EXHIBIT 4.1
AGREEMENT TO AMEND TERMS
This Agreement to Amend Terms ("Agreement"), dated as of
January 22, 1999 (the "Effective Date"), is by and between
Selfcare, Inc. (the "Company") and each of the undersigned
holders (the "Holders") of the Company's Series B Convertible
Preferred Stock (the "Preferred Stock") and the Warrants issued
by the Company on August 26, 1997 (the "Warrants").
The terms of the Preferred Stock are set forth in a
Certificate of Designations, Preferences and Rights that was
filed by the Company with the Secretary of State of the State of
Delaware on August 26, 1997 (the "Certificate of Designation").
The Company issued the Preferred Stock and the Warrants to the
Holders pursuant to the terms of a Securities Purchase Agreement,
dated as of August 26, 1997 (the "Securities Purchase
Agreement").
The Company and the Holders wish to amend the terms of the
Certificate of Designation upon the terms and subject to the
conditions set forth herein and, in connection therewith, to
agree to certain other matters relating to the Preferred Stock
and the Warrants.
In consideration of the agreements set forth herein and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. STOCKHOLDER APPROVAL; AMENDMENT OF CERTIFICATE OF
DESIGNATION; LISTING. The Company agrees to file, as promptly as
reasonably practicable following the Effective Date (but in no
event later than February 5, 1999), (A) proxy solicitation
materials (the "Proxy Materials") with the Securities and
Exchange Commission (the "SEC") seeking such approvals of the
Company's stockholders as may be necessary in order to (i) amend
the Certificate of Designation in accordance with the terms of
the amendment to the Company's Certificate of Incorporation
attached hereto as Exhibit A (the "Amendment") and (ii) allow the
Company to issue shares of the Company's Common Stock (the
"Common Stock") upon conversion of shares of Preferred Stock in
excess of the Cap Amount (as defined in the Certificate of
Designation) and list on the American Stock Exchange ("AMEX") an
appropriate number of shares of Common Stock issuable upon
conversion of all outstanding shares of Preferred Stock (such
approvals being collectively referred to herein as "Stockholder
Approval") and (B) a draft of a listing application with AMEX
requesting that no less than 2,600,000 additional shares of
Common Stock issuable upon conversion of the Preferred Stock be
approved for listing. The Company agrees to use its reasonable
best efforts to call and hold a meeting of its stockholders (the
"Stockholder Meeting") for the purpose of voting on the proposals
set forth in the Proxy Materials on or before March 31, 1999;
provided, however, that in the event the SEC reviews the Proxy
Materials, such time period shall be extended to April 30, 1999
(such March 31 or April 30 being referred to herein as the
"Stockholder Approval Deadline"). The Company shall, no later
than the second Business Day immediately following the date on
which the Company obtains Stockholder Approval, file the
Amendment pursuant to Section 242 of the Delaware General
Corporation Law, it being understood, however, that no amendment
or change to the Company's Certificate of Incorporation shall be
made unless and until the Corporation has obtained Stockholder
Approval and all approvals necessary in order to list the number
of shares of Common Stock specified above on AMEX has been
obtained on or prior to the Stockholder Approval Deadline.
"Business Day" shall mean any day on which the New York Stock
Exchange, AMEX and commercial banks located in the city of New
York are open for business.
2. STANDSTILL AND WAIVER BY HOLDERS. Each Holder agrees as
follows:
(a) During the period beginning on the date hereof and
ending on the earlier to occur of (A) the Approval Date (as
defined below) and (B) the date on which this Agreement
terminates, such Holder will refrain from converting any shares
of Preferred Stock to the extent that the number of shares of
Common Stock issuable upon such conversion, when added to the
number of shares of Common Stock previously issued to such Holder
upon prior conversions of Preferred Stock, would exceed such
Holder's Cap Amount (as defined in the Certificate of
Designation). For purposes hereof, "Approval Date" shall mean
the first date by which each of the following events has
occurred: (i) the Company has obtained Stockholder Approval,
(ii) AMEX has listed the shares of Common Stock (subject to
official notice of issuance) covered by the listing application
described in Section 1 above, and (iii) all other approvals and
filings that are necessary in order to effect the amendments to
the Certificate of Designation and the listing of the shares of
Common Stock contemplated hereby and to permit the conversion of
all of the outstanding shares of Preferred Stock have been
obtained or made. Notwithstanding the terms of the Certificate
of Designation, during the period beginning on the date hereof
and ending on the earlier to occur of (i) the Approval Date and
(ii) the date on which this Agreement terminates, the Conversion
Price (as defined in the Certificate of Designation) applicable
to any conversion shall equal the greater of (x) the Variable
Conversion Price (as defined in the Certificate of Designation)
in effect as of such date, and (y) $2.00 (subject to adjustment
as provided in Article XI of the Certificate of Designation).
