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EXHIBIT 4.11
FORM OF CAPITAL STOCK PURCHASE WARRANT
TO SUBSCRIBE FOR AND PURCHASE CAPITAL STOCK OF
BALANCED CARE CORPORATION
THIS CERTIFIES that, for value received, ______________________
______________________________________ (together with any subsequent
transferees of all or any portion of this Warrant, the "Holder"), is entitled,
upon the terms and subject to the conditions hereinafter set forth, to
subscribe for and purchase from Balanced Care Corporation, a Delaware
corporation (hereinafter called the "Company"), at the Warrant Purchase Price
as defined in Section 3, up to that number of fully paid and non-assessable
shares of the Company's Capital Stock as set forth in Section 2.
1. Definitions. As used herein the following terms shall have the
following meanings:
"Act" means the Securities Act of 1933 as amended, or a similar Federal
statute and the rules and regulations of the Securities and Exchange Commission
issued under that Act, as they each may, from time to time, be in effect.
"Capital Stock" means each and every class or series of authorized
capital stock and Convertible Securities of the Company, including but not
limited to common stock, preferred stock or any form of convertible capital
stock, regardless of voting, dividend and liquidation rights and regardless of
any other powers, preferences and relative participating, optional or other
special rights, qualifications, limitations or restrictions.
"Common Stock" means all stock of any class or classes (however
designated) of the Company, authorized upon the date hereof or thereafter, the
holders of which shall have the right, without limitation as to amount, either
to all or to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any shares
entitled to preference, and the holders of which shall ordinarily, in the
absence of contingencies, be entitled to vote for the election of a majority of
directors of the Company (even though the right so to vote has been suspended by
the happening of such a contingency).
"Convertible Securities" means any evidences of indebtedness, shares
(other than shares of Capital Stock) or other securities convertible into or
exchangeable for Capital Stock.
"Options" means rights, options or warrants to subscribe for, purchase
or otherwise acquire either Capital Stock or Convertible Securities.
"Other Securities" means any stock (other than Common Stock) and other
securities of the Company or any other Person (corporate or other) which the
Holder of this Warrant at any time shall be
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entitled to receive, or shall have received, upon the exercise of this Warrant,
in lieu of or in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in replacement of Common
Stock or Other Securities pursuant to Section 8.2 hereof or otherwise.
"Person" means, without limitation, an individual, a partnership, a
corporation, a limited liability company, a trust, a joint venture, an
unincorporated organization, a government or any department or agency thereof or
any other entity.
"Shares" means the shares of the Company's Capital Stock as set forth in
Section 2 issued or issuable to the Holder upon the exercise of this Warrant and
any other shares of capital stock of the Company issued with respect to such
shares (because of stock splits, stock dividends, reclassifications,
recapitalizations, mergers, consolidations, or similar events); provided,
however, that any shares previously sold by the Holder to the public pursuant to
a registered public offering or Rule 144 under the Act shall cease to be within
the definition of "Shares" as used herein.
"Term" shall have the same meaning ascribed to such term under that
certain Facility Lease Agreement of even date by and among ________________
and the Holder.
2. The Shares Subject to this Warrant. This Warrant shall be exercisable
for up to ( ) shares of Common Stock,
as the same may be adjusted pursuant to the terms of this Warrant. The Company
certifies that the only Capital Stock or Options outstanding on the date hereof
are as set forth in Exhibit A attached hereto and that there are no other
contractual arrangements with any of the Company's stockholders or holders of
Options other than as set forth on Exhibit A attached hereto.
3. The Warrant Purchase Price. The aggregate purchase price for all of
the Shares shall be Dollars ($ ) (the "Warrant Purchase Price").
4. Term. The purchase rights represented by this Warrant are exercisable
by the Holder, in whole or in part, at any time and from time to time commencing
on the date hereof and .
5. Method of Exercise, Payment and Issuance. Subject to Section 4 above,
the purchase rights represented by this Warrant may be exercised, in whole or in
part and from time to time, by (a) the surrender of this Warrant and the duly
executed Notice of Exercise (the form of which is attached hereto as Exhibit B)
at the principal office of the Company and by the payment to the Company, by
check or wire transfer, in an amount equal to the Warrant Purchase Price
multiplied by the percentage which the number of
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Shares then being purchased bears to the total number of Shares subject to this
Warrant, or (b) if in connection with a registered public offering of the
Company's securities, the surrender of this Warrant and the duly executed Notice
of Exercise (the form of which is attached as Exhibit B-1) at the principal
office of the Company together with notice of arrangements reasonably
satisfactory to the Company for payment to the Company either by check or wire
transfer or from the proceeds received from the sale of Shares to be sold by the
Holder in such public offering of an amount equal to the then applicable Warrant
Purchase Price multiplied by the percentage which the number of Shares then
being purchased bears to the total number of Shares subject to this Warrant.
