Exhibit 4.6


 


 


THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAW.  THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES WILL BE
MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH REGISTRATION
OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.


 


 


HYPERTENSION DIAGNOSTICS, INC.,


A Minnesota corporation


 


PREFERRED STOCK PURCHASE WARRANT


 


Date of
Grant:                  


Warrant No.
[A/B/C]    


 


Hypertension Diagnostics, Inc.,
a Minnesota corporation (the “Company”),
hereby agrees that, for value received,
                                                          ,  or its permitted registered assigns (the “Holder”)is entitled, subject to the terms set forth below, to purchase from the
Company at any time or from time to time after the date set forth above, and
for the term set forth in Section 1 hereof,
                              (           )
shares (the “Warrant Shares”) of
the fully paid and nonassessable shares of Series A Convertible Preferred
Stock, $0.01 par value per share, of the Company, subject to adjustment as
provided herein (the “Series A Preferred
Stock”) ,at the exercise price of [$2.04/$2.64/$3.60] per share,
subject to adjustment as provided herein (the “Exercise Price”).  The
term “Warrant” as used herein
shall be deemed to include any warrant issued upon transfer or partial exercise
of this warrant, unless the context clearly requires otherwise.  This Warrant is being issued pursuant to
that certain Securities Purchase Agreement, of even date herewith between the
Company and Holder (the “Securities Purchase
Agreement”), and in connection with the Shareholders’ Agreement,
dated as of August    , 2003, by and among the Company and
holders of the Series A Preferred Stock (the “Shareholders’
Agreement”), and the Registration Rights Agreement, dated as of
August    , 2003, by and among the Company and holders of the
Series A Preferred Stock (the “Registration
Rights Agreement”).


 


1.                                      Term.


 


The purchase right represented by this Warrant is exercisable, in whole
or in part, at any time and from time to time from the Date of Grant through
and including the close of business on
                          ,
20      (the “Expiration
Date”).


 


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2.                                      Exercise
of Warrant.


 


(a)                                  Method
of Exercise; Payment; Issuance of New Warrant.  The purchase right represented by this Warrant may 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, except as otherwise
provided for herein, by the payment to the Company of an amount equal to the
then applicable Exercise Price multiplied by the number of Warrant Shares then
being purchased.  The person or persons
in whose name(s) any certificate(s) representing shares of Series A Preferred
Stock shall be issuable upon exercise of this Warrant shall be deemed to have
become the holder(s) of record of, and shall be treated for all purposes as the
record holder(s) of, the shares represented thereby (and such shares shall be
deemed to have been issued) immediately prior to the close of business on the
date or dates upon which this Warrant is exercised if exercised prior to the
close of business on such date; 
otherwise, the date of record shall be the next business day.  In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Series A Preferred
Stock so purchased shall be delivered to the Holder as soon as possible and in
any event within thirty (30) days after such exercise and, unless this Warrant
has been fully exercised (including without limitation, exercise pursuant to
Section 2(b) below), a new Warrant representing the portion of the Warrant
Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder as soon as possible and in any
event within such thirty (30)-day period.


 


(b)                                 Broker
Assisted Cashless Right to Convert Warrant into Series A Preferred Stock.  In addition to and without limiting the
rights of the Holder under the terms of this Warrant, the Holder shall have the
right to convert this Warrant or any portion thereof (the “Conversion Right”) into shares of Series A
Preferred Stock as provided in this Section 2(b) at any time or from time to
time during the term of this Warrant, by delivering to a broker the notice of
exercise form attached hereto as Exhibit A, duly executed, together with
Holder’s irrevocable instructions to the Company to deliver the Warrant Shares
being exercised (the “Converted Warrant
Shares”) to the broker against the broker’s simultaneous payment to
the Company of the Exercise Price.  Upon
receipt of such documentation, the broker shall sell for Holder’s account such
number of shares of stock necessary to satisfy the Exercise Price, including
applicable tax and withholding obligations. 
When the broker receives the cash proceeds from such sale, the broker
will forward such proceeds to the Company against simultaneous delivery by the
Company of the Converted Warrant Shares to the broker.


