Exhibit 10.48
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is dated as of October __, 1997
and entered into by and between PHYSICIAN HEALTH CORPORATION, a Delaware
corporation (the "Company") and PARIBAS CAPITAL FUNDING LLC (the "Purchaser").
WITNESSETH:
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WHEREAS, the Company has agreed to issue and sell to the Purchaser certain
common stock purchase warrants, as hereinafter described (the "Warrants"), to
purchase, subject to the terms of Section 8 hereof, 1,200,000 shares of the
Company's non-voting common stock, par value $.0025 per share (the "Non-Voting
Common Stock"), pursuant to that certain warrant purchase agreement of even date
herewith by and between the Purchaser and the Company (the "Warrant Purchase
Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1.
DEFINED TERMS
(a) The following terms when used in this Agreement, including its
preamble and recitals, shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Affiliate" shall mean, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agreement" shall have the meaning provided in the preamble of this
Agreement.
"Applicable Law" shall mean all provisions of laws, statutes, ordinances,
rules, regulations, permits or certificates of any Governmental Authority
applicable to such Person or any of its assets or property, and all judgments,
injunctions, orders and decrees of all courts, arbitrators or Governmental
Authorities in proceedings or actions in which such Person is a party or by
which any of its assets or properties are bound.
"Business Day" shall mean any day except Saturday, Sunday and any day which
in New York shall be a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close.
"Certificate" shall mean the Certificate of Incorporation of the Company,
as amended.
"Closing Date" shall mean the initial date of issuance of Warrants under
this Agreement.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the 1933 Act.
"Common Stock" shall mean the common stock of the Company, par value
$.0025, including, without limitation, the Non-Voting Common Stock.
"Common Stock Per Share Market Value" means the price per share of Common
Stock obtained by dividing (A) the Market Value by (B) the number of shares of
Common Stock outstanding (on a Fully-Diluted Basis) at the time of
determination.
"Company" shall have the meaning provided in the preamble of this
Agreement.
"Credit Event" shall mean the first to occur of (A) an initial Public
Offering with net proceeds to the Company (net of underwriting discounts and
offering expenses) of at least $50 million or (B) the date on which (i) the
Consolidated EBITDA of the Company and its subsidiaries is at least $25 million,
and (ii) the ratio of the total Indebtedness of the Company and its subsidiaries
to Consolidated EBITDA of the Company and its subsidiaries is less than 3.5:1
(as such terms are defined in the Senior Subordinated Loan Agreement).
"Equity Securities" shall mean all shares of capital stock of the Company,
all securities convertible into or exchangeable for shares of capital stock of
the Company, and all options, warrants, and other rights to purchase or
otherwise acquire from the Company shares of such capital stock, or securities
convertible into or exchangeable for shares of such capital stock.
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"Equivalent Nonvoting Security" means, with respect to any security issued
or to be issued by any Person, a security of such Person that is identical in
rights and benefits to such security, except that (a) the equivalent security
shall not be entitled to vote on any matter on which holders of voting
securities of such Person are entitled to vote, other than as required by
Applicable Law or with respect to any amendment or repeal of any provision of
the Organizational Documents of such Person or any other agreement or instrument
pursuant to which the equivalent security was issued which provision
specifically affects such equivalent security, (b) subject to such reasonable
restrictions as any affected Regulated Holder may request (including any
restriction necessary to prevent the violation by such Regulated Holder of any
provision of Applicable Law with respect to its ownership of voting securities),
the equivalent security shall be convertible in a one-to-one ratio into the
first security and (c) the terms of the equivalent security shall include such
provisions requested by any affected Regulated Holder as are reasonable and
equitable to ensure that (i) the equivalent security is treated comparably to
the first security with respect to dividends, distributions, stock splits,
reclassifications, capital reorganizations, mergers, consolidations and other
similar events and transactions, (ii) the conversion right provided in clause
(b) above is equitably protected and (iii) the acquisition of the equivalent
security will not cause such Regulated Holder to violate Applicable Law.
"Exercise Price" shall have the meaning provided in Section 5.
"Expiration Date" shall have the meaning provided in Section 5.
"Fully-Diluted Basis" means, as applied to the calculation of the total
number of shares of Common Stock outstanding at any time, after giving effect to
(a) all shares of Common Stock outstanding at the time of determination, (b) all
shares of Common Stock issuable upon the exercise of Equity Securities to
purchase Common Stock outstanding at the time of determination and then so
convertible or exchangeable at a conversion or exchange price equal to or less
than the Market Price per share of Common Stock at such time.
"Governmental Authority" means any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
or any court, in each case whether of the United States of America or foreign.
"Holder" or "Holders" means the Purchaser (so long as it holds any Warrants
or Warrant Shares) and any other holder of any of the Warrants or Warrant
Shares.
"Independent Financial Expert" means a nationally recognized investment
banking firm (a) that does not (and whose directors, officers, employees and
Affiliates do not) have a direct or indirect material financial interest in the
Company, the Purchaser or any Holder, (b) that
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has not been, and, at the time it is called upon to serve as an Independent
Financial Expert under this Agreement is not (and none of whose directors,
officers, employees or Affiliates is) a promoter, director or officer of the
Company, the Purchaser or any Holder, (c) that has not been retained during the
preceding two years by the Company, the Purchaser or any Holder for any purpose,
and (d) that is otherwise qualified to serve as an independent financial
advisor. Any such Person may receive customary compensation and indemnification
by the Company for opinions or services it provides as an Independent Financial
Expert.
"Market Price" means, with respect to a share of Common Stock on any
Business Day:
(a) if the Common Stock is Publicly Traded at the time of
determination, the average of the closing prices on such day of the Common
Stock on all domestic securities exchanges or NASDAQ National Market System
(NASDAQ-NMS") on which the Common Stock is then listed, or, if there have
been no sales on any such exchange or NASDAQ-NMS on such day, the average
of the highest bid and lowest asked prices on all such exchanges at the end
of such day or, if on any such day the Common Stock is not so listed, the
average of the representative bid and asked prices quoted on NASDAQ as of
4:00 P.M., New York time, on such day, or if on any day such security is
not quoted on NASDAQ, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of 20 days
consisting of the day as of which "Market Price" is being determined and
the nineteen consecutive Business Days prior to such day, provided that, if
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Market Price is being determined as of the date of a Public Offering,
Market Price as of such date shall be the offering price for the Common
Stock subject to such Public Offering; or
(b) if the Common Stock is not Publicly Traded at the time of
determination, the Common Stock Per Share Market Value.
