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Exhibit 10.2
FIRST NEW ENGLAND DENTAL CENTERS, INC.
Common Stock Purchase Warrant
Dated as of July 25, 1997
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
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TABLE OF CONTENTS
Page
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1. Exercise of Warrant.............................................................................. 1
1.1. Manner of Exercise........................................................................... 1
1.2. When Exercise Effective..................................................................... 2
1.3. Delivery of Stock Certificates, etc......................................................... 2
2. Adjustment of Common Stock Issuable Upon Exercise................................................ 2
2.1. General; Warrant Quantity.................................................................... 2
2.2. Adjustment of Warrant Quantity.............................................................. 2
2.2.1 Issuance of Additional Shares of Common Stock........................................... 2
2.2.2 Dividends and Distributions............................................................. 3
2.3. Treatment of Option and Convertible Securities.............................................. 3
2.4. Treatment of Stock Dividends, Stock Splits, etc............................................. 5
2.5. Computation of Consideration................................................................ 5
2.6. Adjustments for Combinations, etc........................................................... 6
2.7 Dilution in Case of Other Securities......................................................... 6
2.8 Minimum Adjustment of Warrant Quantity....................................................... 7
2.9 Special Adjustments to Warrant............................................................... 7
2.10 No Duplication of Adjustments............................................................... 7
3. Consolidation, Merger, etc....................................................................... 7
3.1. Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc.................. 7
3.2. Assumption of Obligations................................................................... 8
4. Other Dilutive Events............................................................................ 8
5. No Dilution or Impairment........................................................................ 9
6. Accountants' Report as to Adjustments............................................................ 9
7. Notices of Corporate Action..................................................................... 11
8. Registration of Common Stock.................................................................... 11
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9. Restrictions on Transfer........................................................................ 12
9.1. Restrictive Legends......................................................................... 12
9.2. Transfers to Comply With the Securities Act................................................ 12
9.3. Termination of Restrictions................................................................ 12
10. Reservation of Stock, etc...................................................................... 13
11. Registration and Transfer of Warrants, etc..................................................... 13
11.1. Warrant Register; Ownership of Warrants................................................... 13
11.2. Transfer of Warrants...................................................................... 14
11.3. Replacement of Warrants................................................................... 14
11.4. Adjustments To Warrant Quantity........................................................... 14
12. Definitions.................................................................................... 14
13. Remedies; Specific Performance................................................................. 17
14. No Rights or Liabilities as Stockholder........................................................ 18
15. Notices........................................................................................ 18
16. Amendments..................................................................................... 19
17. Descriptive Headings, Etc...................................................................... 19
18. Governing Law.................................................................................. 19
19. Judicial Proceedings; Waiver of Jury........................................................... 20
20. Registration Rights Agreement.................................................................. 20
21 Determination of Current Market Price or Market Price........................................... 20
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FIRST NEW ENGLAND DENTAL CENTERS, INC.
Common Stock Purchase Warrant
Void After July 25, 2001
No. W-1 July 25, 1997
FIRST NEW ENGLAND DENTAL CENTERS, INC. (the "Company"), a
Delaware corporation, for value received, hereby certifies that ______________,
or registered assigns (the "Holder"), is entitled to purchase from the Company
[_______] duly authorized, validly issued, fully paid and nonassessable shares
of common stock, par value $0.01 per share, of the Company (the "Common Stock")
at the purchase price per share of $0.01, at any time or from time to time
prior to 5:30 PM, New York City time, on July 25, 2001 (the "Expiration Date"),
all subject to the terms, conditions and adjustments set forth below in this
Warrant.
This Warrant is one of the Common Stock Purchase Warrants (the
"Warrants", such term to include any such warrants issued in substitution
therefor) originally issued in connection with the Note Purchase Agreement,
dated as of the date hereof, by and among the Company and the purchasers
indicated therein (as amended or otherwise modified from time to time, the
"Financing Agreement"). The Company hereby represents and warrants that the
Warrants originally so issued evidence the right to purchase a number of shares
of Common Stock equal to seven and one-half percent (7.5%) of the outstanding
Common Stock of the Company on a Fully Diluted Basis immediately before giving
effect to the issuance of the Warrants. The Warrants are subject to adjustment
as provided herein. Certain capitalized terms used in this Warrant are defined
in Section 12; references to an "Exhibit" are, unless otherwise specified, to
one of the Exhibits attached to this Warrant and references to a "Section" are,
unless otherwise specified, to one of the Sections of this Warrant.
1. Exercise of Warrant.
1.1. Manner of Exercise. This Warrant may be exercised by the
Holder, in whole or in part, at any time or from time to time, on or after the
earlier of (i) the one year anniversary of the date hereof, and (ii) the nine
month anniversary of the date on which the Company completes an initial public
offering of it's Common Stock, during normal business hours on any Business Day,
by surrender of this Warrant to the Company at its principal office, accompanied
by the Form of Subscription in substantially the form attached as Exhibit A to
this Warrant (or a reasonable facsimile thereof) duly executed by the Holder and
accompanied by payment, in cash, by certified or official bank check payable to
the order of the Company, or in the manner provided in Section 1.5 or Section
1.6 (or by any combination of such methods), in the amount obtained by
multiplying (a) the number of shares of Common Stock designated in such Form of
Subscription (adjusted as provided in Sections 2 through 4) by (b) $0.01 and
such Holder shall thereupon be entitled to receive such number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities as provided below).
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1.2. When Exercise Effective. Each exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the Business Day on which this Warrant shall have been surrendered to the
Company as provided in Section 1.1. At such time the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock (or
Other Securities) shall be issuable upon such exercise, as provided in Section
1.3, shall be deemed to have become the Holder or holders of record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as
practicable after each exercise of this Warrant, in whole or in part, and in any
event within three Business Days thereafter, the Company at its expense
(including the payment by it of any applicable transfer taxes) will cause to be
issued in the name of and delivered to the Holder hereof or, subject to Section
9, as such Holder (upon payment by such Holder of any applicable transfer taxes)
may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares,
including, if the Company so elects, fractional shares, of Common Stock
(or Other Securities) to which such Holder shall be entitled upon such
exercise plus, at the discretion of the Company, in lieu of any
fractional share to which such Holder would otherwise be entitled, cash
in an amount equal to the same fraction of the Current Market Price per
share on the Business Day next preceding the date of such exercise, and
(b) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock equal (without giving
effect to any adjustment thereof) to the number of such shares called
for on the face of this Warrant minus the number of such shares
designated by the Holder upon such exercise as provided in Section 1.1.
2. Adjustment of Common Stock Issuable Upon Exercise.
2.1. General; Warrant Quantity. This Warrant initially
evidences the right to purchase a number of shares of Common Stock set forth in
the first paragraph of this Warrant (the "Initial Number"), subject to
adjustment as provided in this Section 2, and in Sections 3 and 4. The "Warrant
Price" shall be fixed at $0.01 per share of Common Stock received upon exercise
of this Warrant.
2.2. Adjustment of Warrant Quantity.
2.2.1 Issuance of Additional Shares of Common Stock. In case
the Company at any time or from time to time after the date hereof shall issue
or sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 2.3 or 2.4) without consideration
or for a consideration per share less than the Current Market Price in effect
immediately prior to such issue or sale, then, and in each such case, subject to
Section 2.8, the number of shares of Common Stock provided for in the Warrant
shall be increased, concurrently with such issue or sale, to an amount
determined by multiplying such number by a fraction
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(a) the numerator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale, provided
that, for the purposes of this Section 2.2.1, (x) immediately after any
Additional Shares of Common Stock are deemed to have been issued
pursuant to Section 2.3 or 2.4, such Additional Shares shall be deemed
to be outstanding, and (y) treasury shares shall not be deemed to be
outstanding, and
(b) the denominator of which shall be (i) the number of shares
of Common Stock outstanding immediately prior to such issue or sale
plus (ii) the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of such
Additional Shares of Common Stock so issued or sold would purchase at
such Current Market Price.
2.2.2 Dividends and Distributions. In case the Company at any time or from time
to time after the date hereof shall declare, order, pay or make a dividend or
other distribution (including, without limitation, any distribution of other or
additional stock or other securities or property or Options by way of dividend
or spin-off, reclassification, recapitalization or similar corporate
rearrangement) on the Common Stock other than a dividend payable in Additional
Shares of Common Stock the Holder of this Warrant shall receive the same
dividend per share of Common Stock then issuable upon exercise of this Warrant
based upon the maximum number of shares of Common Stock at the time issuable to
such Holder as the holders of Common Stock.
2.3. Treatment of Options and Convertible Securities. In case
the Company at any time or from time to time after the date hereof shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, then, and in each such case, the maximum number of
Additional Shares of Common Stock (as set forth in the instrument relating
thereto, without regard to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be Additional Shares of
Common Stock issued as of the time of such issue, sale, grant or assumption or,
in case such a record date shall have been fixed, as of the close of business on
such record date (or, if the Common Stock trades on an ex-dividend basis, on the
date prior to the commencement of ex-dividend trading), provided that such
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to Section 2.5) of such shares
would be less than the Current Market Price in effect on the date of and
immediately prior to such issue, sale, grant or assumption or immediately prior
to the close of business on such record date (or, if the Common Stock trades on
an ex-dividend basis, on the date prior to the commencement of ex-dividend
trading), as the case may be, and provided, further, that in any such case in
which Additional Shares of Common Stock are deemed to be issued
(a) whether or not the Additional Shares of Common Stock
underlying such Options or Convertible Securities are deemed to be
issued, no further adjustment of the Warrant Quantity shall be made
upon the subsequent issue or sale of Convertible Securities or shares
of Common Stock upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, except in the case of any such
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Options or Convertible Securities which contain provisions requiring an
adjustment, subsequent to the date of the issue or sale thereof, of the
number of Additional Shares of Common Stock issuable upon the exercise
of such Options or the conversion or exchange of such Convertible
Securities by reason of (x) a change of control of the Company, (y) the
acquisition by any Person or group of Persons of any specified number
or percentage of the Voting Securities of the Company or (z) any
similar event or occurrence, each such case to be deemed hereunder to
involve a separate issuance of Additional Shares of Common Stock,
Options or Convertible Securities, as the case may be;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Warrant Quantity computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be,
with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be
recomputed to reflect such increase insofar as it affects such Options,
or the rights of conversion or exchange under such Convertible
Securities, which are outstanding at such time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have
been exercised or the expiration of any rights of conversion or
exchange under any such Convertible Securities which (or purchase by
the Company and cancellation or retirement of any such Convertible
Securities the rights of conversion or exchange under which) shall not
have been exercised, the Warrant Quantity computed upon the original
issue, sale, grant or assumption thereof (or upon the occurrence of the
record date, or date prior to the commencement of ex-dividend trading,
as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such
cancellation or retirement, as the case may be), be recomputed as if:
(i) in the case of Options for Common Stock or
Convertible Securities, the only Additional Shares of Common
Sock issued or sold were the Additional Shares of Common
Stock, if any, actually issued or sold upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was the
consideration actually received by the Company for the issue,
sale, grant or assumption of all such Options, whether or not
exercised, plus the consideration actually received by the
Company upon such exercise, or for the issue or sale of all
such Convertible Securities which were actually converted or
exchanged, plus the additional consideration, if any, actually
received by the Company upon such conversion or exchange, and
(ii) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually
issued or sold upon the exercise of such Options were issued
at the time of the issue or sale, grant or assumption of such
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Options, and the consideration received by the Company for the
Additional Shares of Common Stock deemed to have then been
issued was the consideration actually received by the Company
for the issue, sale, grant or assumption of all such Options,
whether or not exercised, plus the consideration deemed to
have been received by the Company (pursuant to Section 2.5)
upon the issue or sale of such Convertible Securities with
respect to which such Options were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of decreasing the number of shares issuable upon
exercise of this Warrant by an amount in excess of the amount of the
adjustment thereof originally made in respect of the issue, sale, grant
or assumption of such Options or Convertible Securities; and
(e) in the case of any such Options which expire by their
terms not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the number of shares issuable upon
exercise of this Warrant shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made in the
manner provided in subdivision (c) above.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case
the Company at any time or from time to time after the date hereof shall declare
or pay any dividend on the Common Stock payable in Common Stock, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.
2.5. Computation of Consideration. For the purposes of this
Section 2,
(a) the consideration for the issue or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment of such
consideration,
(i) insofar as it consists of cash, be computed at
the net amount of cash received by the Company, without
deducting any expenses paid or incurred by the Company or any
commissions or compensations paid or concessions or discounts
allowed to underwriters, dealers or others performing similar
services in connection with such issue or sale,
(ii) insofar as it consists of property (including
securities) other than cash, be computed at the fair value
thereof at the time of such issue or sale, as determined in
good faith by the Board of Directors of the Company, and
(iii) in case Additional Shares of Common Stock are
issued or sold together with other stock or securities or
other assets of the Company for a
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consideration which covers both, be the portion of such
consideration so received, computed as provided in clauses (i)
and (ii) above, allocable to such Additional Shares of Common
Stock, all as determined in good faith by the Board of
Directors of the Company;
(b) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 2.3, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration per
share determined by dividing
(i) the total amount, if any, received and receivable
by the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration to protect
against dilution) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such
Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment
of such number to protect against dilution) issuable upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 2.4, relating to stock dividends, stock
splits, etc., shall be deemed to have been issued for no consideration.
2.6. Adjustments for Combinations, etc. In case the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the number of shares issuable upon exercise of this Warrant in effect
immediately prior to such combination or consolidation shall, concurrently with
the effectiveness of such combination or consolidation, be proportionately
decreased.
2.7 Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in Section 3) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis consistent with the standards established in the
other provisions of this Section 2, the purchase rights granted by this Warrant,
then, and in each such case, the computations, adjustments and readjustments
provided for in this Section 2 with respect to the
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number of shares issuable upon exercise of the Warrant shall be made as nearly
as possible in the manner so provided and applied to determine the amount of
Other Securities from time to time receivable upon the exercise of the Warrant,
so as to protect the Holder against the effect of such dilution.
2.8 Minimum Adjustment of Warrant Quantity. If the amount of
any adjustment of the Warrant Quantity required pursuant to this Section 2 would
be less than one tenth (1/10) of one percent (1%) of the number of shares
issuable upon exercise of the Warrant in effect at the time such adjustment is
otherwise so required to be made, such amount shall be carried forward and
adjustment with respect thereto made at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate at least one tenth (1/10) of one
percent (1%) of such number of shares issuable upon exercise of the Warrant. All
calculations under this Warrant shall be made to the nearest one-hundredth of a
share.
2.9 Special Adjustments To Warrant In the event that on or
prior to December 16, 1997, the Company has not redeemed all of the outstanding
Notes in accordance with the terms and conditions of the Notes and the Financing
Agreement, in full plus all accrued and unpaid interest, the then number of
shares of Common Stock covered by this Warrant shall automatically, without any
further action, be doubled and further adjustment under this Section 2 or
Section 3 or 4 shall be based upon such increased number.
2.10 No Duplication of Adjustments. There shall be no
adjustment of the number of shares of Common Stock issuable upon exercise of
this Warrant in case of the issuance of any stock of the Company in a
reorganization, acquisition or other similar transaction except as specifically
set forth in this Warrant. If any action or transaction would require adjustment
of the number of shares of Common Stock issuable upon exercise of this Warrant
pursuant to more than one Section of this Warrant, only one adjustment shall be
made and such adjustment shall be the amount of adjustment that has the highest
absolute value.
3. Consolidation, Merger, etc.
3.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities
(other than a capital reorganization or reclassification resulting in the issue
of Additional Shares of Common Stock for which adjustment in the number of
shares of Common Stock issuable upon the exercise of this Warrant is provided in
Section 2.2.1 or 2.2.2), then, and in the case of each such transaction, proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the Holder, upon the exercise hereof at any time after
the consummation of such
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transaction, shall be entitled to receive (at the aggregate Warrant Price in
effect at the time of such consummation for all Common Stock or Other Securities
issuable upon such exercise immediately prior to such consummation), in lieu of
the Common Stock or Other Securities issuable upon such exercise prior to such
consummation, the highest amount of securities, cash or other property to which
such Holder would actually have been entitled as a shareholder upon such
consummation if such Holder had exercised the rights represented by this Warrant
immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided for
in Sections 2 through 4, provided that if a purchase, tender or exchange offer
shall have been made to and accepted by the holders of more than 50% of the
outstanding shares of Common Stock, and if the Holder so designates in a notice
given to the Company on or before the date immediately preceding the date of the
consummation of such transaction, the Holder shall be entitled to receive the
highest amount of securities, cash or other property to which such Holder would
actually have been entitled as a shareholder if the Holder had exercised this
Warrant prior to the expiration of such purchase, tender or exchange offer and
accepted such offer, subject to adjustments (from and after the consummation of
such purchase, tender or exchange offer) as nearly equivalent as possible to the
adjustments provided for in Sections 2 through 4.
3.2. Assumption of Obligations. Notwithstanding anything
contained in the Warrant or in the Financing Agreement to the contrary, the
Company will not effect any of the transactions described in clauses (a) through
(d) of Section 3.1 unless, prior to the consummation thereof, each Person (other
than the Company) which may be required to deliver any stock, securities, cash
or property upon the exercise of this Warrant as provided herein shall assume,
by written instrument delivered to, and reasonably satisfactory to, the Holder,
(a) the obligations of the Company under this Warrant (and if the Company shall
survive the consummation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any continuing obligations
of the Company under this Warrant), and (b) the obligation to deliver to such
Holder such shares of stock, securities, cash or property as, in accordance with
the foregoing provisions of this Section 3, such Holder may be entitled to
receive, and such Person shall have similarly delivered to such Holder an
opinion of counsel for such Person, which counsel shall be reasonably
satisfactory to such Holder, stating that this Warrant shall thereafter continue
in full force and effect and the terms hereof (including, without limitation,
all of the provisions of this Section 3) shall be applicable to the stock,
securities, cash or property which such Person may be required to deliver upon
any exercise of this Warrant or the exercise of any rights pursuant hereto.
Nothing in this Section 3 shall be deemed to authorize the Company to enter into
any transaction not otherwise permitted by the Financing Agreement.
4. Other Dilutive Events. In case any event shall occur as to
which the provisions of Section 2 or Section 3 are not strictly applicable but
the failure to make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles of such Sections, then, in each such case, the Company shall appoint
a firm of independent certified public accountants of recognized national
standing (which may be the regular auditors of the Company), which shall give
their opinion upon the adjustment, if any, on a basis consistent with the
essential intent and principles established in Sections 2 and 3, necessary to
preserve, without dilution, the purchase rights represented by this
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Warrant. Upon receipt of such opinion, the Company will promptly mail a copy
thereof to the Holder and shall make the adjustments described therein.
5. No Dilution or Impairment. The Company will not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of stock on the exercise of the Warrants from time
to time outstanding, (b) will not take any action which results in any
adjustment of the number of shares of Common Stock issuable upon the exercise of
this Warrant if the total number of shares of Common Stock (or Other Securities)
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Common Stock (or Other Securities) then authorized
by the Company's certificate of incorporation and available for the purpose of
issue upon such exercise, and (c) will not issue any capital stock of any class
which is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding-up, unless the
rights of the holders thereof shall be limited to a fixed sum or percentage of
par value or a sum determined by reference to a formula based on a published
index of interest rates, an interest rate publicly announced by a financial
institution or a similar indicator of interest rates in respect of participation
in dividends and to a fixed sum or percentage of par value in any such
distribution of assets.
6. Accountants' Report as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable upon the exercise of this Warrant, the Company at its expense will
promptly compute such adjustment or readjustment in accordance with the terms of
this Warrant and cause independent certified public accountants of recognized
national standing (which may be the regular auditors of the Company) selected by
the Company to verify such computation (other than any computation of the fair
value of property as determined in good faith by the Board of Directors of the
Company) and prepare a report setting forth such adjustment or readjustment and
showing in reasonable detail the method of calculation thereof and the facts
upon which such adjustment or readjustment is based, including a statement of
(a) the consideration received or to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to have been issued,
(b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Warrant Quantity in effect immediately prior to such
issue or sale and as adjusted and readjusted (if required by Section 2) on
account thereof. The Company will forthwith mail a copy of each such report to
each Holder of a Warrant and will, upon the written request at any time of any
Holder of a Warrant, furnish to such Holder a like report setting forth the
number of shares of Common Stock issuable upon the exercise of this Warrant at
the time in effect and showing in reasonable detail how it was calculated. The
Company will also keep copies of all such reports at its principal office and
will cause the same to be available for inspection at such office during normal
business hours by any Holder of a Warrant or any prospective purchaser of a
Warrant designated by the Holder thereof. Notwithstanding the foregoing the
Company shall not be
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required to retain independent certified public accountants to confirm such
information, as provided for in this Section 6, unless the Company is requested
to do so by the Major Purchaser (as defined in the Financing Agreement), or if
the Major Purchaser is no longer a holder of any of the Warrants, then if so
requested by the holders of not less than 25% of the outstanding Warrants.
7. Financial and Business Information
7.1 Quarterly Information. Except during any period when the
Company either (i) is subject to and is in compliance with the reporting
requirements of Section 15(d) of the Exchange Act or (ii) has securities
registered under Section 12(b) or 12(g) of the Exchange Act and is in compliance
with the reporting requirements mandated thereby (such status being referred to
as being a "Public Company"), the Company will deliver to the Holder, as soon as
practicable after the end of each quarterly fiscal period in each fiscal year of
the Company, and in any event within 45 days thereafter, a copy of the unaudited
consolidated balance sheet as at the close of such quarter, and the related
unaudited consolidated statements of income, shareholders' equity and cash flow
of the Company and its subsidiaries for that portion of the fiscal year ending
as of the close of such quarter. Such financial statements shall be prepared by
the Company in accordance with generally accepted accounting principles, applied
on a consistent basis ("GAAP") (except for normal year end adjustments and the
inclusion of footnotes) and accompanied by the certification of the Company's
chief executive officer or chief financial officer that, to the best of his
knowledge, such financial statements are complete and correct in all material
respects and fairly present in accordance with GAAP (except for normal year end
adjustments and the inclusions of footnotes) the consolidated financial
position, the consolidated statements of income, shareholder equity and cash
flow of the Company and its subsidiaries as at the end of such quarter and for
such year-to-date period, as the case may be.
7.2 Annual Information. Except during any period when the
Company is a Public Company, the Company will deliver to the Holder as soon as
practicable after the end of each fiscal year of the Company, and in any event
within 120 days thereafter, one copy of:
(i) an audited consolidated balance sheet of the Company and
its subsidiaries as at the end of such year, and
(ii) audited consolidated statements of income, shareholders'
equity and cash flow of the Company and its subsidiaries for such year;
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all prepared in accordance with GAAP, and
which audited financial statements shall be accompanied by (i) a certification
of the chief executive officer or chief financial officer of the Company that,
to the best of his knowledge, all such financial statements are complete and
correct in all material respects and present fairly in accordance with GAAP the
consolidated financial position of the Company and its subsidiaries as at the
end of such fiscal year and for the period then ended, (ii) an opinion thereon
of the independent certified public accountants regularly retained by the
Company, or any other firm of independent certified public accountants of
recognized national standing selected by the Company, and (iii) a report of such
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independent certified public accountants confirming any adjustment made pursuant
to Section 2 during such year.
7.3. Filings. During any period when the Company is a Public
Company, the Company will file on or before the required date all required
regular or periodic reports (pursuant to the Exchange Act) with the Commission
and will deliver to the Holder promptly upon their becoming available one copy
of each report, notice or proxy statement sent by the Company to its
stockholders generally, and of each regular or periodic report (pursuant to the
Exchange Act) and any Registration Statement, prospectus or written
communication (other than transmittal letters) (pursuant to the Securities Act),
filed by the Company with (i) the Commission or (ii) any securities exchange on
which shares of Common Stock are listed.
7.4. Notices of Corporate Action. In the event of
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a regular
periodic dividend payable in cash out of earned surplus in an amount
not exceeding the amount of the immediately preceding cash dividend for
such period) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger involving the Company and any
other Person or any transfer of all or substantially all the assets of
the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will mail to the Holder a notice specifying (i) the date or expected
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right, and (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-up. Such notice shall be
mailed at least 45 days prior to the date therein specified.
8. Registration of Common Stock. If any shares of Common Stock
required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act) before such shares may be issued upon
exercise, the Company will, at its expense and as expeditiously as possible, use
its best efforts to cause such shares to be duly registered or approved, as the
case may be. At any such time as Common Stock is listed on any national
securities exchange, the
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Company will, at its expense, obtain promptly and maintain the approval for
listing on each such exchange, upon official notice of issuance, the shares of
Common Stock issuable upon exercise of the then outstanding Warrants and
maintain the listing of such shares after their issuance; and the Company will
also list on such national securities exchange, will register under the Exchange
Act and will maintain such listing of, any Other Securities that at any time are
issuable upon exercise of the Warrants, if and at the time that any securities
of the same class shall be listed on such national securities exchange by the
Company.
9. Restrictions on Transfer.
9.1. Restrictive Legends. Except as otherwise permitted by
this Section 9, each Warrant (including each Warrant issued upon the transfer of
any Warrant) shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
Except as otherwise permitted by this Section 9, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and each
certificate issued upon the transfer of any such Common Stock (or Other
Securities), shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS.
9.2. Transfer to Comply With the Securities Act. Restricted
Securities may not be sold, assigned, pledged, hypothecated, encumbered or in
any manner transferred or disposed of, in whole or in part, except in compliance
with the provisions of the Securities Act and state securities or Blue Sky laws
and the terms and conditions hereof.
9.3. Termination of Restrictions. The restrictions imposed by
this Section 9 on the transferability of Restricted Securities shall cease and
terminate as to any particular
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Restricted Securities (a) when a registration statement with respect to the sale
of such securities shall have been declared effective under the Securities Act
and such securities shall have been disposed of in accordance with such
registration statement, (b) when such securities are sold pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, or (c) when,
in the opinion of both counsel for the Holder and counsel for the Company, such
restrictions are no longer required or necessary in order to protect the Company
against a violation of the Securities Act upon any sale or other disposition of
such securities without registration thereunder. Whenever such restrictions
shall cease and terminate as to any Restricted Securities, the Holder shall be
entitled to receive from the Company, without expense, new securities of like
tenor not bearing the applicable legends required by Section 9.1.
10. Reservation of Stock, etc. The Company shall at all times
reserve and keep available, solely for issuance and delivery upon exercise of
the Warrant, the number of shares of Common Stock (or Other Securities) from
time to time issuable upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof, and, in the case of all
securities, shall be free from all taxes, liens, security interests,
encumbrances, preemptive rights and charges. The transfer agent for the Common
Stock, which may be the Company ("Transfer Agent"), and every subsequent
Transfer Agent for any shares of the Company's capital stock issuable upon the
exercise of any of the purchase rights represented by this Warrant, are hereby
irrevocably authorized and directed at all times until the Expiration Date to
reserve such number of authorized and unissued shares as shall be requisite for
such purpose. The Company shall keep copies of this Warrant on file with the
Transfer Agent for the Common Stock and with every subsequent Transfer Agent for
any shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by this Warrant. The Company shall supply such
Transfer Agent with duly executed stock certificates for such purpose. All
Warrant certificates surrendered upon the exercise of the rights thereby
evidenced shall be canceled, and such canceled Warrants shall constitute
sufficient evidence of the number of shares of stock which have been issued upon
the exercise of such Warrants. Subsequent to the Expiration Date, no shares of
stock need be reserved in respect of any unexercised Warrant.
11. Registration and Transfer of Warrants, etc.
11.1. Warrant Register; Ownership of Warrants. Each Warrant
issued by the Company shall be numbered and shall be registered in a warrant
register (the "Warrant Register") as it is issued and transferred, which Warrant
Register shall be maintained by the Company at its principal office or, at the
Company's election and expense, by a Warrant Agent or the Company's Transfer
Agent. The Company shall be entitled to treat the registered Holder of any
Warrant on the Warrant Register as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other Person, and shall not be affected by
any notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes. Subject to Section
9, a Warrant, if
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properly assigned, may be exercised by a new holder without a new Warrant first
having been issued.
11.2. Transfer of Warrants. Subject to compliance with Section
9, if applicable, this Warrant and all rights hereunder are transferable in
whole or in part, without charge to the Holder hereof, upon surrender of this
Warrant with a properly executed Form of Assignment attached hereto as Exhibit B
at the principal office of the Company. Upon any partial transfer, the Company
shall at its expense issue and deliver to the Holder a new Warrant of like
tenor, in the name of the Holder, which shall be exercisable for such number of
shares of Common Stock with respect to which rights under this Warrant were not
so transferred.
11.3. Replacement of Warrants. On receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office
and cancellation thereof, the Company at its expense shall execute and deliver,
in lieu thereof, a new Warrant of like tenor.
11.4. Adjustments To Warrant Quantity. Notwithstanding any
adjustment in the Warrant Quantity or in the number or kind of shares of Common
Stock purchasable upon exercise of this Warrant, any Warrant theretofore or
thereafter issued may continue to express the same number and kind of shares of
Common Stock as are stated in this Warrant, as initially issued.
11.5 Fractional Shares. Notwithstanding any adjustment
pursuant to Section 2 in the number of shares of Common Stock covered by this
Warrant or any other provision of this Warrant, the Company may, but shall not
be required to, issue fractions of shares upon exercise of this Warrant or to
distribute certificates which evidence fractional shares. In lieu of fractional
shares, the Company shall make payment to the Holder, at the time of exercise of
this Warrant as herein provided, in an amount in cash equal to such fraction
multiplied by the Current Market Price of a share of Common Stock on the date of
Warrant exercise.
12. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Additional Shares of Common Stock: All shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to Section 2.3 or
2.4, deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than
(a) shares issued upon the exercise of the Warrant,
(b) such additional number of shares as may become issuable
upon the exercise of the Warrant by reason of adjustments required
pursuant to anti-dilution provisions applicable to the Warrant as in
effect on the date hereof,
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(c) shares, warrants, options and other securities issued at
any time to the Holder or any Affiliate thereof, and
(d) shares issued upon exercise of any options outstanding as
of the date of this Agreement or granted under First New England's 1996
Stock Plan, as described in the Registration Statement on Form S-1 of
First New England filed with the Securities and Exchange Commission on
January 31, 1997.
Affiliate: Any person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the applicable person. For purposes of this definition "control" has the
meaning specified in Rule 12b-2 under the Exchange Act.
Business Day: Any day other than a Saturday or a Sunday or a
day on which commercial banking institutions in the City of New York are
authorized by law to be closed. Any reference to "days" (unless Business Days
are specified) shall mean calendar days.
Code: As defined in Section 1.7.
Commission: The Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
Common Stock: As defined in the introduction to this Warrant,
such term to include any stock into which such Common Stock shall have been
changed or any stock resulting from any reclassification of such Common Stock,
and all other stock of any class or classes (however designated) of the Company
the holders of which have the right, without limitation as to amount, either to
all or to a share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled to
preference or have the right to vote at elections of directors of the Company,
the authorization of any shares of Common Stock or mergers, consolidations or
sales of assets of the Company.
Company: As defined in the introduction to this Warrant, such
term to include any corporation which shall succeed to or assume the obligations
of the Company hereunder in compliance with Section 3.
Convertible Securities: Any evidences of indebtedness, shares
of stock (other than Common Stock) or other securities directly or indirectly
convertible into or exchangeable for Additional Shares of Common Stock.
Current Market Price: On any date specified herein, the
average daily Market Price during the period of the most recent 20 days, ending
on such date, on which the national securities exchanges were open for trading,
except that if no Common Stock is then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date under clause (d) of
the definition thereof.
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Exchange Act: The Securities Exchange Act of 1934, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
Expiration Date: As defined in the introduction to this
Warrant.
Financing Agreement: As defined in the introduction to this
Warrant.
Fully-Diluted Basis: As of the date of any determination, the
outstanding Common Stock plus the maximum number of shares of Common Stock that
would be issued upon the exercise, conversion or exchange of any outstanding
securities, warrants or options upon the terms thereof, whether or not then
exercisable, convertible, exchangeable or subject to any vesting period, plus
the maximum number of shares of Common Stock issuable pursuant to any agreement
by which the Company is bound whether or not such stock is then required to be
issued.
Holder: As defined in the introduction to this Warrant.
Market Price: On any date specified herein, the amount per
share of the Common Stock, equal to (a) the last reported sale price of such
Common Stock, regular way, on such date or, in case no such sale takes place on
such date, the average of the closing bid and asked prices thereof regular way
on such date, in either case as officially reported on the principal national
securities exchange on which such Common Stock is then listed or admitted for
trading, or (b) if such Common Stock is not then listed or admitted for trading
on any national securities exchange but is designated as a national market
system security by the NASD, the last reported trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the closing bid and asked
prices of the Common Stock on such date as shown by the NASD automated quotation
system, or (d) if such Common Stock is not then listed or admitted for trading
on any national exchange or quoted in the over-the-counter market, and (i) if
during the first year following the date of this Warrant, $10 per share, subject
to adjustment as provided in Sections 2, 3, and 4, or (ii) if following the one
year anniversary of the date of this Warrant, the higher of (x) the book value
thereof as determined by any firm of independent public accountants of
recognized standing selected by the Board of Directors of the Company as of the
last day of any month ending within 60 days preceding the date as of which the
determination is to be made and (y) the fair value thereof (as of a date which
is within 20 days of the date as of which the determination is to be made)
determined in good faith by the Board of Directors of the Company, which
determination may be challenged by the Holder pursuant to Section 21 within 30
days of receipt of notice thereof.
NASD: The National Association of Securities Dealers, Inc.
Notes: The Notes (as defined in the Financing Agreement),
including any such notes issued in substitution for such Notes.
Options: Rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
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Other Securities: Any stock (other than Common Stock) and
other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 3 or otherwise.
Person: A corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.
Registration Rights Agreement: The Registration Rights
Agreement, dated the date hereof, by and among the Company and the Initial
Holders specified on the signature page thereof.
Reporting Event: The completion by the Company of an initial
public offering of its Common Stock or any other transaction pursuant to which
the Company becomes subject to the reporting requirements of Section 15(d) of
the Exchange Act.
Restricted Securities: (a) any Warrants bearing the applicable
legend set forth in Section 9.1, (b) any shares of Common Stock (or Other
Securities) issued or issuable upon the exercise of Warrants which are evidenced
by a certificate or certificates bearing the applicable legend set forth in such
Section, and (c) any shares of Common Stock (or Other Securities) issued
subsequent to the exercise of any of the Warrants as a dividend or other
distribution with respect to, or resulting from a subdivision of the outstanding
shares of Common Stock (or other Securities) into a greater number of shares by
reclassification, stock splits or otherwise, or in exchange for or in
replacement of the Common Stock (or Other Securities) issued upon such exercise,
which are evidenced by a certificate or certificates bearing the applicable
legend set forth in such Section.
Securities Act: The Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
Voting Securities: Stock of any class or classes (or
equivalent interests), if the holders of the stock of such class or classes (or
equivalent interests) are ordinarily, in the absence of contingencies, entitled
to vote for the election of the directors (or persons performing similar
functions) of such business entity, even though the right so to vote has been
suspended by the happening of such a contingency.
Warrant: As defined in the introduction to this Warrant.
Warrant Price: As defined in Section 2.1.
Warrant Quantity: At any time, the number of shares of Common
Stock into which the Warrant is exercisable.
13. Remedies; Specific Performance. The Company stipulates
that there would be no adequate remedy at law to the Holder of this Warrant in
the event of any default or
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threatened default by the Company in the performance of or compliance with any
of the terms of this Warrant and accordingly, the Company agrees that, in
addition to any other remedy to which the Holder may be entitled at law or in
equity, the Holder shall be entitled to seek to compel specific performance of
the obligations of the Company under this Warrant, without the posting of any
bond, in accordance with the terms and conditions of this Warrant in any court
of the United States or any State thereof having jurisdiction, and if any action
should be brought in equity to enforce any of the provisions of this Warrant,
the Company shall not raise the defense that there is an adequate remedy at law.
Except as otherwise provided by law, a delay or omission by the Holder hereto in
exercising any right or remedy accruing upon any such breach shall not impair
the right or remedy or constitute a waiver of or acquiescence in any such
breach. No remedy shall be exclusive of any other remedy. All available remedies
shall be cumulative.
14. No Rights or Liabilities as Shareholder. Nothing contained
in this Warrant shall be construed as conferring upon the Holder hereof any
rights as a shareholder of the Company or as imposing any obligation on the
Holder to purchase any securities or as imposing any liabilities on the Holder
as a shareholder of the Company, whether such obligation or liabilities are
asserted by the Company or by creditors of the Company.
15. Notices.
(a) All notices and other communications (and deliveries)
provided for or permitted hereunder shall be made in writing by hand delivery,
telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (i) if to the Company, to the attention of its President at its
principal office located at First New England Dental Centers, Inc., 00
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or such other address as may
hereafter be designated in writing by the Company to the Holder in accordance
with the provisions of this Section, with a copy to XxXxxxxxx, Will & Xxxxx, 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Xxxxxxx X. Xxxx, Esq., or (ii)
if to the Holder, at its address as it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; when receipt is acknowledged, if telecopied; on the next Business
Day, if timely delivered to a courier guaranteeing overnight delivery; and five
days after being deposited in the mail, if sent first class or certified mail,
return receipt requested, postage prepaid; provided, that the exercise of any
Warrant shall be effective in the manner provided in Section 1.
(b) If:
(i) the Company shall declare a dividend (or any other
distribution) on the Common Stock; or
(ii) the Company shall authorize the granting to all
holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or
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(iii) there shall be any reclassification of the Common
Stock or any consolidation or merger to which the Company is a party and for
which approval of any shareholders of the Company is required, or a statutory
share exchange, or self tender offer by the Company for all or substantially all
of its outstanding shares of Common Stock or the sale or transfer of all or
substantially all of the assets of the Company as an entity; or
(iv) there shall occur the involuntary or voluntary
liquidation, dissolution or winding up of the Company,
then the Company shall cause to be mailed to the Holders, at the address as
shown on the stock records of the Company, as promptly as possible, but at least
30 Business Days prior to the applicable date hereinafter specified, a notice
stating (A) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property, if any, deliverable upon such reclassification,
consolidation, merger, statutory share exchange, sale, transfer, liquidation,
dissolution or winding up.
(c) Whenever the number of shares of Common Stock issuable
upon exercise of this Warrant is adjusted as herein provided, the Company shall
prepare a notice of such adjustment setting forth the adjusted number of shares
of Common Stock issuable upon exercise of this Warrant, the basis and the
computation thereof, and the effective date of such adjustment and shall mail
such notice to the Holders at Holders' last address as shown on the stock
records of the Company.
16. Amendments. This Warrant and any term hereof may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, except by written
instrument duly executed by the Holders of a majority-in-interest of the
Warrants.
17. Descriptive Headings, Etc. The headings in this Warrant
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Warrant
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Warrant shall
refer to this Warrant as a whole and not to any particular provision of this
Warrant, and Section and paragraph references are to the Sections and paragraphs
of this Warrant unless otherwise specified; (4) the word "including" and words
of similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (5) "or" is not exclusive; and (6)
provisions apply to successive events and transactions.
18. Governing Law. This Warrant shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of laws
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principles thereof), except to the extent of matters arising hereunder regarding
the corporate governance of the Company which shall be governed by the Delaware
General Corporation Law.
19. Judicial Proceedings; Waiver of Jury. Any legal action,
suit or proceeding brought against the Company with respect to this Warrant may
be brought in any federal court of the Southern District of New York or any
state court located in New York County, State of New York, and by execution and
delivery of this Warrant, the Company hereby irrevocably and unconditionally
waives any claim (by way of motion, as a defense or otherwise) of improper
venue, that it is not subject personally to the jurisdiction of such court, that
such courts are an inconvenient forum or that this Warrant or the subject matter
may not be enforced in or by such court. The Company hereby irrevocably and
unconditionally consents to the service of process of any of the aforementioned
courts in any such action, suit or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, at its address set forth or
provided for in Section 15 (with copies of such process also being sent to the
Company's counsel referred to in such section), such service to become effective
30 days after such mailing. Nothing herein contained shall be deemed to affect
the right of any party to serve process in any manner permitted by law or
commence legal proceedings or otherwise proceed against any other party in any
other jurisdiction to enforce judgments obtained in any action, suit or
proceeding brought pursuant to this Section. THE COMPANY HEREBY IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING, WHETHER AT LAW OR
EQUITY, BROUGHT BY IT OR THE HOLDER IN CONNECTION WITH THIS WARRANT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
20. Registration Rights Agreement. The shares of Common Stock
(and Other Securities) issuable upon exercise of this Warrant (or upon
conversion of any shares of Common Stock issued upon such exercise) shall
constitute Registrable Securities (as such term is defined in the Registration
Rights Agreement). Each holder of this Warrant shall be entitled to all of the
benefits afforded to a holder of any such Registrable Securities under the
Registration Rights Agreement and such holder, by its acceptance of this
Warrant, agrees to be bound by and to comply with the terms and conditions of
the Registration Rights Agreement applicable to such holder as a holder of such
Registrable Securities.
21. Determination of Current Market Price or Market Price.
(a) The determination by the Board of Directors of the
Current Market Price or Market Price shall be final and binding absent manifest
error except that the determination of Market Price under clause (d) of the
definition thereof may be challenged by the Holders of a majority-in-interest of
the Warrants within 30 days after notice of any adjustment in the number of
shares of Common Stock issuable upon the exercise of this Warrant utilizing such
definition as sent to the Holders.
(b) Such notice of objection shall specify an investment
banking firm of national reputation to determine the market value of the Common
Stock as of the date of determination by the Company's Board of Directors. The
Company may reject the firm included in such notice solely based on such firm
being an affiliate of one or more Holders.
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(c) The Company shall enter into a standard agreement
with such firm and shall provide full cooperation to such firm with respect to
its evaluation of the Market Value of the Common Stock. The Company and the
Holders shall each pay one-half of the fees and expenses of such firm; provided,
however, that in the event that the determination by such firm is 110% or more
of the original determination made by the Company's Board of Directors, the
Company shall pay all of the fees and expenses of such firm.
(d) In determining the Market Value of the Common Stock,
such firm may not take into account that the Common Stock at issue does not
control the Company.
(e) The determination by such firm shall be final and
binding on the Company and the Holders.
FIRST NEW ENGLAND DENTAL
CENTERS, INC.
By:_________________________
Name:
Title:
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Exhibit A
FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
To: FIRST NEW ENGLAND DENTAL CENTERS, INC.
The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, ____ shares of Common
Stock of FIRST NEW ENGLAND DENTAL CENTERS, INC. and herewith makes payment of
$ therefor, and requests that the certificates for such shares be issued
in the name of, and delivered to whose address is
Dated: ___________________________________________________
(Signature must conform in all respects to the
name of holder as specified on the face of Warrant)
___________________________________________________
(Xxxxxx Xxxxxxx)
___________________________________________________
(City) (State) Zip Code)
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Exhibit B
FORM OF ASSIGNMENT
[To be executed only upon assignment of Warrant]
For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto the right represented by such
Warrant to purchase shares of Common Stock of FIRST NEW ENGLAND DENTAL
CENTERS, INC. to which such Warrant relates, and appoints Attorney to make
such transfer on the books of FIRST NEW ENGLAND DENTAL CENTERS, INC., maintained
for such purpose, with full power of substitution in the premises.
Dated: ___________________________________________________
(Signature must conform in all respects to the
name of holder as specified on the face of Warrant)
___________________________________________________
(Xxxxxx Xxxxxxx)
___________________________________________________
(City) (State) Zip Code)
Signed in the presence of:
__________________________
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