Upon exercise, the Holder shall be entitled to receive, within a reasonable
time, and in any event within thirty (30) days of receipt of such Notice, a
certificate or certificates, issued in the Holder's name or in such name or
names as the Holder may direct, for the number of Shares so purchased, and,
unless this Warrant has been fully exercised or expired, a new Warrant
representing the portion of the Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder as
soon as possible and in any event within such thirty (30) day period. The Shares
so purchased shall be deemed to be issued as of the close of business on the
date on which this Warrant shall have been exercised.
6. Shares to be Issued; Reservation of Shares. The Company covenants
that all Shares that may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon issuance, be fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof. During the period within which the purchase rights represented by
this Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issuance upon exercise of the purchase rights
represented by this Warrant, a sufficient number of shares of its Capital Stock
to provide for the exercise of the rights represented by this Warrant. The
Company represents to the Holder that all parties whose consent is necessary for
the issuance of this Warrant and the Shares issuable upon exercise of this
Warrant have so consented and that all parties having any rights of first offer,
first refusal or preemption have waived any such rights.
7. No Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to
such fraction multiplied by the fair market value of such shares of Capital
Stock, as determined in good faith by the Company's Board of Directors.
8. Adjustments of Number of Shares.
8.1 Adjustments for Stock Splits, Etc. If the Company shall at any
time after the date hereof subdivide its outstanding Common Stock or Other
Securities, by split-up or otherwise, or
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combine its outstanding Common Stock or Other Securities, or issue additional
shares of its Capital Stock in payment of a stock dividend in respect of its
Common Stock or Other Securities, the number of shares issuable on the
exercise of the unexercised portion of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend, or
proportionately decreased in the case of combination, but the Warrant Purchase
Price then applicable to Shares covered by the unexercised portion of this
Warrant shall not be changed. The issuance of Capital Stock as a dividend or
other payment on shares of the Company's Series A or Series B Preferred Stock
or as a dividend in lieu of a preferred cash dividend or interest payment on
any class of Capital Stock or Other Security shall not result in an increase
in the number of shares issuable upon exercise of this Warrant.
8.2. Adjustment for Reclassification, Reorganization, Etc. In case of
any reclassification, capital reorganization, or change of the outstanding
Common Stock or Other Securities (other than as a result of a subdivision,
combination or stock dividend), or in the case of any consolidation of the
Company with, or merger of the Company into, another Person (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or change of the outstanding
Common Stock or Other Securities of the Company), or in case of any sale or
conveyance to one or more Persons of the property of the Company as an entirely
or substantially as an entity at any time prior to the expiration of this
Warrant, then, as a condition of such reclassification, reorganization, change
consolidation, merger, sale or conveyance, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the Holder of this Warrant, so that the Holder of this
Warrant shall have the right at any time prior to the expiration of this Warrant
to purchase, at a total price not to exceed that payable upon the exercise of
the unexercised portion of this Warrant, the kind and amount of shares of stock
and other securities and property receivable upon such reclassification,
reorganization, change, consolidation, merger, sale or conveyance by a holder of
the number of shares of Common Stock or Other Securities of the Company as to
which this Warrant was exercisable immediately prior to such reclassification,
reorganization, change, consolidation, merger, sale or conveyance, and in any
such case appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, the number of shares purchasable upon exercise
of this Warrant) shall thereafter be applicable in relation to any shares of
stock, and other securities and property, thereafter deliverable upon exercise
hereof.
8.3 Certificate of Adjustment. Whenever the number of shares issuable
hereunder is adjusted, as herein provided, the
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Company shall promptly deliver to the registered Holder of this Warrant a
certificate of the Treasurer of the Company, which certificate shall state (i)
the number of shares of Common Stock (or Other Securities) issuable hereunder
after such adjustment, (ii) the facts requiring such adjustment, and (iii) the
method of calculation for such adjustment and increase or decrease.
9. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of Capital Stock
receivable on the exercise of the Warrant above the amount payable therefor on
such exercise, (b) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Capital Stock on the exercise of the Warrant from time
to time, and (c) will not transfer all or substantially all of its properties
and assets to any other Person (corporate or otherwise), or consolidate with or
merge into any other Person or permit any such Person to consolidate with or
merge into the Company (if the Company is not the surviving Person), unless
such other Person shall expressly assume in writing and agree to be bound by
all the terms of this Warrant.
10. Right of First Refusal. Meditrust Mortgage Investments, Inc. has
certain rights of first refusal pursuant to the terms and conditions of Section
6 of that certain Series B Stock Purchase Agreement dated as of September 20,
1996, as amended, among the Company and the Investors (as defined in such
agreement).
11. Notices of Record Date Etc. In the event of:
(a) any taking by the Company of a record of the holders of any
Capital Stock for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase, or otherwise acquire any shares of Capital Stock or
any other securities or property, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock or any transfer of
all or substantially all of the assets of the Company to or consolidation or
merger of the Company with or into any other Person; or
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(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issue or grant by the Company of any shares of
Capital Stock, or any right or option to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities of the Company
(other than (i) the issue of Common Stock (or Other Securities) on the exercise
of this Warrant, (ii) stock options to purchase shares of Common Stock which
may be granted to employees of the Company or the issuance of such shares
pursuant to the exercise of such options, and (iii) any shares issued in
transactions to which Sections 8.1 or 8.2 of this Warrant applies);
then and in each such event the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or Other Securities) shall be entitled
to exchange their shares of Common Stock (or Other Securities) for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock of any class or
other securities of the Company, or rights or options with respect thereto,
proposed to be issued or granted, the date of such proposed issue or grant and
the persons or class of persons to whom such proposed issue or grant is to be
offered or made. Such notice shall be mailed at least twenty (20) days prior to
the date therein specified.
12. Registration. The Holder has certain registration rights with
respect to the Shares pursuant to the terms and conditions of that certain
Registration Rights Agreement dated as of September 20, 1996, as amended, among
the Company and its security holders.
13. Intentionally Deleted.
14. Intentionally Deleted.
15. No Rights as Stockholder. This Warrant does not entitle the Holder
to any voting rights or other rights as a stockholder of the Company prior to
exercise of this Warrant and the payment for the shares of Capital Stock so
purchased. Notwithstanding the foregoing, the Company agrees to transmit to the
Holder such information, documents and reports as are distributed to holders of
the Capital Stock of the Company concurrently with the distribution thereof to
the stockholders. Upon valid exercise of this Warrant
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and payment for the shares of Capital Stock so purchased in accordance with the
terms of the Warrant, the Holder or the Holder's designee, as the case may be,
shall be deemed a stockholder of the Company.
16. Modifications and Waivers. This Warrant may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the same is sought.
17. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered, or shall be sent by certified or registered mail, postage prepaid,
if to the Holder, at its address shown on the books of the Company and if to
the Company, at the address indicated therefor on the signature page of this
Warrant.
18. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and of an indemnity or security reasonable satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new warrant, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Warrant.
19. Binding Effect on Successors. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets, and all of the obligations
of the Company relating to the Shares issuable upon exercise of this Warrant
shall survive the exercise and termination of this Warrant and all of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the Holder. This Warrant is fully transferable and
the Company may treat the registered Holder of this Warrant as such Holder
appears on the Company's books at any time as the Holder for all purposes.
20. Remedies. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
21. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, Balanced Care Corporation has caused this Warrant
to be executed under seal by its officer thereunto duly authorized.
DATED:
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BALANCED CARE CORPORATION
CORPORATE
SEAL
By: /s/ Xxxxx X. Xxxxx
----------------------------
Name: XXXXX X. XXXXX
Title: VICE PRESIDENT
ATTEST:
/s/ Xxxxx X. Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title: Asst. Secretary
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SCHEDULE TO EXHIBIT 4.11 PURSUANT TO INSTRUCTION 2 TO ITEM 601(a) OF
REGULATION S-K
CAPITAL STOCK WARRANT
Holder Transaction Shares Date/Term Purchase Price
------ ----------- ------ --------- --------------
Hawthorn Series B 50,000 8/30/96; $2.50/share
Health 10 years
Properties, Inc.
Meditrust Series B 1,387 8/30/96; $2.50/share
Mortgage 10 years
Investments,
Inc.
Xxxx Xxxxxxx Series B 184,000 8/30/96; $2.25/share
10 years
Meditrust Series B 5,103 8/30/96; $2.25/share
Mortgage 10 years
Investments, Inc.
