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EXHIBIT 2.1
EXECUTION COPY
____________________________________________________________________
WARRANT AGREEMENT
DATED
JANUARY 8, 1996
BETWEEN
MEDIRISK, INC.
AND
HEALTHPLAN SERVICES CORPORATION
____________________________________________________________________
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WARRANT AGREEMENT
This WARRANT AGREEMENT is entered into this 8th day of January 1996, by
and between MEDIRISK, INC., a Florida corporation (the "Company"), and
HEALTHPLAN SERVICES CORPORATION, a Delaware corporation (the "Investor").
BACKGROUND
The Company is authorized to issue 20,000,000 shares of Series A Common
Stock, par value $0.001.
Pursuant to this Agreement, the Company shall issue up to 665,180 warrants
to the Investor entitling it to purchase, subject to adjustment as provided in
this Agreement, up to an aggregate of 665,180 shares of Series A Common Stock
of the Company, such maximum aggregate number of shares representing 16% of the
outstanding shares of Series A Common Stock of the Company on a fully diluted
basis on the date hereof.
Capitalized terms used in this Agreement shall have the meanings set forth
on APPENDIX A.
NOW, THEREFORE, the Company and the Investor agree as follows:
ARTICLE 1
THE WARRANTS
1.1 Issuance of Warrants. (a) On each Subsequent Closing Date, in
consideration of the purchase by Investor of the Senior Subordinated Notes
purchased on such Subsequent Closing Date, the Company shall issue to the
Investor a number of Warrants equal to the aggregate original principal amount
of the Senior Subordinated Notes purchased at such Subsequent Closing
multiplied by 0.066518 (the "Warrant Multiple"). A maximum of 665,180 Warrants
will be issued hereunder if Investor purchases Senior Subordinated Notes with
an aggregate original principal amount equal to $10,000,000, such Warrants
representing 16% of the outstanding shares of the Company on a fully diluted
basis on the date hereof. At each such Subsequent Closing the Company shall
deliver to the Investor a Warrant Certificate representing such Warrants. Each
Warrant will entitle the Investor to purchase one share of Series A Common
Stock of the Company, with such number being adjusted as provided in Article 4
of this Agreement on account of events occurring after the date of this
Agreement, whether or not such events occur before or after the issuance of the
Warrant.
(b) If the Company (i) establishes any credit facility (an "Other Credit
Facility") prior to such time as the maximum number of Warrants issuable
hereunder have been issued, which credit facility is not (A) Senior Debt (as
defined in the Securities Purchase Agreement) or (B) indebtedness issued by the
Company to a seller of a business
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acquired by the Company in connection with the Company's acquisition of such
business, and (ii) incurs any indebtedness under such Other Credit Facility,
then the Company shall issue to the Investor effective as of each day on which
it incurs indebtedness under such Other Credit Facility a number of Warrants
equal to the aggregate original principal amount of the indebtedness incurred
by the Company under such Other Credit Facility on such day multiplied by the
Warrant Multiple. The Company shall deliver to the Investor a Warrant
Certificate representing the Warrants issuable under this subsection (b) within
30 days after the day on which it incurs indebtedness under such Other Credit
Facility.
(c) Subject to the provisions of subsection (d) below, if on the day the
Company engages in, or experiences, a Maturity Event the Company has not issued
at least 68.15% of the maximum number of Warrants issuable under this
Agreement, then the Company shall issue to the Investor a number of Warrants
equal to (i) 68.15% of the maximum number of Warrants issuable under this
Agreement minus (ii) the number of Warrants that have been issued under this
Agreement prior to such Maturity Event. The Company shall deliver to the
Investor a Warrant Certificate representing the Warrants issuable under this
subsection (c) within 10 Business Days after the effective date of such
Maturity Event. For the purposes of this Agreement, the term "Maturity Event"
means (A) an Initial Public Offering by the Company; (B) a Change of Control of
the Company; (C) the third anniversary of the date of this Agreement; (D) any
acceleration by the Investor of the maturity of the Indebtedness outstanding
under the Senior Subordinated Notes or any Event of Default that would give the
Investor the right to accelerate such maturity at a time when the Investor is
precluded from accelerating such maturity by reason of a Subordination
Agreement, (E) the death of Xxxx X. Xxxxxx, if such death occurs on or after
January 1, 1997, and (F) the termination of the employment of Xxxx X. Xxxxxx
with the Company.
(d) Notwithstanding the provisions of subsection (c) above, if Xxxx X.
Xxxxxx dies on or before December 31, 1996 (a "1996 Kaiser Death"), the
Investor may, on any date after such 1996 Kaiser Death and prior to a
subsequent Maturity Event, terminate its commitment to purchase Senior
Subordinated Notes as set forth in the Securities Purchase Agreement or
determine not to purchase Senior Subordinated Notes that it was otherwise
obligated to purchase thereunder except for the occurrence of the 1996 Kaiser
Death (a "Kaiser Death Funding Termination Event"); and upon such Kaiser Death
Funding Termination Event, subsection (c) of this Section 1.1 shall terminate
and be of no force and effect. In the absence of a Kaiser Death Funding
Termination Event, the Company shall continue to issue Warrants to Investor in
accordance with the provisions of this Agreement.
1.2 Execution of Warrant Certificates. Warrant Certificates may be
signed on behalf of the Company by any person authorized by the Company to do
so. Any person who, on the actual date of the execution of a Warrant
Certificate, is authorized by the Company to sign the Warrant Certificate, may
sign on the Company's behalf even if such person was not authorized to do so on
the Subsequent Closing Date.
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1.3 Registration. The Company may deem and treat the registered Holder
of a Warrant Certificate as the absolute owner for all purposes, notwithstanding
any notation of ownership or other writing thereon made by anyone.
1.4 Exchanges. At the option of the Holder, any Warrant Certificate may
be exchanged when surrendered at the principal office of the Company for one or
more Warrant Certificates representing in the aggregate a Warrant or Warrants
to acquire a like number and kind of shares of Series A Common Stock in the
Company by the Holder. Warrant Certificates surrendered for exchange shall be
canceled by the Company.
1.5 Mutilated or Missing Warrant Certificates. If any of the Warrant
Certificates shall be mutilated, lost, stolen or destroyed, the Company shall
issue, in exchange and substitution for and upon cancellation of such Warrant
Certificate, a new Warrant Certificate representing an equivalent number of
Warrants, but only upon receipt of evidence of such loss, theft or destruction
reasonably satisfactory to the Company or, if requested by the Company, upon
receipt of a duly executed indemnification agreement reasonably satisfactory to
the Company; provided, however, that the Investor shall not be required to
deliver an indemnity bond.
