EXHIBIT 4.12
WARRANTHOLDERS RIGHTS AGREEMENT
WARRANTHOLDERS RIGHTS AGREEMENT dated as of December 23, 1998, among
AMERICAN PSYCH SYSTEMS HOLDINGS, INC., a Delaware corporation (together with its
successors, the "Company"), the persons identified on the signature pages hereto
as the Investors (the "Investors"), and NATIONSCREDIT COMMERCIAL CORPORATION
("NationsCredit") (the Investors, together with any holder of Conversion Shares
(as defined herein) and such other stockholders of the Company as may, from time
to time, become parties to this Agreement in accordance with the provisions
hereof, the "Stockholders"; and NationsCredit and such other warrantholders of
the Company as may, from time to time, become parties to this Agreement in
accordance with the provisions hereof, the "Warrantholders").
WHEREAS, on the date hereof, the Investors and the Additional
Stockholders are each the beneficial owners of the shares of stock of the
Company listed by their names on the signature pages hereto, and NationsCredit
has purchased and is the beneficial owner of the Warrants (as defined herein) to
purchase up to 1,853,848 shares of the Company's Non-Voting Common Stock; and
WHEREAS, the Company and each Stockholder (other than the holders of
the Conversion Shares) wish to provide to the Warrantholders and the holders of
the Conversion Shares the rights described herein;
NOW THEREFORE the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Unless otherwise defined herein, the
following terms used in this Agreement shall have the meanings specified below.
"Affiliate" means, with respect to any Person, any of (i) a director
or executive officer of such Person, (ii) a spouse, parent, sibling or
descendant of such Person (or a spouse, parent, sibling or descendant of any
director or executive officer of such Person) and (iii) any other Person that,
directly or indirectly, controls, or is controlled by or is under common control
with such Person. For the purpose of this definition, "control" (including the
terms "controlling", "controlled by" and "under common control with"), as used
with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities or by contract or agency or otherwise.
"BHC Act" means the Bank Holding Company Act of 1956, as amended.
"Borrower" means Psych Systems Holdings, Inc., a Delaware
Corporation.
"Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the Voting Common Stock or the Non-Voting
Common Stock, or both, as the context may require.
"Conversion Shares" means (i) any shares of Non-Voting Common Stock
or other securities issued upon the exercise of any Warrants and (ii) any
securities issued with respect to any of such shares or other securities
referred to in clause (i) upon the conversion thereof into other securities
(including Voting Common Stock) or by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise; PROVIDED that any of such securities shall
cease to be Conversion Shares when such securities shall have (x) been disposed
of pursuant to a Public Sale or (y) ceased to be outstanding.
"Credit Agreement" means the Credit Agreement dated as of December
23, 1998, among the Company, the Borrower, the lenders named therein and
NationsCredit, as Agent, as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934 shall include a
reference to the comparable section, if any, of any such successor Federal
statute.
"Initial Public Offering" means the first registration of an
offering of shares of Common Stock under the Securities Act which becomes
effective (other than by a registration on Form S-4 or S-8 or any successor or
similar forms).
"Initiating Holders" has the meaning set forth in Section 3.1
hereof.
"Non-Voting Common Stock" means the Class B common stock, par value
$.001 per share, of the Company.
"Other Shares" has the meaning set forth in Section 3.1.
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"Person" means a corporation, an association, a partnership, a
limited liability company, an organization, a business, an individual, a trust,
a government or a subdivision thereof or a governmental agency.
"Public Sale" means any sale of Common Stock to the public pursuant
to an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 (or any
successor provision then in effect) adopted under the Securities Act.
"Registrable Securities" means any Conversion Shares until the date
(if any) on which such Conversion Shares shall have been transferred or
exchanged and new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Sections 3.1 through 3.5 hereof, including (i)
all registration, filing and NASD fees, (ii) all fees and expenses of complying
with securities or blue sky laws, (iii) all word processing, duplicating and
printing expenses, (iv) all messenger and delivery expenses, (v) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (vi) the
fees and disbursements of any one counsel and any one accountant retained by the
holder or holders of more than 50% of the Registrable Securities being
registered (or, in the case of any registration effected pursuant to Section
3.1, as the Initiating Holders shall have selected to represent all holders of
the Registrable Securities being registered), (vii) premiums and other costs of
policies of insurance (if any) against liabilities arising out of the public
offering of the Registrable Securities being registered if the Company desires
such insurance and (viii) any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but not including underwriting
discounts and commissions and transfer taxes, if any, PROVIDED that, in any case
where Registration Expenses are not to be borne by the Company, such expenses
shall not include (i) salaries of the Company personnel or general overhead
expenses of the Company, (ii) auditing fees, (iii) premiums or other expenses
relating to liability insurance required by underwriters of the Company or (iv)
other expenses for the preparation of financial statements or other data, to the
extent that any of the foregoing either is normally prepared by the Company in
the ordinary course of its business or would have been incurred by the Company
had no public offering taken place.
"Regulation Y Holder" means any Warrant Securityholder that is a
bank holding company within the meaning of the BHC Act, or a subsidiary thereof
subject to Regulation Y under the BHC Act.
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"Regulatory Change" means, with respect to any Regulation Y Holder,
(i) any change on or after the date hereof in United States federal or state or
foreign laws or regulations (including the BHC Act and Regulation Y thereunder);
(ii) the adoption on or after the date hereof of any interpretation or ruling
applying to such Regulation Y Holder, individually or as a member of a class,
under any United States federal or state or foreign laws or regulations by any
court or governmental or regulatory authority charged with the interpretation or
administration thereof; or (iii) the modification on or after the date hereof of
any agreement or commitment with any such governmental or regulatory authority
that is applicable to or binding upon such Regulation Y Holder.
