (10) business days after the rights represented by this
Warrant shall have been so exercised and unless this Warrant has expired, a new
Warrant representing the number of shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to the holder
hereof within such time.
3. Method of Exercise.
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3.1. Standard Method. The purchase right represented by this Warrant may
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be exercised by the Holder, in whole or in part and from time to time by the
surrender of this Warrant (with the notice of exercise form attached hereto as
Exhibit A duly executed) at the principal office of the Company and by the
payment to the Company, by certified or bank check or by wire transfer, of an
amount equal to the then applicable Warrant Price per share multiplied by the
number of Shares then being purchased.
3.2 Net Issue Exercise.
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(a) In lieu of exercising this Warrant, the Holder may elect to receive
Shares equal to the value of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with notice of such election in which event the Company shall issue to
Holder a number of shares of the Company's Common Stock computed using the
following formula:
X= Y(A-B)
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A
Where
X = the number of Shares to be issued to Holder.
Y = the number of Shares purchasable under this Warrant, or if
the entire Warrant is not being exercised on a net issue
basis, the number of Shares the holder is electing to apply
towards the net issue exercise right set forth in this
Section 3.2.
A = the fair market value of one Share.
B = the Warrant Price (as adjusted to the date of such
calculations).
(b) For purposes of this Section, fair market value of one share of the
Company's Common Stock shall be based on the average of the closing per share
bid and asked prices of the Company's Common Stock quoted in the Over-The-
Counter Market Summary or the closing price quoted on Nasdaq or any exchange on
which the Common Stock is listed, whichever is applicable, as published in the
Wall Street Journal for the ten trading days prior to the date of determination
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of fair market value. If the Common Stock is not traded Over-The-Counter or on
Nasdaq or an exchange, the fair market value of the Company's Common Stock shall
be the price per share which the Company could obtain from a willing buyer for
shares sold by the Company from authorized but unissued shares, as such price
shall be agreed by the Company and the Holder, and if they fail to agree within
15 days after the exercise of this Warrant, then at a price equal to the price
used in the Company's most recent sale of Common Stock to an unaffiliated third
party.
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3.3 Automatic Exercise. If the Company has publicly traded Common Stock
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as of the expiration date of this Warrant, this Warrant shall be deemed
automatically exercised pursuant to Section 3.2 above (even if not surrendered)
immediately prior to its expiration.
4. Covenants of Company. The Company covenants and agrees that all Shares
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which may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be duly authorized and issued, fully paid, nonassessable
and free from all taxes, liens and charges with respect to the issue thereof.
The Company further covenants and agrees that, during the period within which
the rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
5. Anti-Dilution Adjustments. The number and kind of securities
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purchasable upon the exercise of the Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) Recapitalization. If any capital reorganization or reclassification of
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the capital stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Common Stock
of the Company shall be entitled to receive stock, securities or assets with
respect to or in exchange for such Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder hereof shall thereafter have
the right to purchase and receive, upon the basis and upon the terms and
conditions specified in this Warrant and in lieu of the shares of Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby, such stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provisions shall be made with respect to the rights and interests of the holder
of this Warrant to the end that the provisions hereof (including without
limitation provisions for adjustments of the Warrant purchase price and of the
number of shares purchasable upon the exercise of this Warrant) shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation, merger or sale unless prior to
the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing such
assets, shall assume by operation of law or written instrument, the obligation
to deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
purchase. Notice of such assumption shall be promptly mailed to the registered
holder hereof at the last address of such holder appearing on the books of the
Company. Notwithstanding any language to the contrary set forth in this
paragraph 5(a), if an occurrence or event described herein shall take place in
which the shareholders of the Company receive solely cash for their shares of
Common Stock of the
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Company, either pursuant to a merger or consolidation or in liquidation of the
Company, the Holder shall be deemed to have elected to exercise this Warrant in
accordance with paragraph 3.2 above as of the effective date of such event and
the Company or its successor shall be obligated to pay to the Holder in cash the
resulting value of this Warrant.
(b) Stock Dividend or Split. In case the Company shall at any time
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hereafter subdivide or combine the outstanding shares of Common Stock or declare
a dividend payable in Common Stock, the number of shares to which this Warrant
relates and the Warrant Price shall each be adjusted. First the number of Shares
to which this Warrant relates shall be redetermined by multiplying the number of
Shares in effect immediately prior to the record date for such subdivision,
combination or dividend payable in common stock by a factor equal to subdivision
or combination (e.g. 2.0 in the case of a two-for-one split or 100% dividend or
1.10 in the case of a 10% stock dividend). The adjusted Warrant Price shall then
be determined by dividing the redetermined number of Shares into the aggregate
exercise price of all Shares purchasable by this Warrant as in effect
immediately prior to such subdivision, combination or dividend.