1.6 Term and Exercisability of Warrants. The Warrants shall be
exercisable, at any time or from time to time, in whole or in part, in the
manner provided in Section 1.7; provided, however, that at the Expiration Date
any unexercised Warrants shall become void and all rights of the Investor with
respect to such Warrants shall cease.
1.7 Manner of Exercise of Warrants. Subject to the provisions of this
Agreement, the Investor shall have the right to purchase from the Company, and
the Company shall issue and sell to the Investor, one share of Series A Common
Stock for each Warrant exercised, upon surrender to the Company at its
principal office of the Warrant Certificate representing such Warrant, together
with a Form of Warrant Subscription in substantially the form of EXHIBIT A-2
completed and signed, and upon payment to the Company of the Exercise Price in
lawful money of the United States of America.
1.8 Issuance of Shares Upon Exercise. Upon exercise of a Warrant, the
Company shall issue and cause to be delivered to the Investor, registered in
the name of the Investor, a certificate representing the share or shares of
Series A Common Stock issuable upon the exercise of such Warrant. Such
certificate shall be deemed to have been issued, and the Investor shall be
deemed to have become a holder of record of such Series A Common Stock, as of
the date of surrender of the Warrant Certificate and payment of the Exercise
Price. The Warrants shall be exercisable, at the election of the Investor,
either as an entirety or for part only of the number of Warrants specified in
the Warrant Certificate representing such Warrants. If less than all of the
Warrants evidenced by a Warrant Certificate are exercised at any time prior to
the Expiration Date, a new Warrant Certificate or Certificates shall be issued
by the Company, registered in the name of the Investor, representing the
remaining unexercised number of Warrants evidenced by the
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Warrant Certificate so surrendered. All Warrant Certificates surrendered upon
exercise of Warrants shall be canceled by the Company.
1.9 Payment of Expenses and Taxes. The Company shall pay all expenses
and taxes imposed by law or any governmental agency, including any documentary
stamp taxes, attributable to the issuance of Warrant Shares upon the exercise
of Warrants.
1.10 Reservation of Shares. The Company covenants and agrees that, so
long as any Warrants remain outstanding, the Company shall (i) at all times
have authorized and reserved a number of shares of Series A Common Stock
sufficient to provide for the exercise of the Warrants, and (ii) take all such
action as may be required to assure that the par value, if any, per share of
Series A Common Stock is at all times equal to or less than the Exercise Price
as in effect from time to time pursuant to this Agreement.
1.11 Securities Law Compliance. If the issuance of any shares of Series A
Common Stock required to be reserved for purposes of the exercise of any
Warrants requires the registration with, or approval of, any governmental
authority or requires listing on any national securities exchange or national
market system before such shares may be so issued, the Company shall at its
expense use its best efforts to cause such shares to be duly registered,
approved or listed, as the case may be, so that such shares may be issued in
accordance with the terms hereof; provided, however, that the foregoing shall
not apply to the extent that such issuance would require registration or
qualification as a public offering as a result of the Transfer of the Warrants.
1.12 Fractional Shares. The Company need not issue fractional shares
upon the exercise of Warrants but in lieu thereof may pay to the Investor the
Fair Value of such fractional shares; provided, however, that in the event that
the Company undertakes a reduction in the number of shares of Series A Common
Stock outstanding, it shall be required to issue fractional shares to Investor
if it exercises all or any part of its Warrants.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 By the Company. The Company represents and warrants to the Investor
as follows:
2.1.1 Legal Status; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated. The Company is duly qualified or
licensed to do business and is in good standing as a foreign corporation in all
jurisdictions where the nature of conduct of its business as now conducted
requires such qualification. The Company has all requisite corporate power and
authority to conduct business as presently conducted and as currently proposed
to be conducted, to own, lease, sell or otherwise dispose of or operate its
properties, and to enter into and perform this Agreement.
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2.1.2 Capitalization. Prior to giving effect to the transactions
contemplated hereunder and under the other Investment Documents, the authorized
capitalization and all outstanding shares of capital stock of the Company and
all outstanding Options and Convertible Securities are as set forth on EXHIBIT
C to the Securities Purchase Agreement.
2.1.3 Valid Issue. All shares of Series A Common Stock that may be issued
upon exercise of the Warrants are duly authorized and, upon issuance in
accordance with the provisions of this Agreement and payment therefor as herein
provided, shall be validly issued, fully paid and nonassessable and free from
all taxes, liens, charges and security interests (other than liens and security
interests created by the Investor).
2.1.4 Authority; No Conflicts. This Agreement and any other instruments
or documents to be executed and delivered on behalf of the Company pursuant to
this Agreement have been duly authorized by all necessary corporate action on
the part of the Company. Neither the execution and delivery nor the
performance of this Agreement and any other instruments or documents executed
and delivered pursuant hereto by the Company (i) conflicts with the Charter
Documents of the Company, (ii) violates any law, regulation or ordinance, or
any order or ruling of any court or governmental entity, applicable to the
Company or (iii) results in a breach or violation of, or constitutes a default
under, any term of any agreement or instrument to which the Company is a party
or by which it or any of its properties or assets are bound.
2.1.5 Binding and Enforceability. This Agreement has been duly executed
and delivered by the Company and is a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium and other laws of general applicability
relating to or affecting creditors' rights and general principles of equity,
whether such enforcement is considered in a proceeding at law or in equity.
2.1.6 Governmental and Other Consents. No governmental or other consents,
approvals, authorizations, registrations, declarations or filings are required
for the execution and delivery of this Agreement on behalf of the Company and
the performance of this Agreement by the Company.
2.2 Securities Law Representations of the Investor. The Investor
represents, warrants and acknowledges to the Company as follows:
2.2.1 Investment. The Warrants issued to the Investor, and the Warrant
Shares to be issued to the Investor upon exercise of the Warrants, are being
acquired for investment only for the Investor's own account, not as a nominee
or agent, and not with a view to the resale or other distribution thereof. The
Investor has not been contacted concerning the acquisition of the Warrants or
Warrant Shares by means of any advertisement.
