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EXHIBIT 4.1
EXHIBIT J
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE
HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED OR QUALIFIED UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES
AN OPINION IN REASONABLY ACCEPTABLE FORM AND SCOPE TO THE COMPANY OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION, QUALIFICATION OR
OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER ANY SUCH LAWS. THE OFFERING OF
THIS SECURITY HAS NOT BEEN REVIEWED OR APPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE'S SECURITIES ADMINISTRATOR.
THIS WARRANT IS ALSO SUBJECT TO CERTAIN ADDITIONAL TRANSFER RESTRICTIONS
PROVIDED FOR HEREIN.
Dated: February 4, 1997
WARRANT
To Purchase an Aggregate of __________ Shares of
Common Stock of MEDAPHIS CORPORATION
Expiring April 1, 2008
THIS TO CERTIFY THAT, for value received, [NAME OF LENDER]
or any registered assigns ("Holder") is entitled to purchase from MEDAPHIS
CORPORATION, a Delaware corporation (the "Company"), at any time or from
time to time after 9:00 a.m., New York City time, on or after (i) January 1,
1998, with respect to ____ shares, as such number shall be adjusted from
time to time in accordance with Article IV hereof (collectively, the
"Initial Shares") and (ii) April 1, 1998, with respect to ____ shares, as
such number shall be adjusted from time to time in accordance with Article
IV hereof (collectively, the "Additional Shares"), and prior to 5:00 p.m.,
New York City time, on April 1, 2008, at the place where the Warrant Agency
is located, at the Exercise Price, the aggregate number of shares of common
stock, par value $.01 per share (the "Common Stock") of the Company shown
above, subject to adjustment as provided in Article 4 hereof and termination
as provided in Section 1.6 hereof, and upon the other terms and conditions
hereinafter provided, and is entitled also to exercise the other appurtenant
rights, powers and privileges hereinafter described.
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This Warrant is one of one or more warrants (the "Warrants") of
the same form and having the same terms as this Warrant, entitling the holders
initially to purchase up to an aggregate of 1,694,201 shares of Common Stock,
originally issued on the date hereof. The Warrants have been issued by the
Company pursuant to the $285,000,000 Second Amended and Restated Credit
Agreement dated as of February 4, 1997 (as amended from time to time, the
"Credit Agreement") among the Company, the Lenders listed on the signature
pages thereof and , as Agent for such Lenders, in consideration of
various loans, extensions of credit, and commitment to make the foregoing, to
the Company by such Lenders.
Certain terms used in this Warrant are defined in Article VI.
ARTICLE I
EXERCISE OF WARRANT
1.1. METHOD OF EXERCISE. To exercise this Warrant with
respect to any shares of Common Stock as to which this Warrant is then
exercisable in whole or in part, the Holder shall deliver on any Business Day
to the Company at the Warrant Agency (a) this Warrant, (b) a written notice of
the Holder's election to exercise this Warrant, which notice shall specify the
number of shares of Common Stock to be purchased (which shall be a whole number
of shares if for less than all the shares then issuable hereunder), the
denominations of the share certificate or certificates desired and the name or
names in which such certificates are to be registered, and (c) payment of the
Exercise Price with respect to such shares. Such payment may be made, at the
option of the Holder, either (a) by cash, certified or bank cashier's check or
wire transfer in an amount equal to the product of (i) the Exercise Price times
(ii) the number of Warrant Shares as to which this Warrant is being exercised
or (b) by receiving from the Company the number of Warrant Shares equal to (i)
the number of Warrant Shares as to which this Warrant is being exercised minus
(ii) the number of Warrant Shares having an aggregate value (determined by
reference to the average Closing Price of the Common Stock on the ten trading
days immediately prior to the date of such exercise), equal to the product of
(x) the Exercise Price times (y) the number of Warrant Shares as to which this
Warrant is being exercised.
The Company shall, as promptly as practicable and in any event
within seven days after receipt of such notice and payment, (i) forward a copy
of such notice to all other Warrantholders, and (ii) execute and deliver or
cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of shares of
Common Stock specified in said notice together with cash in lieu of any
fractions of a share as provided in Section 1.3. The share certificate or
certificates so delivered shall be in such denominations as may be specified in
such notice, and shall be issued in the name of the Holder or such other name
or names as shall be designated in such notice. This Warrant shall be deemed
to have been exercised and such certificate or certificates shall be deemed to
have been issued, and such Holder or any other Person so designated to be named
therein shall be
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deemed for all purposes to have become a holder of record of shares, as of
the date the aforementioned notice and payment is received by the Company.
If this Warrant shall have been exercised only in part, the Company shall,
at the time of delivery of such certificate or certificates, deliver to the
Holder a new Warrant evidencing the right to purchase the remaining shares
of Common Stock called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant, or, at the request of the
Holder, appropriate notation may be made on this Warrant which shall then be
returned to the Holder. The Company shall pay all expenses, stamp,
documentary and similar taxes and other charges payable in connection with
the preparation, issuance and delivery of share certificates and new
Warrants, except that, if share certificates or new Warrants shall be
registered in a name or names other than the name of the Holder, funds
sufficient to pay all transfer taxes payable as a result of such transfer
shall be paid by the Holder at the time of delivery of the aforementioned
notice of exercise or promptly upon receipt of a written request of the
Company for payment.
1.2. SHARES TO BE FULLY PAID AND NONASSESSABLE. All
shares of Common Stock issued upon the exercise of this Warrant shall be
validly issued, fully paid and nonassessable and, if such Common Stock is
then quoted on NASDAQ or listed on any national securities exchange (as
defined in the Exchange Act), shall, to the extent permitted under the
applicable rules of such exchange or NASDAQ, be duly quoted or listed
thereon, as the case may be.
1.3. NO FRACTIONAL SHARES REQUIRED TO BE ISSUED. The
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of this Warrant. If any fraction of a share would, but for
this Section, be issuable upon final exercise of this Warrant, in lieu of
such fractional share, the Company shall pay to the Holder in cash an amount
equal to the same fraction of the Fair Market Value of the Company per share
of outstanding Common Stock on the Business Day immediately prior to the
date of such exercise.
1.4. LEGEND. Each certificate for shares of Common
Stock issued upon exercise of this Warrant, unless at the time of exercise
such shares are registered under the Securities Act, shall bear the
following legend:
"This security has not been registered under the Securities
Act of 1933 and may not be sold or offered for sale unless
registered or qualified under said Act and any applicable state
securities laws or unless the Company receives an opinion in
reasonably acceptable form and scope to the Company of counsel
reasonably satisfactory to the Company that registration,
qualification or other such actions are not required under any such
laws or that an exemption from such registration is available. The
offering of this security has not been reviewed or approved the
United States Securities and Exchange Commission by any state's
securities administrator. This security is also subject to certain
additional transfer restrictions provided for in the Warrant
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the exercise of which resulted in the original issuance of this security,
a copy of which restrictions shall be furnished to the holder hereof by
the Company upon written request and without charge."
Any certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate issued upon
completion of a public offering pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of counsel
selected by the Holder of such certificate (who may be an employee of such
holder) and reasonably acceptable to the Company, the securities represented
thereby need no longer be subject to restrictions on resale under the
Securities Act.