Such Holder agrees that this Section 2(a) shall be binding on any
transferee, permitted or otherwise, of such Holder's shares of
Preferred Stock and, prior to or contemporaneous with any sale or
other transfer of such shares, such Holder will obtain from the
transferee its written agreement (to which the Company shall also
be a party) to be bound by the terms of this Section 2(a), and
any such sale or transfer shall not become effective unless and
until such written agreement is obtained.
(b) Such Holder will refrain from delivering a Redemption
Notice (as defined in the Certificate of Designation) pursuant to
Article VII.A of the Certificate of Designation unless (i) the
Approval Date does not occur prior to the third Business Day
following the Stockholder Approval Deadline (the "Approval
Expiration Date") or (ii) this Agreement terminates. Such Holder
will regain the right to deliver a Redemption Notice pursuant to
and in accordance with Article VII.A of the Certificate of
Designation, in the case of clause (i) above, from and after the
Approval Expiration Date and, in the case of clause (ii) above,
from and after the effective date of such termination.
(c) During the period beginning on the date hereof and
ending on the earlier to occur of (i) the Approval Expiration
Date and (ii) the date on which this Agreement terminates, such
Holder will refrain from pursuing any claim (including without
limitation any claims with respect to Article VII of the
Certificate of Designation) that it may have against the Company
as a result of any default, potential default or alleged default
on the part of the Company which (x) exists on the date hereof or
arises on or prior to the Approval Expiration Date under the
Certificate of Designation, the Securities Purchase Agreement or
the Registration Rights Agreement (as defined in the Securities
Purchase Agreement), and (y) would be cured upon the Company
obtaining Stockholder Approval and listing shares of Common Stock
on AMEX as contemplated by the terms of this Agreement (any such
default being referred to herein as a "Qualified Default").
(d) Such Holder will, promptly upon receiving a written
request from the Company at any time following the Approval Date
(as long as the Approval Date occurs prior to the Approval
Expiration Date), promptly execute and deliver a written release
to the Company covering any and all claims that such Holder may
have as a result of any Qualified Default.
(e) Such Holder waives any rights under the Warrants
relating to antidilution adjustments that would arise as a result
of (i) the issuance of the Amended and Restated Subordinated
Convertible Notes dated January 11, 1999 (the "Notes") or the
conversion thereof in accordance with the terms specified in
Exhibit A to the letter agreement, dated January 7, 1999 (the
"Letter Agreement") by and among the Company and the Holder, (ii)
the issuance of the Company's Series C, D or E Preferred Stock or
the conversion of such preferred stock in accordance with the
terms specified in Exhibit B to the Letter Agreement, or (iii)
the transactions contemplated hereby, including the issuance of
any shares of Common Stock upon conversion of any shares of
Preferred Stock; provided, however, that such waiver shall expire
in the event that this Agreement terminates prior to the Approval
Expiration Date. Following each Holder's receipt of the
Company's written request therefor, each Holder will promptly
deliver its Warrant to the Company upon tender by the Company of,
and in exchange for, an amended warrant that will be identical in
all respects to such Warrant except that such amended warrant
will provide that the holder thereof shall have no rights
relating to antidilution adjustments as provided in this
paragraph (e).
3. WAIVER BY COMPANY. The Company agrees that it will refrain
from delivering to any Holder either (i) an Optional Redemption
Notice (as defined in the Certificate of Designation) pursuant to
Article VIII.B of the Certificate of Designation or (ii) a
Mandatory Conversion Notice (as defined in the Certificate of
Designation) pursuant to Article IV.E of the Certificate of
Designation unless this Agreement terminates prior to the
Approval Expiration Date and, in the event of such termination,
the Company will continue to refrain from delivering either an
Optional Redemption Notice or a Mandatory Conversion Notice until
the expiration of ten (10) Business Days from the date on which
such termination occurs (assuming in such case that the Company
is entitled on the date of the delivery of such notice to deliver
such notice pursuant to the terms of the Certificate of
Designation).