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2.2.2 Sophistication. The Investor has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the Investor's investment in the Warrants and the Warrant Shares; the
Investor has the ability to bear the economic risks of such investment; the
Investor has the capacity to protect its own interests in connection with the
transactions contemplated by this Agreement; and the Investor has had an
opportunity to obtain such financial and other information from the Company as
the Investor deems necessary or appropriate in connection with evaluating the
merits of the investment in the Warrants and the Warrant Shares; provided,
however, that none of the Investor's representations hereunder are intended in
any way to limit the scope or applicability of the Company's representations
and warranties in this Agreement and the Securities Purchase Agreement, the
truth, accuracy and completeness of which such Investor has relied upon in its
investment in the Warrants and the Warrant Shares.
2.2.3 Accredited Investor. The Investor qualifies as an Accredited
Investor.
ARTICLE 3
COVENANTS OF THE COMPANY
The Company covenants that, so long as any of the Warrants or Warrant
Shares remain outstanding, the Company shall and shall cause each of its
Subsidiaries to:
3.1 Records. Maintain adequate books and records in accordance with
GAAP, and permit a representative of Investor, at any reasonable time during the
Company's regular business hours upon reasonable prior notice, to inspect,
copy, audit and examine such books and records, to visit and inspect the
properties of the Company and its Subsidiaries, and to discuss the business,
finances and affairs of the Company and its Subsidiaries with the officers and
directors thereof, all at the expense of the Company.
3.2 Existence; Compliance With Law. Preserve and maintain its corporate
existence, and all of its licenses, permits, governmental approvals, rights,
privileges and franchises necessary or desirable in the normal conduct of its
business as now conducted or presently proposed to be conducted; conduct its
business in an orderly and regular manner; comply with the provisions of all
documents pursuant to which it is organized or which govern its continued
existence; and comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority and requirements for the
maintenance of its insurance, licenses, permits, governmental approvals,
rights, privileges and franchises.
3.3 Reporting Requirements. From and after the date of this Agreement
and until the earlier to occur of (i) the Company's registration of one or more
of its classes of its securities under the Securities Exchange Act of 1934, as
amended, or (ii) Investor's ceasing to own or have the right to acquire an
aggregate of at least 25,000 shares of Series A Common Stock, the Company will
deliver to Investor:
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(i) as soon as available and in any event within 120 days after the end
of each Fiscal Year (other than the Fiscal Year ending December 31, 1995, in
which case on or before June 30, 1996), audited consolidated financial
statements of the Company and its Affiliated Companies (as defined in the
Securities Purchase Agreement) as of the end of and for such Fiscal Year,
together with an unqualified report thereon of the Company's independent
certified public accounting firm, such financial statements to include a
balance sheet, statements of income, shareholders' equity and cash flows, and
footnotes, all prepared in accordance with GAAP;
(ii) as soon as available and in any event within 30 days after the end
of each month, a consolidated balance sheet of the Company and its Affiliated
Companies as of the end of such month and statements of income, retained
earnings and cash flows of the Company and its Affiliated Companies for such
month and for the Fiscal Year to date, prepared in accordance with GAAP subject
to normal year-end audit adjustments applied on a basis consistent with prior
years;
(iii) as soon as possible and in any event within ten Business Days after
the Company has knowledge of the occurrence of any breach of this Agreement or
any other Investment Document (as defined in the Securities Purchase
Agreement), a statement of the chief executive officer, chief financial officer
or chief operating officer of the Company setting forth details of such event
and the action that the Company and its Affiliated Companies propose to take
with respect thereto;
(iv) as soon as possible and in any event within ten Business Days after
acquiring knowledge thereof, written notice of all litigation, actions, suits
or proceedings threatened or commenced affecting the Company or any of its
Affiliated Companies or the properties or business of the Company or any of its
Affiliated Companies if the relief sought thereunder is either unspecified as
to amount, or is for damages in excess of $10,000 or, if awarded, could
reasonably be expected to materially and adversely affect the business,
properties, condition (financial or otherwise), or operations of the Company or
any of its Affiliated Companies; and as soon as possible and in any event
within five Business Days after any material development or change in the
status of any such litigation, action, suit or proceeding, notice of such
development or change; and
(v) promptly after the furnishing thereof, copies of any statement or
report furnished to any other holder of the debt or equity securities of the
Company or any of its Affiliated Companies, including without limitation any
statement or report furnished pursuant to the terms of any stock purchase,
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to Purchaser pursuant to any other clause of this Section 3.3, but
excluding (i) any statement or request delivered to any holder of the debt or
equity securities of the Company or any of its Affiliated Companies other than
in such Person's capacity as a holder of such debt or equity and (ii) routine
correspondence between the Bank (as defined in the Securities Purchase
Agreement) and the Company.
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ARTICLE 4
ANTI-DILUTION PROTECTION
4.1 Basis for Anti-Dilution Calculations. The parties agree that as of
the date of this Agreement each Warrant issued hereunder shall entitle its
holder to receive one share of Series A Common Stock upon the exercise of such
Warrant and that the maximum number of Warrants issuable hereunder is 665,180.
The parties acknowledge and agree that the number of shares of Series A Common
Stock or other consideration to be received upon the exercise of each Warrant
is subject to adjustment as provided in this Article 4 and that such number of
shares and other consideration shall be calculated as if each Warrant issued
hereunder was issued on and as of the date of this Agreement, regardless of
when actually issued. For Example, if (i) this Agreement were executed on
January 5, 1996 (but no Warrants were issued on such date), (ii) on January 25,
1996 an event took place that, upon application of the provisions of this
Article 4, would cause the number of shares of Series A Common Stock issuable
upon the exercise of a Warrant to be adjusted to 2.5 shares per Warrant and
(iii) 200 Warrants were issued on February 1, 1996, then the Warrants issued on
February 1, 1996 would entitle the Investor to receive 500 shares of Series A
Common Stock upon the exercise of all such Warrants.
4.2 Change in Exercise Price Upon Issuance of Securities. If the Company
issues or sells any shares of Series A Common Stock, other than Series A Common
Stock Outstanding on the date hereof and Excluded Shares, or issues any
Convertible Security or Option entitling the issuee to acquire shares of Series
A Common Stock for a consideration per share less than the Fair Value in effect
immediately prior to the time of such issuance or sale, then the Exercise Price
shall be reduced to the lower of the following:
(a) the price determined by dividing (i) an amount equal to the sum of
(x) the Series A Common Stock Outstanding immediately prior to such issuance or
sale multiplied by the then Current Exercise Price, plus (y) the aggregate
consideration, if any, received by the Company upon such issuance or sale, by
(ii) the Series A Common Stock Outstanding immediately after such issuance or
sale; or
(b) the price determined by multiplying the Current Exercise Price by a
fraction (i) the numerator of which shall be the sum of (A) the Series A Common
Stock Outstanding immediately prior to such issuance or sale, plus (B) the
number of shares of Series A Common Stock that the aggregate consideration, if
any, received by the Company upon such issuance or sale would purchase at the
Fair Value on the date of such issuance or sale and (ii) the denominator of
which shall be the Series A Common Stock outstanding immediately after and
giving effect to such issuance or sale.