"Market Value" means the highest price that would be paid for the entire
common equity of the Company on a going-concern basis in an arm's-length
transaction between a willing buyer and a willing seller (neither acting under
compulsion), using valuation techniques then prevailing in the securities
industry (but without giving effect to any discount in respect of a minority
interest and giving effect to any value attributed to the rights of the Holders
to receive dividends and distributions as provided in Section 10 hereof) and
determined in accordance with the Valuation Procedure, and assuming full
disclosure and understanding of all relevant information and a reasonable period
of time for effectuating such sale. For the purposes of determining the Market
Value, (a) the exercise price of options or warrants to acquire Common Stock
which are deemed to have been exercised for the purpose of
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determining the number of shares of Common Stock outstanding on a Fully-Diluted
Basis, shall be deemed to have been received by the Company and (b)(i) the
liquidation preference or indebtedness, as the case may be, represented by
securities which are deemed exercised for or converted into Common Stock for the
purpose of determining the number of shares of Common Stock outstanding on a
Fully-Diluted Basis and (ii) any contractual limitation in respect of the shares
of Common Stock relating to voting rights, shall be deemed to have been
eliminated or cancelled.
"NASDAQ" means the National Association of Securities Dealers, Inc.,
Automated Quotation System.
"Non-Voting Common Stock" shall have the meaning provided in the recitals
to this Agreement.
"Organizational Documents" means, with respect to any Person, each
instrument or other document that (a) defines the existence of such Person,
including its articles or certificate of incorporation, as filed or recorded
with an applicable Governmental Authority or (b) governs the internal affairs of
such Person, including its bylaws, in each case as amended, supplemented or
restated.
"Permitted Transferee" shall mean any Affiliate of any Holder and any
purchaser of the notes issued by the Company pursuant to the terms of the Senior
Subordinated Loan Agreement.
"Person" or "Persons" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Publicly Traded" means, with respect to any security, that such security
is (a) listed on a domestic securities exchange, (b) quoted on NASDAQ or (c)
traded in the domestic over-the-counter market, which trades are reported by the
National Quotation Bureau, Incorporated.
"Public Offering" means any sale of the Common Stock of the Company to the
public pursuant to an offering registered under the 1933 Act.
"Purchaser" shall have the meaning provided in the Preamble of this
Agreement.
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"Put Effective Date" shall mean the first to occur of (i) the fifth (5th)
anniversary of the Closing Date and (ii) a Change of Control (as defined in the
Senior Subordinated Loan Agreement).
"Put Notice" shall have the meaning provided in Section 11.1.
"Put Option Purchase Price" shall mean, with respect to the exercise of any
option to sell any Warrants or Warrant Shares pursuant to any Put Notice
delivered under Section 11 hereof by any Holder of Warrants or Warrant Shares
the Market Price of a share of Common Stock (plus, in the event the Common Stock
is Publicly Traded, the value attributed, on a per share basis, to the rights of
the Holders to receive dividends and distributions as provided in Section 10
hereof determined in accordance with the Valuation Procedure) as of the Put
Repurchase Date, multiplied by the number of Warrant Shares subject to the Put
Notice.
"Put Repurchase Date" shall mean, with respect to the exercise of any put
option pursuant to Section 11 of this Agreement, a date designated by the
Company which is not more than ninety (90) days after the date of receipt by the
Company of the Put Notice relating to the exercise of such put option.
"Qualified IPO" shall mean an initial Public Offering, with net proceeds to
the Company (net of underwriting discounts and offering expenses) of at least
$35 million.
"Regulated Holder" shall have the meaning provided in Section 8.
"Regulation Y" shall have the meaning provided in Section 8.
"Reorganization" shall have the meaning provided in Section 9(d).
"Requisite Holders" means Holders holding Warrants and/or Warrant Shares
representing at least a majority of all Warrant Shares issued or issuable upon
exercise of Warrants outstanding on the date of determination.
"Section 13(e) Transaction" shall have the meaning provided in Section
13(e).
"Senior Credit Agreement" shall mean the credit agreement, dated as of the
date hereof, among the Company, PHC Holding Corporation, the financial
institutions from time to time party thereto and Banque Paribas, as agent, as
amended, amended and restated, supplemented, restructured or otherwise modified
from time to time (in whole or in part and without limitation as to terms,
conditions or covenants and without regard to the principal amount thereof) and
in effect, including all related notes, collateral documents, guaranties,
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instruments and agreements entered into in connection therewith, and any
successive restructurings, renewals, extensions or refundings thereof.
"Senior Subordinated Loan Agreement" means the senior subordinated loan
agreement, dated as of the date hereof, among the Company, PHC Holding
Corporation, the financial institutions from time to time party thereto and
Paribas Capital Funding LLC, as agent, as amended, amended and restated,
supplemented, restructured or otherwise modified from time to time (in whole or
in part and without limitation as to terms, conditions or covenants and without
regard to the principal amount thereof) and in effect, including all related
notes, collateral documents, guaranties, instruments and agreements entered into
in connection therewith, and any successive restructurings, renewals, extensions
or refundings thereof.
"Valuation Procedure" means, with respect to the determination of any
amount or value required to be determined in accordance with such procedure, a
determination (which shall be final and binding on the Company and the Holders)
made (i) by agreement among the Company and the Requisite Holders within 20 days
following the event requiring such determination or (ii) in the absence of such
an agreement, by an Independent Financial Expert selected in accordance with the
further provisions of this definition. If required, an Independent Financial
Expert shall be selected within five days following the expiration of the 20-day
period referred to above, either by agreement among the Company and the
Requisite Holders or, in the absence of such agreement, by lot from a list of
four potential Independent Financial Experts remaining after the Company
nominates three, the Requisite Holders nominate three, and each side eliminates
one potential Independent Financial Expert. The Independent Financial Expert
shall be instructed by the Company and the Requisite Holders to make its
determination within 20 days of its selection. The fees and expenses of an
Independent Financial Expert selected hereunder shall be paid by the Company
unless the Independent Financial Expert's determination pursuant to the
Valuation Procedure is within 5% of the amount proposed by the Company in
connection with the Valuation Procedure and not agreed to by the Requisite
Holders, in which case such fees and expenses shall be paid 50% by the Holders
(on a pro rata basis) participating in the transaction to which the
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determination relates and 50% by the Company.
"Voting Common Stock" shall mean the voting Common Stock of the Company,
par value $.0025 per share.
"Warrant Certificates" shall have the meaning provided in Section 2.