1.5. RESERVATION; AUTHORIZATION; CAPITALIZATION. The Company
has duly reserved, and will keep available for issuance upon exercise of the
Warrants, the total number of Warrant Shares deliverable from time to time upon
exercise of all Warrants from time to time outstanding. The Company will not
take any actions during the term of this Warrant that would result in any
adjustment of the number of shares of Common Stock issuable upon the exercise
of this Warrant if (i) the total number of shares of Common Stock issuable
after such action upon exercise of this Warrant, (ii) all shares of Common
Stock issued and outstanding and (iii) all shares then issuable (y) upon the
exercise of all Options and (z) upon the conversion or exchange of all
Convertible Securities, would exceed the total number of shares of Common Stock
then authorized for issuance by the Company. The Company will not change the
Common Stock from par value $.01 per share to any higher par value which
exceeds the Exercise Price then in effect, and will reduce the par value of the
Common Stock upon any event described in Article IV that provides for an
increase in the number of shares of Common Stock subject to purchase upon
exercise of this Warrant, in inverse proportion to and effective at the same
time as such number of shares is increased; provided that such adjustment shall
only be made in the event that such increase in the number of shares, together
with all other such increases after the date hereof would, but for the proviso
to Section 4.1, cause the aggregate Exercise Price of all Warrants (without
giving effect to any exercise thereof) to be greater than $100,000. Any such
reduction to the par value will take into account, to the extent not accounted
for in previous such reductions to par value, all previous increases in the
number of shares pursuant to Article IV. The issuance of the Warrant Shares
has been duly and validly authorized and, when issued and sold in accordance
with the Warrants, the Warrant Shares will be duly and validly issued, fully
paid and non-assessable. As of the date of the initial issuance of this
Warrant, the Company had outstanding (i) 72,071,388 shares of Common Stock,
(ii) no shares of Non-Voting Common Stock, $.01 par value, (iii) options and
warrants to acquire an additional 10,944,441 shares of Common Stock, and (iv)
no other shares of capital stock or any securities convertible into or
exchangeable for shares of capital stock or any rights, options or warrants to
purchase any shares of capital stock or any securities convertible into or
exchangeable for shares of capital stock. Neither the issuance of this Warrant
nor the issuance of Warrant Shares upon exercise of this Warrant violates or
conflicts with the Company's certificate of incorporation or bylaws or any
agreement to which the Company is a party.
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1.6 SPECIAL PROVISION REGARDING TERMINATION. In the event that
the Company shall pay in full in immediately available funds on or before
December 31, 1997 the entire outstanding principal amount of the Loans and
the outstanding amount of all other Obligations for the payment of money
(other than (x) indemnity obligations not yet due and payable or (y) Cash
Management Services Obligations) and no Revolving Loan Commitments shall
remain in effect, the Warrants shall terminate without becoming exercisable
with respect to any of the Initial Shares or the Additional Shares and shall
be of no further cause or effect. In the event that the Company shall pay
in full in immediately available funds after December 31, 1997 and on or
before March 31, 1998 the entire outstanding principal amount of the Loans
and the outstanding amount of all other Obligations for the payment of money
(other than (x) indemnity obligations not yet due and payable or (y) Cash
Management Services Obligations) and no Revolving Loan Commitments shall
remain in effect, the Warrants shall terminate in respect of any of the
Additional Shares and shall be of no further cause or effect with respect to
such shares.
ARTICLE II
WARRANT AGENCY;
TRANSFER, EXCHANGE AND REPLACEMENT OF WARRANTS
2.1. WARRANT AGENCY. As long as any Warrant remains
outstanding, the Company shall perform the obligations of and be the warrant
agency with respect to the Warrants (the "Warrant Agency") at its address
for notices set forth in Section 11.01 of the Credit Agreement or at such
other address as the Company shall specify by notice to all Warrantholders.
2.2. OWNERSHIP OF WARRANT. The Company shall deem and
treat the person in whose name this Warrant is registered as the holder and
owner hereof (notwithstanding any notations of ownership or writing hereon
made by any person other than the Company) for all purposes and shall not be
affected by any notice to the contrary, until due presentment of this
Warrant for registration of transfer as provided in this Article II.
2.3. TRANSFER OF WARRANT. The Company agrees to
maintain at the Warrant Agency books for the registration of transfers of
the Warrants, and transfer of this Warrant and all rights hereunder shall be
registered, in whole or in part, on such books, upon surrender of this
Warrant at the Warrant Agency, together with (i) a written assignment of
this Warrant duly executed by the Holder or its duly authorized agent or
attorney, with (if the Holder is a natural person) signatures guaranteed by
a bank or trust company or a broker or dealer registered with the NASDAQ,
(ii) an opinion in reasonably acceptable form and scope to the Company of
counsel reasonably satisfactory to the Company that such transfer is in
compliance with all applicable federal or state securities laws, and (iii)
funds sufficient to pay any transfer taxes payable upon such transfer. Upon
surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee
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or assignees and in the denominations specified in the instrument of assignment
(which shall be whole numbers of shares only) and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be canceled. The Company shall permit the Warrant
Securityholders to inspect the warrant registration books from time to time
during normal business hours at the Warrant Agency.
2.4. DIVISION OR COMBINATION OF WARRANTS. This Warrant may be
divided or combined with other Warrants upon presentment hereof and of any
Warrant or Warrants with which this Warrant is to be combined at the Warrant
Agency, together with a written notice specifying the names and denominations
(which shall be whole numbers of shares only) in which the new Warrant or
Warrants are to be issued, signed by the holders hereof and thereof or their
respective duly authorized agents or attorneys. Subject to compliance with
Section 2.3 as to any transfer or assignment which may be involved in the
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
2.5. LOSS, THEFT, DESTRUCTION OF WARRANT CERTIFICATES. Upon
receipt of evidence satisfactory to the Company of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or security
reasonably satisfactory to the Company (it being understood and agreed that if
the holder of such Warrant is the Person named in the first paragraph of this
Warrant, then a written agreement of indemnity given by such Person alone shall
be satisfactory to the Company and no further security shall be required) or,
in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing
the right to purchase the same aggregate number of shares of Common Stock,
which new Warrant shall bear any legend required to be borne by the Warrant
being replaced.
2.6. EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay
all expenses, stamp, documentary and similar taxes (other than transfer taxes)
and other charges payable in connection with the preparation, issuance and
delivery of the Warrants.
ARTICLE III
CERTAIN RIGHTS
3.1. DETERMINATION OF FAIR MARKET VALUE. Subject to Section
3.2 hereof, each determination of Fair Market Value hereunder shall be made in
good faith by the Company. Upon each determination of Fair Market Value by the
Company hereunder, the Company shall promptly give notice thereof to all
Warrantholders, setting forth in reasonable detail the calculation of such Fair
Market Value and the method and basis of determination thereof (the "Company
Determination").
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3.2. CONTEST AND APPRAISAL RIGHTS. (a) If the holders
of Warrants entitling such holders to purchase a majority of the Common
Stock subject to purchase upon exercise of Warrants at the time outstanding
and fully vested (exclusive of Warrants then owned by the Company or any
Subsidiary (as defined in the Credit Agreement) or Affiliate (as defined in
the Credit Agreement) thereof) (the "Required Interest") disagree with the
Company Determination and by notice to the Company given within 30 days
after receipt of notice of the Company Determination (an "Appraisal Notice")
elect to dispute the Company Determination, such dispute shall be resolved
as set forth in subsection (b) of this Section.
(b) The Company shall within 30 days after an
Appraisal Notice shall have been given pursuant to subsection (a) of this
Section engage an investment bank or other qualified appraisal firm
reasonably acceptable to the Required Interest (the "Appraiser") to make an
independent determination of Fair Market Value (the "Appraiser
Determination"). The Appraiser Determination shall be final and binding on
the Company and all Warrantholders. The costs of conducting the appraisal
shall be borne solely by the Company.
