No. A-1
Exhibit 1
FORM OF
WARRANT
TO PURCHASE
SHARES OF COMMON STOCK
OF
MEDAMICUS, INC.
MedAmicus, Inc., a Minnesota corporation (the "Company") hereby agrees
that, for value received, Summit Investment Corporation, or assigns, is
entitled, subject to the terms set forth herein, to purchase from the Company at
any time or from time to time after the date hereof and before 5:00 p.m.,
Minneapolis, Minnesota time, on January 21, 1999, ________ shares of Common
Stock of the Company, subject to adjustment in the number of such shares as set
forth herein, at a price per share of $3.90.
1. Definitions. The following terms when used in this
Warrant will have the following meanings:
"Act" shall mean the United States Securities Act of 1933.
"Common Stock" is the authorized $0.01 par value common shares of the
Company.
"Holder" is the registered holder of this Warrant.
"Holders" are all of the registered holders of the Warrants.
"Offering Circular" shall mean an offering circular filed pursuant to
Regulation A promulgated under the Securities Act of 1933.
"Registration Statement" shall mean a registration statement filed
under the Securities Act of 1933.
"SEC" shall mean the Securities and Exchange Commission.
"Warrant" shall mean the warrant evidenced by this document.
"Warrants" shall mean all warrants to purchase an aggregate of 107,000
shares of Common Stock issued as of May 13, 1996, of which this Warrant is a
part, and designated by a number preceded by the letter "A".
2. Exercise of Warrant. Subject to restrictions which may be set forth
herein, the purchase rights exercisable under this Warrant may be exercised, in
whole or in part, as follows:
(a) by the Holder surrendering this Warrant to the Company at
its principal office, accompanied by a duly executed Exercise Form
attached hereto and payment, in cash or by certified or bank check
payable to the order of the Company, of the purchase price payable in
respect of the Common Stock being purchased.
(b) by the Holder surrendering this Warrant to the Company at
its principal office accompanied by a Cashless Exercise Form attached
hereto (a "Cashless Exercise"). In the event of a Cashless Exercise,
the Holder may exchange this Warrant for that number of shares of
Common Stock determined by multiplying the number of shares of Common
Stock exercisable under the portion of the Warrant being exchanged for
Common Stock (including the number of shares being acquired in such
exchange) by a fraction, the numerator of which shall be the amount by
which the then current market price per share of Common Stock exceeds
the Exercise Price, and the denominator of which shall be the market
price. For purposes of any computation under this Section 2(b), the
then current market price per share of Common Stock at any date shall
be deemed to be the last sale price of the Common Stock on the business
day prior to the date of the Cashless Exercise or, in case no such
reported sales take place on such day, the average of the last reported
bid and asked prices of the Common Stock on such day, in either case on
the principal national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to trading
on any such exchange, the representative closing bid price of the
Common Stock as reported by NASDAQ, or other similar organization if
NASDAQ is no longer reporting such information, or if not so available,
the fair market price of the Common Stock as determined by the Board of
Directors.
(c) If less than all of the Common Stock purchasable under
this Warrant is purchased, the Company will, upon such exercise,
execute and deliver to the Holder a new warrant (dated the date
thereof) evidencing the number of shares of the Common Stock not so
purchased. As soon as practicable after the exercise of this Warrant
and payment of the purchase price, the Company will cause to be issued
in the name of and delivered to the Holder, or as such Holder may
direct, a certificate or certificates representing the shares
purchased. The Company may require that such certificate or
certificates contain on the face thereof a legend substantially as
follows:
"The transfer of the shares represented by this
certificate is restricted pursuant to the terms of a
Warrant to Purchase Shares of Common Stock dated
___________________, 1996, issued by MedAmicus, Inc.
a copy of which is available for inspection at the
offices of MedAmicus, Inc. Transfer may not be made
except in accordance with the terms of the Warrant.
In addition, no sale, offer to sell or transfer of
the shares represented by this certificate shall be
made unless a Registration Statement under the
Securities Act of 1933, as amended, with respect to
such shares is then in effect or an exemption from
the registration requirements of such Act is then in
fact applicable to such shares."