For the purposes of Section 4.2, the following provisions shall also be
applicable:
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4.2.1 Cash Consideration. If the Company issues the Series A Common
Stock, Option or Convertible Security for cash, the consideration received by
the Company therefor (or, if such shares are offered by the Company for
subscription, the subscription price, or, if such shares are sold to
underwriters or dealers for public offering without a subscription offering,
the initial public offering price), after deducting therefrom any compensation
or discount paid or allowed to underwriters or dealers or others performing
similar services but without deducting therefrom any expenses incurred in
connection therewith, shall be deemed to be the consideration received by the
Company for such shares.
4.2.2 Non-Cash Consideration. If the Company issues (other than upon
conversion or issuance of a Convertible Security) the Series A Common Stock,
Option or Convertible Security for a consideration wholly or partially other
than cash, including services rendered, the fair value of such consideration,
as determined by the Board of Directors of the Company in good faith shall be
deemed to be the value, for purposes of this Section 4.2, of the consideration
other than cash received by the Company for such securities except that any
Series A Common Stock, Option or Convertible Security issued for services shall
be deemed to be issued for no consideration.
4.2.3 Options and Convertible Securities. If the Company issues or grants
any Option or any Convertible Security, and the inclusion thereof (as if
exercised or converted) in the calculation of an adjusted Exercise Price
pursuant to this Section 4.2 would result in an Exercise Price lower than if
such Option or Convertible Security were excluded, then the total maximum
number of shares of Series A Common Stock issuable upon the exercise of such
Option or upon conversion or exchange of the total maximum amount of such
Convertible Security outstanding at the time such Convertible Security first
becomes convertible or exchangeable shall be deemed to be issued and to be
outstanding for the purposes of this Section 4.2 as of the date of issue or
grant of such Option or, in the case of the issue or sale of a Convertible
Security other than where the same is issuable upon the exercise of an Option,
as of the date of such issue or sale and to have been issued for the sum of the
amount (if any) paid for such Option or Convertible Security and the amount (if
any) payable upon the exercise of such Option or upon conversion or exchange of
such Convertible Security at the time such Convertible Security becomes
convertible or exchangeable. If the inclusion of such Option or Convertible
Security (as if exercised or converted) would not result in an Exercise Price
lower than if such Option or Convertible Security were excluded, or if, at the
time of exercise, the Exercise Price which would result from deeming such an
Option or Convertible Security to have been issued on the date of exercise is
lower than that which resulted from adjustment of the Exercise Price at the
time of issuance, then such Option or Convertible Security shall not be deemed
to be issued until the close of business on the date of exercise, conversion or
exchange and issuance of Series A Common Stock pursuant thereto.
4.2.4 Reclassification. The reclassification of securities other than
Series A Common Stock into securities including Series A Common Stock shall be
deemed to
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involve the issuance for a consideration other than cash of such Series A
Common Stock at the close of business on the date fixed for the determination
of stockholders entitled to receive such Series A Common Stock.
4.3 Change in Exercise Price or Conversion Rate of Option or Convertible
Securities.
4.3.1 Not Due to Dilution. If the purchase price provided for in any
Option, or the additional consideration (if any) payable upon the conversion or
exchange of any Convertible Security, or the rate at which any Convertible
Security is convertible into or exchangeable for shares of Series A Common
Stock changes at any time (other than under or by reason of provisions designed
to protect against dilution), the Current Exercise Price in effect at the time
of the change shall be readjusted to the Exercise Price that would have been in
effect at such time had such Option or Convertible Security still outstanding
provided for such changed purchase price, additional consideration or
conversion rate, as the case may be, at the time initially granted, issued or
sold.
4.3.2 Due to Dilution. If the purchase price provided for in any Option,
or the additional consideration (if any) payable upon the conversion or
exchange of any Convertible Security, or the rate at which any Convertible
Security is convertible into or exchangeable for shares of Series A Common
Stock is reduced at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then in case of the delivery of
shares of Series A Common Stock upon the exercise of any such Option or upon
conversion or exchange of any such Convertible Security, the Current Exercise
Price then in effect hereunder shall, upon issuance of such shares of Series A
Common Stock, be adjusted to such amount as would have obtained had such Option
or Convertible Security never been issued and had adjustments been made only
upon the issuance of the shares of Series A Common Stock delivered as aforesaid
and for the consideration actually received for such Option or Convertible
Security and the Series A Common Stock.
4.4 Termination of Option or Conversion Rights. If any right to purchase
Series A Common Stock under any Option or any right to convert or exchange any
Convertible Security terminates or expires, the Current Exercise Price shall,
upon such termination, be changed to the Exercise Price that would have been in
effect at the time of such expiration or termination had such Option or
Convertible Security to the extent outstanding immediately prior to such
expiration or termination, never been issued, and the shares of Series A Common
Stock issuable thereunder shall no longer be deemed to be Series A Common Stock
Outstanding.
4.5 Stock Splits; Etc.
4.5.1 Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the date of this Agreement effect a
subdivision or combination of any outstanding shares of Series A Common Stock,
the Exercise Price
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then in effect immediately before that subdivision or combination shall be
proportionately adjusted by multiplying the then effective Exercise Price by a
fraction, (i) the numerator of which shall be the number of shares of Series A
Common Stock issued and outstanding immediately prior to such subdivision or
combination, and (ii) the denominator of which shall be the number of shares of
Series A Common Stock issued and outstanding immediately after such subdivision
or combination. The number of shares of Series A Common Stock outstanding at
any time shall, for the purposes of this Section 4.5, include the number of
shares of Series A Common Stock into which any convertible securities of the
Company may be converted, or for which any warrant, option or rights of the
Company may be exchanged. Any adjustment under this Section 4.5 shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
4.5.2 Adjustments for Other Dividends and Distributions. In the event the
Company at any time or from time to time after the date of this Agreement shall
make or issue, or fix a record date for the determination of holders of shares
of Series A Common Stock entitled to receive, a dividend or other distribution
payable in (i) evidences of indebtedness of the Company, (ii) assets of the
Company (other than cash), or (iii) securities of the Company other than shares
of Series A Common Stock, then and in each such event provision shall be made
so that the holders of Warrants shall receive upon exercise thereof, in
addition to the number of shares of Series A Common Stock receivable upon the
exercise thereof, the amount of such evidences, assets or securities that they
would have received had they held, on such record date, the maximum number of
shares of Common Stock they could have received upon exercise of their
Warrants.