3.3. FINANCIAL STATEMENTS AND OTHER INFORMATION.
Promptly upon transmission thereof, the Company will deliver to the Holder
copies of any and all financial statements, proxy statements, notices and
other reports as it may send to its public stockholders and copies of all
registration statements and all reports which it files with the Securities
and Exchange Commission (or any governmental body or agency succeeding to
its functions).
ARTICLE IV
ANTIDILUTION PROVISIONS
SECTION 4.1. GENERAL. The Exercise Price and the number
of shares of Common Stock (or other securities or property) issuable upon
exercise of this Warrant shall be subject to adjustment from time to time
upon the occurrence of certain events as provided in this Article IV;
provided that notwithstanding anything to the contrary herein, the Exercise
Price shall not be adjusted to an amount less than the par value of the
Common Stock, as such par value is reduced from time to time in accordance
with Section 1.5.
SECTION 4.2. COMMON STOCK REORGANIZATION. If the Company
shall subdivide its outstanding shares of Common Stock (or any class
thereof) into a greater number of shares or consolidate its outstanding
shares of Common Stock (or any class thereof) into a smaller number of
shares (any such event being called a "Common Stock Reorganization"), then
(a) the Exercise Price shall be adjusted, effective immediately after the
effective date of such Common Stock Reorganization, to a price determined by
multiplying the Exercise Price in effect immediately prior to such effective
date by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such
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effective date before giving effect to such Common Stock Reorganization and the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such Common Stock Reorganization, and (b) the number of
shares of Common Stock subject to purchase upon exercise of this Warrant shall
be adjusted, effective at such time, to a number determined by multiplying the
number of shares of Common Stock subject to purchase immediately before such
Common Stock Reorganization by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding after giving effect to such Common
Stock Reorganization and the denominator of which shall be the number of shares
of Common Stock outstanding immediately before such Common Stock
Reorganization.
SECTION 4.3. COMMON STOCK DISTRIBUTION. (a) If the Company shall issue,
sell or otherwise distribute any shares of Common Stock, other than pursuant to
this Warrant or a Common Stock Reorganization (which is governed by Section 4.2
hereof) (any such event, including any event described in paragraphs (b) and
(c) below, being herein called a "Common Stock Distribution"), for a
consideration per share less than the Fair Market Value of the Company per
share of outstanding Common Stock on a Fully Diluted Basis on the date of such
Common Stock Distribution (before giving effect to such Common Stock
Distribution), then, effective upon such Common Stock Distribution, the
Exercise Price shall be reduced (but in no event increased), if such
consideration per share shall be less than such Fair Market Value per share, to
the lowest of the prices (calculated to the nearest one thousandth of one cent)
determined as provided in clauses (i), (ii) and (iii) below:
(i) if the Company shall receive any consideration for the Common
Stock issued, sold or distributed, in such Common Stock Distribution, the
consideration per share of Common Stock received by the Company upon such
issue, sale or distribution;
(ii) by dividing (A) an amount equal to the sum of (1) the number of
shares of Common Stock outstanding immediately prior to such Common Stock
Distribution multiplied by the then existing Exercise Price plus (2) the
consideration, if any, received by the Company upon such Common Stock
Distribution by (B) the total number of shares of Common Stock outstanding
immediately after such Common Stock Distribution; and
(iii) by multiplying the Exercise Price in effect immediately prior to
such Common Stock Distribution by a fraction, the numerator of which shall be
the sum of (A) the number of shares of Common Stock outstanding immediately
prior to such Common Stock Distribution multiplied by such Fair Market Value
per share on the date of such Common Stock Distribution, plus (B) the
consideration, if any, received by the Company upon such Common Stock
Distribution, and the denominator of which shall be the product of (1) the
total number of shares of Common Stock outstanding immediately after such
Common Stock Distribution multiplied by (2) such Fair Market Value per share
on the date of such Common Stock Distribution.
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If any Common Stock Distribution shall require an
adjustment to the Exercise Price pursuant to the foregoing provisions of
this paragraph (a), including by operation of paragraph (b) or (c) below,
then, effective at the time such adjustment is made, the number of shares of
Common Stock subject to purchase upon exercise of this Warrant shall be
increased to a number determined by multiplying the number of shares of
Common Stock subject to purchase immediately before such Common Stock
Distribution by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately after giving effect to such
Common Stock Distribution and the denominator of which shall be the sum of
the number of shares outstanding immediately before giving effect to such
Common Stock Distribution (both calculated on a Fully Diluted Basis) plus
the number of shares of Common Stock which the aggregate consideration
received by the Company with respect to such Common Stock Distribution would
purchase at the Fair Market Value of the Company per share of outstanding
Common Stock on a Fully Diluted Basis on the date of such Common Stock
Distribution (before giving effect to such Common Stock Distribution). In
computing adjustments under this paragraph, fractional interests in Common
Stock shall be taken into account to the nearest one-thousandth of a share.
The provisions of this paragraph (a), including by
operation of paragraph (b) or (c) below, shall not operate to increase the
Exercise Price or reduce the number of shares of Common Stock subject to
purchase upon exercise of this Warrant.
(b) If the Company shall issue, sell, distribute or
otherwise grant in any manner (including by assumption) any rights to
subscribe for or to purchase, or any warrants or options for the purchase of
Common Stock or any stock or securities convertible into or exchangeable for
Common Stock (such rights, warrants or options being herein called "Options"
and such convertible or exchangeable stock or securities being herein called
"Convertible Securities"), whether or not such Options or the rights to
convert or exchange any such Convertible Securities in respect of such
Options are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities in respect of such
Options (determined by dividing (i) the aggregate amount, if any, received
or receivable by the Company as consideration for the granting of such
Options, plus the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options, plus, in the
case of Options to acquire Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable upon the issuance or
sale of such Convertible Securities and upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the exercise of such Options or upon the conversion or exchange of all
such Convertible Securities issuable upon the exercise of such Options)
shall be less than the Fair Market Value of the Company per share of
outstanding Common Stock on a Fully Diluted Basis on the date of granting
such Options (before giving effect to such grant), then, for purposes of
paragraph (a) above, the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange of
the total maximum amount of such Convertible Securities
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issuable upon the exercise of such Options shall be deemed to have been issued
as of the date of granting of such Options and thereafter shall be deemed to be
outstanding and the Company shall be deemed to have received as consideration
such price per share, determined as provided above, therefor. Except as
otherwise provided in paragraph (d) below, no additional adjustment of the
Exercise Price shall be made upon the actual exercise of such Options or upon
conversion or exchange of such Convertible Securities.
(c) If the Company shall issue, sell or otherwise distribute
(including by assumption) any Convertible Securities, whether or not the rights
to exchange or convert thereunder are immediately exercisable, and the price
per share for which Common Stock is issuable upon such conversion or exchange
(determined by dividing (i) the aggregate amount received or receivable by the
Company as consideration for the issuance, sale or distribution of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Fair Market Value of the Company per share of outstanding Common
Stock on a Fully Diluted Basis on the date of such issuance, sale or
distribution (before giving effect to such issuance, sale or distribution),
then, for purposes of paragraph (a) above, the total maximum number of shares
of Common Stock issuable upon conversion or exchange of all such Convertible
Securities shall be deemed to have been issued as of the date of the issuance,
sale or distribution of such Convertible Securities and thereafter shall be
deemed to be outstanding and the Company shall be deemed to have received as
consideration such price per share, determined as provided above, therefor.
Except as otherwise provided in paragraph (d) below, no additional adjustment
of the Exercise Price shall be made upon the actual conversion or exchange of
such Convertible Securities.