This Warrant must be exercised with respect to at least 500 shares of the Common
Stock purchasable hereunder, unless a lessor number of shares of Common Stock
then remain exercisable, in which case it must be exercised with respect to such
lessor number.
3. Transferability; Negotiability. This Warrant may only be sold,
assigned, hypothecated or otherwise transferred subject to the terms of this
Section 3 and Section 5 hereof. This Warrant is issued upon the following terms,
to which each taker or owner hereof consents and agrees:
(a) Subject to the subparagraph (b) below, any person in
possession of this Warrant properly endorsed, is authorized to
represent himself as absolute owner hereof and is granted power to
transfer absolute title hereto by endorsement and delivery hereof to a
Holder in due course. Each prior taker or owner waives and renounces
all of his equities or rights in this Warrant in favor of every such
Holder in due course, and every such Holder in due course shall acquire
absolute title hereto and to all rights represented hereby.
(b) Until this Warrant is transferred on the books of the
Company, the Company may treat the Holder of this Warrant as absolute
owner hereof for all purposes without being affected by any notice to
the contrary.
4. Adjustment of Purchase Price; Reorganization.
(a) In case the Company shall at any time hereafter subdivide
or combine its outstanding shares of Common Stock, or declare a
dividend payable in Common Stock, the exercise price in effect
immediately prior to the subdivision, combination or record date for
such dividend payable in Common Stock shall forthwith be
proportionately increased, in the case of combination, or
proportionately decreased, in the case of subdivision or declaration of
a dividend payable in Common Stock, and each share of Common Stock
purchasable upon exercise of the Warrant shall be changed to the number
determined by dividing the then current exercise price by the exercise
price as adjusted after such subdivision, combination or dividend
payable in Common Stock.
(b) No fractional shares of Common Stock are to be issued upon
the exercise of the Warrant, but the Company shall pay a cash
adjustment in respect of any fraction of a share which would otherwise
be issuable in an amount equal to the same fraction of the market price
per share of Common Stock on the day of exercise as determined in good
faith by the Company.
(c) In case of any capital reorganization or any
reclassification of the shares of Common Stock of the Company, or in
the case of any consolidation with or merger of the Company into or
with another corporation, or the sale of all or substantially all of
its assets to another corporation effected in such a manner that the
holders of Common Stock shall be entitled to receive stock, securities
or assets with respect to or in exchange for Common Stock, then, as a
part of such reorganization, reclassification, consolidation, merger or
sale, as the case may be, lawful provision shall be made so that the
Holder shall have the right thereafter to receive, upon the exercise
hereof, the kind and amount of shares of stock or other securities or
property which the Holder would have been entitled to receive if,
immediately prior to such reorganization, reclassification,
consolidation or merger, the Holder had held the number of shares of
Common Stock which were then purchasable upon the exercise of the
Warrant had the Warrant been exercised. In any such case, appropriate
adjustment (as determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interest thereafter of the
Holder, to the end that the provisions set forth herein (including
provisions with respect to adjustments of the exercise price) shall
thereafter be applicable, as nearly as reasonably may be, in relation
to any shares of stock or other property thereafter deliverable upon
the exercise of the Warrant.
(d) When any adjustment is required to be made in the exercise
price, initial or adjusted, the Company shall forthwith determine the
new exercise price; and
(i) Prepare and retain on file a statement describing
in reasonable detail the method used in arriving at the new
exercise price; and
(ii) Cause a copy of such statement to be mailed to
the Holder as of a date within ten (10) days after the date
when the circumstances giving rise to the adjustment occurred.