4.5.3 Adjustment for Reclassification, Exchange or Substitution. If the
Series A Common Stock issuable upon the exercise of the Warrants shall be
changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for above, or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this Section 4.5), then and in each such event the
holder of a Warrant shall have the right thereafter to receive upon the
exercise of such Warrant the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification
or other change, by holders of the maximum number of shares of Series A Common
Stock as the holder of a Warrant could have received upon exercise of such
Warrant immediately prior to such reorganization, reclassification or change,
all subject to further adjustment as provided herein.
4.5.2 Reorganization, Mergers, Consolidations or Sales of Assets or
Capital Stock. If at any time or from time to time there shall be (i) a
capital reorganization of the Series A Common Stock (other than a subdivision,
combination, reclassification or exchange of shares provided for elsewhere in
this Section 4.5) or (ii) a merger, consolidation or statutory share exchange
of the Company with or into another corporation in which consolidation, merger
or statutory share exchange persons owning
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capital stock of the Company immediately prior to the consolidation, merger or
share exchange own less than a majority of the voting stock of the resulting,
surviving or exchanging corporation, or (iii) the sale of all or substantially
all the Company's properties and assets or capital stock to any other person,
then, as a part of such reorganization, merger, consolidation, share exchange
or sale, provision shall be made so that the holders of the Warrants shall
thereafter be entitled to receive, upon exercise of the Warrants, the number of
shares of stock or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, share
exchange or sale, to which a holder of the maximum number of shares of Series A
Common Stock that a holder of a Warrant could receive upon exercise thereof
would have been entitled on such capital, reorganization, merger, share
exchange, consolidation, or sale. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 4.5 with
respect to the rights of the holders of the Warrants after the reorganization,
merger, share exchange, consolidation or sale to the end that the provisions of
this Section 4.5 (including adjustment of the Exercise Price then in effect and
the number of shares purchasable upon exercise of the Warrants) shall be
applicable after that event as nearly equivalent as may be practicable.
4.6 Successive Changes. The provisions of this Article shall apply to
successive issuances, dividends or other Distributions, subdivisions and
combinations on or of shares of Series A Common Stock after the date of this
Agreement.
4.7 Adjustment of Shares Issuable Upon Exercise of Warrants. Upon each
adjustment of the Exercise Price as a result of the calculations made pursuant
to this Article 4, each Warrant outstanding prior to the making of the
adjustment in the Exercise Price shall thereafter be treated as that number of
Warrants, and shall evidence the right to purchase, at the adjusted Exercise
Price, that number of shares of Series A Common Stock (calculated to the
nearest hundredths), obtained by (i) multiplying the number of shares of Series
A Common Stock purchasable upon exercise of a Warrant prior to adjustment by
the Exercise Price in effect prior to adjustment, and (ii) dividing the product
so obtained by the Exercise Price in effect after such adjustment of the
Exercise Price.
4.8 Notice of Adjustment to Holders. Upon the occurrence of each
adjustment or readjustment of the Exercise Price, the Company at its expense
shall compute such adjustment or readjustment in accordance with the terms
hereof. Promptly, and in no case more than 60 days after the occurrence of
such adjustment or readjustment, the Company shall furnish the Investor with a
certificate signed by the Company's chief financial officer setting forth in
reasonable detail (i) the Exercise Price after such adjustment or readjustment,
(ii) the method of calculation and the facts upon which such calculation is
based and (iii) the number of shares of Series A Common Stock purchasable upon
exercise of a Warrant after such adjustment or readjustment. If, within ten
Business Days after receipt of such certificate, the Investor so requests in
writing, the Company shall at its expense cause the computation of an
adjustment or readjustment to be recalculated by independent certified public
accountants of recognized standing selected by the Company,
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14
which accountants shall have had no affiliation with the Company for the five
years preceding such recalculation except to make another recalculation
hereunder or under the provisions of the Company's Articles of Incorporation
governing the Series B Convertible Preferred Stock. At any time or from time
to time, upon written request from the Investor, the Company shall at its
expense provide the Investor a certificate setting forth the current Exercise
Price and the number of shares of Series A Common Stock and the amount, if any,
of other property which at that time would be received by the Investor upon
exercise of its Warrants.
4.9 Certain Other Actions Prohibited. The Company shall not by amendment
of its Charter Documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the provisions of this Agreement, but shall at all times in good faith
assist in the carrying out of all of the provisions of this Agreement and shall
take all such action as the Investor may reasonably request to protect the
exercise privilege of the Investor against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (i) shall not
increase the par value of a share of Series A Common Stock above the Exercise
Price, (ii) shall take all such actions as may be necessary or appropriate
under local, state or federal laws of the United States of America in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Series A Common Stock upon the exercise of all Warrants from time to
time outstanding and (iii) shall not take any action which results in any
adjustment of the Exercise Price if the total number of shares of Series A
Common Stock or other securities issuable after the action upon the exercise of
all of the Warrants, Options and Convertible Securities then outstanding would
exceed the total number of shares of Series A Common Stock or other securities
then authorized by the Company's Charter Documents and available for the
purpose of issue upon such exercise.
ARTICLE 5
CERTAIN CORPORATE TRANSACTIONS
5.1 Prohibition on Dividends, Distributions. For so long as any of the
Warrants or Warrant Shares remain outstanding, the Company shall not declare or
pay any dividend or Distribution in cash, stock or any other property on its
capital stock now or hereafter outstanding or on any Option now or hereafter
outstanding (other than the Warrants) or redeem, retire, purchase or otherwise
acquire any shares of any class of its capital stock now or hereafter
outstanding or any Option now or hereafter outstanding (other than the
Warrants); provided, however, that nothing in this Section 5.1 or any other
provision of this Warrant Agreement shall restrict the Company's purchase of
shares of Series A Common Stock or options to purchase Series A Common Stock
pursuant to the terms of any shareholder or other agreement between the Company
and any employee or former employee of the Company in accordance with the terms
of such agreement; provided, further, that nothing in this Section 5.1 or any
other provision of this Warrant Agreement shall restrict the Company's ability
to declare or pay a dividend or Distribution permitted by the Securities
Purchase Agreement if such dividend or Distribution is paid to
- 13 -
15
the Investor as if all Warrants held by the Investor immediately prior to such
dividend or Distribution were exercised in full.
