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EXHIBIT 4.6
AMENDMENT NO. 1 TO
NOTE PURCHASE AGREEMENT DATED DECEMBER 20, 1996
Amendment No. 1 dated as of April 18, 1997 (the "Amendment") to that
certain Note Purchase Agreement dated December 20, 1996 (the "Note Purchase
Agreement") among VISION 21, INC. (the "Company"), and all Purchasers (as
defined in Article 2 of the Note Purchase Agreement) as the holders of the
warrants (the "Warrants") issued thereunder.
RECITALS:
1. The Company originally issued Warrants to the Purchasers in
conjunction with the Note Purchase Agreement;
2. The Company subsequently issued a warrant to Xxxxx Xxxxxxx
Health Care Fund II Limited Partnership ("Xxxxx Xxxxxxx") pursuant to a
substantially similar Note Purchase Agreement Dated February 28, 1997, between
the Company and Xxxxx Xxxxxxx (the "Xxxxx Xxxxxxx Agreement");
3. The Purchasers each consented in writing to the Xxxxx Xxxxxxx
Agreement with the understanding that their Warrants would be replaced with
warrants substantially similar in terms to the Xxxxx Xxxxxxx warrant;
4. The Company and Purchasers desire to replace the Warrants
issued to the Purchasers pursuant to the Note Purchase Agreement (the "Original
Warrants") with replacement warrants (the "Replacement Warrants") that are
substantially similar in terms to the Xxxxx Xxxxxxx warrant; and
5. The Company and the Purchasers also wish to amend the Note
Purchase Agreement, including the Form of Warrant attached thereto as Exhibit
B, in order to reflect the difference in terms resulting from the replacement
of the Original Warrants with the Replacement Warrants and the Company and the
Purchasers are permitted, pursuant to Article 25 of the Note Purchase
Agreement, to amend the Note Purchase Agreement at any time and from time to
time, by agreement between the Company and the holders of at least 51 percent
of the Notes, in any respect which they may deem necessary or desirable.
NOW, THEREFORE in consideration of the premises, the mutual agreements
contained herein and other good and valuable consideration, it is agreed by and
among the parties hereto that:
1. The factual recitals set forth at the beginning of this
Amendment are true and correct and are incorporated into this
Amendment.
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2. The Note Purchase Agreement be and it is hereby amended as
follows:
a. The Form of Warrant attached as Exhibit B to the Note
Purchase Agreement (the "Original Warrant") shall be
replaced in its entirety with the Form of Warrant
attached hereto as Exhibit "A" the ("Replacement
Warrant").
b. The word "charter" in Section 4.10 is replaced with
"Articles of Incorporation".
c. In the third sentence of Section 12(i)(1) beginning
with "Notwithstanding", the first "Company" is
replaced with the word "contrary".
d. In the second full paragraph under Section 13.1
beginning with the word "Prior", the phrase "and
there shall be no right of first refusal with respect
to an event that would be First Liquidity Event", is
hereby inserted at the end thereof.
e. Section 14.1 of the Note Purchase Agreement shall be
replaced in its entirety with the following:
Exchange of Warrants. For each Fifty-Thousand Dollar
($50,000) purchase of the Notes the Purchaser shall
receive a Warrant to purchase up to Fifty-Thousand
($50,000) worth of securities of the Company. At any
time after the date hereof to and including the
earlier of (i) December 19, 2003, and (ii) five years
from the closing date of an initial public offering
of the Company; Common Stock, subject to the terms
hereof, each Warrant shall be exchangeable by the
holder thereof. The Warrant shall initially be
exchangeable for 10,549 shares of Common Stock,
potentially increasing to up to 12,500 shares of
Common Stock so that the Purchaser will have the
right to purchase an aggregate of $50,000 worth of
Common Stock of the Company at an exchange price of
between $4.00 and $4.74 per share of Common Stock, as
hereinafter determined, or in a cashless exchange for
a reduced number of shares (the "Net Issuable
Exchange"), as determined by Section 9 of the
Warrant. The Warrant will be exchangeable upon
surrender of the Warrant to the Company at its
principal office in Florida at any time during usual
business hours, accompanied, if the Company so
requires, by an instrument or instruments of transfer
in form satisfactory to the Company and duly executed
by the holder of the Warrant. The Warrant will
expire on the earlier of (i) 5:00 p.m. on December
19, 2003 (or (ii) five years from the date of any
initial public offering by the Company, if not
exchanged by such date. Should the offering price of
the Company's Common Stock in an initial public
offering be less than
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$9.48 per share, then the Warrant exchange price
shall become one-half of that initial offering price,
but not less than $4.00 per share, subject to Section
14.3. Should the Market Price per share of Common
Stock as defined herein be less than $9.48 at the
time of any First Liquidity Event other than an IPO,
then the exercise price for the stock shall become
one-half of that Market Price per share on such date,
but not less than $4.00 per share, subject to Section
14.3.
f. In the lead in sentence in Section 14.3 of the Note
Purchase Agreement shall be replaced in its entirety
with the following:
The exchange price and the number of shares issuable
upon exchange shall, in addition to the preceding
paragraph 14.1, be subject to adjustment as follows
in the event the Company issues or is deemed to have
issued shares at less than the current exchange
price:
g. In Section 14.3(a) the words ", which is set as $4.74
as of the date hereof" are inserted after the word
"effect".
h. Section 14.3(c) of the Note Purchase Agreement shall
be replaced in its entirety with the following:
No adjustment of the exchange price shall be made as
a result of or in connection with any Approved
Transfer as defined in Section 13.1.
i. Section 21.2 of the Note Purchase Agreement shall be
replaced in its entirety with the following:
The Exchange Formula. In a Net Issuable Exchange,
the formula for determining the number of shares of
Common Stock to be received in exchange for a
Warrant shall be determined as provided in Section 9
of the Form of Warrant attached as Exhibit B.
j. Section 21.7 of the Note Purchase Agreement shall be
replaced in its entirety with the following:
Market Price. The Market Price of shares of stock
of the Company shall be determined as set forth in
Section 4(g) of the Form of Warrant attached as
Exhibit B.
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3. Except as expressly amended or modified by this Amendment, the
Note Purchase Agreement shall continue to be and shall remain in full
force and effect and the terms defined in the Note Purchase Agreement
shall have the same respective meanings when used herein.
4. Each Original Warrant issued by the Company to the Purchaser
shall be exchanged by the Purchasers for the Replacement Warrants
issued by the Company upon receipt of the Original Warrant from the
Purchaser. In the event that any Original Warrant is not returned to
the Company by a Purchaser within a reasonable period of time, then
the Company shall have the right to cancel the Original Warrant and
issue the Purchaser a Replacement Warrant.
5. This Amendment may be executed in separate counterparts and
such counterparts taken together shall be deemed to constitute one and
the same instrument.
IN WITNESS WHEREOF, VISION 21, INC. and each of the Purchasers have
duly executed this Amendment as of April 18, 1997.
VISION 21, INC.
By:/s/ Xxxxxxxx X. Xxxxxxxx
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(Please Print Name)
Title: President
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[THIS SPACE INTENTIONALLY LEFT BLANK]
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PURCHASER:
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By:
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(Please Print Name)
Title:
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[THIS SPACE INTENTIONALLY LEFT BLANK]
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EXHIBIT "A" TO AMENDMENT NO. 1
TO NOTE PURCHASE AGREEMENT DATED DECEMBER 20, 1996
EXHIBIT B - FORM OF STOCK PURCHASE WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF VISION 21, INC.
WARRANT NO.
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THIS CERTIFIES THAT, for value received, ____________________________
(herein called "Purchaser"), or its registered assigns, is entitled to
subscribe for and purchase from Vision 21, Inc. (hereinafter called the
"Company"), a corporation organized and existing under the laws of the State
of Florida, at the price specified below (subject to adjustment as noted below)
at any time after the date hereof to and including the earlier of (i) December
19, 2003 and (ii) five years from the closing date of an initial public
offering ("IPO") of the Company's Common Stock (the "Expiration Date") Ten
Thousand Five Hundred Forty-Nine (10,549) fully paid and nonassessable shares
of the Company's Common Stock (hereinafter the "Common Stock") as provided
herein (subject to adjustment as noted below). This Warrant has been issued
pursuant to a Note Purchase Agreement dated as of December 20, 1996 and
amended April 18, 1997 (the "Note Purchase Agreement") between the Purchaser
and the Company and entitles the Purchaser to purchase $50,000 of Common Stock
of the Company. The applicable provisions of the Note Purchase Agreement are
incorporated herein by reference and to the extent that there is any
inconsistency between the Note Purchase Agreement and this Warrant, the terms
of the Note Purchase Agreement shall prevail. All capitalized terms not
otherwise defined in this Warrant shall have the same meaning as defined in
the Note Purchase Agreement.
For purposes of this Warrant, the term "Capital Stock" shall mean and
include the Company's presently authorized Common Stock and shall also include
any capital stock of any class of this Company, including preferred stock, and
any securities convertible or exchangeable into shares of the Company's Common
Stock or preferred stock.
This Warrant shall initially be exchangeable for 10,549 shares of
Common Stock, potentially increasing to up to 12,500 shares of Common Stock so
that the Purchaser will have the right to purchase an aggregate of $50,000
worth of Common Stock of the Company at an exchange price of between $4.00 and
$4.74 per share of Common Stock (the "Warrant Exchange Price"), as hereinafter
determined, or in a cashless exchange for a reduced number of shares (the "Net
Issuable Exchange"), as determined by section 9 of this Warrant. Should the
offering price of the Company's Common Stock in an initial public offering be
less than $9.48 per share, then the Warrant Exchange Price shall become
one-half of that initial offering price, but not less than $4.00 per share,
subject to section 4 below. Should the Market Price per share of Common Stock
as defined herein be less than $9.48 at the time of any First Liquidity Event
other than an IPO, then the exercise price for the stock shall become one-half
of that Market Price per share on such date, but not less than $4.00 per share,
subject to section 4 below.
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This Warrant is subject to the following provisions, terms and
conditions:
1. The rights represented by this Warrant may be exercised by the
holder hereof, in whole or in part, by written notice of exercise delivered to
the Company 20 days prior to the intended date of exercise and by the surrender
of this Warrant (properly endorsed if required) and payment of the Warrant
Exchange Price at the principal office of the Company. The Company agrees that
the shares so purchased shall be and are deemed to be issued to the holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for
such shares as aforesaid. Subject to the provisions of the next succeeding
paragraph, certificates for the shares of stock so purchased shall be delivered
to the holder hereof as promptly as practicable, after the rights represented
by this Warrant shall have been so exercised, and, unless this Warrant has
expired, 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
delivered to the holder hereof as promptly as practicable.
2. Notwithstanding the foregoing, however, the Company shall not
be required to deliver any certificate for shares of stock upon exercise of
this Warrant except in accordance with the provisions, and subject to the
limitations, of paragraph 7 hereof.
3. The Company represents and warrants that this Warrant has been
duly authorized by all necessary corporate action, has been duly executed and
delivered and is a legal and binding obligation of the Company. The Company
covenants and agrees that all shares which may be issued upon the exercise of
the rights represented by this Warrant according to the terms hereof or
represented by the Common Stock to be issued pursuant to the Warrant will, upon
issuance, be duly authorized and issued, fully paid and nonassessable. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
4. The Warrant Exchange Price and the number of shares issuable
upon exchange shall, in addition to the above paragraphs, be subject to
adjustment as follows in the event the Company issues or is deemed to have
issued shares at less than the current exchange price:
(a) For the purposes of this section 4(a), the term "current
exchange price" is defined as meaning at any given time the Warrant Exchange
Price then in effect, which is set as $4.74 as of the date hereof; and the term
"current quotient" is defined as meaning on any given date the amount
determined at the close of business on such day by dividing:
(1) An amount equal to (A) the total number of shares of
Common Stock outstanding when the current exchange price became effective,
exclusive of any such shares
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which may have been issued after the date hereof as provided in this section
4(a), multiplied by the current exchange price, plus (B) the aggregate of the
amounts of all consideration, if any, received by the Company, (or, without
duplication, deemed to be received as provided in paragraph (viii) below) upon
all issuances of shares of Common Stock since the current exchange price became
effective and prior to the time of the determination of the current quotient
except shares of Common Stock issued as provided in Subdivision (c) hereof; by
(2) The total number of shares of Common Stock
outstanding immediately prior to the time of such determination, including any
such shares deemed to have been issued as provided in paragraph (viii) below
but excluding any such shares which may have been issued as provided in this
section 4(a). For the purposes of this paragraph, the Warrant Exchange Price
of $4.74 shall be deemed to have become effective at the close of business on
the date of this Warrant. In determining the current quotient, the result
shall be expressed to the nearest cent.
If at the close of business on any date after the date of this Warrant
on which any adjustment event hereunder takes place, the current exchange price
exceeds the current quotient by as much as one percent of the then effective
Warrant Exchange Price, the Warrant Exchange Price shall be reduced to the
price equal to the current quotient, effective at the close of business on such
date. In such case of a subdivision or combination of the outstanding shares
of Common Stock issuable upon exchange of the Warrant, the Warrant Exchange
Price shall be first reduced, effective immediately prior to an adjustment of
the Warrant Exchange Price pursuant to this section 4, by the amount, if any,
by which the current exchange price exceeds the current quotient.
For the purposes of this section 4, the following provisions shall
also be applicable:
i) If additional shares of Common Stock are issued for cash, the
consideration received by the Company therefor shall be deemed to be the amount
of cash received by the Company for such shares, before deducting therefrom any
commissions or other expenses paid or incurred by the Company for any
underwriting of, or otherwise in connection with, the issuance of such shares.
ii) If additional shares of Common Stock are issued (otherwise
than upon the exchange of the Company's obligations or shares of stock or upon
the exchange of rights or options to subscribe for or to purchase shares of
Common Stock) for a full or partial consideration other than cash, the amount
of the non-cash consideration received by the Company for such shares shall be
deemed to be the value of such consideration as determined in good faith by the
Company's Board of Directors.
iii) If additional shares of Common Stock are issued upon
conversion or exchange of any obligations (including the Notes) or of any
shares of the Company's stock that are convertible into or exchangeable for
shares of Common Stock or upon the exchange of rights or options to subscribe
for or to purchase shares of Common Stock, the amount of the consideration
received by the Company for such additional shares of Common Stock shall be
deemed to be the total of:
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(a) the amount of consideration received by the Company upon the original
issuance of such obligations, shares, rights, or options, plus (b) any other
consideration received by the Company upon conversion, or exchange except in
adjustment of interest and dividends. If obligations, shares, rights, or
options, of the same class or series of a class as the obligations, shares,
rights, or options so converted, or exchanged have been originally issued for
different amounts of consideration, the amount of consideration received by the
Company upon the original issuance of each obligation, share, right, or option
so converted, or exchanged shall be deemed to be the average amount of the
consideration received by the Company upon the original issuance of all such
obligations, shares, rights, or options. The amount of the consideration,
obligations, shares, rights, or options so converted, or exchanged and the
amount of any other consideration received by the Company upon the original
issuance of the obligations, shares, rights, or options so converted, or
exchanged and the amount of any other consideration, received by the Company
upon such conversion, or exchange shall be determined in the same manner
provided in paragraphs (i) and (ii) above with respect to the consideration
received by the Company in case of the issuance of additional shares of Common
Stock. If such obligations, shares, rights, or options have been issued as a
dividend upon any stock of the Company, the amount of the consideration
received by the Company upon the original issuance thereof shall be deemed to
be zero.
iv) If additional shares of Common Stock are issued as a
dividend, the aggregate number of shares of Common Stock issuable in payment of
such dividend shall be deemed to have been issued and to be outstanding at the
close of business on the record date fixed for the determination of
stockholders entitled to such dividend. Shares of Common Stock issued
otherwise than as a dividend shall be deemed to have been issued and to be
outstanding at the close of business on the date of issue.
v) The term dividend shall mean a dividend or other distribution
upon stock of the Company.
vi) The number of shares of Common Stock at any time outstanding
shall not include all shares of Common Stock then owned or held by or for the
account of the Company.
vii) If the Company declares a dividend without fixing a record
date for determining the stockholders entitled thereto, the first business day
during which the Company's stock transfer books are closed for the purpose of
such determination shall be deemed to be the record date fixed for the
determination of stockholders entitled to such dividend.
viii) In case of (a) the issuance of shares of stock or obligations
convertible into or exchangeable for shares of Common Stock at an exchange
price per share less than the current exchange price in effect immediately
prior to the issuance of such convertible stock or obligations, or (b) the
issuance of any rights to subscribe for or to purchase, or any options for the
purchase of, additional shares of Common Stock, at a price per share for the
additional shares of Common Stock issuable upon the exchange of such rights or
options less than the current exercisable price in effect immediately prior to
the issuance of such rights or the granting of such
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options, then the issuance of such stock, obligations, rights, or options shall
be deemed to be an issuance (as of the date of issuance of such stock,
obligations, rights, or options) of the total maximum number of shares of
Common Stock issuable upon the conversion or exchange of all such convertible
stock or obligations or upon the exchange of all such rights or options, as the
case may be. In such case, the amount received or receivable by the Company in
consideration of the issuance of such stock, obligations, rights, or options
(plus the minimum aggregate amount of premium or additional consideration
payable to the Company upon conversion or exchange of the stock or obligations
or upon the exchange of such rights or options) before deducting therefrom any
commissions or other expenses paid or incurred by the Company for any
underwriting of, or otherwise in connection with, the issuance of such stock,
obligations, rights or options, shall be deemed to be the consideration
actually received (as of the date of issuance of such rights or options) for
the issuance of the additional shares of Common Stock.
The Consideration actually received by the Company for any shares of
Common Stock issued upon the exchange of such stock or obligations or upon the
exchange of such rights or options, which pursuant to this paragraph (viii) is
deemed to have been received, shall not be included in the (first paragraph of
this section 4(a) for the purpose of computing the current quotient and no
further adjustment of the exchange price shall be made in respect thereof
except that:
a) On the expiration of such rights or options or the
termination of the right to convert or exchange such stock or obligations, the
current quotient and the current exchange price shall forthwith be readjusted
to the current quotient and current exchange price which would have obtained
had the adjustments made on account of the issuance of such options, rights or
convertible or exchangeable securities been made upon the basis of the delivery
of only the number of shares of Common Stock actually delivered upon the
exchange of such rights or options or upon conversion or exchange of such
securities for the consideration actually received by the Company for such
options, rights or securities and upon the exchange, exchange or conversion
thereof; and
b) If the purchase or exchange price or exchange rate
provided for in any such options, rights, stock, or obligations changes or a
different purchase or exchange price or exchange rate becomes effective at any
time or from time to time (other than under or by reason of provisions
designated to protect against dilution) then, upon such change becoming
effective, the current quotient and current exchange price then in effect
hereunder shall forthwith be increased or decreased to such current quotient
and current exchange price as would have obtained had the adjustments made upon
the issuance of such options, rights or convertible or exchangeable securities
been made upon the basis of (A) the issuance of the number of shares of Common
Stock theretofore actually delivered upon the exchange, conversion or exchange
thereof, (B) the issuance of all Common Stock and all other options, rights or
convertible or exchangeable securities issued after the issuance of such
options, rights or convertible or exchangeable securities, and (C) the original
issuance at the time of such exchange of any such options, rights or
convertible or exchangeable securities then still outstanding.
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In case, however, such stock or obligations are convertible or
exchangeable at an exchange price or exchange rate or such rights or options
are exercisable at a purchase price per share equal to or in excess of the
current exchange price immediately prior to the issuance or sale of such
convertible stock or obligations or of such rights or options, then no
adjustment of the exchange price shall be made except in respect of additional
shares of Common Stock actually issued upon the conversion or exchange of any
such convertible stock or obligations or upon the exchange of any such rights
or options.
ix) No adjustment in the Warrant Exchange Price shall be made in
respect of the issuance or sales of Common Stock held in the Company's treasury
to the extent it acquired such Common Stock after the date of this Warrant,
except that if any such treasury shares are issued or sold for a consideration
per share which is less than the Warrant Exchange Price in effect immediately
prior to such issue or sale and which is less than the average cost per share
of such treasury shares, the Company shall be deemed for purposes of this
section 4, to have issued or sold shares of Common Stock equal in number to
such treasury shares for a consideration per share equal to the Warrant
Exchange Price in effect immediately prior to such issue or sale reduced by the
amount by which such average cost of such treasury share exceeds such
consideration per share.
(b) In case the Company at any time subdivides or issues a stock
dividend upon the outstanding shares of Common Stock the Warrant Exchange Price
in effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case the outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares, the Warrant Exchange
Price in effect immediately prior to such combination shall be proportionately
increased. Any such adjustment shall become effective at the close of business
on the date that such subdivision, stock dividend or combination becomes
effective.
(c) If any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the shares of the Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of the holder
of this Warrant to the end that the provisions hereof (including without
limitation provisions for adjustments of the Warrant Exchange Price and of the
number of shares purchasable upon the exercise of this Warrant) shall
thereafter be
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applicable as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof. The Company shall
not effect any such consolidation, merger or sale, unless prior to the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument executed and mailed to the
registered holder hereof at the last address of such holder appearing on the
books of the Company, the obligation to deliver to such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase.
(d) Upon any adjustment of the Warrant Exchange Price, then and in
each such case the Company shall give written notice thereof, by first-class
mail, postage prepaid, addressed to the registered holder of this Warrant at
the address of such holder as shown on the books of the Company, which notice
shall state the warrant purchase price resulting from such adjustment and the
increase or decrease, if any, in the number of shares purchasable at such price
upon the exercise of this Warrant setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
(e) In case any time:
(1) the Company shall declare any cash dividend on its
capital stock at a rate in excess of the rate of the last cash
dividend theretofore paid;
(2) the Company shall pay any dividend payable in stock
upon its capital stock or make any distribution (other than regular
cash dividends) to the holders of its capital stock;
(3) the Company shall offer for subscription pro rata to
the holders of its capital stock any additional shares of stock of any
class or other rights;
(4) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation
or merger of the Company with, or sale of all or substantially all of
its assets to, another corporation; or
(5) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company.
then, in any one or more of said cases, the Company shall give written
notice, by first-class mail, postage prepaid, addressed to the
registered holder of this Warrant at the address of such holder as
shown on the books of the Company, of the date on which (aa) the books
of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights, or (bb) such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, or conversion or redemption
shall take place, as the case may be. Such notice shall also specify
the date
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as of which the holders of capital stock of record shall participate
in such dividend, distribution or subscription rights, or shall be
entitled to exchange their capital stock for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up,
or conversion or redemption, as the case may be. Such written notice
shall be given at least 20 days prior to the action in question and
not less than 20 days prior to the record date or the date on which
the Company's transfer books are closed in respect thereto.
(f) If any event occurs as to which in the opinion of the Board of
Directors of the Company the other provisions of this section 4 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the holder of this Warrant in accordance with the essential
intent and principles of such provisions, then the Board of Directors shall
make an adjustment in the application of such provisions, in accordance with
such essential intent and principles, so as to protect such purchase rights as
aforesaid. In addition, if the Company issues any shares of Common Stock other
than for an Approved Transfer (as defined herein) at a price less than the
then-current exchange price as defined herein, then the Warrant Exchange Price
shall be adjusted as provided in this section 4.
(g) No fractional shares of Common Stock shall be issued upon the
exercise of this Warrant, but, instead of any fraction of a share which would
otherwise be issuable, the Company shall pay a cash adjustment (which may be
effected as a reduction of the amount to be paid by the holder hereof upon such
exercise) in respect of such fraction in an amount equal to the same fraction
of the Market Price per share of Common Stock as of the close of business on
the date of the notice required by paragraph 1 above. "Market Price" shall
mean, if the Common Stock is traded on a securities exchange or on the Nasdaq
National Market or Nasdaq SmallCap Market, the average of the closing prices of
the Common Stock on such exchange or on the Nasdaq National Market or Nasdaq
SmallCap Market on the 10 trading days ending on the trading day prior to the
date of determination, or, if the Common Stock is otherwise traded in the
over-the- counter market, the average of the closing bid prices on the 10
trading days ending on the trading day prior to the date of determination. If
at any time the Common Stock is not traded on an exchange or on the Nasdaq
National Market or Nasdaq SmallCap Market or otherwise traded in the
over-the-counter market, then the Market Price shall be deemed to be the
average closing prices or average closing bid prices of the Common Stock, as
the case may be, or, if such exercise occurs in connection with a public
offering of the Common Stock, the public offering price of the Common Stock. If
at any time the Common Stock is not traded on an exchange or the or on the
Nasdaq National Market or Nasdaq SmallCap Market or otherwise traded in the
over-the-counter market the Market Price shall be deemed to be the higher of
(i) the book value thereof as determined by any firm of independent public
accountants of recognized standing selected by the Board of Directors of the
Company as of the last day of any month ending within 60 days preceding the
date as of which the determination is to be made, or (ii) the fair value
thereof determined in good faith by the Board of Directors of the Company as of
a date which is within 15 days of the date as of which the determination is to
be made.
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(h) No adjustment of the Warrant Exchange Price shall be made as a
result of or in connection with (i) shares issued in acquisitions to be made by
the Company, (ii) shares issued in establishing a strategic alliance, (which
includes any financial and lending arrangements with Prudential Securities
Incorporated ("Prudential"), or any affiliates or assigns thereof on terms
substantially similar to those set forth on Schedule 13.1 to the Note Purchase
Agreement), or (iii) for option shares issued to employees, contractors,
consultants or affiliated physicians approved by the Board of Directors and
pursuant to previous option grants or Warrants disclosed on the attached
Schedule 13.1 to the Note Purchase Agreement or related to future options
granted where shares issued are at a price equal to or higher than the current
exchange price as defined herein, ("Approved Transfers").
(i) The issuance of certificates for shares of Common Stock upon
the exchange of Warrants shall be made without charge to the Warrant holders
for any tax (other than federal or state income taxes) in respect to the
issuance of such certificates. Such certificates shall be issued in the
respective names of, or in the names directed by, the holder of the Warrant
exchanged. Company, however, shall not be required to pay any tax which may be
payable in respect to any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the holder of the Warrants
exchanged, or to issue or deliver such certificates until the person or persons
requesting the issuance thereof have paid the Company the amount of such tax or
have established to the satisfaction of the Company that such tax has been
paid.
5. This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a stockholder of the Company. Unless otherwise
provided in the Note Purchase Agreement, no dividends are, or should be
payable, or shall accrue on or with respect to this Warrant or any interest
represented by this Warrant or on the shares purchasable upon exercise hereof
until or unless, and except to the extent that this Warrant is exercised.
6. The holder of this Warrant, by acceptance hereof, agrees to
give written notice to the Company before transferring this Warrant or
transferring any Common Stock issuable or issued upon the exercise hereof of
such holder's intention to do so, describing briefly the manner of any proposed
transfer of this Warrant or such holder's intention as to the disposition to be
made of shares of Common Stock issuable or issued upon the exercise hereof. In
addition the holder of this Warrant shall represent in such notice to the
Company that a copy of the Note Purchase Agreement has been provided to any
proposed transferree(s). Such holder shall also provide the Company with an
opinion of counsel satisfactory to the Company to the effect that the proposed
transfer of this Warrant or disposition of shares may be effected without
registration or qualification (under any Federal or State law) of this Warrant
or the shares of Common Stock issuable or issued upon the exercise hereof.
Upon receipt of such written notice and opinion by the Company, such holder
shall be entitled to transfer this Warrant, or to exercise this Warrant in
accordance with its terms and dispose of the shares received upon such exercise
or to dispose of shares of Common Stock received upon the previous exercise of
this Warrant, all in accordance with the terms of the notice delivered by such
holder to the Company, provided that an appropriate legend respecting the
aforesaid restrictions on transfer and disposition may be endorsed on this
Warrant or the certificates for such shares.
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15
7. Subject to the provisions of paragraph 6 hereof, this Warrant
and all rights hereunder are transferable, in whole or in part, at the
principal office of the Company by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that the bearer of this Warrant when endorsed, may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented by this Warrant, or to the transfer hereof on the books of the
Company, any notice to the contrary notwithstanding; but until such transfer on
such books, the Company may treat the registered holder hereof as the owner for
all purposes.
8. If permitted by federal and state securities laws, this
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
principal office of the Company, for new Warrants of like tenor representing in
the aggregate the right to subscribe for and purchase the number of shares
which may be subscribed for and purchased hereunder, each of such new Warrants
to represent the right to subscribe for and purchase such number of shares as
shall be designated by said holder hereof at the time of such surrender.
9. (a) In addition to and without limiting the rights of the
holder of this Warrant under the terms of this Warrant the holder of this
Warrant shall have the right (the "Conversion Right") to convert this Warrant
or any portion thereof into shares of Common Stock as provided in this
paragraph 9 at any time or from time to time prior to its expiration. Upon
exercise of the Conversion Right with respect to a particular number of shares
subject to this Warrant (the "Converted Warrant Shares"), the Company shall
deliver to the holder of this Warrant, without payment by the holder of any
exercise price or any cash or other consideration, that number of shares of
Common Stock equal to the quotient obtained by dividing the Net Value (as
hereinafter defined) of the Converted Warrant Shares by the fair market value
(as defined in paragraph (c) below) of a single share of Common Stock,
determined in each case as of the close of business on the Conversion Date (as
hereinafter defined). The "Net Value" of the Converted Warrant Shares shall be
determined by subtracting the aggregate Warrant Exchange Price of the Converted
Warrant Shares from the aggregate fair market value of the Converted Warrant
Shares. No fractional shares shall be issuable upon exercise of the
Conversion Right and if the number of shares to be issued in accordance with
the foregoing formula is other than a whole number, the Company shall pay to
the holder of this Warrant an amount in cash equal to the fair market value of
the resulting fractional share.
(b) The Conversion Right may be exercised by the holder of this
Warrant by the surrender of this Warrant at the principal office of the Company
together with a written statement specifying that the holder thereby intends to
exercise the Conversion Right and indicating the number of shares subject to
this Warrant which are being surrendered (referred to in paragraph (a) above as
the Converted Warrant Shares) in exercise of the Conversion Right. Such
conversion shall be effective upon receipt by the Company of this Warrant
together with the aforesaid written statement or on such later date as is
specified therein (the "Conversion Date"), but not later than the expiration
date of this Warrant. Certificates for the shares of Common
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16
Stock issuable upon exercise of the Conversion Right together with a check in
payment of any fractional share and, in the case of a partial exercise, a new
warrant evidencing the shares remaining subject to this Warrant shall be issued
as of the Conversion Date and shall be delivered to the holder of this Warrant
within 15 days following the Conversion Date.
(c) For purposes of this paragraph 9, the "fair market value" of a
share of the Common Stock as of a particular date shall be its Market Price,
calculated as described in paragraph 4(g) hereof.
10. The holder of this Warrant shall have no registration rights
except for the registration rights specified in the Note Purchase Agreement.
11. All questions concerning this Warrant will be governed and
interpreted and enforced in accordance with the internal law, not the law of
conflicts, of the State of Florida.
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17
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer and this Warrant to be dated as of April 18,
1997.
VISION 21, INC.
By
---------------------------------------
Its
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RESTRICTION ON TRANSFER
"The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any state and may
not be transferred without (i) the opinion of counsel satisfactory to this
corporation that such transfer may be lawfully made without registration under
the Federal Securities Act of 1933 and all applicable state securities laws or
(ii) such registration."
B-12