5. Investment Intent. The issuance of the shares of Common Stock
issuable upon exercise of the Warrant has not been registered under the Act or
any applicable state law. The Warrant is issued to the Holder on the condition
that the Warrant and any Common Stock purchased upon exercise of the Warrant
(excepting Common Stock for which a Notification under Regulation A or a
Registration Statement has been filed and declared effective and for which such
exercise may be effected pursuant to registration or an exemption from
registration under any applicable state law) are or will be purchased for
investment purposes and not with an intent to distribute the same. Prior to
making any disposition of the Warrant or of any Common Stock purchased upon
exercise of the Warrant, the Holder will give written notice to the Company
describing briefly the manner of any such proposed disposition. The Holder will
not make any such disposition, until and unless (i) the Company has notified him
that, in the opinion of its counsel, registration under the Act and any
applicable state law is not required with respect to such disposition, or (ii) a
Notification under Regulation A or a Registration Statement covering the
proposed distribution has been filed by the Company and has become effective and
applicable state laws relating to registration are complied with. Upon receipt
of written notice from the Holder with respect to such proposed distribution,
the Company will use its best efforts, in consultation with the Holder's
counsel, to ascertain as soon as possible whether or not registration is
required, and will advise the Holder promptly with respect thereto.
6. Registration Upon Request.
(a) Upon written request of the Holder as provided hereunder
given prior to January 21, 1999, the Company will, on a one time basis
after (six months), promptly proceed to file a Registration Statement
or, at the Holder's election, an Offering Circular pursuant to
Regulation A under the Securities Act of 1933, covering the offering
and sale of the Common Stock purchased or purchasable by the Holder
under the terms of this Warrant, at the Holder's option, (i) by the
Company to the Holder, and/or (ii) by the Holder in a public
distribution as described in the request. At the earliest possible date
following such request the Company will diligently proceed to use its
best efforts to (x) have such Registration Statement or Offering
Circular become effective with the SEC, and (y) have such Common Stock,
or the offer and sale thereof, registered or qualified in such states
as may be reasonably requested by the Holder. The Company will provide
▇▇▇▇▇▇'s counsel with reasonable opportunities to review and comment
on, and otherwise participate in, the preparation of such Registration
Statement or Offering Circular.
(b) Notwithstanding anything to the contrary herein, and
except where the Company in its sole discretion otherwise permits, no
request under this Section 6 shall be effective unless made in writing
by any one or more of the Holders of the Warrants (and/or shares of
Common Stock issued upon exercise of such Warrants) covering more than
55,000 shares of the Common Stock (subject to adjustment as provided in
Section 4 hereof). Upon effectiveness of a Registration Statement or
Offering Circular which covers the offer and sale of the shares of
Common Stock purchased or purchasable upon the exercise of this Warrant
in accordance with a valid request by Holders of the Warrants under
this Section 6, the rights under this Warrant of any and all Holders to
make such request or election shall terminate. The Company will mail to
the record Holder, at the last known post office address, written
notice of any exercise of the rights granted under this Section 6, by
certified mail, and each Holder shall have thirty (30) days from the
date of deposit of such notice in the U.S. Mail to notify the Company
in writing whether such Holder wishes to join in such exercise. Each
purchaser or transferee of a portion of this Warrant is responsible to
determine whether his rights under this Section 6 have been terminated
by such an exercise. Any Warrants issued upon transfers subsequent to
such an exercise shall have all of the provisions under this Section 6
deleted.
7. Inclusion in Registration Statement. If prior to January 21, 1999,
the Company shall propose to file a Registration Statement (other than on Forms
S-4 or S-8, or any other similarly inappropriate form) under the Act covering a
public offering of the Company's Common Stock, it will notify the Holder at
least thirty (30) days prior to such filing and will include in the Registration
Statement and in any application to register or qualify Common Stock under state
securities laws (to the extent permitted by applicable regulation), the Common
Stock purchased or purchasable by the Holder upon the exercise of the Warrant,
at the Holder's option, (i) by the Company to the Holder, and/or (ii) by the
Holder in a public distribution, to the extent requested by the Holder, but, in
any event, with respect to not less than twenty percent (20%) of the shares of
Common Stock purchasable by the Holder upon exercise of the Warrant.