"Restricted Securities" means the Warrants, the Conversion Shares
and any securities obtained upon exchange for or upon conversion or transfer of
or as a distribution on Warrants, the Conversion Shares or any such securities;
PROVIDED that particular securities shall cease to be Restricted Securities when
such securities shall have (x) been disposed of pursuant to a Public Sale, (y)
been otherwise transferred or exchanged and new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state law then in
force or (z) ceased to be outstanding. Whenever any particular securities cease
to be Restricted Securities, the holder thereof shall be entitled to receive
from the issuer thereof or its transfer agent, without expense (other than
transfer taxes, if any), new securities of like tenor not bearing a legend of
the character set forth in Section 2.2.
"Securities Act" means 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. Reference to a particular section of
the Securities Act of 1933 shall include a reference to the comparable section,
if any, of any such similar Federal statute.
"Stockholder" has the meaning set forth in the introductory
paragraph.
"Voting Common Stock" means the Class A common stock, par value
$.001 per share, of the Company.
"Warrant Securityholder" means at any time any Warrantholder or any
holder of Conversion Shares.
"Warrantholders" has the meaning set forth in the introductory
paragraph (and for purposes of Section 2.8 shall include any Person that held
Warrants that were redeemed pursuant to Section 5.3 of the Warrants).
"Warrants" means the Warrant or Warrants originally issued to
NationsCredit, as such Warrants may be transferred or otherwise assigned, but
only to the extent not theretofore exercised, redeemed or expired in accordance
with their respective terms.
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All references herein to "days" shall mean calendar days unless
otherwise specified.
ARTICLE II
TRANSFER OF SHARES;
PAYMENTS TO WARRANT SECURITYHOLDERS
SECTION 2.1 GENERAL. Except as otherwise provided in this Agreement
or by law, each Stockholder may transfer its shares of Common Stock at any time
to any Person.
SECTION 2.2 RESTRICTIONS ON TRANSFER; LEGEND ON CERTIFICATES. (a)
Except as otherwise provided in this Agreement, Restricted Securities shall not
be transferable except (i) pursuant to an effective registration statement under
the Securities Act, (ii) pursuant to Rule 144 or 144A (or any successor
provisions) under the Securities Act or (iii) pursuant to a transaction that is
otherwise exempt from the registration requirements of the Securities Act.
(b) Unless otherwise expressly provided herein, each certificate for
Restricted Securities and each certificate issued in exchange for or upon
transfer of any thereof 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 AND MAY NOT BE SOLD OR OFFERED FOR SALE
UNLESS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO AND HAVE THE BENEFIT
OF A WARRANTHOLDERS RIGHTS AGREEMENT DATED AS OF DECEMBER 23, 1998, AMONG
AMERICAN PSYCH SYSTEMS, INC. AND THE STOCKHOLDERS AND WARRANTHOLDERS
PARTIES THERETO, COPIES OF WHICH ARE ON FILE WITH AMERICAN PSYCH SYSTEMS
HOLDINGS, INC.
(c) Any other provision of this Agreement to the contrary
notwithstanding, no transfer of any Restricted Securities other than pursuant to
a Public Sale may be made to any Person unless such Person shall have agreed in
writing that such Person, as a holder of Restricted Securities, and the
Restricted Securities it acquires shall be bound by and be entitled to the
benefits of all the provisions of this Agreement
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applicable to such Restricted Securities (and upon such agreement such Person
shall be entitled to such benefits). Any purported transfer of Restricted
Securities without compliance with the applicable provisions of this Agreement
shall be void and of no effect, and the purported transferee shall have no
rights as a Warrantholder or Stockholder (as applicable) or under this
Agreement. In the event of such non-complying transfer, the Company shall not
transfer any such Restricted Securities on its books or recognize the purported
transferee as a shareholder or warrantholder, as the case may be, for any
purpose, until all applicable provisions of this Agreement have been complied
with.
SECTION 2.3 PERMITTED TRANSFERS. The restrictions on transfer
provided in Section 2.2(a) shall not be applicable to (i) any transfer in
compliance with federal and all applicable state securities laws to an Affiliate
of the holder of Restricted Securities, from an Affiliate of such holder to such
holder or between Affiliates of such holder (if any such Affiliate to whom
shares of Restricted Securities have been transferred by a holder thereof ceases
to be an Affiliate of such holder of Restricted Securities, such Restricted
Securities shall immediately be transferred back to the transferor thereof),
(ii) any transfer upon the death of any holder of Restricted Securities to such
holder's executors, administrators or testamentary trustees or (iii) any
transfer to a trust the beneficiaries of which include only the holder of such
Restricted Securities or such holder's spouse, parents, siblings or descendants
(any transferee referred to in (i), (ii) or (iii) above being referred to herein
as a "Permitted Transferee"); PROVIDED that no such transfer shall be made to
any Permitted Transferee unless such Permitted Transferee shall have agreed in
writing that such Permitted Transferee, as a Stockholder or Warrantholder (as
the case may be), and the shares of Common Stock or Warrants it acquires shall
be bound by and be entitled to the benefits of all the provisions of this
Agreement applicable to Common Stock or Warrants (as the case may be), and upon
such agreement such Permitted Transferee shall be entitled to such benefits.
SECTION 2.4 TAG-ALONG RIGHTS. If any Stockholder or any of its
Affiliates (any such Person for purposes of this Section 2.4, the "Transferor")
wishes to transfer its shares of Common Stock or any portion thereof to any
Person (the "Transferee"), the Transferor shall first give to the Company and
each Warrant Securityholder (pursuant to a list provided by the Company) a
written notice (a "Transfer Notice"), executed by it and the Transferee and
containing (i) the number of shares of Common Stock that the Transferee proposes
to acquire from the Transferor, (ii) the name and address of the Transferee,
(iii) the proposed purchase price, terms of payment and other material terms and
conditions of such proposed transfer, (iv) an estimate, in the Transferor's
reasonable judgment, of the fair market value of any non-cash consideration
offered by the Transferee and (v) an offer by the Transferee or Transferor to
purchase, upon the purchase by the Transferee of any shares of Common Stock
owned by the Transferor and for the same per share consideration, that number of
Conversion Shares (or if such number is not an integral number, the next
integral number which is greater than such number) of each Warrant
Securityholder which shall be the product of (x) the aggregate number of
Conversion Shares either then owned, or issuable upon exercise of
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Warrants then owned, by such Warrant Securityholder and (y) a fraction, the
numerator of which shall be the number of shares of Common Stock indicated in
the Transfer Notice as subject to purchase by the Transferee and the denominator
of which shall be the sum of (A) the total number of shares of Common Stock then
owned by the Transferor and its Affiliates plus (B) the total number of
Conversion Shares either then owned, or issuable upon exercise of Warrants then
owned, by each Warrant Securityholder. Each Warrant Securityholder shall have
the right, for a period of 20 days after the Transfer Notice is given, to accept
such offer in whole or in part, exercisable by delivering a written notice to
the Transferor and the Company within such 20-day period, stating therein the
number of shares of Common Stock (which may be the number of shares set forth in
the offer by the Transferor or Transferee, as the case may be, or a portion
thereof) to be sold by such Warrant Securityholder to the Transferor or
Transferee, as the case may be. Prior to the earlier of (x) the end of such
20-day period or (y) the acceptance or rejection by each Warrant Securityholder
of the Transferee's or Transferor's offer, as the case may be, neither the
Transferor nor its Affiliates will complete any sale of shares of Common Stock
to the Transferee. Thereafter, for a period of 60 days after the prohibition
under the preceding sentence shall have terminated, the Transferor may sell to
the Transferee for the consideration stated and on the terms set forth in the
Transfer Notice the shares of Common Stock stated in the Transfer Notice as
subject to purchase by the Transferee, PROVIDED that the Transferor or
Transferee, as the case may be, shall simultaneously purchase the number of
shares of Common Stock as calculated above from those Warrant Securityholders
who have accepted the Transferor's or Transferee's offer, as the case may be.
The provisions of this Section 2.4 shall not apply to transfers between the
Transferor and any of its Affiliates or between Affiliates of the Transferor.
SECTION 2.5 [RESERVED]
SECTION 2.6. RESTRICTIONS ON TRANSFER BY REGULATION Y HOLDERS. (a)
No Regulation Y Holder may transfer any Warrant or any Conversion Shares;
PROVIDED that such Regulation Y Holder may transfer such Warrant or Conversion
Shares (i) to the Company, (ii) to the public in an offering registered under
the Securities Act, (iii) in a transaction pursuant to Rule 144 or Rule 144A (or
any successor provisions) under the Securities Act or otherwise exempt from the
registration requirements of the Securities Act in which no single purchaser
receives an interest (treating any such Warrant as exercised and any Non-Voting
Common Stock as converted to Voting Common Stock) equivalent to more than two
percent of the outstanding Voting Common Stock or (iv) in a single transaction
to a third party who acquires at least a majority of the Voting Common Stock
without regard to the transfer of such Warrant or Conversion Shares. In the
event of a Regulatory Change, the effect of which is to permit such Regulation Y
Holder to transfer such Warrant or Conversion Shares in any other manner, the
foregoing PROVISO shall be deemed modified to permit a transfer of such Warrant
or Conversion Shares in such other manner.
(b) Nothing in Section 2.4 of this Agreement shall require any
Regulation Y Holder to make a transfer of Warrants or Conversion Shares in a
manner not permitted
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by Section 2.6(a) (an "Impermissible Transfer"). If Section 2.4 of this
Agreement would otherwise require any Regulation Y Holder to make an
Impermissible Transfer as a condition precedent to making a transfer of Warrants
or Conversion Shares in a manner permitted by Section 2.6(a) (a "Permissible
Transfer"), then such Regulation Y Holder shall not be required to make such
Impermissible Transfer as a condition precedent to making such Permissible
Transfer.
SECTION 2.7 ADJUSTMENT EVENT FEE. If (a) any Adjustment Event shall
occur within twelve months after the Optional Redemption Date and (b) the
Consideration Per Share for such Adjustment Event is greater than the Redemption
Price Per Share then, immediately upon the occurrence of such Adjustment Event,
the Company shall pay to each Warrant Securityholder an amount equal to the
product of (x) the number of shares of Non-Voting Common Stock issuable upon
exercise of the Warrants of such Warrant Securityholder that were redeemed and
(y) the difference between the Consideration Per Share for such Adjustment Event
and the Redemption Price Per Share paid to such Warrant Securityholder.
"Adjustment Event" means:
(a) the completion of an Initial Public Offering by the Company; or
(b) 25% or more of the:
(i) Common Stock on a Fully Diluted Basis (as defined in the
Warrants) on an aggregate basis is sold, exchanged, transferred or
otherwise disposed of by the Company or any stockholder of the Company (as
part of a single sale or a series of sales) to any Person or group or
Persons other than an Affiliate of the Company or such stockholder, as the
case may be; or
(ii) capital stock of the Company issued and outstanding on the
Optional Redemption Date is sold, exchanged, transferred or otherwise
disposed of by the Company (as part of a single sale or a series of sales)
to any Person or group of Persons other than an Affiliate of the Company
or such stockholder, as the case may be; or
(iii) assets of the Company and its Subsidiaries on a consolidated
basis are, directly or indirectly, sold, exchanged, leased, transferred or
otherwise disposed of as an entirety or substantially as an entirety (in
one transaction or a series of transactions) to any Person or group of
Persons other than any Affiliate of the Company.
"Consideration Per Share" means:
(i) in the case of any Adjustment Event described in clause (a) or
(b)(i) of the definition of Adjustment Event, the highest consideration per
share (if any) received
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by the Company or any stockholder of the Company from the sale, exchange,
transfer or other disposition by it of Common Stock in connection with such
Adjustment Event; and
(ii) in the case of any other Adjustment Event, the highest
consideration per share of Common Stock that would be received by any
stockholder of the Company upon the disposition of all or substantially all of
the Common Stock or of the assets of the Company (determined by reference to all
of the consideration received by the stockholders of the Company (as
stockholders) for that portion actually disposed of in connection with such
Adjustment Event, or which would be received by such shareholders if the Company
were liquidated immediately following receipt of the consideration received by
the Company in connection with such Adjustment Event), in each case net of
underwriting commissions and other appropriate costs and expenses deducted from
such consideration.
"Optional Redemption Date" means the date of any redemption of the
Warrants pursuant to Section 5.3 of the Warrants.
"Redemption Price Per Share" means the Optional Redemption Price (as
defined in the Warrants) which was paid to the Warrant Securityholders pursuant
to Section 5.3 of the Warrants (determined on a per share basis by reference to
the number of shares of Non-Voting Common Stock issuable upon exercise of the
Warrants that were redeemed) plus interest thereon from the Optional Redemption
Date to the date of the relevant Adjustment Event referred to in clause (a) or
(b) of Section 2.7 at a rate per annum announced by Bank of America, N.A. from
time to time as its prime rate (calculated on the basis of a 360-day year for
the actual number of days elapsed).
SECTION 2.8 NO INCONSISTENT AGREEMENTS. The Company has not entered
into and will not enter into any registration rights agreement or similar
arrangements the performance by the Company of the terms of which would in any
manner conflict with, restrict or be inconsistent with the performance by the
Company of its obligations under this Agreement.
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ARTICLE III
REGISTRATION RIGHTS
SECTION 3.1 REGISTRATION ON REQUEST. (a) At any time or from time to
time after the date of consummation of an Initial Public Offering, upon the
written request of the holder or holders of a majority of all outstanding
Conversion Shares and Warrants (such majority determined, for purposes of this
Section 3.1, by calculating the number of Conversion Shares for which such
Warrants are then exercisable) (the "Initiating Holders"), requesting that the
Company effect the registration under the Securities Act of all or part of such
Initiating Holders' Registrable Securities and specifying the intended method of
disposition thereof, the Company will promptly give written notice of such
requested registration to all holders of Warrants and Registrable Securities,
and thereupon the Company will use its best efforts to effect the registration
under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such request;
(ii) all other Registrable Securities the holders of which shall
have made a written request to the Company for registration thereof within
30 days after the giving of such written notice by the Company (which
request shall specify the intended method of disposition of such
Registrable Securities); and
(iii) all shares of Common Stock which the Company may elect to
register in connection with the offering of Registrable Securities
pursuant to this Section 3.1, whether for its own account or for the
account of a holder of Common Stock,
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional shares of Common Stock, if any, to be so registered, PROVIDED that
the Warrant Securityholders as a class shall be entitled to not more than two
registrations upon request pursuant to this Section 3.1.
(b) Registrations under this Section 3.1 shall be on such
appropriate registration form of the Commission (i) as shall be selected by the
Company and (ii) as shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified in
their request for such registration. The Company agrees to include in any such
registration statement all information which holders of Registrable Securities
being registered shall reasonably request.
(c) The Company will pay all Registration Expenses in connection
with one registration requested pursuant to this Section 3.1, PROVIDED that, in
addition, the
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Company shall pay all Registration Expenses in connection with any registration
upon request pursuant to which less than 50% of the Registrable Shares requested
to be registered by such Initiating Holders are registered, but no such
registration shall be counted as a requested registration for purposes of this
Section 3.1. The Registration Expenses (and underwriting discounts and
commissions and transfer taxes, if any, allocable to the Registrable Shares
requested to be registered by the Initiating Holders) in connection with each
other registration requested under this Section 3.1 shall be paid for by the
Initiating Holders requesting such registration.
(d) A registration requested pursuant to this Section 3.1 shall not
be deemed to have been effected (i) unless a registration statement with respect
thereto has become effective; PROVIDED that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal to proceed by the Initiating Holders
(other than a refusal to proceed based upon the advice of counsel relating to a
matter with respect to the Company) shall be deemed to have been effected by the
Company at the request of the Initiating Holders unless the Initiating Holders
shall have elected to pay all Registration Expenses in connection with such
registration, (ii) if, after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason, other than
by reason of some act or omission by any Warrantholder or Warrant
Securityholder, or (iii) the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied, other than by reason of some act or omission by
any Warrantholder or Warrant Securityholder.
(e) If a requested registration pursuant to this Section 3.1
involves an underwritten offering, the underwriter or underwriters thereof shall
be selected by the holders of at least a majority (by a number of shares) of the
Registrable Securities as to which registration has been requested and shall be
reasonably acceptable to the Company.
(f) If a requested registration pursuant to this Section 3.1
involves an underwritten offering, and the managing underwriter shall advise the
Company (with a copy of any such notice to each holder of Registrable Securities
requesting registration) that, in its opinion, the number of securities
requested to be included in such registration (including securities proposed to
be sold for the account of the Company) exceeds the number which can be sold in
such offering within a price range acceptable to the Initiating Holders, the
Company will include in such registration, to the extent of the number which the
Company is so advised can be sold in such offering, (i) first, Registrable
Securities requested to be included in such registration by the holder or
holders of Registrable Securities, PRO RATA among such holders requesting such
registration on the basis of the number of such securities requested to be
included by such holders, (ii) second, all shares proposed to be included by the
Company in such registration and (iii) third, all shares other than Registrable
Shares (any such shares with respect to any registration, "Other Shares")
requested to be included in such registration by the holder or holders thereof.
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SECTION 3.2 INCIDENTAL REGISTRATION. (a) If the Company at any time
proposes to register any of its securities under the Securities Act (other than
(x) by a registration on Form S-4 or S-8 or any successor or similar forms or
(y) pursuant to Section 3.1) whether for its own account or for the account of
the holder or holders of any Other Shares, it will each such time give prompt
written notice to all Warrant Securityholders of its intention to do so and of
such holders' rights under this Section 3.2. Upon the written request of any
such holder made within 20 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such holder and the intended method of disposition thereof), the Company will
use its best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities in
the registration statement which covers the securities which the Company
proposes to register; PROVIDED that if, at any time after giving written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason either not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any Warrant
Securityholder or Warrant Securityholders entitled to do so to request that such
registration be effected as a registration under Section 3.1, and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section
3.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 3.1, nor shall any such registration hereunder be deemed
to have been effected pursuant to Section 3.1. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 3.2.
(b) If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by Section 3.2 and such
securities are to be distributed by or through one or more underwriters, the
Company will, if requested by any holder of Registrable Securities as provided
in this Section 3.2, use its best efforts to arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters, PROVIDED that if
the managing underwriter of such underwritten offering shall inform the Company
and holders of the Registrable Securities requesting such registration and all
other holders of any Other Shares of Common Stock which shall have exercised, in
respect of such underwritten offering, registration rights comparable to the
rights under this Section 3.2 by letter of its belief that inclusion in such
distribution of all or a specified number of such securities proposed to be
distributed by such underwriters would interfere with the
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successful marketing of the securities being distributed by such underwriters
(such letter to state the basis of such belief and the approximate number of
such Registrable Securities and such Other Shares proposed so to be registered
which may be distributed without such effect), then the Company will, upon
written notice to all holders of such Registrable Securities and holders of such
Other Shares include in such registration: FIRST, all securities proposed to be
sold by the Company for its own account and, if applicable, all securities
proposed to be sold by such holders other than the Warrant Securityholders for
which registration is made, in accordance with the agreement between the Company
and such holders; SECOND, the Registrable Securities requested to be included in
such registration by Warrant Securityholders pursuant to this SECTION 3.2 and
the Registrable Securities (as such term is defined in that certain Registration
Rights Agreement, dated as of September 26, 1997, as amended among the Company
and the holders of the Registrable Securities referred to therein) requested to
be included in such registration, pro rated, based on the number of such
Registrable Securities (as defined herein) and Other Shares the registration of
which shall have been requested by each holder thereof; THIRD, all other
securities being registered pursuant to the exercise of contractual rights
comparable to those granted in this SECTION 3.2, pro rated based on the number
of such shares the registration of which shall have been requested by each
holder thereof; and FOURTH, all other securities requested to be included in
such registration.
SECTION 3.3 REGISTRATION PROCEDURES. (a) If and whenever the Company
is required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 3.1 and 3.2, the Company shall, as
expeditiously as possible:
(i) prepare and (within 60 days after the end of the period within
which requests for registration may be given to the Company or in any
event as soon thereafter as possible; PROVIDED that, in the case of a
registration pursuant to Section 3.1, such filing to be made within 60
days after the initial request of an Initiating Holder of Registrable
Securities or in any event as soon thereafter as possible) file with the
Commission the requisite registration statement to effect such
registration (including such audited financial statements as may be
required by the Securities Act) and thereafter use its best efforts to
cause such registration statement to become and remain effective; PROVIDED
FURTHER that the Company may discontinue any registration of its
securities which are not Registrable Securities at any time prior to the
effective date of the registration statement relating thereto; PROVIDED
FURTHER that before filing such registration statement or any amendments
thereto, the Company will furnish to the counsel selected by the holders
of Registrable Securities which are to be included in such registration
copies of all such documents proposed to be filed, which documents will be
subject to the review of such counsel;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to
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comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until
the earlier of (x) in the case of a registration pursuant to Section 3.1,
the expiration of 120 days after such registration statement becomes
effective, or (y) in the case of a registration pursuant to Section 3.2,
the expiration of 90 days after such registration statement becomes
effective;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement and each underwriter, if any, of the
securities being sold by such seller such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents, as
such seller and underwriter, if any, may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Securities owned by such seller;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under blue sky or similar laws of such jurisdictions as any seller thereof
and any underwriter of the securities being sold by such seller shall
reasonably request, to keep such registrations or qualifications in effect
for so long as such registration statement remains in effect, and take any
other action which may be reasonably necessary or advisable to enable such
seller and underwriter to consummate the disposition in such jurisdictions
of the securities owned by such seller, except that the Company shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller and the underwriters, if any, of
(x) an opinion of counsel for the Company, dated the effective
date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date
of the closing
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under the underwriting agreement), reasonably satisfactory in form
and substance to such seller, and
(y) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing
under the underwriting agreement), signed by the independent public
accountants who have certified the Company's financial statements
included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities;
(vii) notify the holders of Registrable Securities and the managing
underwriter or underwriters, if any, promptly and confirm such advice in
writing promptly thereafter:
(A) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when
the same has become effective;
(B) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or
for additional information;
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration or the initiation
of any proceedings by any Person for that purpose; and
(D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
(viii) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon the Company's
discovery that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
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make the statements therein not misleading in the light of the
circumstances then existing, and at the request of any such seller
promptly prepare and furnish to such seller and each underwriter, if any,
a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(ix) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the registration statement at the
earliest possible moment;
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first full calendar quarter after the effective
date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act;
(xi) make available for inspection by a representative of the
holders of Registrable Securities participating in the offering, any
underwriter participating in any disposition pursuant to the registration
and any attorney or accountant retained by such selling holders or
underwriter (each, an "Inspector"), all financial and other records,
pertinent corporate documents and properties of the Company (the
"Records"), and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspector in
connection with such registration; PROVIDED that the Company shall not be
required to comply with this subdivision (xi) if there is a reasonable
likelihood, in the judgment of the Company, that such delivery could
result in the loss of any attorney-client privilege related thereto; and
PROVIDED FURTHER that Records which the Company determines, in good faith,
to be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors (other than to any holder of
Registrable Securities participating in the offering) unless (x) such
Records have become generally available to the public or (y) the
disclosure of such Records may be necessary or appropriate (A) to comply
with any law, rule, regulation or order applicable to any such Inspectors
or holder of Registrable Securities, (B) in response to any subpoena or
other legal process or (C) in connection with any litigation to which such
Inspectors or any holder of Registrable Securities is a party (PROVIDED
that the Company is provided with reasonable notice of such proposed
disclosure and a reasonable opportunity to seek a protective order or
other appropriate remedy with respect to such Records);
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(xii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
Registration Statement;
(xiii) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which
any of the Common Stock is then listed and, if not so listed, to be listed
on the NASD automated quotation system and, if listed on the NASD
automated quotation system, use its best efforts to secure designation of
all such Registrable Securities covered by such registration statement as
a NASDAQ "national market system security" within the meaning of Rule
11Aa2-1 of the Securities and Exchange Commission or, failing that, to
secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable
Securities with the NASD; and
(xiv) use its best efforts to provide a CUSIP number for the
Registrable Securities, not later than the effective date of the
registration.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing for purposes of preparing the relevant
registration statement and amendments and supplements thereto.
(b) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the occurrence of any event of the kind described in subdivision (viii) of
Section 3.3(a), such holder will forthwith discontinue such holder's disposition
of Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of Section
3.3(a). In the event the Company shall give any such notice, the periods
specified in subdivision (ii) of Section 3.3(a) shall be extended by the length
of the period from and including the date when each seller of any Registrable
Securities covered by such registration statement shall have received such
notice to the date on which each such seller has received the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of Section
3.3(a).
(c) If any such registration or comparable statement refers to any
holder of Registrable Securities by name or otherwise as the holder of any
securities of the Company, then such holder shall have the right to require, in
the event that such reference to such holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force, the
deletion of the reference to such holder.
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SECTION 3.4 UNDERWRITTEN OFFERINGS. (a) If requested by the
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 3.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to the Company, each such
holder and the underwriters, and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
such type, including, without limitation, indemnities to the effect and to the
extent provided in Section 3.5. The holders of the Registrable Securities will
cooperate with the Company in the negotiation of the underwriting agreement.
(b) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of any equity securities of the Company, during the ten days
prior to and the 90 days after the effective date of any underwritten
registration pursuant to Section 3.1 or 3.2 has become effective, except as part
of such underwritten registration, whether or not such holder participates in
such registration, and except as otherwise permitted by the managing underwriter
of such underwriting (if any). Each holder of Registrable Securities agrees that
the Company may instruct its transfer agent to place stop transfer notations in
its records to enforce this Section 3.4(b).
(c) The Company agrees (x) not to sell, make any short sale of,
loan, grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of its equity securities or securities
convertible into or exchangeable or exercisable for any of such securities
during the ten days prior to and the 90 days after the effective date of any
registration pursuant to Section 3.1 or 3.2 has become effective, except (i) as
part of such registration, (ii) pursuant to registrations on Form S-4 or S-8 or
any successor or similar forms thereto or (iii) as otherwise permitted by the
managing underwriter of such offering (if any), and (y) to use all reasonable
efforts to cause each holder of its equity securities or any securities
convertible into or exchangeable or exercisable for any of such securities, in
each case purchased from the Company at any time after the date of this
Agreement (other than in a public offering) to agree not to sell, make any short
sale of, loan, grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of such securities during such period
except as part of such underwritten registration; PROVIDED that no holder of
Registrable Securities included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters other than representations and warranties regarding such holder and
such holder's intended method of distribution.
(d) No Person may participate in any underwritten offering hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved, subject to the terms and
conditions hereof, by the Person or a majority of the Persons entitled to
approve such arrangements and (ii) completes and executes all agreements,
questionnaires, indemnities and other documents
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(other than powers of attorney) required under the terms of such underwriting
arrangements.
SECTION 3.5 INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each holder of Registrable Securities whose Registrable Securities
are covered by any registration statement, its directors and officers and each
other Person, if any, who controls such holder within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which any such indemnified party may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse each such indemnified party for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding; PROVIDED that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such holder specifically for use in the
preparation thereof. In addition, the Company shall indemnify any underwriter of
such offering and each other Person, if any, who controls any such underwriter
within the meaning of the Securities Act in substantially the same manner and to
substantially the same extent as the indemnity herein provided to each
Indemnified Party. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or any such
director, officer, underwriter or controlling person and shall survive the
transfer of such securities by such holder.
(b) Each prospective seller of Registrable Securities hereunder
shall indemnify and hold harmless (in the same manner and to the same extent as
set forth in subdivision (a) of this Section 3.5) the Company, each director of
the Company, each officer of the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereof, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such seller specifically for use in the preparation
of such registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement. Any such indemnity shall remain in
full force and
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effect, regardless of any investigation made by or on behalf of the Company or
any such director, officer or controlling person and shall survive the transfer
of such securities by such seller. The amount payable by any prospective seller
of a Registrable Security with respect to the indemnification set forth in this
subsection (b) in connection with any offering of securities will not exceed the
amount of net proceeds received by such prospective seller pursuant to such
offering.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in the
preceding subdivisions of this Section 3.5, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action; provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 3.5, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that the
indemnifying party may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. No indemnified party shall
consent to entry of any judgment or enter into any settlement of any such action
the defense of which has been assumed by an indemnifying party without the
consent of such indemnifying party.
(d) If the indemnification provided for in the preceding
subdivisions of this Section 3.5 is unavailable to an indemnified party in
respect of any expense, loss, claim, damage or liability referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such expense, loss, claim, damage or liability (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the holder or underwriter, as the case may be, on the other
from the distribution of the Registrable Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the holder or underwriter, as the case may be, on the other in
connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The
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relative benefits received by the Company on the one hand and the holder or
underwriter, as the case may be, on the other in connection with the
distribution of the Registrable Securities shall be deemed to be in the same
proportion as the total net proceeds received by the Company from the initial
sale of the Registrable Securities by the Company to the purchaser bear to the
gain realized by the selling holder or the underwriting discounts and
commissions received by the underwriter, as the case may be. The relative fault
of the Company on the one hand and of the holder or underwriter, as the case may
be, on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission to
state a material fact relates to information supplied by the Company, by the
holder or by the underwriter and parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
PROVIDED that the foregoing contribution agreement shall not inure to the
benefit of any indemnified party if indemnification would be unavailable to such
indemnified party by reason of the proviso contained in the first sentence of
subdivision (a) of this Section 3.5, and in no event shall the obligation of any
indemnifying party to contribute under this subdivision (d) exceed the amount
that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under subdivisions (a) or
(b) of this Section 3.5 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subdivision (d)
were determined by PRO RATA allocation (even if the holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph and subdivision (c) of this Section
3.5. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subdivision (d), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
SECTION 3.6 RULE 144; RULE 144A. (a) If the Company shall have filed
a registration statement pursuant to Section 12 of the Exchange Act or a
registration
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statement pursuant to the Securities Act, the Company will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder and will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
(b) The Company represents and warrants that as of the date hereof,
the Common Stock is not, and is not part of a class of securities that is,
listed on a national securities exchange registered under Section 6 of the
Exchange Act or quoted in an automated inter-dealer quotation system. For so
long as any shares of Registrable Securities are restricted securities within
the meaning of Rule 144(a)(3) under the Securities Act, the Company covenants
and agrees that it shall, during any period in which it is not subject to
Section 13 or 15(d) of the Exchange Act, make available to any holder of
Registrable Securities in connection with the sale of such holder Registrable
Securities and any prospective purchaser of Registrable Securities from such, in
each case upon request, the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Securities Act.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1 NOTICES. All notices and other communications provided
for hereunder shall be dated and in writing and shall be deemed to have been
given (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section and telephonic confirmation of receipt
thereof is obtained (with a copy of such notice or other communication promptly
sent by mail, overnight courier or hand delivery) or (ii) if given by mail,
prepaid overnight courier or any other means, when received at the address
specified in this Section or when delivery at such address is refused. Such
notices shall be addressed to the appropriate party to the attention of the
person who executed this Agreement at the address or telecopy number set forth
under such party's signature below (or to the attention of such other person or
to such other address or telecopy number as such party shall have furnished to
each other party in accordance with this Section 4.1).
SECTION 4.2 BINDING NATURE OF AGREEMENT. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto or their successors in interest, except as expressly otherwise provided
herein.
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SECTION 4.3 DESCRIPTIVE HEADINGS. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 4.4 SPECIFIC PERFORMANCE. Without limiting the rights of
each party hereto to pursue all other legal and equitable rights available to
such party for the other parties' failure to perform their obligations under
this Agreement, the parties hereto acknowledge and agree that the remedy at law
for any failure to perform their obligations hereunder would be inadequate and
that each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
SECTION 4.5 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAW. EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SUCH PARTY MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
4.1. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 4.6 COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
SECTION 4.7 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended
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that all of the rights and privileges of the parties hereto shall be enforceable
to the fullest extent permitted by law.
SECTION 4.8 ENTIRE AGREEMENT. This Agreement is intended by the
parties hereto as a final and complete expression of their agreement and
understanding in respect to the subject matter contained herein. This Agreement
supersedes all prior agreement and understandings, written or oral, between the
parties with respect to such subject matter.
SECTION 4.9 AMENDMENT AND WAIVER. Any provision of this Agreement
may be amended if, but only if, such amendment is in writing and is signed by
the Company and Stockholders and Warrantholders owning, or having Warrants
exercisable for, at least a majority of shares of Common Stock either then
outstanding or issuable upon the exercise of all outstanding Warrants, PROVIDED
that no such amendment may adversely affect the rights of any Warrant
Securityholder unless signed by such Warrant Securityholder. Any provision may
be waived if, but only if, such waiver is in writing and is signed by the party
or parties waiving such provision and for whose benefit such provision is
intended.
SECTION 4.10 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement
shall convey any rights upon any person or entity which is not a party or an
assignee of a party to this Agreement.
-24-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
COMPANY:
AMERICAN PSYCH SYSTEMS
HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxxxx
________________________________
Title: President & CEO
Address:
________________________________
________________________________
Facsimile: _____________________
INVESTORS:
/s/ Xxxxxxx Xxxxxxx
________________________________
XX. XXXXXXX X. XXXXXXX
Address:
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: ______________
/s/ Xxxx Xxxxxx
________________________________
XXXX XXXXXXX
Address:
________________________________
________________________________
________________________________
Attn:___________________________
Facsimile: _____________________
NAZEM & COMPANY IV, L.P.
By: NAZEM & ASSOCIATES, L.P.,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
___________________________
Title: General Partner
Address:
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: ______________
APPLEWOOD ASSOCIATES, L.P.
By: /s/ Xxxxx Xxxxxxxxxx
________________________________
Title: General Partner
Address:
00 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
Attn:
Facsimile:
WOODLAND PARTNERS
By: /s/ Xxxxx Xxxxxxxxxx
________________________________
Title: General Partner
Address:
00 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
Attn:_____________________
Facsimile:________________
SENECA VENTURES
By: /s/ Xxxxx Xxxxxxxxxx
________________________________
Title: General Partner
Address:
00 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
Attn: ____________________
Facsimile:________________
WOODLAND VENTURE FUND
By: /s/ Xxxxx Xxxxxxxxxx
________________________________
Title: General Partner
Address:
00 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
Attn:_____________________
Facsimile:________________
WARRANTHOLDERS:
NATIONSCREDIT COMMERCIAL
CORPORATION
By:_____________________________
Title:_________________________
Address:
000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attn:_____________________
Facsimile: (000) 000-0000
Exhibit A to
Warrant
SUBSCRIPTION AGREEMENT
(To be signed and delivered
upon exercise of Warrant)
AMERICAN PSYCH SYSTEMS, INC.
One Democracy Plaza
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, M.D.
The undersigned. the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, shares of Series I Convertible Preferred Stock, par value
$.001 per share (the "Stock"), of AMERICAN PSYCH SYSTEMS, INC. (the "Company")
and subject to the following paragraph, herewith makes payment of
___________________ Dollars ($_________) therefor and requests that the
certificates for such shares be issued in the name of, and delivered to,
_____________________ whose address is _______________________.
The undersigned does/does not (circle one) request the exercise of the
within Warrant pursuant to the Conversion Right set forth in Section 1.3 of the
Warrant.
If the exercise of this Warrant is not covered by a registration statement
effective under the Securities Act of 1933, as amended (the "Act"), the
undersigned represents, that:
(i) the undersigned is acquiring such Stock for investment for the
undersigned's own account, not as nominee or agent, and not with a view to
the distribution thereof and the undersigned has not signed or otherwise
arranged for the selling, granting any participation in, or otherwise
distributing the same;
(ii) the undersigned has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks
of the undersigned's investment in the Stock;
(iii) the undersigned has received all of the information the
undersigned has requested from the Company and considers necessary or
appropriate for deciding whether to purchase the shares of Stock;
(iv) the undersigned has the ability to bear the economic risks
of the undersigned's prospective investment;
(v) the undersigned is able, without materially impairing the
undersigned's financial condition, to hold the shares of Stock for an
indefinite period of time and to suffer complete loss on the undersigned's
investment;
(vi) the undersigned understands and agrees that (A) the undersigned
may be unable to readily liquidate the undersigned's investment in the
shares of Stock and that the shares must be held indefinitely unless a
subsequent disposition thereof is registered or qualified under the Act
and applicable state securities or Blue Sky laws or is exempt from such
registration or qualification, and that the Company is not required to
register the same or to take any action or make such an exemption
available except to the extent provided in the within Warrant and (B) the
exemption from registration under the Act afforded by Rule 144 promulgated
by the Securities and Exchange Commission ("Rule 144") depends upon the
satisfaction of various conditions by the undersigned and the Company and
that, if applicable, Rule 144 affords the basis for sales under certain
circumstances in limited amounts, and that if such exemption is utilized
by the undersigned, such conditions must be fully complied with by the
undersigned and the Company, as required by Rule 144;
(vii) the undersigned either (A) is familiar with the definition of
and the undersigned is an "accredited investor" within the meaning of such
term under Rule 501 of Regulation D promulgated under the Act, or (B) is
providing representations and warranties reasonably satisfactory to the
Company and its counsel, to the effect that the sale and issuance of Stock
upon exercise of such Warrant may be made without registration under the
Act or any applicable state securities and Blue Sky laws; and
(viii) the address set forth below is the true and correct
address of the undersigned's residence.
If said number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of the shares purchasable
thereunder.
DATED:__________________
______________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant
______________________________________
______________________________________
(Address)
Exhibit B to
Warrant
NOTICE OF CONVERSION
(To be executed upon exercise of Warrant pursuant to Section 1.3)
The undersigned hereby irrevocably elects to surrender its Warrant for
such shares of Stock pursuant to the Conversion Right of the within Warrant, as
provided for in Section 1 of such Warrant.
Please issue a certificate or certificates for such Stock in the name
specified below, and pay cash for fractional shares pursuant to Section 14 of
the Warrant.
If said number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of the shares purchasable
thereunder.
______________________________________
Address:______________________________
______________________________
______________________________
Social Security No.:__________________
Signature:____________________________
(Signature must conform in
all respects to the name
of holder as specified on
the face of this Warrant)
FORM OF ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned 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 Series I Convertible Preferred
Stock set forth below:
No. of Shares of
Series I Convertible
Name and Address of Assignee Preferred Stock
---------------------------- ------------------
and does hereby irrevocably constitute and appoint __________________
attorney-in-fact to register such transfer on the books of the Company, with
full power of substitution in the premises.
Date:___________________ ____________________________________
Signature of Holder
NOTE: The signature of this Assignment must correspond with the name
exactly as it appears upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatever.