(d) If (i) the purchase price provided for in any Option
referred to in paragraph (b) above or the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities referred
to in paragraph (b) or (c) above or the rate at which any Convertible
Securities referred to in paragraph (b) or (c) above are convertible into or
exchangeable for Common Stock shall change at any time (other than under or by
reason of provisions designed to protect against dilution upon an event which
results in a related adjustment pursuant to this Article IV), or (ii) any of
such Options or Convertible Securities shall have terminated, lapsed or
expired, then the Exercise Price then in effect shall forthwith be readjusted
(effective only with respect to any exercise of this Warrant after such
readjustment) to the Exercise Price which would then be in effect had the
adjustment made upon the issuance, sale, distribution or grant of such Options
or Convertible Securities been made based upon such changed purchase price,
additional consideration or conversion rate, as the case may be (in the case of
any event referred to in clause (i) of this paragraph (d)) or had such
adjustment not been made (in the case of any event referred to in clause (ii)
of this paragraph (d)).
(e) If the Company shall pay a dividend or make any other
distribution
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upon any capital stock of the Company payable in Common Stock, Options or
Convertible Securities, then, for purposes of paragraph (a) above, such Common
Stock, Options or Convertible Securities shall be deemed to have been issued or
sold without consideration.
(f) If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for cash, the
consideration received therefor shall be deemed to be the amount received by
the Company therefor, after deduction therefrom of any expenses incurred in
connection therewith. If any shares of Common Stock, Options or Convertible
Securities shall be issued sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the Fair Market Value of such consideration, after
deduction of any expenses incurred in connection therewith. If any shares of
Common Stock, Options or Convertible Securities shall be issued in connection
with any merger in which the Company is the surviving corporation, the amount
of consideration therefor shall be deemed to be the Fair Market Value of such
portion of the assets and business of the non-surviving corporation as shall be
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. If any Options shall be issued in connection with the issuance
and sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued without
consideration.
SECTION 4.4. SPECIAL DIVIDENDS. If the Company shall issue or
distribute to any holder or holders of shares of Common Stock evidences of
indebtedness, any other securities of the Company or any cash, property or
other assets (excluding a Common Stock Reorganization or a Common Stock
Distribution), whether or not accompanied by a purchase, redemption or other
acquisition of shares of Common Stock (any such nonexcluded event being herein
called a "Special Dividend"), (a) the Exercise Price shall be decreased,
effective immediately after the effective date of such Special Dividend, to a
price determined by multiplying the Exercise Price then in effect by a
fraction, the numerator of which shall be the Fair Market Value of the Company
per share of outstanding Common Stock as of such effective date less any cash
and the then Fair Market Value of any evidences of indebtedness, securities or
property or other assets issued or distributed in such Special Dividend with
respect to one share of Common Stock, and the denominator of which shall be
such Fair Market Value per share and (b) the number of shares of Common Stock
subject to purchase upon exercise of this Warrant shall be increased to a
number determined by multiplying the number of shares of Common Stock subject
to purchase immediately before such Special Dividend by a fraction, the
numerator of which shall be the Exercise Price in effect immediately before
such Special Dividend and the denominator of which shall be the Exercise Price
in effect immediately after such Special Dividend. A reclassification of
Common Stock (other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common Stock and shares
of any other class of stock shall be deemed a distribution by the Company to
the holders of such Common Stock of such shares of such other class of stock
and, if the outstanding shares of Common Stock shall be changed into a larger
or smaller number of shares of Common Stock as part of such reclassification, a
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Common Stock Reorganization.
SECTION 4.5. CAPITAL REORGANIZATIONS. If there shall be any
consolidation or merger to which the Company is a party, other than a
consolidation or a merger of which the Company is the continuing corporation
and which does not result in any reclassification of, or change (other than a
Common Stock Reorganization) in, outstanding shares of Common Stock, or any
sale or conveyance of the property of the Company as an entirety or
substantially as an entirety, or any recapitalization of the Company (any such
event being called a "Capital Reorganization"), then, effective upon the
effective date of such Capital Reorganization, the Holder shall no longer have
the right to purchase Common Stock, but shall have instead the right to
purchase, upon exercise of this Warrant, the kind and amount of shares of stock
and other securities and property (including cash) which the Holder would have
owned or have been entitled to receive pursuant to such Capital Reorganization
if this Warrant had been exercised immediately prior to the effective date of
such Capital Reorganization. As a condition to effecting any Capital
Reorganization, the Company or the successor or surviving corporation, as the
case may be, shall (a) execute and deliver to each Warrantholder and to the
Warrant Agency an agreement as to the Warrantholder's rights in accordance with
this Section 4.5, providing, to the extent of any right to purchase equity
securities hereunder, for subsequent adjustments as nearly equivalent as may be
practicable to the adjustments provided for in this Article IV and (b) provide
each Regulation Y Holder with an opinion of counsel reasonably satisfactory to
such Regulation Y Holder and such other assurances as any Regulation Y Holder
may reasonably request to the effect that the ownership and exercise by any
Regulation Y Holder of this Warrant after giving effect to such Capital
Reorganization shall not be prohibited by the BHC Act or the regulations
thereunder. The provisions of this Section 4.5 shall similarly apply to
successive Capital Reorganizations.
SECTION 4.6. ADJUSTMENT RULES. Any adjustments pursuant to this
Article IV shall be made successively whenever an event referred to herein
occurs, except that, notwithstanding any other provision of this Article IV, no
adjustment shall be made to the number of shares of Common Stock to be
delivered to each Warrantholder (or to the Exercise Price) if such adjustment
represents less than 1% of the number of shares previously required to be so
delivered, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together
with any adjustments so carried forward shall amount to 1% or more of the
number of shares to be so delivered. No adjustment shall be made pursuant to
this Article IV in respect of (a) the issuance of options or warrants to
acquire shares of Common Stock to employees, officers or directors of the
Company pursuant to employee stock ownership plans or other benefit plans, or
the exercise of any such options or warrants, provided that the aggregate
amount of all such Common Stock and Common Stock for which such options or
warrants are exercisable does not exceed 20% of the Common Stock on a Fully
Diluted Basis on the date hereof and (b) the issuance from time to time of any
Warrants or shares of Common Stock upon the exercise of any of the Warrants.
If the Company takes a record of the holders of its Common Stock for any
purpose referred to in this Article IV, then (i) such record date shall be
deemed to be the date of the issuance, sale, distribution or grant in question
and (ii) if the Company shall legally abandon
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such action prior to effecting such action, no adjustment shall be made
pursuant to this Article IV in respect of such action.
SECTION 4.7. PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As
a condition precedent to the taking of any action which would require an
adjustment pursuant to this Article IV, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that (a) the Company may thereafter validly and legally issue as fully
paid and nonassessable all shares of Common Stock which any Warrantholder is
entitled to receive upon exercise of a Warrant and (b) the ownership and
exercise of any Warrant by any Regulation Y Holder shall not be prohibited by
the BHC Act or the regulations thereunder.
SECTION 4.8. NOTICE OF ADJUSTMENT. Not less than 10 nor more than 30
days prior to the record date or effective date, as the case may be, of any
action which requires or might require an adjustment or readjustment pursuant
to this Article IV, the Company shall give notice to each Warrantholder of such
event, describing such event in reasonable detail and specifying the record
date or effective date, as the case may be, and, if determinable, the required
adjustment and the computation thereof. If the required adjustment is not
determinable at the time of such notice, the Company shall give notice to each
Warrantholder of such adjustment and computation promptly after such adjustment
becomes determinable.