5.2 Reorganization. For so long as any of the Warrants or Warrant Shares
remain outstanding, the Company shall not reorganize, or consolidate with,
merge into or enter into a statutory share exchange with another corporation,
partnership or other entity (other than a reorganization, consolidation or
merger not involving a Change of Control in which the Company is the surviving
entity) or transfer all or substantially all of its assets to another entity
(any one of which shall constitute a "Reorganization") unless each Holder shall
have the right to continue to have the Warrants outstanding and receive upon
exercise thereof the consideration specified in Section 4.5.4.
5.3 Notice. Notice of any contemplated Reorganization, or of any
dissolution, winding up or liquidation, and the proposed terms thereof,
including specifically in the case of a Reorganization how compliance with the
requirements of Section 5.2 shall be secured, shall be given to the Holders at
least 30 days before (i) the proposed consummation of such Reorganization,
dissolution, winding up or liquidation or (ii) the record date therefor,
whichever is earlier.
ARTICLE 6
MISCELLANEOUS
6.1 Transfers. Prior to the earlier to occur of (i) an Initial Public
Offering by the Company or (ii) December 31, 2002, Investor may not assign this
Agreement or make a transfer of the Warrants, except to an Affiliate of
Investor, the obligations of which Affiliate the Investor unconditionally
guarantees. Following an Initial Public Offering by the Company or December
31, 2002, the Investor may transfer the Warrants to any Person subject to
compliance with applicable federal and state securities laws.
6.2 Notices. In order to be effective, any notice or other communication
required or permitted hereunder, shall, unless otherwise stated herein, be in
writing and shall be transmitted by messenger, delivery service, mail,
telecopy, as specified below:
If to Investor:
HealthPlan Services Corporation
P. O. Xxx 00000
Xxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxxx III, Executive
Vice President and Chief Financial Officer
and Xxxx Xxxx, General Counsel
- 14 -
16
with a copy (which shall not constitute notice) to:
Xxxxxx, White, Gillen, Boggs, Villareal, and Banker, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxx
If to the Company:
Medirisk, Inc.
Two Piedmont Center, Suite 400
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Chairman and Chief
Executive Officer
With a copy (which shall not constitute notice) to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxx
or at such other address as a party shall designate in a written notice to the
other parties hereto given in accordance with this Section 6.2. All notices
and other communications shall be effective (i) if sent by messenger or
delivery service, when delivered, (ii) if sent by mail, five days after having
been sent by certified mail, with return receipt requested, or (iii) if sent by
telecopier with receipt acknowledged, when sent.
6.3 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that Investor may not assign this Agreement or any rights
hereunder except as provided in Section 6.1.
6.4 Costs of Enforcement. If any party to this Agreement seeks to
enforce its rights under this Agreement by legal proceedings, the
non-prevailing party shall pay all reasonable costs and expenses incurred by
the prevailing party, including, without limitation, all reasonable attorneys'
fees.
6.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
- 15 -
17
GEORGIA.
6.6 CONSENT TO EXCLUSIVE JURISDICTION, VENUE AND FORUM. THE COMPANY
HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION, VENUE AND FORUM OF ANY STATE OR
FEDERAL COURT IN TAMPA, FLORIDA WITH RESPECT TO ANY ACTION, WHETHER COMMENCED
BY AN INVESTOR OR ANY OTHER PERSON, WHICH, IN WHOLE OR IN PART, IN ANY WAY
ARISES UNDER OR RELATES TO THIS AGREEMENT, AND THE COMPANY AGREES THAT ANY SUCH
ACTION FILED BY IT WILL BE FILED IN SUCH A COURT.
6.7 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which, when so executed, shall be deemed to be an
original and all of which, when taken together, shall constitute but one and
the same agreement.
6.8 Survival of Representations and Warranties. The representations and
warranties in this Agreement shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
notwithstanding any investigation made by any of the Investor, their agents or
representatives. All statements as to factual matters contained in any
certificate, exhibit or other instrument delivered by or on behalf of the
Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties of the Company
hereunder as of the date of such certificate, exhibit or instrument.
6.9 Remedies. In the event of a breach by the Company of this Agreement,
the Investor, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, shall be entitled to seek specific
performance of its rights under this Agreement. The Company agrees that in any
action seeking specific performance of this Agreement (i) it will not argue
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach of this Agreement by the Company and (ii) it will waive
the defense in any action for specific performance that a remedy at law would
be adequate.
6.10 Incorporation of Exhibits and Schedules by Reference. All Exhibits
and Schedules to this Agreement are incorporated herein by this reference.
6.11 Entire Agreement; Amendment. This Agreement (including the Exhibits,
Schedules and the parts of the Securities Purchase Agreement incorporated by
reference herein) constitute the entire agreement between the Company and the
Investor with respect to the subject matter hereof, superseding all prior or
contemporaneous negotiations, communications, discussions and correspondence
concerning the subject matter hereof. This Agreement may be modified or
amended or any provision hereof may be waived only with the written consent of
the Holders of at least two-thirds (2/3) of the aggregate number of Warrants
and Warrant Shares then outstanding.
- 16 -
18
(remainder of page intentionally left blank, signatures follow)
- 17 -
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, this Agreement
to become effective as of the date first above written.
MEDIRISK, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx, Chairman and
Chief Executive Officer
HEALTHPLAN SERVICES
CORPORATION
By: /s/ Xxxxx X. Xxxxxx III
----------------------------------
Xxxxx X. Xxxxxx III, Executive
Vice President and Chief Financial
Officer
20
EXHIBITS
Exhibit A: Form of Warrant Certificate
A-1: Form of Assignment
A-2: Form of Warrant Subscription
B-1
21
APPENDIX A
DEFINITIONS
A. Certain Defined Terms. The following terms used in this Agreement
have the following meanings:
"Accredited Investor" has the same meaning as in Section 501(a)(3) of
Regulation D promulgated under the Act.
"Act" means the Securities Act of 1933, as amended from time to time, or
any successor statute.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities, or
partnership or other ownership interests, by contract or otherwise); provided
that, in any event: (i) any Person which owns directly or indirectly 50% or
more of the securities having ordinary voting power for the election of
directors or other members of the governing body of a corporation or fifty 50%
or more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to
control such corporation or other Person.
"Change of Control" has the meaning set forth in the Securities Purchase
Agreement.