"Warrant Documents" means this Agreement, the Warrant Purchase Agreement
and the Warrant Certificates.
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"Warrant Number" shall have the meaning provided in Section 9.
"Warrant Purchase Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Warrant Shares" means (a) the shares of Non-Voting Common Stock (or, upon
the election of any Holder to receive Voting Common Stock in accordance with the
provisions of the Certificate governing the conversion of Non-Voting Common
Stock into Voting Common Stock, the shares of Voting Common Stock) issued or
issuable upon exercise of a Warrant in accordance with Section 5 or upon
exchange of a Warrant in accordance with Section 5, (b) all other securities or
other property issued or issuable upon any such exercise or exchange in
accordance with this Agreement and (c) any securities of the Company distributed
with respect to, or issued upon the conversion of, the securities referred to in
the preceding clauses (a) and (b). As used in this Agreement, the phrase
"Warrant Shares then held" by any Holder or Holders shall mean Warrant Shares
held at the time of determination by such Holder or Holders, and shall include
Warrant Shares issuable upon exercise of Warrants held at the time of
determination by such Holder or Holders.
"Warrants" shall have the meaning provided in the recitals of this
Agreement.
SECTION 2.
WARRANT CERTIFICATES
The Company will issue and deliver a certificate or certificates evidencing
the Warrants (the "Warrant Certificates") in accordance with Section 1 of the
Warrant Purchase Agreement. Warrant Certificates shall be dated the date of
issuance by the Company.
SECTION 3.
EXECUTION OF WARRANT CERTIFICATES;
MUTILATION OR MISSING WARRANT CERTIFICATES
Warrant Certificates shall be signed on behalf of the Company by its
Chairman of the Board or its President or a Vice President. Each Warrant
Certificate shall also be manually signed on behalf of the Company by its
Secretary or an Assistant Secretary.
In case any of the Warrant Certificates shall be mutilated, lost, stolen or
destroyed, the Company shall, upon request of the Holder of any such Warrant
Certificate, issue, in exchange and substitution for and upon cancellation of
the mutilated Warrant Certificate, or in lieu of
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and substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also satisfactory to the Company. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
SECTION 4.
REGISTRATION/RESERVATION OF WARRANT SHARES
The Company shall number and register the Warrant Certificates in a
register as they are issued. The Company may deem and treat the registered
Holders of the Warrant Certificates as the absolute owners thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes and shall not be affected by any notice to the
contrary. The Warrants shall be registered initially in such name or names as
the Purchaser shall designate.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock, for the purpose of enabling it to satisfy any obligation to issue Warrant
Shares upon exercise of Warrants, the maximum number of shares of Common Stock
which may then be deliverable upon the exercise of all outstanding options,
warrants (including the Warrants) or other securities convertible into or
exchangeable for Common Stock.
The Company covenants that all Warrant Shares and other capital stock
issued upon exercise of Warrants will, upon payment of the Exercise Price
therefor and issue thereof, be validly authorized and issued, fully paid,
nonassessable, free of preemptive rights (except as may be granted by this
Agreement) and free from all taxes, liens, charges and security interests with
respect to the issue thereof.
If and so long as the outstanding Common Stock may be listed on any
securities exchange in the United States, the Company shall use its reasonable
best efforts to cause all reserved Warrant Shares to be listed on each such
exchange upon official notice of issuance upon such exercise.
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SECTION 5.
WARRANTS; EXERCISE OF WARRANTS
Subject to the terms of this Agreement, each Holder shall have the right,
which may be exercised at any time or from time to time until 5:00 p.m., New
York time, on October __, 2007 (the "Expiration Date") to receive from the
Company the number of fully paid and nonassessable Warrant Shares which the
Holder may at the time be entitled to receive on exercise of such Warrants and
payment of the Exercise Price then in effect for such Warrant Shares. Each
Warrant not exercised prior to 5:00 p.m., New York time, on the Expiration Date
shall become void and all rights thereunder and all rights in respect thereof
under this Agreement shall cease as of such time; provided that the occurrence
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of the Expiration Date shall not relieve the Company of any obligation to any
Holder which arose pursuant to the terms of this Agreement prior to such date.
The price at which each Warrant shall be exercisable (as such price may be
adjusted from time to time, in accordance with the terms hereof, the "Exercise
Price") shall initially be $.0025 per share. The Common Stock shall have a par
value of no greater than $.0025 per share. In the event that the amount obtained
by dividing the Exercise Price by the Warrant Number is less than the par value
per share of Common Stock, the Company shall take all necessary actions to
ensure that all Warrant Shares issued pursuant to this Agreement are fully paid.
A Warrant may be exercised upon surrender to the Company at its address set
forth on the signature pages hereto of the Warrant Certificate or Warrant
Certificates to be exercised with the form of election to purchase attached
thereto duly completed and signed, and upon payment to the Company of the
Exercise Price for the number of Warrant Shares in respect of which such
Warrants are then exercised. Payment of the aggregate Exercise Price may be
made, at the option of the applicable Holder, (i) by cash, certified or bank
cashier's check or wire transfer, (ii) by surrendering to the Company the number
of Warrants which, when exercised, would entitle the Holder thereof to that
number of Warrant Shares which is equal to (A) such aggregate Exercise Price
divided by (B) the excess of (x) the product of the number of Warrant Shares
which may be purchased with one Warrant, multiplied by the Market Price per
share of Common Stock over (y) the Exercise Price, (iii) by surrendering to the
Company the number of shares of Common Stock which is equal to (A) such
aggregate Exercise Price divided by (B) the Market Price per share of Common
Stock or (iv) any combination of the foregoing.
Subject to the provisions of Section 6, upon such surrender of Warrants and
payment of the Exercise Price the Company shall issue and cause to be delivered
with all reasonable dispatch to or upon the written order of the Holder and in
such name or names as such Holder
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may designate a certificate or certificates for the number of full Warrant
Shares issuable upon the exercise of such Warrants (and such other consideration
as may be deliverable upon exercise of such Warrants) together with, at the sole
option of the Company, cash for fractional Warrant Shares as provided in Section
7. Such certificate or certificates shall be deemed to have been issued and the
Person so named therein shall be deemed to have become a holder of record of
such Warrant Shares as of the date of the surrender of such Warrants and payment
of the Exercise Price, irrespective of the date of delivery of such certificate
or certificates for Warrant Shares.