 


3.                                      Adjustment
of Exercise Price and Number of Shares.  The number and kind of securities purchasable upon the exercise
of this Warrant and the Exercise Price shall be subject to adjustment from time
to time upon the occurrence of certain events, as follows:


 


(a)                                  Adjustments
to Exercise Price for Dividends, Reclassifications, etc.  If the Company, at any time while this
Warrant is outstanding and unexpired, shall (A) pay a stock dividend or
otherwise make a distribution or distributions on shares of its Series A
Preferred Stock payable in shares of Series A Preferred Stock, (B) subdivide
outstanding shares of Series A Preferred Stock into a larger number of shares,
(C) combine outstanding shares of Series A Preferred Stock into a smaller
number of shares, (D) issue by reclassification of shares of Series


 


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A Preferred Stock any shares of capital stock of the Company, or (E)
consolidate or merge into another entity (where the Company is not the
surviving entity or where there is a change in or distribution with respect to
the Series A Preferred Stock), the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Series A
Preferred Stock outstanding before such event and of which the denominator
shall be the number of shares of Series A Preferred Stock outstanding after
such event.  Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the record date
for the determination of shareholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination, reclassification or merger.


 


(b)                                 Notice
of Adjustments.  Whenever the
Exercise Price or the number of Warrant Shares purchasable hereunder shall be
adjusted pursuant to Section 3 hereof, the Company shall make a certificate
signed by its chief financial officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Exercise Price and the number of
Warrant Shares purchasable hereunder after giving effect to such adjustment,
which shall be mailed to the Holder.


 


4.                                      Fractional
Shares.  Unless the Holder
specifies otherwise, the Company shall issue fractional shares of Series A
Preferred Stock (carried out to three (3) decimal places) upon exercise of this
Warrant.  At the option of the Holder,
the Holder may require that the Company, instead of issuing any fractional
shares of Series A Preferred Stock which would otherwise be issuable upon
exercise of this Warrant, pay a cash adjustment in respect of such fractional
share in an amount equal to the product of such fraction multiplied by the Fair
Market Value (as defined in the Certificate of Designation, Preferences and
Rights of Series A Preferred Stock (the “Certificate of Designation”))  of one share of Series A Preferred Stock on
the date of exercise.


 


5.                                      Restrictions on Transferability; Transfer.


 


(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)                                 Prior
to making any disposition of the Warrant or of any Series A Preferred Stock
purchased upon exercise of the Warrant, the Holder shall give written notice to
the Company describing briefly the manner of any such proposed disposition.


 


(c)                                  The
Holder shall not make any such disposition until (i) the Company has notified
the Holder that, in the opinion of its counsel, registration under the
Securities Act of 1933, as amended (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.  Notwithstanding
the foregoing, the Holder may transfer the Warrant to holders of the Series A Preferred
Stock.


 


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(d)                                 The
Company agrees that, upon receipt of written notice from the Holder with
respect to a proposed disposition, 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.


 


(e)                                  Transfer
of this Warrant is subject to the terms and conditions of the Shareholders’
Agreement and the Registration Rights Agreement. No transfer shall be effective
unless the prospective transferee agrees to be bound by, and delivers to the
Company an executed counterpart to, each of the Shareholders’ Agreement and the
Registration Rights Agreement.


 


(f)                                    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.


 


6.                                      Representations
and Warranties.  The Company
represents and warrants to the Holder as of the Date of Grant as follows:


 


(a)                                  This
Warrant has been duly authorized and executed by the Company and is a valid and
binding obligation of the Company enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and the rules of law or principles at equity governing
specific performance, injunctive relief and other equitable remedies;


 


(b)                                 The
rights, preferences, privileges and restrictions granted to or imposed upon the
Series A Preferred Stock and the holders thereof are as set forth in the
Articles of Incorporation of the Company, as amended to the Date of Grant, and
the Certificate of Designation (as so amended, the “Articles”), a true and complete copy of which has been made
available to the original holder of this Warrant;


 


(c)                                  The
execution and delivery of this Warrant are not, and the issuance of the Warrant
Shares upon exercise of this Warrant in accordance with the terms hereof will
not be, inconsistent with the Articles or by-laws of the Company, do not and
will not contravene, in any material respect, any governmental rule or
regulation, judgment or order applicable to the Company, and do not and will
not conflict with or 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 or filing with or the taking of any
action in respect of or by, any federal, state or local government authority or
agency or other person, except for the filing of notices pursuant to federal
and state securities laws, which filings will be effected by the time required
thereby; and


 


(d)                                 There
are no actions, suits, audits, investigations or proceedings pending or, to the
knowledge of the Company, threatened against the Company in any court or before
any governmental commission, board or authority which, if adversely determined,
will have a


 


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material adverse effect on the ability of the Company to perform its
obligations under this Warrant.


