EXHIBIT 10.17
COMMON STOCK WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS BY REASON OF EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH STATE SECURITIES LAWS AND MAY
NOT BE SOLD, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF IN ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS, IN THE OPINION OF COUNSEL TO XXXXXXXXXXXXXX.XXX, INC., AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
WARRANT
No.24 Warrant to Purchase a Number of Shares of
Common Stock to be determined as set
forth herein.
XXXXXXXXXXXXXX.XXX, INC.
This certifies that, for value received, Xxxxxx-Xxxxxxxxx Capital
Focus II, L.P., or its registered assigns, is entitled to subscribe for and
purchase, at any time and from time to time during the Effective Period, a
number of shares of duly authorized, validly issued, fully paid and
non-assessable Common Stock, including fractional shares, equal to the Number
of Shares at an exercise price of $0.01 per share, upon the terms and subject
to the conditions hereinafter set forth.
1. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Appraisal Procedure" shall mean a determination of Fair Value per
share of Common Stock (on the basis set forth in the definition of that term and
in Section 9 hereof) by an Appraiser selected by the Corporation and Two Thirds
in Interest of the Holders, which Appraiser shall be directed to independently
determine Fair Value per share of Common Stock as of the Effective Date of a
Triggering Event and to submit its determination in writing to the Corporation
and the Holders at the earliest practicable date, but in any event within 45
days following the selection of such Appraiser, provided that if the Corporation
and Two Thirds in Interest of the Holders are unable to agree upon the selection
of an Appraiser within 30 days, then each of the Corporation and Two Thirds in
Interest of the Holders shall select an Appraiser who shall be directed to
independently determine the Fair Value per share of Common Stock and to submit
its determination in writing to the Corporation and the Holders at the earliest
practicable date, but in any event within 45 days following the selection of
both Appraisers. If the value determined by the Appraiser whose determination is
the higher of the two appraisals does not exceed by more than ten percent (10%)
the average of the values
determined by each Appraiser, Fair Value per share of Common Stock shall be the
average of the values determined by the two Appraisers. If the value determined
by the Appraiser whose determination is the higher of the two appraisals does
exceed by more than ten percent (10%) the average of the value determined by
each Appraiser, then the two Appraisers shall, within 15 days following
submission to the Corporation and the Holders of the later of such two
appraisals, select a third independent Appraiser who shall be directed to
determine Fair Value per share of Common Stock independently of the other
Appraisers and to submit its determination in writing to the Corporation and the
Holders at the earliest practicable date, but in any event within 15 days of
such Appraiser's selection. The value determined by the Appraiser whose
determination is the most discrepant from the average of the three appraisals
shall be discarded, and Fair Value per share of Common Stock shall equal the
average of the remaining two appraisals, except that if the highest and lowest
appraisals are equally discrepant from the average of the three appraisals, Fair
Value per share of Common Stock shall be such average. Fair Value per share of
Common Stock shall in all cases be determined on the basis set forth in the
definition of that term, and all Appraisers shall be so instructed.
"Appraiser" shall mean an independent appraiser of recognized
national standing.
"Common Stock" shall mean the Corporation's Common Stock, par value
$0.01 per share, and any Stock into which such Common Stock may hereafter be
changed.
"Common Stock Equivalents" shall mean any warrant, option or other
right to subscribe for or purchase any shares of Common Stock or any evidences
of indebtedness, shares of Stock or other securities which are or may be at any
time convertible into or exchangeable for shares of Common Stock.
"Composite Transactions Tape": A security price reporting service
that includes all transactions in a security on each of the exchanges and in the
over-the-counter market.
"Corporation" shall mean America's Doctor, Inc., a Delaware
corporation, and its successors and assigns.
"Counsel" shall mean counsel to the Corporation.
"Effective Date of a Triggering Event" shall mean the following:
(a) with respect to a Triggering Event defined in clause (a) of the
definition of Triggering Event, the closing date of such sale;
(b) with respect to a Triggering Event defined in clause (b) or (c)
of the definition of Triggering Event, the closing date of such sale,
transfer or other disposition; and
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(c) with respect to a Triggering Event defined in clause (d) of the
definition of Triggering Event, the effective date of such merger or
consolidation.
"Effective Period" shall mean the period beginning on the Effective
Date of a Triggering Event and ending on the later of (a) (i) with respect to a
Triggering Event as defined in clause (a) of the definition of a Triggering
Event, on such date which is five years after the Effective Date of a Triggering
Event and (ii) with respect to a Triggering Event as defined in clause (b), (c)
or (d) of the definition of a Triggering Event, on such date which is twelve
months after the Effective Date of a Triggering Event and (b) twelve months
after the final determination of the Number of Shares.
"Exercise Price" shall mean the product of the Warrant Price and
the Number of Shares.
"Fair Market Value" shall mean the amount per share of Common Stock
as determined in good faith by the board of directors of the Corporation based
on an opinion of an independent investment banking firm reasonably acceptable to
the majority in interest of the outstanding Warrants with an established
national reputation as a value of securities.
"Fair Value" per share of Common Stock as of any date shall mean:
(i) with respect to a Triggering Event of the type defined in
clause (a) of the definition of a Triggering Event, if the
registered securities are shares of Common Stock, then the price at
which such shares of Common Stock are offered to the public, and if
the registered securities are not shares of Common Stock, then the
Common Stock price implied by the price at which such securities are
offered to the public;
(ii) with respect to a Triggering Event of the type defined in
clause (b) of the definition of a Triggering Event, an amount equal
to the ratio of:
(1) the difference between:
(x) the sum of (A) the aggregate consideration received in
connection with such sale (including the value of any cash,
securities, tangible assets and intangible assets received and
the value of any liabilities of the Corporation assumed by the
acquiror), (B) the value of any assets retained by the
Corporation after giving effect to such sale, and (C) the
consideration which would be received by the Corporation upon
the exercise, conversion or exchange of all outstanding Common
Stock Equivalents, regardless of whether such Common Stock
Equivalents are then exercisable, convertible or exchangeable,
and
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(y) the value of any liabilities retained by the Corporation
after giving effect to such sale, and
(2) the number of shares of Common Stock outstanding determined on a
Fully Diluted Basis as of the Effective Date of a Triggering Event
(excluding all classes of preferred stock of the Corporation which
were not converted to Common Stock in connection with such sale);
(iii) with respect to a Triggering Event of the type defined
in clause (c) of the definition of a Triggering Event, the purchase
price per share of Common Stock received in such sale; and
(iv) with respect to a Triggering Event of the type defined in
clause (d) of the definition of a Triggering Event, the
consideration per share of Common Stock received in such merger or
consolidation.
The "Fair Value" of a number of shares of Common Stock as of any date shall mean
the product of (a) Fair Value per share of Common Stock as of such date and (b)
such number of shares of Common Stock. The "Fair Value" shall be determined by
either (i) the mutual agreement of the Corporation and Two Thirds in Interest of
the Holders within thirty days of receipt of written notice from the
Corporation, pursuant to Section 2.1 hereof, of the anticipated occurrence of a
Triggering Event; or (ii) if the Holders and the Corporation are unable to agree
within thirty days of the date of receipt of written notice from the Corporation
pursuant to Section 2.1 hereof, at the election of either party, pursuant to the
Appraisal Procedure.
"Fully Diluted Basis" shall mean on a basis whereby the aggregate
number of shares for such determination includes (i) all shares of such Common
Stock then issued and outstanding; and (ii) all shares of Common Stock which
would be outstanding upon the exercise, conversion or exchange of all
outstanding Common Stock Equivalents, which Common Stock Equivalents are then
exercisable, convertible or exchangeable.
"Holder" shall mean the Person or Persons who shall from time to
time own of record this Warrant.
"Holders" shall mean the Persons who shall from time to time own of
record all the outstanding Warrants, including this Warrant.
"Investment Date" shall mean, with respect to any shares of Series B
Preferred Stock, the date upon which such shares of Series B Preferred Stock
were issued.
"Number of Shares" shall mean, with respect to any Holder, the
number of shares of Common Stock that, when taken together with the Value of the
Original Series B Equity Stake of such Holder as of the Effective Date of the
Triggering Event and all dividends
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or other distributions received by such Holder (or its predecessor-in-interest)
with respect to the Series B Preferred Stock, would have a Fair Value as of such
date equal to an amount that implies achievement of a 15% annual pre-tax
internal rate of return (determined on a pro rata basis for any partial year and
on a monthly compounding basis) on the aggregate amount paid by such Holder (or
its predecessor-in-interest) for Series B Preferred Stock shares and for this
Warrant from the Investment Date, calculated in accordance with generally
accepted financial principles; provided, however, that if the Number of Shares
determined as provided above is zero or less than zero, then the Number of
Shares shall be zero and this Warrant shall immediately terminate.
"Person" shall mean an individual, a corporation, a partnership, a
trust, an unincorporated organization or a government organization or an agency
or political subdivision thereof.
"Securities Act" shall mean as of any date the Securities Act of
1933, as amended, or any similar Federal statute then in effect.
"Securities Purchase Agreement" shall mean the Securities Purchase
Agreement dated as of June 1, 1999, among the Corporation and the Purchasers
named therein, as it may be amended from time to time.
"Series A Preferred Stock" shall mean the Corporation's Series A
Convertible Preferred Stock, par value $0.01 per share.
"Series B Preferred Stock" shall mean the Corporation's Series B
Redeemable Convertible Preferred Stock, par value $0.01 per share.
"Stock" shall include any and all shares, interests or other
equivalents (however designated) of, or participations in, the capital stock of
the Corporation of any class.
"Triggering Event" means the first to occur of the following
events:
(a) Any sale by the Corporation of shares of Common Stock or Common
Stock Equivalents pursuant to a registration statement filed by the
Corporation under the Securities Act (other than a registration statement
filed on Form S-4 or Form S-8), which filing shall have been declared
effective by the Securities and Exchange Commission, at a before-the-money
market capitalization of not less than $75,000,000 and in which the gross
proceeds received by the Corporation for such securities equals or exceeds
$15,000,000.
(b) Any sale, transfer or other disposition of all or substantially
all of the assets of the Corporation, other than (i) sales or other
transfers to affiliates or partners of the Holder and (ii) sales or other
transfers to wholly owned affiliates of the Corporation, provided that
such affiliate assumes all of the Corporation's obligations hereunder.
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(c) Any sale, transfer or other disposition of more than 80% of the
outstanding Common Stock of the Corporation determined on a Fully Diluted
Basis, other than (i) sales or other transfers to affiliates or partners
of the Holder and (ii) sales or other transfers to wholly owned affiliates
of the Corporation, provided that such affiliate assumes all of the
Corporation's obligations hereunder.
(d) Any merger or consolidation involving the Corporation
immediately following the effective date of which a majority of the board
of directors of the corporation surviving such merger or consolidation are
not members of the board of directors immediately prior to such merger or
consolidation.
"Two Thirds in Interest of the Holders" means Holders of (i)
Warrants representing at least two-thirds of the number of shares of Common
Stock then issuable upon exercise of the Warrants or (ii) two-thirds of the
number of shares of Series B Preferred Stock then outstanding.
"Value of the Original Series B Equity Stake," as of any date with
respect to any Holder, shall mean the greater of:
(a) the Fair Value of the number of shares of Common Stock issuable
upon the conversion of the issued shares of Series B Preferred Stock
originally issued to the Holder (or its predecessor-in-interest); and
(b) the lesser of:
(i) the liquidation value as of such date of the shares of
Series B Preferred Stock originally issued to the Holder (or its
predecessor-in-interest); and
(ii) the stockholders equity of the Corporation as of the end
of the most recent fiscal quarter of the Corporation, as reflected
on the balance sheet of the Corporation, determined in accordance
with generally accepted accounting principles; provided, however,
that if the stockholders equity of the Corporation as reflected on
such balance sheet is zero or less than zero, then the number
calculated pursuant to this clause (b) shall be zero.
"Warrant" shall mean this Warrant.
"Warrant Price" shall mean $0.01 per share of Common Stock.
"Warrants" shall mean this Warrant and all other Warrants issued by
the Corporation pursuant to the Securities Purchase Agreement.
2. Determination of "Number of Shares".
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2.1. Thirty days prior to the anticipated occurrence of a
Triggering Event, the Corporation shall deliver notice to the Holder that a
Triggering Event is expected to occur and providing a description in reasonable
detail of the Triggering Event and the anticipated Effective Date of such
Triggering Event.
2.2. Within thirty days of receipt by the Holder of written
notice from the Corporation pursuant to Section 2.1 hereof, the Corporation and
the Two Thirds in Interest of Holders shall attempt to agree on the Number of
Shares for the Holders and, if they so agree, the number so agreed shall be the
Number of Shares. If, within thirty days of receipt by the Holders of the notice
from the Corporation referred to in Section 2.1, the Corporation and Two Thirds
in Interest of the Holders have been unable to so agree, either party may invoke
the Appraisal Procedure described in Section 9 hereof, in which event such
Appraiser or Appraisers shall be instructed to determine the Number of Shares,
which shall then be binding on the Corporation and the Holder.
3. Duration. The right to exercise this Warrant to subscribe for and
purchase shares of Common Stock represented hereby shall commence on the
Effective Date of a Triggering Event and shall expire at 5:00 P.M., Eastern
Time, on the last day of the Effective Period.
4. Method of Exercise; Payment; Issuance of New Warrant; Transfer
and Exchange.
4.1. The purchase right represented by this Warrant may be
exercised any time during the Effective Period. If this Warrant is exercised on
the Effective Date of a Triggering Event, such exercise shall be deemed to occur
prior to the occurrence of the Triggering Event, except for purposes of
determining the Fair Value per share of Common Stock, the Number of Shares and
determining the number of shares outstanding on a Fully Diluted Basis hereunder.
4.2. The Holder hereof may exercise this Warrant, in whole or
in part, by delivery to the Corporation at its office at 00000 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxx, 00000, Attention: Chief Executive Officer (or
such other address as the Corporation may specify to Holder from time to time),
of (a) a written notice of Holder's election to exercise this Warrant, which
notice shall specify the number of shares of Common Stock to be purchased, (b)
payment of the Exercise Price in the manner provided below and (c) this Warrant.
Such notice shall be substantially in the form of the subscription form
appearing at the end of this Warrant as Exhibit A, duly executed by Holder or
its agent or attorney. Payment of the Exercise Price shall be made at the option
of Holder by (i) wire transfer to an account in a bank located in the United
States designated for such purpose by the Corporation, (ii) certified or
official bank check, (iii) cancellation of indebtedness of the Corporation to
Holder at the time of exercise, (iv) cancellation as of the date of exercise of
a portion of this Warrant (calculated as the net fair market value of such
cancelled portion at the time of
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exercise) or (v) any combination of the foregoing. The net fair market value of
any portion of this Warrant cancelled in full or partial payment of the Exercise
Price shall be determined by (A) multiplying (i) the number of shares of Common
Stock for which the portion of this Warrant to be cancelled was exercisable by
(ii) the Fair Value of a share of Common Stock as of the date of cancellation
and (B) subtracting from such product the aggregate Exercise Price of the shares
of Common Stock for which the portion of this Warrant to be cancelled was
exercisable. In the event of any exercise of the rights represented by this
Warrant, (x) certificates for the shares of Common Stock so purchased shall be
dated the date of such exercise and delivered to the Holder hereof within a
reasonable time, not exceeding 15 days after such exercise, and the Holder
hereof shall be deemed for all purposes to be the Holder of the shares of Common
Stock so purchased as of the date of such exercise, and (y) unless this Warrant
has expired pursuant to Section 3 hereof, a new Warrant representing the number
of shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder hereof within such time. Any such
warrant shall be dated the date hereof and shall represent the right to purchase
the remaining number of shares of Common Stock issuable pursuant thereto. By
exercising this Warrant, the Holder represents and warrants as of the date of
exercise with respect to the matters set forth in Section 4 of the Securities
Purchase Agreement.
4.3. Subject to compliance with Section 7 hereof, this Warrant
may be transferred on the books of the Corporation by the Holder hereof in
person or by duly authorized attorney, upon surrender of this Warrant at the
principal office of the Corporation, properly endorsed and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Subject to compliance with Section 7 hereof, this Warrant is exchangeable at the
aforesaid principal office of the Corporation for two or more warrants for the
purchase of the same aggregate number of shares of Common Stock, each new
warrant to represent the right to purchase such number of shares of Common Stock
as the Holder hereof shall designate at the time of such exchange. If this
Warrant is transferred or exchanged for two or more Warrants prior to the
Effective Date of a Triggering Event, the Number of Shares issuable under each
such warrant shall be a percentage of the Number of Shares issuable hereunder
which, together with all other warrants issued in the transfer or exchange of
this Warrant, shall aggregate 100% of the Number of Shares hereunder. Any such
warrants shall be dated the date hereof and shall be identical with this Warrant
except as to the number of shares of Common Stock issuable pursuant thereto.
5. Adjustments to Number of Shares for Diluting Issues.
5.1. Adjustment for Dividends, Distributions, Subdivisions,
Combinations or Consolidation of Common Stock.
(i) Stock Dividends, Distributions or Subdivisions. In the
event the Corporation at any time or from time to time after the
Effective Date of a Triggering Event shall declare or pay any
dividend or make any other
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distribution on the Common Stock payable in cash (other than regular
quarterly cash dividends), Common Stock or other property (such
other property being valued at the Fair Market Value) effect a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
Common Stock), then and in any such event, the Number of Shares
shall be proportionately adjusted to reflect such dividend,
distribution or subdivision as of:
(1) in the case of any such dividend or distribution, 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 distribution, or
(2) in the case of any such subdivision, at the close of business on
the date immediately prior to the date upon which such corporate
action becomes effective.
If such record date or other effective date shall have been fixed and such
dividend, distribution or subdivision shall not have been fully paid or effected
on the date fixed therefor, the adjustment previously made to the Number of
Shares which became effective on such record date or other date shall be
canceled as of the close of business on such record date or other date, and
thereafter the Number of Shares shall be adjusted pursuant to this Section 5.1
as of the time of actual payment of such dividend, distribution or effectiveness
of such subdivision.
(ii) Combinations or Consolidations. In the event 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 in effect
immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or
consolidation, be proportionately adjusted.
5.2. Adjustment for Reclassification or Reorganization. In
case of any capital reorganization or reclassification of the capital stock of
the Corporation (other than a reclassification covered by Section 5.1(ii)), the
Holder hereof shall thereafter be entitled upon the exercise of this Warrant to
receive, in lieu of the shares of Common Stock for which this Warrant was
exercisable prior to such reorganization or reclassification, the number of
shares of stock or other securities or property to which a holder of the number
of shares of Common Stock of the Corporation deliverable upon the exercise of
this Warrant would have been entitled upon such reorganization or
reclassification. In any such case, appropriate adjustments (as determined by
the board of directors) shall be made in the application of the provisions of
this Section 5 set forth with respect to the rights and interest thereafter of
the holders Common Stock issuable upon the exercise of this Warrant, to the end
that the provisions of this Section 5 (including provisions with respect to
changes in and other adjustments of the Number of Shares) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of this Warrant.
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6. Stock Fully Paid; Reservation of Shares.
6.1. The Corporation covenants and agrees that all shares of
Common Stock which may be issued upon the exercise of the rights represented by
this Warrant will, upon issuance, be fully paid and non-assessable and free from
all taxes, liens and charges with respect to issuance. The Corporation further
covenants and agrees that during the period within which the rights represented
by this Warrant may be exercised, the Corporation will at all times have
authorized and reserved for the purpose of the issue upon exercise of this
Warrant a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant. Notwithstanding any
adjustment required pursuant to Section 5 above, in no event shall the Exercise
Price per share of Common Stock be less than the par value of the Common Stock.
6.2. The Corporation shall not by any action, including,
without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, 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 actions as may be necessary or appropriate to protect the
rights of the Holder hereof against impairment. Without limiting the generality
of the foregoing, the Corporation will (a) not increase the par value of any
shares of Common Stock above the amount payable therefor upon the exercise of
this Warrant immediately prior to such increase in par value and (b) take all
such action as may be necessary or appropriate in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of Common Stock,
free and clear of any liens, claims, encumbrances and restrictions (other than
as provided herein) upon the exercise of this Warrant.
7. Restrictions on Transferability. The Warrant and the Common Stock
issued upon exercise of the Warrant shall not be transferred, hypothecated or
assigned before satisfaction of the conditions specified in this Section 7,
which conditions are intended to ensure compliance with the provisions of the
Securities Act and state securities or "blue sky" laws with respect to the
transfer, hypothecation or assignment of any Warrant or Common Stock issued upon
exercise of any Warrant. Holder, by acceptance of this Warrant, agrees to be
bound by the provisions of this Section 7.
7.1. Restrictive Legend.
7.1.1 Except as otherwise provided in this Section 7, each
certificate for Common Stock issued upon exercise of this Warrant, and each
certificate for Common Stock issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT AND LAWS OR THE RULES AND REGULATIONS
THEREUNDER."
7.1.2 Except as otherwise provided in this Section 7, each
Warrant shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS
BY REASON OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND SUCH STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF IN ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL TO
AMERICA'S DOCTOR, INC., AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE."
7.2. Notice of Proposed Transfers. Prior to any transfer,
hypothecation or assignment or attempted transfer, hypothecation or assignment
of the Warrant or any Common Stock issued upon exercise of the Warrant, the
Holder of such Warrant or Common Stock shall give ten (10) days prior written
notice (a "Transfer Notice") to the Corporation of such Xxxxxx's intention to
effect such transfer, hypothecation or assignment, describing the manner and
circumstances of the proposed transfer, hypothecation or assignment, and obtain
from Counsel a written opinion addressed to the Corporation that the proposed
transfer, hypothecation or assignment of the Warrant or such Common Stock may be
effected without registration under the Securities Act and applicable state
securities or "blue sky" laws. After receipt of the Transfer Notice and written
opinion, the Corporation shall, within five (5) days thereof, so notify the
Holder of the Warrant or such Common Stock in writing and such Holder shall
thereupon be entitled to transfer, hypothecate or assign the Warrant or Common
Stock, in accordance with the terms of the Transfer Notice. Each certificate, if
any, evidencing such shares of Common Stock issued upon such Transfer shall bear
the restrictive legend set forth in Section 7.1.1, and each Warrant issued upon
such Transfer shall bear the legend set forth in Section 7.1.2, unless in the
written opinion of Counsel addressed to the Corporation such legend is not
required in order to ensure compliance with the Securities Act and applicable
state securities or "blue sky" laws. The Holder of the Warrant or such Common
Stock, as the case may be, giving the Transfer Notice shall not be entitled to
transfer the Warrant or such Common Stock until receipt of notice from the
Corporation under this Section 7.2.
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8. Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise hereof, but in lieu of such fractional
shares, the Corporation shall make a cash payment therefor equal in amount to
the product of the applicable fraction multiplied by the Warrant Price.
9. Determination of Fair Value Binding; Expenses; Cooperation.
Whenever any provision of this Agreement requires a determination of Fair Value
per share of Common Stock pursuant to the Appraisal Procedure, such
determination in accordance with such procedure shall be binding on the Holder
and the Corporation. If an Appraiser is selected by agreement between the
Corporation and Two Thirds in Interest of the Holders, the fees and expenses of
such Appraiser shall be paid one-half by the Corporation and one-half by the
Holders. If two Appraisers are selected (one by each of the Corporation and Two
Thirds in Interest of the Holders), the Corporation shall pay the fees and
expenses of the Appraiser selected by it and the Holders shall pay the fees and
expenses of the Appraiser selected by the Holders. If a third Appraiser is
selected, the fees and expenses of such third Appraiser shall be paid one-half
by the Corporation and one-half by the Holders. The Corporation and the Holder
agree to fully cooperate with all Appraisers and, in connection therewith, the
Corporation shall make available to all such Appraisers all information
(financial or otherwise) relating to the Corporation reasonably requested by
such Appraisers.
10. Amendment and Waiver. Any term, covenant, agreement or condition
in this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Corporation and the Holder.
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11. 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 PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA, IN
EACH CASE LOCATED IN THE COUNTY OF NEW YORK, FOR ANY ACTION, PROCEEDING OR
INVESTIGATION IN ANY COURT OR BEFORE ANY GOVERNMENTAL AUTHORITY ("LITIGATION")
ARISING OUT OF OR RELATING TO THIS WARRANT AND THE TRANSACTIONS CONTEMPLATED
HEREBY (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN
SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR
DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN THIS
WARRANT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST
IT IN ANY SUCH COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION
ARISING OUT OF THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE
COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE
LOCATED IN THE COUNTY OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL
BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THIS
WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Dated: June 1, 1999 XXXXXXXXXXXXXX.XXX, INC.
Attest: By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx, Chief Executive Officer
/s/ Xxxxx Xxxxxxx
-------------------------
Xxxxx Xxxxxxx, Secretary
-13-
EXHIBIT A
SUBSCRIPTION FORM
To be executed only upon exercise of Warrant
The undersigned registered owner of the attached Warrant irrevocably
exercises the attached Warrant for the purchase of ________ shares of Common
Stock, $0.01 par value, of America's Doctor, Inc. and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant and requests that certificates for the shares of Common Stock hereby
purchased (and any securities or other property issuable upon such exercise) be
issued in the name of and delivered to _______________________ whose address is
______________________________________________ and, if such shares of Common
Stock shall not include all of the shares of Common Stock issuable as provided
in this Warrant, that a new Warrant of like tenor and date for the balance of
the shares of Common Stock issuable hereunder be delivered to the undersigned.
--------------------------------
Name of Registered Owner
--------------------------------
Signature of Registered Owner
--------------------------------
--------------------------------
Address
--------------------------------
Federal ID Number
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
-14-
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
---------------------------- -----------------------------
and does hereby irrevocably constitute and appoint __________________
attorney-in-fact to register such transfer on the books of America's Doctor,
Inc. maintained for the purpose, with full power of substitution in the
premises.
Dated:
------------------------------
Name:
-------------------------------
Signature:
--------------------------
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
-15-