Each Warrant shall be exercisable, at the election of the Holder thereof,
either in full or from time to time in part and, in the event that a Warrant
Certificate is exercised in respect of fewer than all of the Warrant Shares
issuable on such exercise at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will be
issued and delivered pursuant to the provisions of this Section 5 and of Section
2.
All Warrant Certificates surrendered upon exercise of Warrants shall be
cancelled and disposed of by the Company. The Company shall keep copies of this
Agreement and any notices given or received hereunder available for inspection
by the Holders during normal business hours at its office.
SECTION 6.
PAYMENT OF TAXES
The Company will pay all taxes and other governmental charges (including
all documentary stamp taxes, but excluding all foreign, federal, state or local
income taxes payable by a Holder) in connection with the issuance or delivery of
the Warrants hereunder, including all such taxes attributable to the initial
issuance or delivery of Warrant Shares upon the exercise of Warrants and payment
of the Exercise Price. The company shall not, however, be required to pay any
tax that may be payable in respect of any subsequent transfer of the Warrants or
any transfer involved in the issuance and delivery of Warrant Shares in a name
other than that in which the Warrants to which such issuance relates were
registered, and, if any such tax would otherwise be payable by the Company, no
such issuance or delivery shall be made unless and until the Person requesting
such issuance has paid to the Company the amount of any such tax, or it is
established to the reasonable satisfaction of the Company that any such tax has
been paid.
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SECTION 7.
FRACTIONAL INTERESTS
The Company shall not issue fractional Warrant Shares on the exercise of
Warrants; provided, that in the event the Market Price of the fractional
interests of such Warrant Shares is less than $100, the Company may issue
fractional Warrant Shares. If more than one Warrant shall be presented for
exercise in full at the same time by the same Holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would, except for
the provisions of this Section 7, be issuable on the exercise of any Warrants
(or specified portion thereof), the Company may, at its sole option, pay an
amount in cash equal to the Market Price of the Warrant Share so issuable
multiplied by such fraction.
SECTION 8.
LIMITATIONS ON CERTAIN HOLDERS
Notwithstanding anything in this Agreement or any Warrant Certificate to
the contrary, no Holder which is subject to the provisions of Regulation Y
promulgated by the Board of Governors of the Federal Reserve, or any successor
regulation thereto ("Regulation Y"), or which is affiliated with any entity
subject to the provisions of Regulation Y (if such Affiliate holds securities of
the Company (any such Holder being referred to herein as a "Regulated Holder"))
and no transferee of such Regulated Holder may exercise the Warrants for a
number of Warrant Shares which would permit such Regulated Holder, together with
its Affiliates and transferees, to own or control a number of Warrant Shares
greater than that permitted by Applicable Law including, without limitation,
Regulation Y.
SECTION 9.
ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE
AND EXERCISE PRICE
The number of shares of Common Stock issuable upon the exercise of each
Warrant (the "Warrant Number") is initially one. The Warrant Number is subject
to adjustment from time to time upon the occurrence of any event enumerated in,
or as otherwise provided in this Section 9.
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(a) Adjustment for Change in Capital Stock. If the Company:
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(i) Subdivides or reclassifies its outstanding shares of Common
Stock into a greater number of shares;
(ii) combines or reclassifies its outstanding shares of Common
Stock into a smaller number of shares; or
(iii) issues by reclassification of its Common Stock any shares
of its capital stock;
then the Warrant Number in effect immediately prior to such action shall be
adjusted so that the Holder of any Warrant thereafter exercised may receive the
aggregate number and kind of shares of capital stock of the Company which it
would have owned immediately following such action if such Warrant had been
exercised immediately prior to such action. The adjustment shall become
effective immediately after the effective date thereof. Such adjustment shall be
made successively whenever any event listed above shall occur.
(b) When De Minimis Adjustment Deferred. No adjustment in the Warrant
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Number need be made unless the adjustment would require an increase or decrease
of at least one-tenth of one percent in the Warrant Number. Any adjustments that
are not made shall be carried forward and taken into account in any subsequent
adjustment, provided that no such adjustment shall be deferred beyond the date
on which a Warrant is exercised. All calculations under this Section 9 shall be
made to the nearest 1/10th of a share.
(c) Notice of Adjustment. Whenever the Warrant Number is adjusted, the
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Company shall provide the notices required by subsection 13(a) hereof. Whenever
the Warrant Number is required to be adjusted, as herein provided, the Company
shall mail by first class, postage prepaid, to each Holder, notice of such
adjustment or adjustments and a certificate of a firm of nationally recognized
independent public accountants selected by the board of directors of the Company
(who may be the regular accountants employed by the Company) setting forth the
Warrant Number after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made.
(d) Reorganizations. In case of any capital reorganization, other than
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in the cases referred to in subsection 9(a) hereof, or the consolidation or
merger of the Company with or into another Person (other than a merger or
consolidation in which the Company is the surviving entity and which does not
result in any reclassification of the outstanding shares of Common Stock into
shares of other stock or other securities or property), or the sale of the
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property of the Company as an entirety or substantially as an entirety other
than in the cases referred to in Subsection 9(a) hereof (collectively, such
actions being hereinafter referred to as "Reorganizations"), there shall
thereafter be deliverable upon exercise of any Warrant (in lieu of the number of
shares or securities theretofore deliverable) the number of shares of stock or
other securities or property to which a holder, of the number of shares of
Common Stock that would otherwise have been deliverable upon the exercise of
such Warrant, would have been entitled upon such Reorganization if such Warrant
had been exercised in full immediately prior to such Reorganization. In case of
any Reorganization, appropriate adjustment, as determined in good faith by the
board of directors of the Company, whose determination shall be described in a
duly adopted resolution certified by the Company's Secretary or Assistant
Secretary, shall be made in the application of the provisions herein set forth
with respect to the rights and interests of Holders so that the provisions set
forth herein shall thereafter be applicable, as nearly as possible, in relation
to any shares or other property thereafter deliverable upon exercise of
Warrants.
The Company shall not effect or permit any such Reorganization unless
(i) the successor entity resulting from such Reorganization or the Person
purchasing such assets is a corporation duly organized and validly existing
under the laws of a state of the United States and (ii) prior to or
simultaneously with the consummation of such Reorganization the successor entity
(if other than the Company) resulting from such Reorganization or the Person
purchasing such assets shall expressly assume, by a supplemental Warrant
Agreement or other acknowledgement executed and delivered to the Holder(s) in
form and substance satisfactory to the Requisite Holders, the obligation to
deliver to each such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase, and all other obligations and liabilities under this Agreement.