(c) No fractional shares of common stock shall result from any
redetermination of the number of Shares to which this Warrant relates and any
such fractional entitlement resulting from the foregoing formulae shall be
increased to the next larger whole share. Any adjustment to the Warrant Price
pursuant to the foregoing formulae shall be reduced to the nearest whole cent by
eliminating any fraction of a cent. .
(d) Upon any adjustment of the Warrant Price or number of Shares, then,
and in each such case, the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Holder of this Warrant at the
address of such Holder as shown on the books of the Company, which notice shall
state the Warrant Price resulting from such adjustment and the increase or
decrease or other change, if any, in the number of Shares purchasable at such
price upon the exercise of this Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
(e) If the Company shall, at any time while this Warrant is outstanding,
declare or otherwise authorize any distribution in respect of its Common Stock
other than a dividend payable in cash or in shares of such Common Stock, the
Company shall give notice of such declaration or authorization to the Holder at
least ten business days prior to the record date for determining holders of the
Common Stock entitled to participate therein. In addition, in the event that any
such distribution to shareholders consists of rights to purchase from the
Company shares of the Common Stock at a discount from the fair market value
thereof, the Company agrees to issue to the Holder similar rights covering a
number of shares of the Company's Common Stock equal to the number of rights the
Holder would have received had the Warrant been exercised in full in accordance
with Section 3.1 as of the record date for such distribution.
(f) If any event occurs as to which in the good faith determination of the
Board of Directors of the Company the other provisions of this paragraph 5 are
not strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder of this Warrant or of common stock in accordance
with the essential intent and principles of such provisions, then the
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Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such purchase rights as aforesaid.
6. No Shareholder Rights. No Holder, as such, shall be entitled to vote
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or receive dividends or be deemed the holder of Shares or any other securities
of the Company which may at any time be issuable on the exercise thereof for any
purpose, nor shall anything contained herein be construed to confer upon the
holder of this Warrant, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised
and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
7. Transfer of Warrant or Resale of Shares. In the event the Holder
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desires to transfer this Warrant, or any Shares issued upon the exercise hereof,
the Holder shall provide the Company with a written notice describing the manner
of such transfer and an opinion of counsel (reasonably acceptable to the
Company) that the proposed transfer may be effected without registration or
qualification (under any Federal or State law), whereupon such Holder shall be
entitled to transfer this Warrant or to dispose of shares of Common Stock
received upon the previous exercise hereof in accordance with the notice
delivered by such holder to the Company; provided, that an appropriate legend
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may be endorsed on this Warrant or the certificates for such shares respecting
restrictions upon transfer thereof necessary or advisable in the opinion of
counsel satisfactory to the Company to prevent further transfers which would be
in violation of Section 5 of the Securities Act of 1933. Notwithstanding the
foregoing, (i) for a period of 180 days following the commencement of the
Company's initial public offering of securities (provided the initial public
offering is declared effective by the Securities and Exchange Commission prior
to December 31, 1999), without the prior written consent of the Company, the
holder of this Warrant will not offer, sell, pledge, contract to sell or grant
any option to purchase or otherwise dispose of or transfer this Warrant or any
Shares, and (ii) the Company will issue certificates evidencing the Shares free
of any restrictive legend at such time as the Holder is entitled to rely upon
the provisions of clause (k) of Rule 144 under the Securities Act of 1933 (or
any successor rule).
8. Financial Statements and Information. The Company shall deliver
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to the registered holder hereof (i) within 90 days after the end of the fiscal
year of the Company, a consolidated balance sheet of the Company as of the end
of such year and a consolidated statement of income, retained earnings and cash
flows for such year, which year-end financial reports shall be in reasonable
detail and certified by independent public accountants of nationally recognized
standing selected by the Company and (ii) within 45 days after the end of each
quarter other than the last quarter of the fiscal year, unaudited consolidated
statements of income, retained earnings and cash flows for such quarter and a
consolidated balance sheet as of the end of such quarter. If the Company has a
class of securities registered under the Securities Exchange Act of 1934, the
provisions of this Section 8 shall be satisfied by the delivery to the holder,
within 90 days after the end of the Company's fiscal year, of a report on Form
10-K for such fiscal year, and with respect to the first three fiscal quarters
in each fiscal year, within 45 days after the end of each such fiscal quarter,
of a report on Form 10-Q for such fiscal quarter.
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In addition, the Company shall deliver to the registered holder hereof any other
information or data provided generally to the shareholders of the Company..