Notwithstanding the foregoing, the Company need not include the Common Stock so
purchased or purchasable in any such Registration Statement if the principal
underwriter with respect to such proposed public offering determines in writing,
and has a reasonable basis for determining, that such inclusion would be
inadvisable or detrimental to the success of that offering. The Company will
provide ▇▇▇▇▇▇'s counsel with reasonable opportunities to review and comment on,
and otherwise participate in, the preparation of the Registration Statement. If
the Registration Statement filed pursuant to such thirty (30) day notice has not
become effective within six months following the date such notice is given to
the Holder, the Company must again notify such Holder in the manner provided
above. The obligations of the Company to include the shares purchased or
purchasable under the Warrant in a Registration Statement pursuant to this
Section 7, shall terminate if on the last day on which this Warrant may be
exercised, the Company would not have been obligated to provide the Holder with
thirty (30) days notice as provided in this Section 7.
8. Registration - General Provisions.
(a) In the event Common Stock owned by the Holder is included
in a Registration Statement as provided in Section 6 or Section 7, the
Company will furnish the Holder with a reasonable number of copies of
any prospectus included in such filings and will amend or supplement
the same as required during the period of required use thereof,
provided that the Company need not maintain the effectiveness of any
Registration Statement filed by the Company, more than nine (9) months
following the effective date thereof.
(b) In the case of the filing of any Registration Statement,
and to the extent permissible under the Act and controlling precedent
thereunder, the obligations of the Company under Section 6 and Section
7 shall be subject to (i) the Holder entering into cross
indemnification agreements with the Company and, if requested and
applicable, the underwriter(s) named in such Registration Statement, in
customary scope covering the accuracy and completeness of the
information furnished by each and (ii) the Holder agreeing to cooperate
with the Company in the preparation and filing of any such Registration
Statement.
(c) The Company shall pay all Registration Expenses (as
defined below) in connection with the inclusion of Common Stock in any
Registration Statement or Offering circular, or application to register
or qualify Common Stock under state securities laws, filed by the
Company under Section 6 or 7, other than as set forth herein. For
purposes of this Agreement, the term "Registration Expenses" means the
filing fees payable to the SEC, any state agency and the National
Association of Securities Dealers, Inc.; the fees and expenses of the
Company's legal counsel and independent certified public accountants in
connection with the preparation and filing of the Registration
Statement or Offering Circular (and all amendments and supplements
thereto) with the SEC (provided that fees and expenses relating to the
Company's independent public accountants shall be limited to the fees
and expenses relating to (i) audited financial statements which are
dated as of the end of the Company's fiscal year, (ii) unaudited
financial statements which are dated as of the end of any fiscal
quarter of the Company, and (iii) audited or unaudited financial
statements otherwise prepared or required to be prepared by the Company
for its own business or regulatory compliance purposes); and all
expenses relating to the printing of the Registration Statement,
Offering Circular, prospectuses and various agreements executed in
connection with the Registration Statement or Offering Circular. The
Holder will pay the fees and expenses of any legal counsel Holder may
engage, as well as Holder's proportionate share of (i) any commissions
or expense allowances which may be payable to any underwriter, and (ii)
any filing fees payable with respect to the registration or
qualification of the Holder's Common Stock with any state
administrative agency as requested by the Holder pursuant to Section 6
or 7.
9. Notices. The Company shall mail to the registered Holder of the
Warrant, at his last post office address appearing on the books of the Company,
not less than fifteen (15) days prior to the date on which (i) a record will be
taken for the purpose of determining the holders of Common Stock entitled to
dividends (other than cash dividends) or subscription rights, or (ii) a record
will be taken (or in lieu thereof, the transfer books will be closed) for the
purpose of determining the holders of Common Stock entitled to notice of and to
vote at a meeting of shareholders at which any capital reorganization,
reclassification of shares of Common Stock, consolidation, merger, dissolution,
liquidation, winding up or sale of substantially all of the Company's assets
shall be considered and acted upon. Notwithstanding such notice requirements,
until exercise and payment therefor, any Holder shall not be deemed a
shareholder of the Company with respect to shares of Common Stock underlying
this Warrant.
10. Reservation of Common Stock. A number of shares of Common Stock
sufficient to provide for the exercise of the Warrant upon the basis herein set
forth shall at all times be reserved for the exercise thereof.
11. Miscellaneous. Whenever reference is made herein to the issue or
sale of shares of Common Stock, the term "Common Stock" shall include any stock
of any class of the Company other than preferred stock with a fixed limit on
dividends and a fixed amount payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company. The Company
will not, by amendment of its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act of deed, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder by the Company, but will, at all times in good faith,
assist, insofar as it is able, in the carrying out of all provisions hereof and
in the taking of all other action which may be necessary in order to protect the
rights of the Holder against dilution.
Upon written request of the Holder, the Company will promptly provide
such Holder with a then current written list of the names and addresses of all
Holders of Warrants originally issued under the terms of, and concurrent with,
this Warrant.
The representations, warranties and agreements herein contained shall
survive the exercise of this Warrant. References to the "Holder" includes the
immediate Holder of shares of Common Stock purchased on the exercise of this
Warrant.
All shares of Common Stock or other securities issued upon the exercise
of the Warrant shall be validly issued, fully paid and nonassessable.
IN WITNESS WHEREOF, this Warrant has been duly executed by MedAmicus,
Inc. as of the ______ day of ________________, 1996.
MEDAMICUS, INC.
By ______________________________
Its President
EXERCISE FORM
(To Be Signed Only Upon Exercise Of Warrant Pursuant To Section 2(a))
TO MEDAMICUS, INC.:
The undersigned Holder hereby irrevocably elects to exercise the
purchase right represented by the accompanying Warrant No. ______ for, and to
purchase thereunder, *___________________ shares of the Common Stock and
herewith makes payment of $________________ therefor.
Please issue a certificate for such Common Stock in the name of:
Name __________________________________________________________________
Address _______________________________________________________________
Social Security No. ___________________________________________________
Signature _____________________________________________________________
(Signature must correspond in all respects with the
name of the Holder appearing on the face of this
Warrant or with the name of the assignee appearing in
the Assignment accompanying this Exercise Form.)
In the presence of:
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Capitalized terms contained in this Exercise Form shall have the same
meanings as set forth in the Warrant.
* Insert here all or such portion of the number of shares called for on the
face of the within Warrant with respect to which the holder desires to
exercise the purchase right represented thereby, without adjustment for
any other or additional stock, other securities, property or cash which
may be deliverable on such exercise.
Dated: _______________________, 199__.
CASHLESS EXERCISE FORM
(To Be Signed Only Upon Exercise Of Warrant Pursuant To Section 2(b))
TO MEDAMICUS, INC.:
The undersigned Holder hereby irrevocably elects to exchange Warrants
exercisable for *____________ shares ("Warrant Shares") of Common Stock
purchasable upon the exercise of the accompanying Warrant No. ______ for
*___________________ shares of the Common Stock pursuant to the Cashless
Exercise provisions of the accompanying Warrant, as provided for in Section 2(b)
of such Warrant, and for such purpose hereby sell, assign and transfer unto the
Company the accompanying Warrant No. _____ with respect to *____________ Warrant
Shares, together with all rights, title and interest therein, and does appoint
______________________ attorney to transfer and/or cancel said Warrant on the
books of the Company, with full power of substitution in the premises.
Please issue a certificate for such Common Stock in the name of:
Name __________________________________________________________________
Address _______________________________________________________________
Social Security No. ___________________________________________________
Signature _____________________________________________________________
(Signature must correspond in all respects with the
name of the Holder appearing on the face of this
Warrant or with the name of the assignee appearing in
the Assignment accompanying this Exercise Form.)
In the presence of:
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Capitalized terms contained in this Cashless Exercise Form shall have
the same meanings as set forth in the Warrant.
* Insert here all or such portion of the relevant number of Warrant Shares
which are being delivered for cancellation (including both the Warrant
Shares being cancelled in payment and the Warrant Shares being cancelled
as the result of the issuance of the underlying shares), without
adjustment for any other or additional stock, other securities, property
or cash which may be deliverable on such exercise.
Dated: _______________________, 199__.
ASSIGNMENT FORM
(TO BE SIGNED ONLY UPON TRANSFER OF THE 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 common stock of MedAmicus, Inc. to
which the within warrant relates, and appoints ______________________________
attorney to transfer said right on the books of MedAmicus, 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)
______________________________
(City - State - Zip)
In the presence of:
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