(e) Form of Warrants. Irrespective of any adjustments in the number or
----------------
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrant Certificates initially
issuable pursuant to this Agreement.
(f) Exercise Price Adjustment. Whenever the Warrant Number is adjusted
-------------------------
as herein provided, the Exercise Price payable upon exercise of this Warrant
shall be adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the Warrant Number
immediately prior to such adjustment, and of which the denominator shall be the
Warrant Number immediately thereafter; provided, however, that the Exercise
-------- -------
Price shall in no event be less than the current par value of the Common Stock.
14
(g) Dissolution, Liquidation or Winding Up. Notwithstanding any other
--------------------------------------
provision of this Agreement, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, each Holder shall be
entitled to share, with respect to the Warrant Shares issuable upon exercise of
the Holder's Warrants, equally and ratably in any cash or non-cash distributions
payable to holders of Common Stock, less the aggregate Exercise Price payable
upon the exercise of such Warrants. The Company shall give notice to each Holder
at the earliest practicable time (and, in any event, not less than 20 days
before the date of such dissolution, liquidation or winding-up, as the case may
be) and each Holder of outstanding Warrants shall be entitled to share equally
and ratably in any cash or noncash distributions payable to holders of Common
Stock. In case of any such voluntary or involuntary dissolution, liquidation or
winding up of the Company, the Company shall hold in escrow any funds or other
property which a Holder is entitled to receive in respect of such Holder's
Warrant Shares at the time of any distribution. No such Holder will be entitled
to receive payment of any such distribution until such Holder has surrendered
the Warrant Certificates evidencing such Warrant to the Company. From and after
such voluntary or involuntary dissolution, liquidation or winding up with
respect to the Company, all rights of the Holders, except the right to receive
such distribution, without interest, upon the surrender of the Warrant
Certificates, shall cease and terminate and such Warrants shall not thereafter
be transferred (except with the consent of the Company) and such Warrants shall
not be deemed to be outstanding for any other purpose whatsoever. For the
purposes of this Agreement, neither the voluntary sale, lease, conveyance,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all the property or assets of the
Company, nor the consolidation or merger of the Company with one or more other
corporations, shall be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, with respect to the Company.
(h) Miscellaneous. In the event that at any time, as a result of an
-------------
adjustment made pursuant to this Section 9, the Holders shall become entitled to
purchase any securities of the Company other than, or in addition to, shares of
Common Stock, thereafter the number or amount of such other securities so
purchasable upon exercise of each Warrant shall be 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 Warrant Shares contained in this Section 9, and
the provisions of Sections 5, 6, 7 and 8 with respect to the Warrant Shares or
the Common Stock shall apply on like terms to any such other securities.
(i) Occurrence of a Credit Event. If the Commitment (as defined in the
----------------------------
Senior Subordinated Loan Agreement) is terminated upon the occurrence of a
Credit Event on or before February 28, 1998, then 360,000 Warrants, or 360,000
of the then issued Warrant Shares will be canceled.
15
(j) Repayment of Senior Subordinated Debt. (i) If the number of
-------------------------------------
Warrants or Warrant Shares has not been reduced pursuant to Section 9(k) and the
Loan outstanding under the Senior Subordinated Loan Agreement is repaid in full
from the proceeds of an initial Public Offering of Common Stock at a price per
share of $6.00 or more and the Commitment (as defined in the Senior Subordinated
Loan Agreement) is terminated (A) on or before the six (6) month anniversary of
the Closing Date then 600,000 Warrants, or 600,000 of the then issued Warrant
Shares will be canceled, (B) after the six (6) month anniversary but on or
before the one (1) year anniversary of the Closing Date then 300,000 Warrants,
or 300,000 of the then issued Warrant Shares, will be canceled or (C) after the
one (1) year anniversary but on or before the 18 month anniversary of the
Closing Date, then 150,000 Warrants, or 150,000 of the then issued Warrant
Shares, will be canceled.
(ii) If the number of Warrants or Warrant Shares has been
reduced pursuant to Section 9(k) and the Loan outstanding under the Senior
Subordinated Loan Agreement is repaid in full from the proceeds of an initial
Public Offering of Common Stock at a price per share of $6.00 or more and the
Commitment (as defined in the Senior Subordinated Loan Agreement) is terminated
(A) on or before the six (6) month anniversary of the Closing Date then 360,000
shares, or 360,000 of the then issued Warrant Shares will be canceled, (B) after
the six (6) month anniversary but on or before the one (1) year anniversary of
the Closing Date then 180,000 shares, or 180,000 of the then issued Warrant
Shares, will be canceled or (C) after the one (1) year anniversary but on or
before the 18 month anniversary of the Closing Date, then 90,000 shares, or
90,000 of the then issued Warrant Shares, will be canceled.
(iii) All such cancellations shall be applied pro rata among
all Holders and, as to each Holder, to its Warrant first.
SECTION 10.
PAYMENTS IN RESPECT OF DIVIDENDS AND DISTRIBUTIONS
If the Company pays any dividend or makes any distribution (whether in
cash, property, evidences of indebtedness or securities of the Company) on its
Common Stock, then the Company shall simultaneously pay to the Holders a portion
of such dividend or distribution in the same form as such dividend or
distribution was paid, based on the number of Warrant Shares issuable upon
exercise of the Warrants.
16
SECTION 11.
HOLDERS' PUT RIGHTS
11.1 Granting of Put, Put Option Purchase Price. Subject to the
------------------------------------------
limitations set forth in Section 11.5 hereof, at any time or from time to time
after the Put Effective Date but on or before the earlier of (A) the
consummation of a Qualified IPO or (B) the later of (x) the Expiration Date and
(y) the date 10 business days after the date on which there are no limitations
on the Company's obligation to purchase shares of Common Stock pursuant to this
Section 11.1 of the type described in Section 11.5, any Holder of Warrants
and/or Warrant Shares, upon written notice to the Company (a "Put Notice"),
shall be entitled to sell, and the Company shall be obligated to purchase from
such Holder, all or any portion of the Warrants and/or Warrant Shares held by
such Holder at the Put Option Purchase Price.
11.2 Put Notice. Each Put Notice delivered pursuant to Section 11.1
----------
shall specify:
(a) the name of the Holder of Warrants and/or Warrant Shares
delivering such Put Notice;
(b) that such Holder is exercising its option, pursuant to this
Section 11, to sell the Warrants and/or Warrant Shares held by such Holder; and
(c) the number of, and a description of, the Warrants and/or Warrant
Shares being tendered, including a statement, to the extent relevant, of:
(i) the number of Warrants and/or Warrant Shares sought to be
sold by such Holder that were issued upon the exercise of any Warrant; and
(ii) the total number of Warrants and/or Warrant Shares sought
to be sold by such Holder that have not been exercised or cancelled
11.3 Company Notices.
---------------
(a) The Company, within thirty (30) days of receipt of such Put
Notice, shall deliver to the Holder or Holders exercising its or their put
option pursuant to this Section 11, a notice (i) specifying the Put Repurchase
Date and (ii) stating the type and number of the Warrants and/or Warrant Shares
held by each such other Holder.
(b) The Company, not less than ten (10) days prior to the Put
Repurchase Date, shall deliver to the Holder or Holders exercising its or their
put option pursuant to this Section
17
11, a notice containing a detailed calculation of the Put Option Purchase Price
with respect to the Warrants and/or Warrant Shares which are to be so
repurchased from such Holder.
11.4 Obligation to Purchase Warrant Shares. The Company shall be
-------------------------------------
obligated, subject to Section 11.5 hereof, to purchase all of such Holder's or
Holders' Warrants and/or Warrant Shares which are the subject of such Put
Notice, and shall pay the Put Option Purchase Price with respect to the exercise
of the put option which is the subject of each such Put Notice payable to such
Holder or Holders in immediately available funds, on the Put Repurchase Date
with respect to such Put Notice, against delivery by such Holder or Holders of
any and all certificates or other instruments evidencing the Warrants and/or
Warrant Shares which are the subject of such Put Notice, together with
appropriate stock powers or other instruments of transfer or assignment duly
endorsed in blank.
11.5 Limitations on Right of Repurchase. Notwithstanding anything
----------------------------------
contained in this Section 11 to the contrary, the Company shall not be obligated
to purchase Warrants and/or Warrant Shares which are the subject of a Put Notice
or be obligated to pay the Put Option Purchase Price in respect of a Put Notice,
if, at any time:
(a) payment of the Put Option Purchase Price at such time would result
in a breach of, or default or event of default in respect of, the Senior Credit
Agreement or the Senior Subordinated Loan Agreement; or
(b) payment of the Put Option Purchase Price is, at such time,
prohibited by Applicable Law;
provided, however, with respect to (a) and (b) above, if such breach, event of
-------- -------
default, default or violation would not result from the purchase of any number
of Warrant Shares which is less than the total number of shares the Company is
obligated to purchase on the Put Repurchase Date, the Company shall purchase on
the Put Repurchase Date the maximum number of shares it may so purchase,
allocated among the Holders which have elected to have their Warrant Shares so
repurchased ratably according to the number of Warrant Shares so tendered;
provided further, however, with respect to (a) and (b) above, the Company shall
use its reasonable best efforts to cure such default or violation in a timely
matter and remove any associated restrictions or limitations which are
applicable to the rights of the holders contained in this Section 11.
18
SECTION 12.
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to the Holders that the
representations and warranties contained in Article 4 of the Senior Subordinated
Loan Agreement, are hereby confirmed and restated, each such representation and
warranty, together with all related definitions and ancillary provisions, being
hereby incorporated into this Agreement by reference as though specifically set
forth in this Section.
SECTION 13.
COVENANTS
(a) Notices of Certain Actions. (i) In the event that, prior to the
--------------------------
consummation of an initial Public Offering, the Company:
(A) shall have authorized the issuance of rights or warrants
to subscribe for or purchase more than 400,000 shares of capital stock of the
Company since the last notice delivered pursuant to this Section 13(a) or the
date hereof, whichever is later, or of any other subscription rights or warrants
to purchase more than 400,000 shares of capital stock to holders of any type of
capital stock of the Company since the last notice delivered pursuant to this
Section 13(a)(l) or the date hereof, whichever is later; or
(B) shall authorize a dividend or other distribution of
evidences of its indebtedness, cash or other property or assets to holders of
any type of capital stock of the Company; or
(C) proposes to become a party to any consolidation or merger
for which approval of any stockholders of the Company will be required, or to a
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any capital reorganization or reclassification or change
of any type of capital stock of the Company; or
(D) commences a voluntary or involuntary dissolution,
liquidation or winding up; or
(E) commences a Public Offering; or
(F) fails to comply with the provisions of this Agreement; or
19
(G) proposes to take any other action which would require an
adjustment pursuant to Section 9;
then the Company shall provide a written notice to each Holder stating (i) the
date as of which the holders of record of capital stock to be entitled to
receive any such rights, warrants or distribution are to be determined, (ii) the
material terms of any such consolidation or merger and the expected effective
date thereof, (iii) the material terms of any such conveyance or transfer, and
the date on which any such conveyance, transfer, dissolution, liquidation or
winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of capital stock will be entitled to
exchange their shares for securities or other property, if any, deliverable upon
such reclassification, conveyance, transfer, dissolution, liquidation or winding
up, (iv) the material terms of any such Public Offering (including a copy of any
prospectus, registration statement or offering statement) and the expected
effective date thereof, (v) the nature of the lack of compliance, any corrective
action taken and any rights or remedies which such lack of compliance has
bestowed on the Holders or (vi) the information required by Section 9(c). Such
notice shall be given not later than 3 Business Days prior to the effective date
(or the applicable record date, if earlier) of such event.
(ii) From and after the consummation of an initial Public Offering, the
Company shall provide to each Holder (A) all notices or other documents that are
provided generally to the holders of Common Stock and (B) if the Company
proposes to take any action which would require an adjustment pursuant to
Section 9, the information required by Section 9(c).
(iii) The failure to give the notice required by this subsection 13(a)
or any defect therein shall not affect the legality or validity of any
distribution, right, warrant, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, or the vote upon any action.
(b) Financial Statements and Reports. The Company shall furnish to
--------------------------------
each Holder such information relating to the Company and its Subsidiaries and
their operations and financial condition as any Holder shall reasonably request,
including the financial statements required by Sections 5.1(b) and (c) of the
Senior Subordinated Loan Agreement.
(c) Information Rights and Access Rights. Each Holder shall have the
------------------------------------
right, upon its reasonable request, whether or not such Holder has exercised or
exchanged any Warrants, to receive lists of stockholders or other information
respecting the Company, to inspect the books and records of the Company and to
visit the properties of the Company. Nothing contained in this Agreement shall
be construed as conferring upon any Holder, prior to its exercise of any
Warrant, the right to vote or to consent or to receive notice as stockholders in
20
respect of meetings of stockholders or the election of directors of the Company
or any other matter, or any rights whatsoever as stockholders of the Company,
except as expressly provided hereunder or under Applicable Law.
(d) Observation Rights of the Purchaser. The Company hereby covenants
-----------------------------------
and agrees that, for so long as the Purchaser and Paribas Principal Incorporated
in the aggregate owns at least 5.0% of the outstanding capital stock of the
Company, the Company shall provide the Purchaser with reasonable notice of all
meetings of the Board of Directors of the Company and meetings of committees
which have been delegated any decision making authority by the board of
Directors of the Company. The Company shall invite or cause to be invited a
representative of the Purchaser (an "Observer") to attend (in person or by
telephone, at the Observer's option if the meeting is not a telephone meeting)
each such board meeting or committee meeting. The Observer shall be provided
with all advance materials provided to Board members and such committee members.
Following any such meeting, the Company shall provide the Purchaser with copies
of the agenda and minutes with respect thereto, whether or not an Observer
participated in or attended such meeting. Notwithstanding the foregoing, Section
5.14 of the Senior Subordinated Loan Agreement and Section 5.1.1 of the
Securities Purchase Agreement between the Company and Paribas Principal
Incorporated, the Purchaser agrees that the Purchaser and Paribas Principal
Incorporated shall together be entitled to designate only one Observer, as shall
be mutually agreed upon by them from time to time.
(e) Regulated Holders.
-----------------
(i) Notwithstanding any other provision of this Agreement to
the contrary, except as provided in this subsection 13(e), without the prior
written consent of any Regulated Holder, the Company shall not, directly or
indirectly, redeem, purchase or otherwise acquire, convert or take any action
(including any amendment to its Certificate) with respect to the voting rights
of, or undertake any other action or transaction (including any merger,
consolidation or recapitalization) affecting, any shares of its capital stock or
other voting securities if the result of the foregoing would be to cause the
ownership of the capital stock of the Company by such Regulated Holder, or the
ownership of voting securities of the Company (or any class thereof) by such
Regulated Holder, to exceed the quantity of such capital stock or voting
securities (or any class thereof) that such Regulated Holder is permitted under
Applicable Law to own. Any action or transaction referred to in the preceding
sentence shall be referred to herein as a "Section 13(e) Transaction". If the
Company proposes to undertake any action or transaction which could constitute a
Section 13(e) Transaction, it shall provide the Holders at least 15 days prior
written notice thereof. If, in the written opinion of counsel to any Regulated
Holder (which may be internal counsel) delivered within 10 days following
receipt of such notice, such action or transaction constitutes a Section 13(e)
Transaction with
21
respect to such Regulated Holder, then the Company shall delay undertaking such
Section 13(e) Transaction for the purpose of using its best efforts to agree on
a manner in which to restructure such action or transaction in a manner
reasonably satisfactory to the Company and such Regulated Holder so that it no
longer would constitute a Section 13(e) Transaction. Notwithstanding anything to
the contrary contained herein, the Company shall be permitted to undertake any
Section 13(e) Transaction which would otherwise result in the ownership by any
Regulated Holder of voting securities (or any class thereof in excess of the
quantity permitted by Applicable Law) if, in a manner reasonably satisfactory to
such Regulated Holder, the Company shall provide or cause to be provided for
such Regulated Holder (i) to receive in connection with any such action or
transaction a number of shares or other units of Equivalent Nonvoting Securities
equal to such excess in lieu of the same number of shares or other units of the
voting securities it would otherwise have received or (ii) if it would not
otherwise have received voting securities in connection with such action or
transaction to exchange a number of shares or other units of voting securities
then held by such Regulated Holder equal to such excess for the same number of
shares or other units of Equivalent Nonvoting Securities.
(ii) If it becomes unlawful for any Regulated Holder to
continue to hold some or all of the Warrants or Warrant Shares held by it, or
restrictions are imposed on any Regulated Holder by Applicable Law which, in the
reasonable judgment of such Regulated Holder, make it unduly burdensome to
continue to hold such Warrants or Warrant Shares, the Company shall (i)
cooperate with such Regulated Holder in any efforts by such Regulated Holder to
dispose of some or all of such Warrants or Warrant Shares in a prompt and
orderly manner, including providing (and authorizing such Regulated Holder to
provide) financial and other information concerning the Company to any
prospective purchaser of such Warrants or Warrant Shares and (ii) at the request
of such Regulated Holder, take all steps (including using its best efforts to
cause its Certificate to be amended) necessary to create an Equivalent Nonvoting
Security with respect to the Warrant Shares then held by such Regulated Holder
and permit such Regulated Holder to exchange Warrant Shares for the same number
of shares or other units of such Equivalent Nonvoting Security; provided, that
--------
nothing in this subsection 13(e) shall require the Company to register or
qualify such Warrants or Warrant Shares under any federal or state securities
laws.
(f) Current Public Information. At all times after the Company has
--------------------------
filed a registration statement with the Commission pursuant to the requirements
of either the 1933 Act or the 1934 Act, the Company will file all reports
required to be filed by it under the 1933 Act and the 1934 Act and the rules and
regulations adopted by the Commission thereunder, and will take such further
action as any Holder may reasonably request, all to the extent required to
enable such Holder to sell Warrant Shares pursuant to Rule 144 or Rule 144A
adopted by the Commission under the 1933 Act. Upon request, the Company will
deliver to any such Holder a written statement as to whether it has complied
with such requirements.
22
(g) Public Disclosures. The Company will not disclose any Holder's
------------------
name or identity as an investor in the Company in any press release or other
public announcement or in any written consent of such Holder, unless such
disclosure is required by Applicable Law or governmental regulations or by order
of a court of competent jurisdiction in which case prior to making such
disclosure the Company will give written notice to such Holder describing in
reasonable detail the proposed content of such disclosure and will permit the
Holder to review and comment upon the form and substance of such disclosure.
(h) Certain Restrictions. The Company will not without the consent of
--------------------
the Requisite Holders, take any action, corporate or otherwise, the effect of
which would be to alter, impair or affect adversely either the rights of the
Holders or the duties and obligations of the Company under the Warrant
Documents.
(i) Specific Performance. Each Holder shall have the right to specific
--------------------
performance by the Company of the provisions of this Agreement, in addition to
any other remedies it may have at law or in equity. The Company hereby
irrevocably waives, to the extent that it may do so under Applicable Law, any
defense based on the adequacy of a remedy at law which may be asserted as a bar
to the remedy of specific performance in any action brought against the Company
for specific performance of this Agreement by any Holder of the Warrants or
Warrant Shares.