9. Representations and Warranties. This Warrant is issued and delivered
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on the basis of the following:
9.1 Authorization and Delivery. The Company represents that this Warrant
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has been duly authorized and executed by the Company and when delivered will be
the valid and binding obligation of the Company enforceable in accordance with
its terms;
9.2 No Inconsistency. The Company represents that the execution and
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delivery of this Warrant are not, and the issuance of the Shares upon exercise
of this Warrant in accordance with the terms hereof will not be, inconsistent
with the Company's Articles of Incorporation or Bylaws, do not and will not
contravene any law, governmental rule or regulation, judgment or order
applicable to the Company, and do not and will not contravene any provision of,
or constitute a default under, any indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the registration with or
the taking of any action in respect of or by, any Federal, state or local
government authority or agency or other person.
9.3 Accredited Investor. The Holder represents (i) that it is as of
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the date hereof, and will be as of the date of any exercise of this Warrant, an
"accredited investor" as that term is defined and utilized in Regulation D under
the Securities Act of 1933 and (ii) that it is not acquiring this Warrant with a
view to the public distribution of the Warrant or the Shares.
10. Modification and Waiver. This Warrant and any provision hereof may be
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changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. Notices. Any notice, request or other document required or permitted
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to be given or delivered to the holder hereof or the Company shall be delivered
by facsimile where confirmation of receipt by the receiving party's receiver can
be documented, or delivered by hand, or shall be sent by reputable overnight
courier, certified or registered mail, postage prepaid, to each such holder at
its address as shown on the books of the Company or to the Company at the
address indicated therefore on the signature page of this Warrant.
12. Binding Effect on Successors. This Warrant shall be binding upon any
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corporation succeeding the Company by merger or consolidation, and all of the
obligations of the Company relating to the Shares issuable upon the exercise of
this Warrant shall be as set forth in the Company's Articles of Incorporation
and the Company's Bylaws (each as amended from time to time) and shall survive
the exercise and termination of this Warrant and all of the covenants and
agreements herein and in such other documents and instruments of the Company
shall inure to the benefit of the successors and assigns of the holder hereof.
The Company will, at the time of the exercise of this Warrant, in whole or in
part, upon request of the holder hereof but at the Company's expense,
acknowledge in writing its continuing obligation to the holder hereof in
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respect of any rights to which the holder hereof shall continue to be entitled
after such exercise in accordance with this Warrant; provided, that the failure
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of the holder hereof to make any such request shall not affect the continuing
obligation of the Company to the holder hereof in respect of such rights.
14. Lost Warrants or Stock Certificates. The Company covenants to the
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holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant or any
stock certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate, or like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.
15. Descriptive Headings. The descriptive headings of the several
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paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
16. Governing Law. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
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ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF MINNESOTA.
IN WITNESS WHEREOF, Vascular Solutions, Inc. and Jones Pharma Incorporated
have caused this Warrant to be executed by its duly authorized officers and this
Warrant to be dated as of June 10, 1999.
VASCULAR SOLUTIONS, INC.
By /s/ Howard C. Root
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Howard C. Root
Chief Executive Officer
By /s/ Michael P. Nagel
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Michael P. Nagel
Secretary
JONES PHARMA INCORPORATED
By /s/ Dennis M. Jones, President
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EXERCISE FORM
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
VASCULAR SOLUTIONS, INC.
The undersigned, the holder of the within warrant, hereby irrevocably
elects to exercise the purchase right represented by such warrant for, and to
purchase hereunder ______________ shares of the Common Stock, $.01 par value, of
Vascular Solutions, Inc. and herewith makes payment of $__________ therefor, and
requests that the certificates for such shares be issued in the name of
______________________ and be delivered to _____________________________, whose
address is _______________________________________________________________.
Dated:____________________ ______________________________________________
(Signature must conform in all respects to the
name of holder as specified on the face of the
warrant)
(Address)
[Signature Guaranteed]
(City - State - Zip)
ASSIGNMENT FORM
(TO BE SIGNED ONLY UPON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns and transfers
unto _________________________ the right represented by the within warrant to
purchase __________________ of the shares of the Common Stock, $.01 par value,
of Vascular Solutions, Inc., to which the within warrant relates, and appoints
______________________ attorney to transfer said right on the books of Vascular
Solutions, Inc., with full power of substitution in the premises.
Dated:____________________ ______________________________________________
(Signature must conform in all respects to the
name of holder as specified on the face of the
warrant)
(Address)
[Signature Guaranteed]
(City - State - Zip)
In the presence of: