EXHIBIT 10.8
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AS AMENDED. NO SALE OR DISPOSITION OF THIS WARRANT MAY BE MADE WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN EXEMPTION
THEREUNDER SUCH THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES
ACT OF 1933.
U.S. DIAGNOSTIC INC.
COMMON STOCK PURCHASE WARRANT
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THIS WARRANT to purchase shares of common stock, $.01 par value, (the
"COMMON STOCK") of U.S. DIAGNOSTIC INC., a Delaware corporation (the "COMPANY")
evidences that, for valuable consideration, receipt of which is hereby
xxxxxxxxxxxx, XXX FINANCIAL SERVICES INC., a Delaware corporation ("PURCHASER"),
or registered assigns, is entitled to subscribe for and purchase from the
Company, an aggregate of up to One Hundred Twenty-five Thousand (125,000) shares
(subject to adjustment as specified in Section 4 hereof) of the fully paid and
nonassessable, Common Stock, (the "WARRANT STOCK"), at the price per share equal
to the closing price per share paid for Common Stock of the Company on September
29, 1997 on the principal national securities exchange on which the Common Stock
is admitted to trading (such price and such other price as results, from time to
time from the adjustments specified in Section 4 hereof, is referred to herein
as the "EXERCISE PRICE"), subject to the provisions and upon the terms and
conditions set forth herein.
1. CONDITIONS TO EXERCISE. The purchase right represented by this
Warrant is exercisable, in whole or in part, as to the Warrant Stock at any time
after April 30, 1998, and from time to time, on or before September 30, 2004.
This Warrant expires and may not be exercised after September 30, 2004. If the
Company has reduced the principal amount of Indebtedness (as such term is
defined in the Loan and Security Agreements dated as of the date hereof entered
into between affiliates of the Company as Borrower, the Company as Guarantor and
Purchaser as Lender) owed by the Company and its affiliates to Purchaser and its
affiliate DVI Business Credit Corporation as of September 29, 1997 by an amount
not less than $12,500,000, then this Warrant terminates and may not be
exercised. For purposes of calculating the amount by which the principal amount
of Indebtedness has been reduced, scheduled amortization of the such principal
are excluded and any repayment of a revolving line of credit will be excluded
only to the extent that such repayment is accompanied by a reduction in the
Commitment amount under such revolving line of credit.
2. METHOD OF EXERCISE: PAYMENT, ISSUANCE OF NEW WARRANT. The purchase
right represented by this Warrant may be exercised at any time, and from time to
time, by the surrender of this Warrant (with the Notice of Exercise form
attached hereto duly executed) at the principal office of the Company and by the
payment to the Company by check in an amount equal to the then applicable
Exercise Price per share multiplied by the number of shares of the Warrant Stock
then
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being purchased. In the event of any exercise of the rights represented by this
Warrant, the Company shall deliver to Purchaser certificates for the shares of
the Warrant Stock so purchased within a reasonable time, but not later than
twenty business days after exercise. This Warrant will be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above and the person entitled to receive the
shares of the Warrant Stock issuable upon such exercise is treated for all
purposes as the holder of such shares of record as of the close of business on
such date. Unless this Warrant has been fully exercised or has expired, a new
Warrant representing the number of shares, if any, with respect to which this
Warrant has not then been exercised must also be issued to Purchaser within such
reasonable time.
3. STOCK FULLY PAID; RESERVATION OF SHARES. All Warrant Stock which may
be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issue thereof. 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 the issue upon exercise
of the purchase rights evidenced by this Warrant, a sufficient number of shares
of its fully paid and nonassessable Common Stock to provide for the exercise of
the rights represented by this Warrant.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price are subject to adjustment from time to time upon the happening of
the events and in the manner described in this Section 4.
4.1 RECLASSIFICATION, CONSOLIDATION OR MERGER. If any capital
reorganization or reclassification of the capital stock of the Company,
consolidation or merger of the Company with another corporation or any other
entity or the sale of all or substantially all of its assets to another entity
is effected, the successor entity (if other than the Company) resulting from
such consolidation or merger or the entity purchasing such assets must assume
this Warrant by written instrument executed and mailed or delivered to
Purchaser, and lawful and adequate provision (in form reasonably satisfactory to
Purchaser) must be made whereby the holder hereof thereafter has the right to
purchase and receive 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 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 Common 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. In any such case, appropriate provision must be
made with respect to the rights and interests of the holder of this Warrant to
assure that the provisions hereof (including without limitation provisions for
adjustment of the Exercise Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) are thereafter applicable, as
nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof.
4.2 ANTIDILUTION ADJUSTMENTS. In case the Company, subsequent
to September 30, 1997, (a) pays a dividend or make a distribution on its shares
of Common Stock in shares of
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Common Stock, (b) subdivides or reclassifies its outstanding Common Stock into a
greater number of shares, or (c) combines or reclassifies its outstanding Common
Stock into a smaller number of shares or otherwise effect a reverse split, then
the Exercise Price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination or
reclassification must be proportionately adjusted so that the Holder of this
Warrant exercised after such date is entitled to receive the aggregate number
and kind of shares which, if this Warrant had been exercised immediately prior
to such time, the Holder would have owned upon such exercise and been entitled
to receive upon such dividend, subdivision, combination or reclassification.
Such adjustment is made successively whenever any event listed in this Section
4.2 occur.
4.3 ADJUSTMENT FOR DISTRIBUTION OF PROPERTY. In case the
Company, subsequent to the issuance hereof, distributes to all holders of Common
Stock assets (excluding cash dividends or distributions paid out of current
earnings and dividends or distributions referred to in Section 4.2 of this
Warrant), then the Exercise Price is adjusted thereafter by multiplying the
Exercise Price in effect immediately prior thereto by a fraction, of which the
numerator is the total number of shares of Common Stock outstanding multiplied
by the Current Market Price (as determined pursuant to Section 9.3) per share of
Common Stock, less the fair market value of the assets distributed, and of which
the denominator is the total number of shares of Common Stock outstanding
multiplied by such current market price per share of Common Stock. Such
adjustment must be made successively whenever such a record date is fixed. Such
adjustment must be made whenever any such distribution is made and becomes
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.
4.4 INTENTIONALLY DELETED.
4.5 OTHER ADJUSTMENTS. In the case any event occurs as to
which the failure to make any adjustment would not fairly protect the purchase
rights represented by this Warrant in accordance with the essential intent and
principles of this Warrant, then, in each such case, the Purchaser may appoint
an independent investment bank or firm of independent public accountants, which
will give its opinion as to the adjustment, if any, on a basis consistent with
the essential intent and principles established in this Warrant, necessary to
preserve the purchase rights represented by this Warrant. Upon receipt of such
opinion, the Company will promptly deliver a copy of such opinion to the
Purchaser and will make the adjustments described in such opinion. The fees and
expenses of such investment bank or independent public accountants will be borne
by the Company.
4.6 ADJUSTMENT IN NUMBER OF SHARES. Whenever the Exercise
Price payable upon exercise of each Warrant is adjusted pursuant to Sections 4.2
or 4.3, the number of shares of Common Stock purchasable upon exercise of each
Warrant must simultaneously be adjusted by multiplying the number of shares of
Common Stock issuable upon exercise of each Warrant in effect on the date
thereof by the Exercise Price in effect on the date thereof and dividing the
product so obtained by the Exercise Price, as adjusted.
4.7 DE MINIMUM ADJUSTMENT. No adjustment in the Exercise Price
is required unless such adjustment would require an increase or decrease of at
least one-half cent ($0.005) in
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the price. Any adjustments which by reason of this Section 4.5 are not required
to be made are carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4 are made to the nearest cent
or to the nearest one-hundredth of a share, as the case may be.
4.8 RETENTION OF ACCOUNTANTS. The Company may retain a firm of
independent accountants of recognized standing selected by the Board of
Directors (who may be the regular accountants employed by the Company) to make
any computation required by this Section 4, and a certificate signed by such
firm is presumptive evidence of the correctness of such adjustment.
4.9 APPLICABILITY OF ADJUSTMENTS. In the event that at any
time, as a result of an adjustment made pursuant to Section 4.2 of this Warrant,
the holder of any Warrant thereafter becomes entitled to receive any shares of
the Company, other than Common Stock, thereafter the number of such other shares
so receivable upon exercise of any Warrant is subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in this Section 4.
4.10 NO CHANGE IN LANGUAGE OF WARRANT. Irrespective of any
adjustments in the Exercise Price or the number or kind of shares purchasable
upon exercise of Warrants, Warrants theretofore or thereafter issued may
continue to express the same price and number and kind of shares as are stated
in this and similar Warrants initially issued by the Company.
4.11 NOTICE OF SPECIFIC EVENTS. In case at any time:
(a) the Company declares any dividend payable in
stock upon its Common Stock or make any special dividend or other
distribution (other than cash dividends paid at an established annual
or quarterly rate) to the holders of its Common Stock;
(b) the Company offers for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any
class or other rights;
(c) there is a 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 entity; or
(d) there is a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, the Company shall give Purchaser (i) at least one hundred twenty days
prior written notice of the date on which the books of the Company close or a
record is taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least
one hundred twenty days prior written notice of the date when the same will take
place. Notice in accordance with the foregoing clause (i) must also specify, in
the case of any
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dividend, distribution or subscription rights, the date on which the holders of
Common Stock are entitled to exchange their Common Stock for securities or other
property deliverable upon Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up, as the case may be.
4.12 NOTICE OF ADJUSTMENTS. Whenever the Exercise Price is
adjusted pursuant to Section 4 hereof, the Company shall promptly as practicable
prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise
Price after giving effect to such adjustment, and shall cause copies of such
certificate to be delivered to Purchaser.
4.13 FRACTIONAL SHARES. Fractional shares of the Warrant Stock
will be issued in connection with any issuance hereunder.
5. TRANSFERS. This Warrant or the Warrant Stock may be transferred in
whole or in part by Purchaser in complianc with applicable law.
6. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
6.1 PIGGY-BACK REGISTRATION RIGHTS. If, at any time during the
period commencing upon the issuance hereof and ending September 30, 2004, the
Company proposes to file a registration statement under the Security Act of
1933, as amended (the "1933 ACT"), covering securities of the Company, whether
for the Company's own account or for the account of selling securities holders,
other than registration statement relating to an acquisition or merger or a
registration statement on Form S-8 or subsequent similar form, it shall advise
the holders of this Warrant or the Warrant Stock (each such person being
referred to herein as a "HOLDER") by written notice at least one hundred twenty
days prior to the filing of such registration statement and will upon the
request of any such holder include in any such registration statement such
information as may be required to permit a public offering of the Warrant Stock.
The Company shall keep such registration statement current for a period of nine
months from the effective date of such registration statement or until such
earlier date as all of the registered Warrant Stock has been sold. In connection
with such registration, the holders shall execute and deliver such customary
underwriting documents as the managing underwriter requests as a condition to
the inclusion of the Warrant Stock in the registration statement.
6.2 INTENTIONALLY DELETED.
6.3 ADDITIONAL PROVISIONS CONCERNING REGISTRATION. The
following provisions of this Section 6.3 are also applicable to any registration
statement filed pursuant to Section 6.1:
(a) The Company shall bear the entire cost and
expense of any registration of securities initiated under Section 6.
Notwithstanding the foregoing, any holder whose Warrant Stock is
included in any such registration statement pursuant to this Section 6
shall,
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however, bear the fees of its own counsel and accountants and
any transfer taxes or underwriting discounts or commissions applicable
to the Warrant Stock sold by the holder pursuant thereto.
(b) The Company shall indemnify and hold harmless
each such holder and each underwriter, within the meaning of the 1933
Act, who may purchase from or sell for any such holder any Warrant
Stock from and against any and all losses, claims, damages and
liabilities (including fees and expenses of counsel, which counsel may,
if the holders request, be separate from counsel for the Company)
caused by any untrue statement or alleged untrue statement of material
fact contained in the registration statement or any post-effective
amendment thereto or any registration statement under the 1933 Act or
any prospectus included therein required to be filed or furnished by
reason of this Section 6 or any application or other filing under any
state securities law caused by any omission or alleged omissions to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading to which such
holder or any such underwriter or any of them may become subject under
the 1933 Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue
statement or alleged untrue statement or omission or alleged omission
based upon information furnished to the Company by the indemnified
holder or underwriter expressly for use therein, which indemnification
includes each person, if any, who controls any such underwriter within
the meaning of each such Act. Any such holder or underwriter must at
the same time indemnify the Company, its directors, each officer
signing the related registration statement, each person, if any, who
controls the Company within the meaning of each such Act and each other
holder or underwriter, from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration
statement or any prospectus required to be filed or furnished by reason
of this Section 6 or caused by 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, insofar as
such losses, claims, damages or liabilities are caused by any untrue
statement or alleged untrue statement or omission based upon
information furnished to the Company by such holder or underwriter
expressly for use therein.
(c) The Company shall qualify the Warrant Stock for
sale in such states as it is otherwise qualifying its Common Stock for
sale. The Company shall also provide the holders with prospectuses upon
request from the holders.
(d) The selling holders shall furnish information and
provide indemnification as set forth in Section 6.3(b).
(e) Neither the giving of any notice by any holder
nor the making of any request for prospectuses imposes any upon any
holder making such request any obligation to sell any Warrant Stock or
exercise any Warrant.
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(f) The registration rights set forth in Section 6.1
are exercisable only by Purchaser and its permitted assigns.
(g) The Company is not required to include in any
registration statement any Warrant Stock which could, pursuant to the
provisions of Rule 144 of the Securities and Commission under the 1933
Act, be sold during a period of four months following the date on which
registration of such Warrant Stock was requested.
(h) The Company's agreements with respect to this
Warrant or the Warrant Stock in this Section 6 continue in effect
regardless of the exercise and surrender of this Warrant.
7. LISTING RIGHTS. If the Company at any time lists any Common Stock or
other securities of the same class as those issuable on the exercise of this
Warrant on any national securities exchange, the Company will, at its expense,
simultaneously list on that exchange, on official notice of issuance on exercise
of this Warrant, and maintain such listing of, all shares of the Warrant Stock
or other securities from time to time issuable on exercise of this Warrant.
8. NO RIGHTS AS STOCKHOLDERS. Purchaser is not entitled by virtue of
the terms hereof to vote or receive dividends or be deemed the holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof until the Warrant has been exercised.
9. CURRENT MARKET PRICE. The "CURRENT MARKET PRICE"of the Common Stock
at any date is based on the public market for the Common Stock, if any, and is
based on the average of the daily closing prices for a twenty consecutive
trading days commencing thirty trading days before such date. The closing price
for each day is the last sale price reported or, in case no such reported sale
takes place on such day, the average of the reported last bid and asked prices
regular way, in either case on the principal national securities exchange on
which the Common Stock is admitted to trading or listed or on the NASDAQ System,
or if not listed or admitted to trading on such exchange or such System, the
average of the reported highest bid and reported lowest asked prices as reported
by NASDAQ, or other similar organization if NASDAQ is no longer reporting such
information.
10. GOVERNING LAW. This Warrant must be construed and interpreted in
accordance with and is governed in all respects by the laws of the State of
Delaware applicable to agreements executed and to be performed wholly within
such State.
11. NOTICES. All notices, demands, requests and other communications
which any party hereto desires or is required to deliver or otherwise give to
any other party hereunder must be in writing and are deemed to have been
delivered, given and received when personally given, delivered by overnight
courier against receipt or transmitted by facsimile if receipt is acknowledged
or transmission is confirmed by mail or on the third day after it is mailed by
registered or certified mail,
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postage prepaid, return receipt requested, addressed as follows (or to such
other address as any of the parties shall specify by notice in accordance with
this provision:
Notices to the Company:
U.S. Diagnostic Inc.
000 Xxxxx Xxxxxxx Xxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxx X. Xxxx
Fax:
Notices to Purchaser:
DVI Financial Services Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn.: Xxxxxxx Xxxxxx
Fax: 215/000-0000
With a copy to:
Xxxxxxx Xxxx, Esq.
Xxxxxx, White & Xxxxxx
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: 415/000-0000
12. REGISTERED HOLDER. The Company may deem and treat the person whose
name appears on its warrant register as the holder of this Warrant as the
absolute owner hereof for all purposes, and the Company is not affected by any
notice to the contrary.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers duly authorized as of September 29, 1997.
U.S. DIAGNOSTIC INC.
By:
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Name:
Title:
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NOTICE OF EXERCISE
TO: U.S. DIAGNOSTIC, INC.
1. The undersigned hereby elects to purchase ________ shares of Common
Stock of U.S. Diagnostic Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price in full, together with all
applicable transfer taxes, if any, in the amount of
$_________________.
2. Please issue a certificate or certificates representing the shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
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(Name)
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3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares.
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