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.1 REGISTRATION ON REQUEST. (a) Subject to Section 5.1(g),
at any time or from time to time on or after January 1, 1998, upon the written
request of the holder or holders of a majority of all outstanding Conversion
Shares and Warrants (such majority determined, for purposes of this Section
5.1, by calculating the number of Conversion Shares for which such Warrants are
then exercisable) (the "Initiating Holders"), requesting that the Company
effect the registration under the Securities Act of all or part of such
Initiating Holders' Registrable Securities and specifying the intended method
of disposition thereof, the Company will promptly give written notice of such
requested registration to all holders of Warrants and Registrable Securities,
and thereupon the Company will use its best efforts to effect the registration
under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such
request;
(ii) all other Registrable Securities the holders of which shall
have made a written request to the Company for registration thereof
within 30 days after the giving
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of such written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities); and
(iii) all shares of Common Stock which the Company may elect
to register in connection with the offering of Registrable Securities
pursuant to this Section 5.1, whether for its own account or for the
account of a holder of Common Stock,
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional shares of Common Stock, if any, to be so registered, provided that
the Warrant Securityholders as a class shall be entitled to not more than two
registrations upon request pursuant to this Section 5.1.
(b) Registrations under this Section 5.1 shall be on such
appropriate registration form of the Commission (i) as shall be selected by the
Company and (ii) as shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified in
their request for such registration. The Company agrees to include in any such
registration statement all information which holders of Registrable Securities
being registered shall reasonably request.
(c) The Company will pay all Registration Expenses in
connection with the registrations requested pursuant to this Section 5.1,
provided that, in addition, the Company shall pay all Registration Expenses in
connection with any registration upon request pursuant to which less than 50%
of the Registrable Shares requested to be registered by such Initiating Holders
are registered, but no such registration shall be counted as a requested
registration for purposes of this Section 5.1.
(d) A registration requested pursuant to this Section 5.1
shall not be deemed to have been effected (i) unless a registration statement
with respect thereto has become effective; provided that a registration which
does not become effective after the Company has filed a registration statement
with respect thereto solely by reason of the refusal to proceed by the
Initiating Holders (other than a refusal to proceed based upon the advice of
counsel relating to a matter with respect to the Company) shall be deemed to
have been effected by the Company at the request of the Initiating Holders
unless the Initiating Holders shall have elected to pay all Registration
Expenses in connection with such registration, (ii) if, after it has become
effective, such registration is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental agency or
court for any reason, other than by reason of some act or omission by any
Warrantholder or Warrant Securityholder, or (iii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied, other than by reason of
some act or omission by any Warrantholder or Warrant Securityholder.
(e) If a requested registration pursuant to this Section 5.1
involves an underwritten offering, the underwriter or underwriters thereof
shall be selected by the holders
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of at least a majority (by a number of shares) of the Registrable Securities as
to which registration has been requested and shall be reasonably acceptable to
the Company.
(f) If a requested registration pursuant to this
Section 5.1 involves an underwritten offering, and the managing underwriter
shall advise the Company (with a copy of any such notice to each holder of
Registrable Securities requesting registration) that, in its opinion, the
number of securities requested to be included in such registration (including
securities proposed to be sold for the account of the Company) exceeds the
number which can be sold in such offering within a price range acceptable to
the Initiating Holders, the Company will include in such registration, to the
extent of the number which the Company is so advised can be sold in such
offering, (i) first, Registrable Securities requested to be included in such
registration by the holder or holders of Registrable Securities, pro rata among
such holders requesting such registration on the basis of the number of such
securities requested to be included by such holders, (ii) second, all shares
proposed to be included by the Company in such registration and (iii) third,
all shares other than Registrable Shares (any such shares with respect to any
registration, "Other Shares") requested to be included in such registration by
the holder or holders thereof.
(g) The Company may suspend any registration requested
pursuant to this Section 5.1 one time per registration for a single period of
up to 90 days upon notice to the Initiating Holders that, in the good faith
determination of the Board of Directors of the Company, the registration and
sale at such time of the Registrable Securities requested to be so registered
would not be in the best interests of the Company. No registration shall be
requested pursuant to this Section 5.1 during the period from the date of the
notice to the Warrant Securityholders pursuant to Section 5.2(a) of the
Company's intention to register securities until the expiration of the lockup
period specified in Section 5.4(b), or, if earlier, the date of the Company's
notice pursuant to the proviso to the second sentence of Section 5.2(a).
SECTION 5.2 INCIDENTAL REGISTRATION. (a) If the Company
at any time proposes to register any of its securities under the Securities Act
(other than (x) by a registration on Form S-4 or S-8 or any successor or
similar forms or (y) pursuant to Section 5.1) whether for its own account or
for the account of the holder or holders of any Other Shares, it will each such
time give prompt written notice to all Warrant Securityholders of its intention
to do so and of such holders' rights under this Section 5.2. Upon the written
request of any such holder made within 20 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such holder and the intended method of disposition thereof), the
Company will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the holders thereof, to the extent requisite to permit
the disposition (in accordance with the intended methods thereof as aforesaid)
of the Registrable Securities so to be registered, by inclusion of such
Registrable Securities in the registration statement which covers the
securities which the Company proposes to register; provided that if, at any
time after giving written notice of its intention to register any securities
and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall
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determine for any reason either not to register or to delay registration of
such securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any Warrant
Securityholder or Warrant Securityholders entitled to do so to request that
such registration be effected as a registration under Section 5.1, and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section
5.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 5.1, nor shall any such registration hereunder be deemed
to have been effected pursuant to Section 5.1. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 5.2.
(b) If the Company at any time proposes to register any of
its securities under the Securities Act as contemplated by Section 5.2 and such
securities are to be distributed by or through one or more underwriters, the
Company will, if requested by any holder of Registrable Securities as provided
in this Section 5.2, use its best efforts to arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters, provided that if
the managing underwriter of such underwritten offering shall inform the Company
and holders of the Registrable Securities requesting such registration and all
other holders of any other shares of Common Stock which shall have exercised,
in respect of such underwritten offering, registration rights comparable to the
rights under this Section 5.2 by letter of its belief that inclusion in such
distribution of all or a specified number of such securities proposed to be
distributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such letter to state
the basis of such belief and the approximate number of such Registrable
Securities and such Other Shares proposed so to be registered which may be
distributed without such effect), then the Company may, upon written notice to
all holders of such Registrable Securities and holders of such Other Shares,
reduce pro rata (if and to be extent stated by such managing underwriter to be
necessary to eliminate such effect) the number of such Registrable Securities
and Other Shares the registration of which shall have been requested by each
holder thereof so that the resultant aggregate number of such Registrable
Securities and Other Shares so included in such registration, together with the
number of securities to be included in such registration for the account of the
Company, shall be equal to the number of shares stated in such managing
underwriter's letter.