"Charter Documents" of a Person means the articles or certificate of
incorporation, the by-laws and any other charter documents of such Person,
including without limitation any certificate of designation, as amended or
restated and as in effect as of the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Act.
"Convertible Securities" means any indebtedness or shares of capital stock
convertible into or exchangeable for shares of Series A Common Stock.
22
"Current Exercise Price" means the Exercise Price immediately before the
occurrence of any event which, pursuant to Article 4, causes an adjustment to
the Exercise Price.
"Distribution" has the meaning given such term "distribution" in Section
607.06401 of the Florida Business Corporation Act as in effect on the date of
this Agreement, including without limitation, the distribution of evidences of
the Company's indebtedness, securities other than the Company's voting common
stock, and other assets.
"Event of Default" shall have the meaning given such term in the
Securities Purchase Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute.
"Excluded Shares" has the meaning set forth in the Amended and Restated
Articles of Incorporation of the Company in effect as of the date of this
Agreement
"Exercise Price" means the price of $0.01 per share adjusted from time to
time as provided in Article 4.
"Expiration Date" means 5:00 p.m., Atlanta time, on January 8, 2003.
"Fair Value" of a share of Series A Common Stock on any specified date
means:
(i) If shares of Series A Common Stock are then listed or admitted to
trading on any national securities exchange or traded on any national market
system, the average of the daily closing prices for the thirty (30) trading
days before such date, excluding any trades which are not bona fide, arm's
length transactions. The closing price for each day shall be the last sale
price on such date or, if no such sale takes place on such date, the average of
the closing bid and asked prices on such date, in each case as officially
reported on the principal national securities exchange or national market
system on which such shares are then listed, admitted to trading or traded.
(ii) If no shares of Series A Common Stock are then listed or admitted to
trading on any national securities exchange or traded on any national market
system, the average of the reported closing bid and asked prices thereof on
such date in the over-the-counter market as shown by the National Association
of Securities Dealers automated quotation system or, if such shares are not
then quoted in such system, as published by the National Quotation Bureau,
Incorporated or any similar successor organization, and in either case as
reported by any member firm of the New York Stock Exchange selected by the
Holder.
(iii) If no shares of Series A Common Stock are then listed or admitted to
trading on any national exchange or traded on any national market system, and
if no
23
closing bid and asked prices thereof are then so quoted or published in the
over-the-counter market, the fair value of a share of Series A Common Stock
shall be as mutually agreed by the Company and the Investor; provided, however
that if the Company and the Investor are unable to mutually agree upon the fair
value, the Company and the Investor shall, within five days from the date that
either party determines that they cannot agree, jointly retain an investment
banking firm, or a nationally recognized accounting firm or other firm
providing similar valuation services, satisfactory to each of them. If the
Company and the Investor are unable to agree on the selection of such a firm
within such five day period, the Company and the Investor shall, within twenty
days after expiration of such five day period, each retain a separate
independent investment banking firm (which firm, in either case, shall not be
the investment banking firm regularly retained by the Company or the Investor).
If either the Company or the Investor fail to retain such an investment
banking firm during such twenty day period, then the independent investment
banking firm retained by the Investor or the Company, as the case may be, shall
alone take the actions described below. Such firms shall determine within
thirty days of being retained the fair value of a share of Series A Common
Stock and deliver their opinion in writing to the Company and to the Investor
as to the fair value. If such firms cannot jointly agree upon the fair value,
then, unless otherwise directed in writing by both the Company and the
Investor, such firms, in their sole discretion, shall choose another investment
banking firm independent of the Company and the Investor, which firm shall make
such determination and render such an opinion as promptly as practicable. In
either case, the determination so made shall be conclusive and binding on the
Company and the Investor. The fees and expenses for such determination made by
any and all such investment banking or other firms shall be paid one-half by
the Company and one-half by the Investor. In the determination of the fair
value of a share of Series A Common Stock, there shall not be taken into
consideration any premium for shares representing control of the Company.
"GAAP" means generally accepted accounting principles and practices,
consistently applied, as promulgated in (i) the documents of Rule 203 of the
Code of Professional Conduct of the American Institute of Certified Public
Accountants, (ii) Statement of Accounting Standards No. 43 "Omnibus Statement
on Auditing Standards" of the Auditing Standards Board of the American
Institute of Certified Public Accountants and (iii) any superseding or
supplemental documentation of equal authority promulgating generally accepted
accounting principles and practices, all as in effect from time to time.
Accounting principles and practices are "consistently applied" when the
accounting principles and practices observed in a current period are comparable
in all material respects to the accounting principles and practices applied in
the preceding period.
"Holder" means any registered holder of Warrants or Warrant Shares.
"Initial Public Offering" has the meaning set forth in the Securities
Purchase Agreement
"Maturity Event" has the meaning set forth in Section 1.3(c).
24
"New Securities" means any and all shares of the Company's capital stock,
Options or Convertible Securities other than Excluded Shares.
"Option" means any right, warrant or option to subscribe for or purchase
shares of Series A Common Stock or Convertible Securities, including the
Warrants.
"Other Credit Facility" has the meaning set forth in Section 1.1(b).
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts and other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
"Reorganization" has the meaning set forth in Section 5.2.
"Securities Purchase Agreement" means that certain Securities Purchase
Agreement, dated January 8, 1996, by and between the company and the Investor.
"Senior Subordinated Notes" means those promissory notes issued by the
Company pursuant to the Securities Purchase Agreement.
"Series A Common Stock" means the Series A Common Stock issued by the
Company or any successor thereto.
"Series A Common Stock Outstanding" means the number of shares of Series A
Common Stock outstanding plus the number of shares of Series A Common Stock
issuable upon exercise of all outstanding Options and upon conversion of all
outstanding Convertible Securities, including this Warrant.
"Subsequent Closing Date" means a date on which Senior Subordinated Notes
are purchased by the Investor pursuant to the Securities Purchase Agreement.
"Subsidiary" of any Person means a corporation of which more than fifty
percent (50%) of the outstanding shares of capital stock of each class entitled
to vote on the election of directors is owned by such Person, by one or more
Subsidiaries of such Person, or by such Person and one or more of its
Subsidiaries.
"Subordination Agreement" has the meaning set forth in the Securities
Purchase Agreement.
"Transfer" means the sale, pledge, assignment or other transfer of the
Warrants or the Warrant Shares, in whole or in part, and of the rights of the
Holders under this Agreement.
25
"Warrant Certificates" means the certificates representing the Warrants,
registered in the name of the Holder, substantially in the form of EXHIBIT A.
"Warrant Multiple" has the meaning set forth in Section 1.1(a).
"Warrants" means the warrants issued pursuant to this Agreement, which,
when exercised, give the Holder thereof the right to obtain one share of Series
A Common Stock per warrant, subject to adjustment.
"Warrant Shares" means the shares of Series A Common Stock acquired or
acquirable upon exercise of the Warrants, any shares of Series A Common Stock
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with
respect to, or in exchange for or in replacement of, such shares of Series A
Common Stock any other interest in the Company that has been or may be acquired
upon exercise of the Warrants.
B Interpretation.
Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, to the singular include the
plural, and to the part include the whole. The term "including" is not
limiting and the term "or" has the inclusive meaning represented by the term
"and/or." The words "hereof," "herein," "hereunder," and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. References to "Articles," "Sections,"
"Appendices," "Subsections," "Exhibits," and "Schedules" are to Articles,
Sections, Appendices, Subsections, Exhibits and Schedules, respectively, of
this Agreement, unless otherwise specifically provided. Terms defined herein
may be used in the singular or the plural. Any capitalized terms used herein
which are not specifically defined herein have the meaning given to them in the
Securities Purchase Agreement.
26
EXHIBIT A
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE AND THE SHARES PURCHASABLE
UPON EXERCISE OF THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE ACT, THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND
ANY APPLICABLE STATE SECURITIES LAWS.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED PURSUANT TO AND ARE
SUBJECT TO A WARRANT AGREEMENT THAT FIXES THE RIGHTS AND OBLIGATIONS OF THE
COMPANY AND THE HOLDER OF THESE WARRANTS AND PLACES CERTAIN RESTRICTIONS ON THE
TRANSFERABILITY OF THE WARRANTS. A COPY OF THE WARRANT AGREEMENT IS ON FILE AT
THE COMPANY'S PRINCIPAL OFFICE.
SERIES A COMMON STOCK WARRANT CERTIFICATE
VOID AFTER January 8, 2003 For the Purchase of _______
Shares of Series A Common Stock
MEDIRISK, INC. a Florida corporation (the "Company"), hereby certifies
that, for value received, HEALTHPLAN SERVICES CORPORATION, or any permitted
assigns, is the registered holder (the "Holder") of ________________________
(_________) Warrants (the "Warrants") to purchase shares (the "Shares") of
Series A Common Stock of the Company ("Series A Common Stock"). As of January
8, 1996, each Warrant entitles the Holder to purchase from the Company one
fully paid and nonassessable share of Series A Common Stock at an initial
exercise price (the "Exercise Price") of $.01 per share; provided, however,
that the number of shares that each Warrant entitles the Holder to purchase is
subject to adjustment as provided in Article 4 of the Warrant Agreement, dated
January 8, 1996, between the Company and the Holder (the "Warrant Agreement"),
whether the event leading to such adjustment takes place before or after the
date on which this Warrant Certificate is issued.
The Holder's right to purchase Shares hereunder shall be exercised by
surrender to the Company of this Warrant Certificate, together with an executed
Form of Warrant Subscription (attached hereto) and payment of the aggregate
Exercise Price of the Warrants exercised, at the principal executive office of
the Company, upon the terms and subject to the conditions set forth in this
Warrant Certificate and in the Warrant Agreement referred to herein.
A-1
27
The Warrants represented by this Warrant Certificate are part of a duly
authorized issue of up to 665,180 warrants to purchase shares of Series A
Common Stock and have been issued pursuant to the Warrant Agreement. The
Warrant Agreement is incorporated in this Warrant Certificate by this reference
and must be referred to for a description of the rights, obligations and duties
of the Company and the Holders of the Warrants issued pursuant to the Warrant
Agreement.
If, upon any exercise of Warrants represented by this Warrant Certificate,
the number of Warrants exercised is less than the total number of Warrants
represented by this Warrant Certificate, there shall be issued to the Holder or
the Holder's assignee a new Warrant Certificate representing the number of
Warrants not exercised.
This Warrant Certificate, when surrendered to the Company in accordance
with the terms of the Warrant Agreement, may be exchanged without payment of
any service charge for another Warrant Certificate or Warrant Certificates
representing in the aggregate a like number of Warrants.
Subject to and in accordance with the terms of the Warrant Agreement, any
or all of the Warrants represented by this Warrant Certificate may be
transferred by presentation to the Company accompanied by an executed Form of
Assignment (attached hereto). A new Warrant Certificate representing the
number of Warrants so transferred shall be issued to the transferee, subject to
any limitations provided in the Warrant Agreement, without charge. If the
number of Warrants so transferred is less than the total number of Warrants
represented by this Warrant Certificate, there shall be issued to the
transferor a new Warrant Certificate representing the number of Warrants not
transferred.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
signed by the person named below thereunto duly authorized.
DATED: ____________, 199___ MEDIRISK, INC.
By:
----------------------------
Title:
----------------------------
A-2
28
EXHIBIT A-1
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED, ____________________ hereby sells, assigns and
transfers unto ____________________, the Warrants represented by the within
Warrant Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ to transfer
such Warrants on the books of the within-named Corporation with full power of
substitution.
DATED: __________, 19__
Signature
--------------------------------
A-1-1
29
EXHIBIT A-2
FORM OF WARRANT SUBSCRIPTION
(To be signed only upon exercise of Warrant.)
TO: __________
The undersigned, the holder of the Warrants represented by the attached
Warrant Certificate (the "Holder"), hereby irrevocably elects to exercise the
purchase right represented by such Warrants for, and to purchase thereunder,
__________* Shares of Series A Common Stock (the "Shares") of ______________
(the "Company") and herewith makes payment, as provided in the Warrant
Agreement, of US $_____________ therefor. The Holder hereby requests that the
Company issue ______ shares of Series A Common Stock and requests that the
certificate(s) for such Shares be issued in the name of, and delivered to:
--------------------
--------------------
--------------------
------------------------- (Signature must conform in all
------------------------- respects to name of Holder as
(Address) specified on the face of the
Warrant Certificate)
Dated: __________, 19__.
* Insert here the number of Shares called for on the face of the Warrant
Certificate (or, in the case of a partial exercise, the portion thereof as
to which the Warrants are being exercised), in either case without making
any adjustment for additional Shares or any other securities or property
or cash which, pursuant to the adjustment provisions of the Warrant
Agreement, may be deliverable upon exercise.
A-2-1