4. TERMINATION. This Agreement shall terminate automatically
upon the occurrence of any of the following events (unless a
waiver thereof is delivered by each Holder to the Company):
(a) the Company fails to file the Proxy Materials with the
SEC on or before February 5, 1999;
(b) the Company fails to obtain Stockholder Approval on or
before the Stockholder Approval Deadline;
(c) the Approval Date does not occur prior to the Approval
Expiration Date;
(d) as of the Approval Date, a registration statement is
not effective and available to each Holder for the
resale of all of the shares of Common Stock issuable
upon (i) conversion of all of the shares of Preferred
Stock and (ii) exercise of all of the Warrants then
held by such Holder (assuming such conversion or
exercise were to occur as of the Approval Date and
without regard to any limitation on such conversion or
exercise that might otherwise exist);
(e) a Redemption Event (as defined in the Certificate of
Designation) occurs, other than a Redemption Event
arising under subparagraph (i) of Article VIII.A of the
Certificate of Designation as a result of the failure
by the Company to have a sufficient number of shares of
Common Stock listed for trading on the exchanges or
market specified in such subparagraph (i).
(f) the Company breaches any of its material obligations
hereunder and such breach is not cured within five (5)
Business Days following receipt by the Company of
written notice from any holder of Preferred Stock then
outstanding; or
(g) each Holder fails to receive, on or before February 5,
1999, the written agreement of each officer or director
of the Company who beneficially owns at least 100,000
shares of Common Stock to vote the shares of Common
Stock beneficially owned by such person on, and
outstanding on, the record date for the Stockholder
Meeting in favor of (i) the issuance of shares of
Common Stock in excess of the Cap Amount (as defined in
the Certificate of Designation) and (ii) the filing of
the Amendment.
Upon the termination of this Agreement, no party shall have
any further obligation hereunder to any other party and each
party shall retain all rights and remedies it may have at law or
in equity under the Certificate of Designation, the Securities
Purchase Agreement or the Registration Rights Agreement. Nothing
contained herein shall affect the rights or remedies available to
the Company, on the one hand, or any Holder, on the other hand,
in the event of a breach of any term hereof by a Holder or the
Company, as the case may be.
5. REPRESENTATIONS OF THE PARTIES. The Company hereby
represents and warrants to each Holder, and each Holder hereby
represents to the Company, that (i) such party has the requisite
power and authority (corporate or otherwise) to enter into and
perform its obligations under this Agreement, (ii) this Agreement
constitutes the valid and legally binding agreement of such
party, enforceable against such party in accordance with its
terms and (iii) neither this Agreement nor the performance by it
of its obligations hereunder will, in any such case, result in
any violation of any provisions of its charter, bylaws or any
other governing document as amended and in effect on and as of
the date hereof or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a
default under any provision of any instrument or contract to
which it is a party or by which it is bound, or of any provision
of any Federal or state judgment, writ, decree, order, statute,
rule or governmental regulation applicable to it, or an event
which results in the creation of any lien, charge or encumbrance
upon any of its or of any of its subsidiaries' assets.
6. REPRESENTATIONS AND AGREEMENTS OF THE COMPANY. The Company
represents and warrants to, and agrees with, each Holder that (i)
each document or report (a "Disclosure Document") filed by the
Company with the SEC since December 31, 1997 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as of the
date of the filing thereof with the SEC, conformed in all
material respects to the requirements of the Exchange Act, and
the rules and regulations thereunder and, as of the date of such
filing, such Disclosure Document did not contain an untrue
statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, (ii) the Company has issued and sold the
Notes and the Series C, D and E Preferred Stock, and has not
granted any registration rights with respect to the Series C, D
or E Preferred Stock or the securities into which such preferred
stock is convertible and (iii) the capitalization of the Company,
including its authorized capital stock and the number of shares
issued and outstanding, is set forth on Exhibit B hereto.
7. OPINION OF COUNSEL. The Company agrees that, promptly
following the filing of the Amendment, the Company shall deliver
to each Holder an opinion of counsel addressed to such Holder and
stating that, in reliance on a certificate received from the
Secretary of State of the State of Delaware, the Amendment has
been duly filed and is effective as of the date of such opinion.
8. HEADINGS. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.
9. NOTICES. Any notice, demand or request required or
permitted to be given by any party to any other party pursuant to
the terms of this Agreement shall be in writing and shall be
deemed given (i) when delivered personally or by verifiable
facsimile transmission (with an original to follow) on or before
5:00 p.m., eastern time, on a Business Day or, if such day is not
a Business Day, on the next succeeding Business Day, (ii) on the
next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) upon actual
receipt after deposit in the U.S. mail (certified or registered
mail, return receipt requested, postage prepaid), addressed to
the parties as follows:
If to the Company:
Selfcare, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, P.C. and Xxxxxx Xxxxxxxxxx,
III, P.C.
and if to any Holder, to such address for such Holder as appears
in the Securities Purchase Agreement or as may be designated by
such Holder in writing to the Company.
10. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes
the entire agreement between the parties with regard to the
amendment to the matters described herein, superseding all prior
agreements or understandings, whether written or oral, between or
among the parties, other than the Securities Purchase Agreement,
the Registration Rights Agreement (as defined in the Securities
Purchase Agreement), the Warrants and the other agreements and
documents executed and/or delivered by the Company under or in
connection with the Securities Purchase Agreement, the
Registration Rights Agreement, the Certificate of Designation or
the Warrants. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended except pursuant to a
written instrument executed by the Company and the holders of at
least two-thirds (_) of the shares of Preferred Stock then
outstanding, and no provision hereof may be waived other than by
a written instrument signed by the party against whom enforcement
of any such waiver is sought.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first-above written.
SELFCARE, INC.
By: /s/ Xxx Xxxxxxxxx
-----------------------
Name: Xxx Xxxxxxxxx
Title: President and Chief
Executive Officer
HOLDER NAME: Xxxxxxxx Capital Management Inc.
---------------------------------
By: /s/ Xxxxx Xxxxx
-----------------
Name: Xxxxx Xxxxx
Title: President
HOLDER NAME: CC Investments, LDC
--------------------
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxxxx
Title: Director
HOLDER NAME: Capital Ventures International
------------------------------
By: Heights Capital Management, its
-----------------------------------
authorized agent
----------------
By: /s/ Xxxxxxx Xxxxxx
-------------------
Name: Xxxxxxx Xxxxxx
Title: General Counsel and Secretary
Exhibit A to
Agreement to
Amend Terms
CERTIFICATE OF AMENDMENT
TO
THE CERTIFICATE OF INCORPORATION
OF
SELFCARE, INC.
(Pursuant to Section 242 of the
Delaware General Corporation Law)
Selfcare, Inc., a Delaware corporation (the "Corporation"),
hereby certifies that the following amendment to the
Corporation's Certificate of Incorporation (the "Amendment") has
been duly adopted in accordance with Section 242 of the Delaware
General Corporation Law.
The Certificate of Designations, Preferences and Rights of
the Series B Convertible Preferred Stock filed by the Corporation
with the Secretary of State of the State of Delaware on August
26, 1997 and incorporated into the Corporation's Certificate of
Incorporation (the "Certificate") is hereby amended as follows:
1. In Article I of the Certificate, the words "One
Thousand U.S. Dollars ($1,000)" SHALL BE DELETED AND
REPLACED WITH THE WORDS "[THE AMOUNT TO BE INSERTED
WILL BE EQUAL TO THE PRODUCT OF (A) $1,000 PLUS PREMIUM
ON EACH SHARE OF PREFERRED STOCK ACCRUED TO, BUT NOT
INCLUDING, THE DATE OF THE AMENDMENT TIMES (B) 1.15]".
2. Paragraph D of Article III of the Certificate shall be
deleted in its entirety and replaced with the
following:
"`Conversion Price' means (i) on any date occurring
from and after [THE DATE OF THE AMENDMENT] through and
including July 20, 1999, the Fixed Conversion Price;
and (ii) on any date occurring after July 20, 1999, the
lower of (A) the Variable Conversion Price and (B) the
Fixed Conversion Price; provided, however, that in the
event that at any time following [THE DATE OF THE
AMENDMENT] the Closing Bid Price for a share of Common
Stock exceeds $3.25 (subject to equitable adjustment
for the events specified in Article XI, A and B) for a
period of ten (10) consecutive trading days and the
Corporation delivers to each Holder, in accordance with
the provisions of this Certificate relating to the
delivery of notice, written notice of the occurrence of
such event within five (5) Business Days after the
tenth such trading day, "Conversion Price" shall mean,
from and after the effective date specified in such
notice, which date shall be at least thirty (30) days
after delivery of such notice to each Holder, the Fixed
Conversion Price, it being understood that after the
date of such delivery and prior to such effective date,
each Holder shall have the right to convert shares of
Series B Preferred Stock at any time and from time to
time at the lower of (A) the Variable Conversion Price
and (B) the Fixed Conversion Price."
3. Article III of the Certificate shall be amended as
follows:
Paragraph E thereof shall be deleted in its entirety
and replaced with the following:
"E. `Fixed Conversion Price' means $2.00, and shall be
subject to adjustment as provided herein."
Paragraph H thereof shall be deleted in its entirety
and replaced with the following:
"H. `N' means the number of days from and including
[THE DATE OF THE AMENDMENT]."
4. In Section A of Article IV of the Certificate, the
formula described in clause (i) thereof shall be
deleted and replaced with the following:
FA + P
CP
where FA represents the Face Amount of such share of
Series B Preferred Stock,
P represents the aggregate Premium accrued on such
share of Series B Preferred Stock up to and including
the Conversion Date, and
CP represents the Conversion Price (as defined below)
in effect on the applicable Conversion Date.
5. In the first sentence of paragraph (i) of Section B of
Article IV of the Certificate, the following words
shall be inserted in the parenthetical after the words
"subject to a two (2) business day grace period":
"or, if the Corporation does not have a sufficient
number of shares of Common Stock listed on the
principal exchange or market on which the Common Stock
is then traded in order to effect the conversion of
Series B Preferred Stock, a five (5) business day grace
period"
6. Section C of Article IV of the Certificate shall be
amended as follows:
(i) In the first sentence of Section C, the words
"limitations (each of which limitations shall be
applied independently)" shall be deleted and
replaced with the word "limitation".
(ii) Paragraph (i) of Section C shall be deleted in its
entirety.
(iii) The number "(ii)" at the beginning of
paragraph (ii) of Section C shall be deleted.
7. Section E of Article IV of the Certificate shall be
amended so that the words "the Fixed Conversion Price
then in effect" appearing in subparagraph (iii)(a)
shall be deleted and replaced with "$13.9581 (subject
to equitable adjustment for the events specified in
Article XI, A and B)".
8. Article VII of the Certificate shall be deleted in its
entirety and replaced with the following:
"VII. [Intentionally Omitted]"
9. In subparagraph (iv) of Section B, Article VIII of the
Certificate, the parenthetical shall be amended so that
(i) the words "Articles V or VII" shall be deleted and
replaced with the words "Article V" and (ii) the words
"such Articles" shall be deleted and replaced with the
words "such Article".
10. Section B of Article VIII of the Certificate shall be
amended as follows:
(i) In the first sentence of paragraph VIII.B.(i), the
words "for any five (5) consecutive trading days
is less than $9.00" shall be deleted and replaced
with the words "for any ten (10) consecutive
trading days occurring after July 20, 1999 is less
than $2.00".
(ii) In the first sentence of paragraph VIII.B.(i), the
words "following the expiration of such five (5)
day period" shall be deleted and replaced with the
words "following the expiration of such ten (10)
day period".
(iii) In the last sentence of paragraph VIII.B.(i),
the words "115% of the Face Amount thereof" shall
be deleted and replaced with the words "the Face
Amount thereof".
11. In Section C of Article XIV of the Certificate, all
references to "Cap Amount" shall be deleted.
12. The following paragraph shall be added at the end of
Article XIV:
"NOTICES. Any notice, demand or request required or
permitted to be delivered by the Corporation to any Holder or by
any Holder to the Corporation pursuant to the terms of this
Certificate of Designation shall be in writing and shall be
deemed delivered (i) when delivered personally or by verifiable
facsimile transmission (with an original to follow) on or before
5:00 p.m., eastern time, on a Business Day or, if such day is not
a Business Day, on the next succeeding Business Day, (ii) on the
next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) upon actual
receipt after deposit in the U.S. mail (certified or registered
mail, return receipt requested, postage prepaid), addressed as
follows:
If to the Corporation:
Selfcare, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, P.C. and Xxxxxx Xxxxxxxxxx,
III, P.C.
and if to any Holder, to such address for such Holder as appears
in the Securities Purchase Agreement, dated as of August 26, 1997
by and among the Corporation and each of the purchasers named
therein, or as may be designated by such Holder in writing to the
Corporation."
Except as specifically amended hereby, the Certificate of
Incorporation (including without limitation the Certificate of
Designation) shall remain in full force and effect in accordance
with its terms. No amendment effected hereby shall apply to any
event or circumstance occurring prior to the date on which this
Amendment is filed with the Secretary of State of the State of
Delaware and has become effective in accordance with the laws of
the State of Delaware.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, this Certificate of Amendment has been
executed on behalf of the Corporation this ____ day of
_______________, 1999.
SELFCARE, INC.
By:
Name: _____________________
Title: ______________________