SECTION 5.3 REGISTRATION PROCEDURES. (a) If and whenever the
Company is required to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 5.1 and 5.2, the Company
shall, as expeditiously as possible:
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(i) prepare and (within 60 days after the end of the period
within which requests for registration may be given to the Company or
in any event as soon thereafter as possible; provided that, in the
case of a registration pursuant to Section 5.1, such filing to be made
within 60 days after the initial request of an Initiating Holder of
Registrable Securities or in any event as soon thereafter as possible)
file with the Commission the requisite registration statement to
effect such registration (including such audited financial statements
as may be required by the Securities Act) and thereafter use its best
efforts to cause such registration statement to become and remain
effective; provided further that the Company may discontinue any
registration of its securities which are not Registrable Securities at
any time prior to the effective date of the registration statement
relating thereto; provided further that before filing such
registration statement or any amendments thereto, the Company will
furnish to the counsel selected by the holders of Registrable
Securities which are to be included in such registration copies of all
such documents proposed to be filed, which documents will be subject
to the review of such counsel;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement until the earlier of (x) in the
case of a registration pursuant to Section 5.1, the expiration of 120
days after such registration statement becomes effective, or (y) in
the case of a registration pursuant to Section 5.2, the expiration of
90 days after such registration statement becomes effective;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement and each underwriter, if any, of the
securities being sold by such seller such number of conformed copies
of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number
of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and
any other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, as such seller and underwriter, if any, may reasonably
request in order to facilitate the public sale or other disposition of
the Registrable Securities owned by such seller;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under blue sky or similar laws of such jurisdictions as any seller
thereof and any underwriter of the securities being sold by such
seller shall reasonably request, to keep such registrations or
qualifications in effect for so long as such registration statement
remains in effect, and take any other action which may be reasonably
necessary or advisable to enable such seller and underwriter to
consummate the disposition in such jurisdictions of the securities
owned by such seller, except that the Company shall not for any such
purpose be
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required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this
subdivision (iv) be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of process
in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Securities;
(vi) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller and the underwriters, if any, of
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion
dated the date of the closing under the underwriting agreement),
reasonably satisfactory in form and substance to such seller, and
(y) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing
under the underwriting agreement), signed by the independent public
accountants who have certified the Company' financial statements
included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities;
(vii) notify the holders of Registrable Securities and the managing
underwriter or underwriters, if any, promptly and confirm such advice in
writing promptly thereafter:
(A) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when
the same has become effective;
(B) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information;
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(C) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration or the
initiation of any proceedings by any Person for that purpose;
and
(D) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue
sky laws of any jurisdiction or the initiation or threat of
any proceeding for such purpose;
(viii) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon the
Company' discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, and at the
request of any such seller promptly prepare and furnish to such seller
and each underwriter, if any, a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances then existing;
(ix) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the registration statement
at the earliest possible moment;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but
not more than eighteen months, beginning with the first full calendar
quarter after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act;
(xi) make available for inspection by a representative of the
holders of Registrable Securities participating in the offering, any
underwriter participating in any disposition pursuant to the
registration and any attorney or accountant retained by such selling
holders or underwriter (each, an "Inspector"), all financial and other
records, pertinent corporate documents and properties of the Company
(the "Records"), and cause the Company' officers, directors and
employees to supply all information reasonably requested by any such
Inspector in connection with such registration; provided that
the Company shall not be required to comply with this subdivision (xi)
if there is a reasonable likelihood, in the judgment of the Company,
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that such delivery could result in the loss of any attorney-client privilege
related thereto; and provided further that Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (other
than to any holder of Registrable Securities participating in the offering,
and if disclosed to any such holder shall not be disclosed by such holder)
unless (x) such Records have become generally available to the public or (y)
the disclosure of such Records may be necessary or appropriate (A) to comply
with any law, rule, regulation or order applicable to any such Inspectors or
holder of Registrable Securities, (B) in response to any subpoena or other
legal process or (C) in connection with any litigation to which such
Inspectors or any holder of Registrable Securities is a party (provided that
the Company is provided with reasonable notice of such proposed disclosure
and a reasonable opportunity to seek a protective order or other appropriate
remedy with respect to such Records);
(xii) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement from
and after a date not later than the effective date of such Registration
Statement;
(xiii) use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which any of the
Common Stock is then listed and, if not so listed, to be listed on the NASD
automated quotation system and, if listed on the NASD automated quotation
system, use its best efforts to secure designation of all such Registrable
Securities covered by such registration statement as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 of the Securities
and Exchange Commission or, failing that, to secure NASDAQ authorization for
such Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such Registrable Securities with the NASD; and
(xiv) use its best efforts to provide a CUSIP number for the
Registrable Securities, not later than the effective date of the
registration.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company
may from time to time reasonably request in writing for purposes of preparing
the relevant registration statement and amendments and supplements thereto.
(b) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company
of the occurrence of any event of the kind described in subdivision (viii) of
Section 5.3(a), such holder will forthwith discontinue such holder's
disposition of Registrable Securities pursuant to the registration statement
relating to such Registrable Securities until such holder's receipt of the
copies of the supplemented or amended prospectus contemplated by subdivision
(viii) of
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Section 5.3(a). In the event the Company shall give any such notice, the
periods specified in subdivision (ii) of Section 5.3(a) shall be extended by
the length of the period from and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received such notice to the date on which each such seller has received the
copies of the supplemented or amended prospectus contemplated by subdivision
(viii) of Section 5.3(a).
(c) If any such registration or comparable statement
refers to any holder of Registrable Securities by name or otherwise as the
holder of any securities of the Company, then such holder shall have the
right to require, in the event that such reference to such holder by name or
otherwise is not required by the Securities Act or any similar federal
statute then in force, the deletion of the reference to such holder.
SECTION 5.4 UNDERWRITTEN OFFERINGS. (a) If requested by
the underwriters for any underwritten offering by holders of Registrable
Securities pursuant to a registration requested under Section 5.1, the
Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to be satisfactory in substance and form to
the Company, each such holder and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of such type, including, without
limitation, indemnities to the effect and to the extent provided in Section
5.5. The holders of the Registrable Securities will cooperate with the
Company in the negotiation of the underwriting agreement.
(b) Each holder of the Registrable Securities agrees
by acquisition of its Registrable Securities not to sell, make any short
sale of, loan, grant any option for the purchase of, effect any public sale
or distribution of or otherwise dispose of any equity securities of the
Company, during the ten days prior to and the 90 days after the effective
date of any underwritten registration pursuant to Section 5.1 or 5.2 has
become effective, except as part of such underwritten registration, whether
or not such holder participates in such registration, and except as
otherwise permitted by the managing underwriter of such underwriting (if
any). Each holder of the Registrable Securities agrees that the Company may
instruct its transfer agent to place stop transfer notations in its records
to enforce this Section 5.4(b).
(c) The Company agrees (x) not to sell, make any short
sale of, loan, grant any option for the purchase of, effect any public sale
or distribution of or otherwise dispose of its equity securities or
securities convertible into or exchangeable or exercisable for any of such
securities during the ten days prior to and the 90 days after the effective
date of any registration pursuant to Section 5.1 or 5.2 has become
effective, except (i) as part of such registration, (ii) pursuant to
registrations on Form S-4 or S-8 or any successor or similar forms thereto
or (iii) as otherwise permitted by the managing underwriter of such offering
(if any), and (y) to use all reasonable efforts to cause each holder of its
equity securities or any securities convertible into or exchangeable or
exercisable for any of such securities, in each case purchased from the
Company at any time after the date of this Agreement (other than in a
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public offering) to agree not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of such securities during such period except as part of such
underwritten registration; provided that no holder of Registrable Securities
included in any underwritten registration shall be required to make any
representations or warranties to the Company or the underwriters other than
representations and warranties regarding such holder and such holder's intended
method of distribution.
(d) No Person may participate in any underwritten offering
hereunder unless such Person (i) agrees to sell such Person's securities on the
basis provided in any underwriting arrangements approved, subject to the terms
and conditions hereof, by the Person or a majority of the Persons entitled to
approve such arrangements and (ii) completes and executes all agreements,
questionnaires, indemnities and other documents (other than powers of attorney)
required under the terms of such underwriting arrangements.
