THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH
RESPECT THERETO.
COMMON STOCK PURCHASE WARRANT
Warrant No. W- Number of Shares -
U.S. PHYSICIANS, INC.
Void after December 31, 1999
1. Issuance. This Warrant is issued to ___________ by U.S. PHYSICIANS,
Inc., a Pennsylvania corporation (hereinafter with its successors called the
"Company"). This Warrant is one of a series of Warrants (the "Warrants") being
issued to purchasers of the Company's Series B Convertible Preferred Stock.
2. Purchase Price; Number of Shares. Subject to the terms and conditions
hereinafter set forth, the registered holder of this Warrant (the "Holder"), is
entitled upon surrender of this Warrant with the subscription form annexed
hereto duly executed, at the office of the Company, 000 Xxxxxxxx Xxxxx, Xxxxx
000, Xxxx Xxxxxxxxxx, XX 00000 or such other office as the Company shall notify
the Holder of in writing, to purchase from the Company at a price per share (the
"Purchase Price") of $3.15, up to ______ fully paid and nonassessable shares of
Common Stock, $.01 par value, of the Company (the "Common Stock"). Until such
time as this Warrant is exercised in full or expires, the Purchase Price and the
securities issuable upon exercise of this Warrant are subject to adjustment as
hereinafter provided.
3. Exercisablity. This Warrant will become exercisable upon issuance.
4. Payment of Purchase Price. The Purchase Price may be paid (i) in cash or
by check, (ii) by the surrender by the Holder to the Company of any promissory
notes or
other obligations issued by the Company, with all such notes and obligations so
surrendered being credited against the Purchase Price in an amount equal to the
principal amount thereof plus accrued interest to the date of surrender, (iii)
through delivery by the Holder to the Company of other securities issued by the
Company, with such securities being credited against the Purchase Price in an
amount equal to the fair market value thereof, as determined in good faith by
the Board of Directors of the Company (the "Board"), or (iv) by any combination
of the foregoing. The Board shall promptly respond in writing to an inquiry by
the Holder as to the fair market value of any securities the Holder may wish to
deliver to the Company pursuant to clause (iii) above.
5. Net Issue Election. The Holder may elect to receive, without the payment
by the Holder of any additional consideration, shares equal to the value of this
Warrant or any portion hereof by the surrender of this Warrant or such portion
to the Company, with the net issue election notice annexed hereto duly executed,
at the office of the Company. Thereupon, the Company shall issue to the Holder
such number of fully paid and nonassessable shares of Common Stock as is
computed using the following formula:
X = Y (A-B)
-------
A
where X = the number of shares to be issued to the Holder pursuant
to this Section 5.
Y = the number of shares covered by this Warrant in respect of
which the net issue election is made pursuant to this Section
5.
A = the fair market value of one share of Common Stock, as
determined in good faith by the Board, as at the time the net
issue election is made pursuant to this Section 5.
B = the Purchase Price in effect under this Warrant at the time
the net issue election is made pursuant to this Section 5.
The Board shall promptly respond in writing to an inquiry by the Holder as to
the fair market value of one share of Common Stock.
6. Partial Exercise. This Warrant may be exercised in part, and the Holder
shall be entitled to receive a new warrant, which shall be dated as of the date
of this Warrant, covering the number of shares in respect of which this Warrant
shall not have been exercised.
7. Issuance Date. The person or persons in whose name or names any
certificate representing shares of Common Stock is issued hereunder shall be
deemed to have become the holder of record of the shares represented thereby as
at the close of business on the date this Warrant is exercised with respect to
such shares, whether or not the transfer books of the Company shall be closed.
8. Expiration Date; Automatic Exercise. This Warrant shall expire at the
close of business on December 31, 1999 and shall be void thereafter.
Notwithstanding the foregoing, this Warrant shall automatically be deemed to be
exercised in full pursuant to the provisions of Section 5 hereof, without any
further action on behalf of the Holder, immediately prior to the time this
Warrant would otherwise expire pursuant to the preceding sentence.
9. Reserved Shares; Valid Issuance. The Company covenants that it will at
all times from and after the date hereof reserve and keep available such number
of its authorized shares of Common Stock, free from all preemptive or similar
rights therein, as will be sufficient to permit the exercise of this Warrant in
full. The Company further covenants that such shares as may be issued pursuant
to the exercise of this Warrant will, upon issuance, be duly and validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issuance thereof.