 


7.                                      Notices.


 


(a)                                  All
notices under this Warrant shall be in writing and shall be delivered by first
class mail, postage prepaid.  Any notice
addressed to the Holder shall be delivered to the address designated by the
Holder in the Securities Purchase Agreement, as may be changed from time to
time upon ten (10) days written notice by the Holder, and any notice addressed
to the Company shall be delivered to its principal office.


 


(b)                                 The
Holder shall be entitled to receive a notice from the Company not less than ten
(10) days prior to the date on which (a) a record will be taken for the purpose
of determining the holders of Series A Preferred Stock 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 Series A Preferred Stock entitled to notice of
and to vote at a meeting of shareholders at which any capital reorganization,
reclassification of shares of Common Stock or Series A Preferred Stock,
consolidation, merger, dissolution, liquidation, winding up or sale of
substantially all of the Company’s assets shall be considered and acted
upon.  The Holder shall also be entitled
to receive such as otherwise provided in this Warrant.


 


8.                                      Reservation of Preferred Stock.  All Warrant Shares that may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance
pursuant to the terms and conditions herein, be fully paid and nonassessable,
and free from all taxes, liens, charges, and pre-emptive rights with respect to
the issue thereof.  The Company shall
pay all transfer taxes, if any, attributable to the issuance of the Warrant
Shares upon the exercise of this Warrant. 
During the period within which this Warrant may be exercised, the
Company will at all times have authorized, and reserved for the purpose of the
issue upon exercise of the purchase rights evidenced by this Warrant, a
sufficient number of shares of its Series A Preferred Stock to provide for the
exercise of the rights represented by this Warrant.


 


9.                                      Modification
and Waiver.  This Warrant and
any provision hereof may be changed, waived, discharged or terminated only by
an instrument in writing signed by the party against which enforcement of the
same is sought.


 


10.                               Binding
Effect on Successors.  This
Warrant shall be binding upon any corporation succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s
assets, and all of the obligations of the Company relating to the Series A
Preferred Stock issuable upon the exercise or conversion of this Warrant shall
survive the exercise, conversion and termination of this Warrant and all of the
covenants and agreements of the Company shall inure to the benefit of the successors
and assigns of the Holder.  The Company
will, at the time of the exercise or conversion of this Warrant, in whole or in
part, upon request of the Holder but at the Company’s expense, acknowledge in
writing its continuing obligation to the Holder in respect of any rights to
which the Holder shall continue to be entitled after such exercise or
conversion in accordance with this Warrant; provided, that the failure of the
Holder


 


5

















 


to make any such request shall not affect the continuing obligation of
the Company to the Holder in respect of such rights.


 


11.                               Lost
Warrants or Stock Certificates. 
The Company covenants to the Holder 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
loss, theft or destruction, upon receipt of an executed lost securities bond or
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, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.


 


12.                               Descriptive
Headings.  The descriptive
headings of the several paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant.


 


13.                               Governing
Law.  The validity,
interpretation and performance of this Warrant shall be governed by, and
construed in accordance with, the laws of the State of Minnesota applicable to
contracts made and to be performed entirely within such state, regardless of
the law that might be applied under principles of conflicts of law.


 


14.                               Remedies.  In case any one (1) or more of the covenants
and agreements contained in this Warrant shall have been breached, the Holder
(in the case of a breach by the Company), or the Company (in the case of a
breach by the Holder), may proceed to protect and enforce their or its rights
either by suit in equity and or by action at law, including, but not limited
to, an action for damages as a result of any such breach and or an action for
specific performance of any such covenant or agreement contained in this
Warrant.


 


15.                               No
Impairment of Rights.  The
Company will not, by amendment of its Articles or through any other means,
avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against material
impairment.


 


16.                               No
Voting Rights.  Notwithstanding
anything contained herein to the contrary, the Holder shall have no right to
vote on any matters coming before the shareholders of the Company for any
purpose whatsoever until and unless this Warrant is duly exercised.


 


 


IN WITNESS WHEREOF,
this Warrant has been duly executed by Hypertension Diagnostics, Inc. as of the
     day of
                ,
2003.


 


	
   

  	
  Hypertension Diagnostics, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Greg H. Guettler, President

  
					



 


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EXHIBIT A


 


WARRANT EXERCISE FORM


 


To be signed only upon exercise of Warrant.


 


The undersigned, the holder of the attached
Preferred Stock Purchase Warrant (the “Warrant”),
hereby irrevocably elects to exercise the purchase right represented by this
Warrant for, and to purchase thereunder,
                                          
of the shares of Series A Preferred Stock of Hypertension Diagnostics, Inc. to
which this 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:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Taxpayer’s I.D. Number)

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  



 


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