SECTION 5.5 INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless each holder of Registrable Securities whose
Registrable Securities are covered by any registration statement, its directors
and officers and each other Person, if any, who controls such holder within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which any such indemnified party may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse each such indemnified party for any legal or any
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such holder
specifically for use in the preparation thereof. In addition, the Company
shall indemnify any underwriter of such offering and each other Person, if any,
who controls any such underwriter within the meaning of the Securities Act in
substantially the same manner and to substantially the same extent as the
indemnity herein provided to each Indemnified Party. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such holder or any such director, officer, underwriter or controlling
person and shall survive the transfer of such securities by such holder.
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(b) Each prospective seller of Registrable Securities
hereunder shall indemnify and hold harmless (in the same manner and to the
same extent as set forth in subdivision (a) of this Section 5.5) the
Company, each director of the Company, each officer of the Company and each
other person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereof, if such statement or
alleged statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such seller specifically for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in
full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling person and shall
survive the transfer of such securities by such seller. The amount payable
by any prospective seller of Registrable Securities with respect to the
indemnification set forth in this subsection (b) in connection with any
offering of securities will not exceed the amount of net proceeds received
by such prospective seller pursuant to such offering.
(c) Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 5.5, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement
of such action; provided that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 5.5, except to
the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that the indemnifying
party may wish, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by the latter in connection with the defense
thereof. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement of any such action which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or
litigation. No indemnified party shall consent to entry of any judgment or
enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying
party.
(d) If the indemnification provided for in the
preceding subdivisions of this Section 5.5 is unavailable to an indemnified
party in respect of any expense, loss, claim,
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damage or liability referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such expense, loss, claim,
damage or liability (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the holder or
underwriter, as the case may be, on the other from the distribution of the
Registrable Securities or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of the holder or
underwriter, as the case may be, on the other in connection with the statements
or omissions which resulted in such expense, loss, damage or liability, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the holder or underwriter, as the case may
be, on the other in connection with the distribution of the Registrable
Securities shall be deemed to be in the same proportion as the total net
proceeds received by the Company from the initial sale of the Registrable
Securities by the Company (including therein for the purposes of such
calculation the value of the Loans and Revolving Loan Commitments under the
Credit Agreement) to the purchaser bear to the gain realized by the selling
holder or the underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of the Company on the one
hand and of the holder or underwriter, as the case may be, on the other shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission to state a material
fact relates to information supplied by the Company, by the holder or by the
underwriter and parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided that the
foregoing contribution agreement shall not inure to the benefit of any
indemnified party if indemnification would be unavailable to such indemnified
party by reason of the proviso contained in the first sentence of subdivision
(a) of this Section 5.5, and in no event shall the obligation of any
indemnifying party to contribute under this subdivision (d) exceed the amount
that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under subdivisions (a) or
(b) of this Section 5.5 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this subdivision
(d) were determined by pro rata allocation (even if the holders and any
underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph and subdivision (c) of this
Section 5.5. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.
Notwithstanding the provisions of this subdivision (d), no holder
of Registrable Securities or underwriter shall be required to contribute any
amount in excess of the amount
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by which (i) in the case of any such holder, the net proceeds received by such
holder from the sale of Registrable Securities or (ii) in the case of an
underwriter, the total price at which the Registrable Securities purchased by
it and distributed to the public were offered to the public exceeds, in any
such case, the amount of any damages that such holder or underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
SECTION 5.6 RULE 144. If the Company shall have filed a registration
statement pursuant to Section 12 of the Exchange Act or a registration
statement pursuant to the Securities Act, the Company will file the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the Commission thereunder and will take
such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
ARTICLE VI
DEFINITIONS
The following terms, as used in this Warrant, have the following
meanings:
"Additional Shares" has the meaning set forth in the first paragraph of
this Warrant.
"Appraisal Notice" has the meaning set forth in Section 3.2(a).
"Appraiser" has the meaning set forth in Section 3.2(b).
"Appraiser Determination" has the meaning set forth in Section 3.2(b).
"BHC Act" means the Bank Holding Company Act of 1956, as amended.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banking institutions located in New York are authorized by law or other
governmental action to be closed, unless there shall have been an offering of
Common Stock registered under the Securities Act, in which case "Business Day"
means (a) if Common Stock is listed or admitted to trading on a national
securities exchange, a day on which the principal national
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securities exchange on which the Common Stock is listed or admitted to trading
is open for business or (b) if Common Stock is not so listed or admitted to
trading, a day on which the New York Stock Exchange is open for business.
"Capital Reorganization" has the meaning set forth in Section
4.5.
"Cash Management Services Obligations" has the meaning set forth
in the Credit Agreement.
"Closing Price" on any day means (a) if Common Stock is listed or
admitted for trading on a national securities exchange, the reported last sales
price regular way or, if no such reported sale occurs on such day, the average
of the closing bid and asked prices regular way on such day, in each case on
the principal national securities exchange on which Common Stock is listed or
admitted to trading, or (b) if Common Stock is not listed or admitted to
trading on any national securities exchange, the average of the closing bid and
asked prices in the over-the-counter market on such day as reported by NASDAQ
or any comparable system or, if not so reported, as reported by any New York
Stock Exchange member firm selected by the Company for such purpose.
"Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stock" has the meaning ascribed to such term in the
second paragraph of this Warrant.
"Common Stock Distribution" has the meaning set forth in Section
4.3(a).
"Common Stock Reorganization" has the meaning set forth in
Section 4.2.
"Company" has the meaning set forth in the first paragraph of
this Warrant.
"Company Determination" has the meaning set forth in Section 3.1.
"Conversion Shares" means (i) any shares of Common Stock or other
securities issued upon the exercise of any Warrants and (ii) any securities
issued with respect to any of such shares or other securities referred to in
clause (i) upon the conversion thereof into other securities or by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise;
provided that any of such securities shall cease to be Conversion Shares when
such securities shall have (x) been disposed of pursuant to a Public Sale or
(y) ceased to be outstanding.
"Convertible Securities" has the meaning set forth in Section
4.3(b).
"Credit Agreement" has the meaning set forth in the second
paragraph of this Warrant.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
"Exercise Price" means initially $.01 per share, as adjusted from time
to time in accordance with the terms hereof.
"Fair Market Value" as at any date of determination means the fair
market value of the business or property or services in question as of such
date, as determined in good faith by the Board of Directors of the Company or
otherwise in accordance with Section 3.2 hereof. The Fair Market Value of the
Company as at any date of determination shall be the Market Price on such date
multiplied by the number of shares of Common Stock then outstanding.
"Fully Diluted Basis" means, with respect to any determination or
calculation, that such determination or calculation is performed on a fully
diluted basis determined in accordance with generally accepted accounting
principles as in effect from time to time.
"Holder" has the meaning set forth in the first paragraph of this
Warrant.
"Initial Shares" has the meaning set forth in the first paragraph of
this Warrant.
"Initiating Holders" has the meaning set forth in Section 5.1 hereof.
"Loan" has the meaning ascribed to such term in the Credit Agreement.
"Market Price" as at any date of determination means the average of the
daily Closing Prices of a share of Common Stock for the shorter of (i) the 20
consecutive Business Days ending on the most recent Business Day prior to the
Time of Determination and (ii) the period commencing on the date next
succeeding the first public announcement of the issuance, sale, distribution,
grant or exercise in question through such most recent Business Day prior to
the Time of Determination. "Time of Determination" means the time and date of
the earliest of (x) the determination of the stockholders entitled to receive
such issuance, sale, distribution or grant, and (z) the commencement of
"ex-dividend" trading in respect thereof.
"NASD" means The National Association of Securities Dealers, Inc.
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"Obligations" has the meaning ascribed to such term in the Credit
Agreement.
"Options" has the meaning set forth in Section 4.3(b).
"Other Shares" has the meaning set forth in Section 5.1.
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"Person" means any natural person, corporation, limited liability
company, limited partnership, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, and any government
agency or political subdivision thereof.
"Public Sale" means any sale of Common Stock to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
(or any successor provision then in effect) adopted under the Securities Act.
"Registrable Securities" means any Warrants or Conversion Shares
until the date (if any) on which such Conversion Shares shall have been
transferred or exchanged and new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with Section 5.1 through 5.5 hereof,
including (i) all registration, filing and NASD fees, (ii) all fees and
expenses of complying with securities or blue sky laws, (iii) all word
processing, duplicating and printing expenses, (iv) all messenger and delivery
expenses, (v) the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits of
"cold comfort" letters required by or incident to such performance and
compliance, (vi) the fees and disbursements of any one counsel and any one
accountant retained by the holder or holders of more than 50% of the
Registrable Securities being registered (or, in the case of any registration
effected pursuant to Section 5.1, as the Initiating Holders shall have selected
to represent all holders of the Registrable Securities being registered), (vii)
premiums and other costs of policies of insurance (if any) against liabilities
arising out of the public offering of the Registrable Securities being
registered if the Company desires such insurance and (viii) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but not including underwriting discounts and commissions and
transfer taxes, if any, provided that, in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include (i)
salaries of the Company personnel or general overhead expenses of the Company,
(ii) auditing fees, (iii) premiums or other expenses relating to liability
insurance required by underwriters of the Company or (iv) other expenses for
the preparation of financial statements or other data, to the extent that any
of the foregoing either is normally prepared by the Company in the ordinary
course of its business or would have been incurred by the Company had no public
offering taken place.
"Regulation Y Holder" means the Holder or a holder of Warrant
Shares, if such Holder or holder of Warrant Shares is a bank holding company
within the meaning of the BHC Act or a subsidiary thereof subject to Regulation
Y under the BHC Act.
"Regulatory Change" means, with respect to any Regulation Y
Holder, (i) any change on or after the date hereof in United States federal or
state or foreign laws or
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regulations (including the BHC Act and Regulation Y thereunder); (ii) the
adoption on or after the date hereof of any interpretation or ruling applying
to such Regulation Y Holder, individually or as a member of a class, under any
United States federal or state or foreign laws or regulations by any court or
governmental or regulatory authority charged with the interpretation or
administration thereof; or (iii) the modification on or after the date hereof
of any agreement or commitment with any such governmental or regulatory
authority that is applicable to or binding upon such Regulation Y Holder.
"Required Interest" has the meaning set forth in Section 3.2(a).
"Revolving Loan Commitments" has the meaning ascribed to such term in
the Credit Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor Federal statute and the rules and regulations of the Securities and
Exchange Commission (or its successors) thereunder, all as the same shall be in
effect from time to time.
"Special Dividend" has the meaning set forth in Section 4.4.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, association or other business entity of which more than 50% of the
total voting power of shares of stock or other interests therein entitled to
vote in the election of members of the board of directors, partnership
committee, board of managers or trustees or other managerial body thereof is at
the time owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of such Person or a combination thereof. Unless
otherwise specified, "Subsidiary" means a Subsidiary of the Company and
"Subsidiaries" means all Subsidiaries of the Company.
"Warrant Agency" has the meaning set forth in Section 2.1.
"Warrant Securityholder" means at any time any Warrantholder or any
holder of Conversion Shares.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the Warrants.
"Warrantholder" means a holder of a Warrant.
"Warrants" has the meaning set forth in the second paragraph of this
Warrant.
All references herein to "days" shall mean calendar days unless
otherwise specified.
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ARTICLE VII
MISCELLANEOUS
7.1. NOTICES. Notices and other communications provided for
herein must be in writing and may be given by mail, courier, confirmed telex or
facsimile transmission and shall, unless otherwise expressly required, be
deemed given when received or, if mailed, four Business Days after being
deposited in the United States mail with postage prepaid and properly
addressed. In the case of the Holder, such notices and communications shall be
addressed to its address as shown on the books maintained by the Warrant
Agency, unless the Holder shall notify the Warrant Agency that notices and
communications should be sent to a different address (or telex or facsimile
number), in which case such notices and communications shall be sent to the
address (or telex or facsimile number) specified by the Holder.
7.2. WAIVERS; AMENDMENTS. No failure or delay of the Holder
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on the Company in any case shall entitle
the Company to any other or future notice or demand in similar or other
circumstances. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the holders of Warrants entitling
such holders to purchase a majority of the Common Stock subject to purchase
upon exercise of such Warrants at the time outstanding (exclusive of Warrants
then owned by the Company or any Subsidiary (as defined in the Credit
Agreement) or Affiliate (as defined in the Credit Agreement) thereof);
provided, however, that no such amendment, modification or waiver shall,
without the written consent of the holders of all Warrants at the time
outstanding, (a) change the number of shares of Common Stock subject to
purchase upon exercise of this Warrant, the Exercise Price or provisions for
payment thereof or (b) amend, modify or waive the provisions of this Section or
Article III, IV, V or Section 1.5.
Any such amendment, modification or waiver effected pursuant to
and in accordance with the provisions of this Section or the applicable
provisions of the Credit Agreement shall be binding upon the holders of all
Warrants and Warrant Shares, upon each future holder thereof and upon the
Company. In the event of any such amendment, modification or waiver, the
Company shall give prompt notice thereof to all holders of Warrants and Warrant
Shares and, if appropriate, notation thereof shall be made on all Warrants
thereafter surrendered for registration of transfer or exchange.
7.3. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW).
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7.4. TRANSFER; COVENANTS TO BIND SUCCESSOR AND ASSIGNS. All
covenants, stipulations, promises and agreements in this Warrant contained by
or on behalf of the Company or the Holder shall bind its successors and
assigns, whether so expressed or not. This Warrant shall be transferable and
assignable by the Holder hereof in whole or from time to time in part to any
other Person, subject to the restrictions on transferability contained herein
and under the applicable securities laws, and the provisions of this Warrant
shall be binding upon and inure to the benefit of the Holder hereof and its
successors and assigns.
7.5. SEVERABILITY. In case any one or more of the provisions
contained in this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
7.6. SECTION HEADINGS. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
7.7. TAX BASIS. The Company and the Holder agree pursuant to
Proposed Treasury Regulation Section 1.1273-2 that, for Federal income tax
purposes, the aggregate issue price of the Loans (as defined in the Credit
Agreement) is $284,990,000 and the aggregate purchase price for this Warrant is
Ten Thousand Dollars ($10,000.00). Neither the Company nor the Holder hereof
shall voluntarily take any action inconsistent with the agreement set forth in
this Section 7.7.
7.8. RIGHT TO SPECIFIC PERFORMANCE. The Company acknowledges and
agrees that in the event of any breach of the foregoing covenants and
agreements, the Holder would be irreparably harmed and could not be made whole
only by the award of monetary damages. Accordingly, the Company agrees that
the Holder, in addition to any other remedy to which the Holder may be entitled
at law or equity, will be entitled to seek and obtain an award of specific
performance of any of the foregoing covenants and agreements.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed in its corporate name by one of its officers thereunto duly
authorized, and its corporate seal to be hereunto affixed, attested by its
Secretary or an Assistant Secretary, all as of the day and year first above
written.
MEDAPHIS CORPORATION
(CORPORATE SEAL)
By:
--------------------------------------
Name:
------------------------------
Title:
-----------------------------
Attest:
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Name:
-------------------------------------------
Title:
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