SECTION 14.
AMENDMENTS AND WAIVERS
(a) Consent of Holders. No amendment, modification, termination or
------------------
waiver of any provision of this Agreement and the Warrant Certificates or
consent to any departure by the Company therefrom, shall in any event be
effective without the written concurrence of the Requisite Holders; provided,
--------
however, that without the consent of each Holder affected, no amendment,
-------
modification, termination or waiver may:
(i) make any change to the definition of "Requisite Holders";
(ii) make any change to the transfer provisions of Section 15
that adversely affects the ability of a Holder to make any transfer described
therein;
(iii) make any change in the foregoing amendment and waiver
provisions; or
(iv) make any change to Section 11 hereof and the definitions
relating thereto.
23
After an amendment, modification, termination or waiver under this
Section 14 becomes effective, the Company shall mail to the Holders affected
thereby a notice briefly describing such amendment, modification, termination or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, modification, termination or waiver.
In connection with any amendment, modification, termination or waiver
under this Section 14, the Company may offer, but shall not be obligated to
offer, to any Holder who consents to such amendment, modification, termination
or waiver, consideration for such Holder's consent, so long as such
consideration is offered to all Holders.
(b) Solicitation of Holders. The Company will not effect any proposed
-----------------------
amendment, modification, termination or waiver of any of the provisions of this
Agreement or the Warrant Certificates unless each Holder (irrespective of the
amount of Warrants or Warrant Shares then owned by it) shall be informed thereof
by the Company prior to the effectuation thereof (but only to the extent the
Company has been provided with addresses for the Holders) and shall be afforded
the opportunity of considering the same and shall be supplied by the Company
with sufficient information to enable it to make an informed decision with
respect thereto. Executed or true and correct copies of any amendment,
modification, termination or waiver effected pursuant to the provisions of this
Section 14 shall be delivered by the Company to each Holder of outstanding
Warrants or Warrant Shares forthwith following the date on which the same shall
have been executed and delivered by the Holder or Holders of the requisite
percentage of outstanding Warrant Shares (but only to the extent the Company has
been provided with the addresses for the Holders).
(c) Revocation and Effect of Consents. Until an amendment,
---------------------------------
modification, termination or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Warrant or Warrant Shares, even if notation of the consent is not made on any
Warrant Certificate or stock certificate. However, any such Holder or subsequent
Holder may revoke any such consent by notice to the Company received before the
date on which the Requisite Holders have consented (and not theretofore revoked
such consent) to such amendment, modification, termination or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
modification, termination or waiver, which record date shall be at least 10 days
prior to the first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
24
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
SECTION 15.
TRANSFERS
(a) Each Holder, subject to the provisions of subsection 15(c) below,
shall be permitted to transfer any Warrant or Warrant Share (and the rights
relating thereto under this Agreement and the other Warrant Documents) to any
Permitted Transferee.
(b) In addition to the rights of transfer under Section 15(a), each
Holder, subject to the provisions of subsection 15(c) below, shall be permitted
to transfer any Warrant or Warrant Share (and the rights relating thereto under
this Agreement and the other Warrant Documents) to any other Person; provided
--------
that:
(i) such transfer is made pursuant to a registration statement
under the 1933 Act (it being acknowledged that the Company shall not be
obligated to assist in any manner in any such registration except as provided by
the Registration Rights Agreement dated as of the date hereof, between the
Company and the Purchaser) or pursuant to an exemption from the registration
requirements of the 1933 Act;
(ii) if such transfer is being made pursuant to an exemption
from such registration requirements and if requested by the Company, counsel for
such Holder (which counsel may be internal counsel) furnishes to the Company an
opinion reasonably acceptable to the Company to the effect that such transfer is
being made pursuant such an exemption;
(iii) the applicable transferee (or, in the case of an account
manager, the managed account on behalf of which the account manager is acting)
is an "accredited investor" as defined in Regulation D promulgated under the
1933 Act; and
(iv) such transferee represents to the Company in writing that
it is acquiring such Warrant or Warrant Share solely for its own account (or in
the case of account managers, on behalf of managed accounts) and not as nominee
or agent for any other Person (other than for such managed accounts, if
applicable) and not with a view to, or for offer or sale in connection with, any
distribution thereof (within the meaning of the 0000 Xxx) that would be in
violation of the securities laws of the United States of America or any state
thereof, without prejudice, however, to its right at all times to sell or
otherwise dispose of all or any part of said Warrant or Warrant Share pursuant
to a registration statement under the 1933 Act or
25
pursuant to an exemption from the registration requirements of the 1933 Act, and
subject, nevertheless, to the disposition of its property being at all times
within its control.
(c) The Company shall promptly register the transfer of any
outstanding Warrants in the Warrant register and any outstanding Warrant Shares
in a Common Stock register to be maintained by the Company upon surrender
thereof accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, duly executed by the registered Holder or Holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney. Upon any such registration of transfer, a new Warrant or
Warrant Share, as the case may be, shall be issued and delivered with all
reasonable dispatch to the transferee(s) and such transferee(s) shall be deemed
to have become the Holder(s) of record of such Warrant or Warrant Share, as the
case may be, and the surrendered Warrant or Warrant Share, as the case may be,
shall be canceled and disposed of by the Company.
SECTION 16.
MISCELLANEOUS
(a) Notices. Unless otherwise specifically provided herein, any notice
-------
or other communication herein required or permitted to be given shall be in
writing and shall be made by personal service, telecopy, United States mail or
reputable courier service:
(i) if to the Purchaser or subsequent Holder, at the address
or telecopy number set forth on the signature pages to this Agreement, or such
other address as shall be designated in a written notice delivered to the
Company; and
(ii) if to the Company, at the address or telecopy number set
forth on the signature pages to this Agreement, or such other address as shall
be designated in a written notice delivered to the other parties hereto with a
copy to Xxxxxxx Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
Attention: Xxxxx X. Xxxx.
Unless otherwise specifically provided herein, any notice or other
communication shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telecopy, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed.
(b) Failure or Indulgence Not Waiver: Remedies Cumulative. No failure
-----------------------------------------------------
or delay on the part of any Holder in the exercise of any power, right or
privilege hereunder or under any other Warrant Document shall impair such power
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any
26
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Warrant Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
(c) Severability. In case any provision in or obligation under this
------------
Agreement or the Warrant Certificates shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
(d) Headings. Section and subsection headings in this Agreement are
--------
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
(e) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
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CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(f) