EXHIBIT 10.52
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ORPHAN MEDICAL, INC.
COMMON STOCK PURCHASE WARRANT
Orphan Medical, Inc., a Minnesota corporation (the "Company"),
hereby agrees that, for value received, ▇.▇. ▇▇▇▇▇▇▇▇, Minneapolis, Minnesota,
or its assigns, is entitled, subject to the terms set forth below, to purchase
from the Company at any time or from time to time after January 1, 1999, and
before 4:30 p.m., Minneapolis, Minnesota time, on December 31, 2004, Ten
Thousand (10,000) Shares of the Company at an exercise price of $8.50 per Share
(the "Shares")
1. Exercise of Warrant. The purchase rights granted by this Warrant
shall be exercised (in minimum quantities of 100 Shares) by the holder
surrendering this Warrant with the form of exercise attached hereto duly
executed by such holder, to the Company at its principal office, accompanied by
payment, in cash or by cashier's check payable to the order of the Company, of
the purchase price payable in respect of the Shares being purchased. If less
than all of the Shares purchasable hereunder are purchased, the Company will,
upon such exercise, execute and deliver to the holder hereof a new Warrant
(dated the date hereof) evidencing the number of Shares 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 hereof, or as such holder may direct, a certificate or
certificates representing the Shares purchased upon such exercise. 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 Common Stock Purchase Warrant
dated January 1, 1999, issued by Orphan Medical, Inc., a copy of
which is available for inspection at the offices of Orphan Medical,
Inc. Transfer may not be made except in accordance with the terms of
the Common Stock Purchase Warrant. In addition, no sale, offer to
sell or transfer of the Shares represented by this certificate shall
be made without (i) the opinion of counsel satisfactory to Orphan
Medical, Inc. that such sale, offer or transfer may be made without
registration or qualification under the Federal Securities Act of
1933, as amended (the "Act"), and applicable state securities laws;
or (ii) such registration or qualification."
2. Negotiability and Transfer. This Warrant is issued upon the
following terms, to which each holder hereof consents and agrees:
(a) Until this Warrant is duly transferred on the books of the
Company, the Company may treat the registered holder of this Warrant
as absolute owner hereof for all purposes without being affected by
any notice to the contrary.
(b) Each successive holder of this Warrant, or of any portion
of the rights represented thereby, shall be bound by the terms and
conditions set forth herein.
EXHIBIT 10.52
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3. Antidilution Adjustments. If 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 the number
of Shares purchasable upon exercise of this Warrant, immediately preceding such
event, 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 and multiplying the result of
such division against the number of Shares purchasable upon the exercise of this
Warrant immediately preceding such event, so as to achieve an exercise price and
number of Shares purchasable after such event proportional to such exercise
price and number of Shares purchasable immediately preceding such event. All
calculations hereunder shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No fractional Shares are to be issued upon the exercise of this
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 Shares on the day of exercise as
determined in good faith by the Company.
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, which is 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
of the Warrant 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, merger or sale, the holder
had held the number of Shares which were then purchasable upon the exercise of
the Warrant. 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 of the Warrant, 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.
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
EXHIBIT 10.52
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(a) prepare and retain on file a statement describing in
reasonable detail the method used in arriving at the new exercise
price; and
(b) cause a copy of such statement to be mailed to the holder
of the Warrant as of a date within ten (10) days after the date when
the circumstances giving rise to the adjustment occurred.
4. Registration Rights. Prior to making any disposition of the
Warrant or of any Shares 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 (i)
the Company has notified him that, in the opinion of its counsel, registration
under the Act is not required with respect to such disposition, or (ii) a
Registration Statement covering the proposed distribution has been filed by the
Company and has become effective. The Company agrees that, upon receipt of
written notice from the holder hereof with respect to such proposed
distribution, it will use its best efforts, in consultation with the holder's
counsel, to ascertain as promptly as possible whether or not registration is
required, and will advise the holder promptly with respect thereto, and the
holder will cooperate in providing the Company with information necessary to
make such determination.
If, at any time prior to the expiration of seven (7) years from
January 1, 1999, the Company shall propose to file any Registration Statement
(other than any registration on Forms S-4, S-8 or any other similarly
inappropriate form) under the Securities Act of 1933, as amended, covering a
public offering of the Company's Shares or other shares of Common Stock, it will
notify the holder hereof at least thirty (30) days prior to each such filing and
will include in the Registration Statement (to the extent permitted by
applicable regulation), the Shares purchased by the holder or purchasable by the
holder upon the exercise of the Warrant to the extent requested by the holder
hereof. Notwithstanding the foregoing, the number of Shares of the holders of
the Warrants proposed to be registered thereby shall be reduced pro rata with
any other selling shareholder (other than the Company) upon the reasonable
request of the managing underwriter of such offering.
At any time prior to the expiration of five (5) years from January
1, 1999, and provided that a registration statement on Form S-3 (or its
equivalent) is then available to the Company, and on a one-time basis only, if
the holders of 50% or more of the Warrants and/or the Shares acquired upon
exercise of the Warrants request the registration of at least 51% of the Shares
on Form S-3 (or its equivalent), the Company shall promptly thereafter use its
best efforts to effect the registration under the Securities Act of 1933, as
amended, of all such shares which such holders request in writing to be so
registered, and in a manner corresponding to the methods of distribution
described in such holders' request (and with respect to the "demand"
registration rights referred to immediately above, on a one-time basis only);
provided, however, that the Company may postpone taking action with respect to a
requested registration or may require that holders of Shares cease making sales
under an effective registration for a reasonable period of time, not to exceed
180 days, if, in the good faith opinion of the Board of Directors of the
EXHIBIT 10.52
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Company, effecting the registration or allowing such sales would adversely
affect or require the premature disclosure of information the disclosure of
which would have an adverse effect on the Company.
All expenses of any such registrations referred to in this Section
4, except the fees of counsel to such holders and underwriting commissions or
discounts, filing fees, and any transfer or other taxes applicable to such
shares, shall be borne by the Company.
The Company will mail to each record holder, at the last known post
office address, written notice of any exercise of the rights granted under this
paragraph 4, by certified or registered mail, return receipt requested, and each
holder shall have twenty (20) 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. The Company will furnish the holder hereof 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. The Company will maintain, at its expense, the effectiveness of any
Registration Statement or the Offering Statement filed by the Company, whether
or not at the request of the holder hereof, for a time sufficient to allow for
the disposition of the Shares, but not to exceed ninety (90) days, following the
effective date thereof.
In the case of the filing of any Registration Statement, and to the
extent permissible under the Securities Act of 1933, as amended, and controlling
precedent thereunder, the Company and the holder hereof shall provide cross
indemnification agreements to each other in customary scope covering the
accuracy and completeness of the information furnished by each.
The holder of the Warrant agrees to cooperate with the Company in
the preparation and filing of any such Registration Statement or Offering
Statement, and in the furnishing of information concerning the holder for
inclusion therein, or in any efforts by the Company to establish that the
proposed sale is exempt under the Act as to any proposed distribution.
Shares shall cease to be entitled to the registration rights set
forth in this Section 4 when they (i) shall have been disposed of pursuant to an
effective registration statement under the Securities Act, or (ii) they shall
have been distributed to the public pursuant to Rule 144 promulgated under the
Securities Act.
5. Right to Convert.
(a) The holder of this Warrant shall have the right to require
the Company to convert this Warrant (the "Conversion Right") into
shares of Common Stock as provided for in this Section 5. Upon
exercise of the Conversion Right, the Company shall deliver to the
holder (without payment by the holder of any exercise price) that
number of shares of Common Stock equal to the number of shares of
Common Stock resulting from multiplying the number of shares
requested to be converted hereunder times the quotient
EXHIBIT 10.52
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obtained by dividing (x) the value of the Warrant at the time the
Conversion Right is exercised (determined by subtracting the
aggregate exercise price for the Warrant Shares in effect
immediately prior to the exercise of the Conversion Right from the
aggregate Fair Market Value (as determined below) for the Warrant
Shares immediately prior to the exercise of the Conversion Right) by
(y) the Fair Market Value of one share of Common Stock immediately
prior to the exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the holder, at
any time or from time to time, prior to its expiration, on any
business day, by delivering a written notice (the "Conversion
Notice") to the Company at the offices of the Company exercising the
Conversion Right and specifying (i) the total number of shares of
Stock the Warrant holder will purchase pursuant to such conversion,
and (ii) a place, and a date not less than five (5) nor more than
twenty (20) business days from the date of the Conversion Notice for
the closing of such purchase.
(c) At any closing under Section 5(b) hereof, (i) the holder
will surrender the Warrant, (ii) the Company will deliver to the
holder a certificate or certificates for the number of shares of
Common Stock issuable upon such conversion, together with cash, in
lieu of any fraction of a share, and (iii)the Company will deliver
to the holder a new Warrant representing the number of shares, if
any, with respect to which the Warrant shall not have been
converted.
(d) "Fair Market Value" of a share of Common Stock as of a
particular date (the "Determination Date") shall mean:
(i) If the Company's Common Stock is traded on an
exchange or is quoted on the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ")
National or Small-Cap Market, then the average closing or last
sale prices, respectively, reported for the ten (10) business
days immediately preceding the Determination Date.
(ii) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ National or Small-Cap Market, but is
traded in the over-the-counter market, then the average of the
closing bid and asked prices reported for the ten (10)
business days immediately preceding the Determination Date.
6. Notices. The Company shall mail to the registered holder of the
Warrant, at his or her last known post office address appearing on the books of
the Company, not less than fifteen (15) days prior to the date on which (a) a
record will be taken for the purpose of determining the holders of Shares
entitled to dividends (other than cash dividends) or subscription rights, or (b)
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
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shareholders at which any capital reorganization, reclassification 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.
7. Reservation of Common Stock. A number of shares of Common Stock
sufficient to provide for the exercise of the Warrant and the Shares included
therein upon the basis herein set forth shall at all times be reserved for the
exercise thereof.
8. 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 that has a fixed limit on
dividends or a payment preference 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 or 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 hereof against dilution.
Upon written request of the holder of this Warrant, 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 of"
include the immediate holder of shares purchased on the exercise of this
Warrant, and the word "holder" shall include the plural thereof. This Common
Stock Purchase Warrant shall be interpreted under the laws of the State of
Minnesota.
All Shares or other securities issued upon the exercise of the
Warrant shall be validly issued, fully paid and non-assessable, and the Company
will pay all taxes in respect of the issuer thereof.
Notwithstanding anything contained herein to the contrary, the
holder of this Warrant shall not be deemed a stockholder of the Company for any
purpose whatsoever until and unless this Warrant is duly exercised.
EXHIBIT 10.52
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IN WITNESS WHEREOF, this Warrant has been duly executed by Orphan
Medical, Inc., this 1st day of January, 1999.
ORPHAN MEDICAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: CEO
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EXHIBIT 10.52
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WARRANT EXERCISE FORM
To be signed only upon exercise of Warrant.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________ of the Shares of Orphan Medical, Inc. to which
such Warrant relates and herewith makes payment of $ _____________, therefor in
cash or by certified check, and requests that such shares be issued and be
delivered to, ______________________________, the address for which is set forth
below the signature of the undersigned.
Dated: _____________________
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(Taxpayer's I.D. Number) (Signature)
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(Address)
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ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto _____________________ the right to purchase Shares of Orphan Medical, Inc.
to which the within Warrant relates and appoints ____________________________,
attorney, to transfer said right on the books of Orphan Medical, Inc. with full
power of substitution in the premises.
Dated: _______________________
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(Signature)
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(Address)