10. Dividends. If after __________, ____(the "Original Issue Date") the
Company shall subdivide the Common Stock, by split-up or otherwise, or combine
the Common Stock, or issue additional shares of Common Stock in payment of a
stock dividend on the Common Stock, the number of shares issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination, and the Purchase Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination.
11. Mergers and Reclassifications. If after the Original Issue Date there
shall be any reclassification, capital reorganization or change of the Common
Stock (other than as a result of a subdivision, combination or stock dividend
provided for in Section 10 hereof), or any consolidation of the Company with, or
merger of the Company into, another corporation or other business organization
(other than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
outstanding Common Stock), or any sale or conveyance to another corporation or
other business organization of all or substantially all of the assets of the
Company, then, as a condition of such reclassification, reorganization, change,
consolidation, merger, sale or conveyance, lawful provisions shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the Holder, so that the Holder shall thereafter have the
right to purchase, at a total price not to exceed that payable upon the exercise
of this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, reorganization,
change, consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock which might have been purchased by the Holder immediately
prior to such reclassification, reorganization, change, consolidation, merger,
sale or conveyance, and in any such case appropriate provisions shall be made
with respect to the rights and interest of the Holder to the end that the
provisions hereof (including without limitation, provisions for the adjustment
of the Purchase Price and the number of shares issuable hereunder) shall
thereafter be
applicable in relation to any shares of stock or other securities and property
thereafter deliverable upon exercise hereof.
12. Adjustments for Issuances Below Purchase Price. In case the Company
shall at any time or from time to time after the Original Issue Date issue or
sell any shares of Common Stock (other than shares issued in transactions to
which Sections 10 or 11 of this Warrant apply) for a consideration per share
less than the Purchase Price in effect for this Warrant immediately prior to the
time of such issue or sale, or pay any dividend or make any other distribution
upon the Common Stock payable in cash, property or securities of the Company
other than Common Stock or in securities of a corporation other than the
Company, then forthwith upon such issue or sale, or upon the payment of such
dividend or the making of such other distribution, as the case may be, the
Purchase Price shall (until another such issue or sale, or dividend or other
distribution) be reduced to a price (calculated to the nearest cent) determined
by dividing (i) an amount equal to the sum of (X) the number of shares of Common
Stock outstanding immediately prior to such issue or sale or the payment of such
dividend or the making of such other distribution, multiplied by the Purchase
Price in effect immediately prior to such event plus (Y) the consideration, if
any, received by the Company upon such issue or sale minus (Z) the amount of
such dividend or other distribution in respect of Common Stock, by (ii) the
total number of shares of Common Stock outstanding immediately after such issue
or sale or dividend or other distribution. Further, the number of shares
purchasable hereunder shall be increased to a number determined by dividing (i)
the number of shares purchasable hereunder immediately prior to such issue or
sale or dividend or other distribution, multiplied by the Purchase Price
hereunder immediately prior to such event, by (ii) the Purchase Price in effect
immediately after the foregoing adjustment. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any adjustment of the
Purchase Price in the case of the issuance from and after December 31, 1996: (i)
of up to an aggregate of 2,500,000 shares (appropriately adjusted to reflect the
occurrence of any event described in Section 10) of Common Stock (directly or
through the grant of options or other convertible securities) to directors,
officers, employees, consultants or affiliated physicians of the Company in
connection with their service to the Company; (ii) of Common Stock made solely
in consideration for the acquisition (whether by merger or otherwise) by the
Company or by an affiliate of the Company of all or substantially all of the
stock or assets of any other entity engaged primarily in the practice of
medicine or other operating business; (iii) in connection with the employment by
the Company or an affiliate of the Company of a physician, provided that the
issuances contemplated by this clause (iii) shall be limited to 600,000 shares
(appropriately adjusted to reflect the occurrence of any event described in
Section 10) of Common Stock in the aggregate; or (iv) of Warrants on or prior to
January 15, 1997 (or the issuance of Common Stock upon the exercise of
Warrants).
For the purpose of this Section 12, the following provisions shall also
be applicable:
A. In case the Company shall in any manner offer any rights to subscribe
for or to purchase shares of Common Stock, or grant any options for the purchase
of shares of
Common Stock, at a price less than the Purchase Price in effect immediately
prior to the time of the offering of such rights or the granting of such
options, as the case may be, all shares of Common Stock which the holders of
such rights or options shall be entitled to subscribe for or purchase pursuant
to such rights or options shall be deemed to be issued or sold as of the date of
the offering of such rights or the granting of such options, as the case may be,
and the minimum aggregate consideration named in such rights or options for the
Common Stock covered thereby, plus the consideration received by the Company for
such rights or options, shall be deemed to be the consideration actually
received by the Company (as of the date of the offering of such rights or the
granting of such options, as the case may be) for the issue or sale of such
shares.
B. In case the Company shall in any manner issue or sell any shares of
any class or obligations directly or indirectly convertible into or exchangeable
for shares of Common Stock and the price per share for which Common Stock is
deliverable upon such conversion or exchange (determined by dividing (i) the
total minimum amount received or receivable by the Company in consideration of
the issue or sale of such convertible or exchangeable shares or obligations,
plus the total minimum amount of premiums, if any, payable to the Company upon
conversion or exchange, by (ii) the total number of shares of Common Stock
necessary to effect the conversion or exchange of all such convertible or
exchangeable shares or obligations) shall be less than the Purchase Price in
effect immediately prior to the time of such issue or sale, then such issue or
sale shall be deemed to be an issue or sale (as of the date of issue or sale of
such convertible or exchangeable shares or obligations) of the total maximum
number of shares of Common Stock necessary to effect the conversion or exchange
of all such convertible or exchangeable shares or obligations, and the total
minimum amount received or receivable by the Company in consideration of the
issue or sale of such convertible or exchangeable shares or obligations, plus
the total minimum amount of premiums, if any, payable to the Company upon
exchange or conversion, shall be deemed to be the consideration actually
received (as of the date of the issue or sale of such convertible or
exchangeable shares or obligations) for the issue or sale of such Common Stock.
C. In the case of any dividend or other distribution on the Common Stock
of the Company payable in property, securities of the Company other than Common
Stock or securities of a corporation other than the Company, such dividend or
other distribution shall be deemed to have been paid or made at a value equal to
the fair value of the property or securities so distributed. Any dividend or
distribution referred to in this Subsection C shall be deemed to have been paid
or made on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or distribution.
D. In determining the amount of consideration received by the Company
for Common Stock, securities convertible thereinto or exchangeable therefor, or
rights or options for the purchase thereof, no deduction shall be made for
expenses or underwriting discounts or commissions paid by the Company. The Board
shall determine in good faith the fair value of the amount of consideration
other than money received by the Company upon
the issue by it of any of its securities. The Board shall also determine in good
faith the fair value of any dividend or other distribution made upon Common
Stock payable in property, securities of the Company other than Common Stock or
securities of a corporation other than the Company. The Board shall, in the case
that any Common Stock, securities convertible thereinto or exchangeable
therefor, or rights or options for the purchase thereof are issued with other
stock, securities or assets of the Company, determine in good faith what part of
the consideration received therefor is applicable to the issue of the Common
Stock, securities convertible thereinto or exchangeable therefor, or rights or
options for the purchase thereof.
E. If there shall be any change in (i) the minimum aggregate
consideration named in the rights or options referred to in Subsection A above,
(ii) the consideration received by the Company for such rights or options, (iii)
the price per share for which Common Stock is deliverable upon the conversion or
exchange of the convertible or exchangeable shares or obligations referred to in
Subsection B above, (iv) the number of shares which may be subscribed for or
purchased pursuant to the rights or options referred to in Subsection A above,
or (v) the rate at which the convertible or exchangeable shares or obligations
referred to in Subsection B above are convertible into or exchangeable for
Common Stock, then the Purchase Price in effect at the time of such event shall
be readjusted to the Purchase Price which would have been in effect at such time
had such rights, options, or convertible or exchangeable shares or obligations
still outstanding provided for such changed consideration, price per share,
number of shares, or rate of conversion or exchange, as the case may be, at the
time initially offered, granted, issued or sold, but only if as a result of such
adjustment the Purchase Price then in effect hereunder is thereby reduced.
13. Fractional Shares. In no event shall any fractional share of Common
Stock be issued upon any exercise of this Warrant. If, upon exercise of this
Warrant as an entirety, the Holder would, except as provided in this Section 13,
be entitled to receive a fractional share of Common Stock, then the Company
shall issue the next higher number of full shares of Common Stock, issuing a
full share with respect to such fractional share.
14. Certificate of Adjustment. Whenever the Purchase Price is adjusted,
as herein provided, the Company shall promptly deliver to the Holder a
certificate of a firm of independent public accountants setting forth the
Purchase Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment.
15. Notices of Record Date, Etc. 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 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,
B. any reclassification of the capital stock of the Company, capital
reorganization of the Company, consolidation or merger involving the Company, or
sale or conveyance of all or substantially all of its assets, or
C. any voluntary or involuntary dissolution, liquidation or winding-
up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
any such reclassification, reorganization, consolidation, merger, sale or
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record in respect of
such event are to be determined. Such notice shall be mailed at least 20 days
prior to the date specified in such notice on which any such action is to be
taken.
16. Amendment. The terms of this Warrant may be amended, modified or
waived only with the written consent of the Company and the holders of Warrants
representing at least two-thirds of the number of shares of Common Stock then
issuable upon the exercise of the Warrants. No such amendment, modification or
waiver shall be effective as to this Warrant unless the terms of such amendment,
modification or waiver shall apply with the same force and effect to all of the
other Warrants then outstanding.
17. Warrant Register; Transfers, Etc.
A. The Company will maintain a register containing the names and
addresses of the registered holders of the Warrants. The Holder may change its
address as shown on the warrant register by written notice to the Company
requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be given by certified mail or delivered
to the Holder at its address as shown on the warrant register.
B. Subject to compliance with applicable federal and state securities
laws, this Warrant may be transferred by the Holder with respect to any or all
of the shares purchasable hereunder. Upon surrender of this Warrant to the
Company, together with the assignment hereof properly endorsed, for transfer of
this Warrant as an entirety by the Holder, the Company shall issue a new warrant
of the same denomination to the assignee. Upon surrender of this Warrant to the
Company, together with the assignment hereof properly endorsed, by the Holder
for transfer with respect to a portion of the shares of Common Stock purchasable
hereunder, the Company shall issue a new warrant to the assignee, in such
denomination as shall be requested by the Holder hereof, and shall issue to such
Holder a new warrant covering the number of shares in respect of which this
Warrant shall not have been transferred.
C. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and
denomination and deliver the same (i) in exchange and substitution for and upon
surrender and cancellation of any mutilated Warrant, or (ii) in lieu of any
Warrant lost, stolen or destroyed, upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft or destruction of such Warrant
(including a reasonably detailed affidavit with respect to the circumstances of
any loss, theft or destruction) and of indemnity reasonably satisfactory to the
Company, provided, however, that so long as the original holder of this Warrant
is the registered holder of this Warrant, no indemnity shall be required other
than its written agreement to indemnify the Company against any loss arising
from the issuance of such new warrant.
18. No Impairment. The Company will not, by amendment of its Articles of
Incorporation or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
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.
19. Governing Law. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Pennsylvania.
20. Successors and Assigns. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.
21. Business Days. If the last or appointed day for the taking of any
action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in the Commonwealth of Pennsylvania, then
such action may be taken or right may be exercised on the next succeeding day
which is not a Saturday or Sunday or such a legal holiday.
Dated: U.S. PHYSICIANS, Inc.
By:___________________________
SUBSCRIPTION
To:____________________ Date:_________________________
The undersigned hereby subscribes for __________ shares of Common Stock
covered by this Warrant. The certificate(s) for such shares shall be issued in
the name of the undersigned or as otherwise indicated below:
------------------------------
Signature
------------------------------
Name for Registration
------------------------------
Mailing Address
NET ISSUE ELECTION NOTICE
To:____________________ Date:__________________________
The undersigned hereby elects under Section 5 to surrender the right to
purchase _______ shares of Common Stock pursuant to this Warrant. The
certificate(s) for the shares issuable upon such net issue election shall be
issued in the name of the undersigned or as otherwise indicated below.
------------------------------
Signature
------------------------------
Name for Registration
------------------------------
Mailing Address
ASSIGNMENT
For value received ____________________________ hereby sells,
assigns and transfers unto ______________________________________
_________________________________________________________________
Please print or typewrite name and address of Assignee
_________________________________________________________________
the within Warrant, and does hereby irrevocably constitute and appoint
_______________________ its attorney to transfer the within Warrant on the books
of the within named Company with full power of substitution on the premises.
Dated:_______________________
In the Presence of:
_____________________________
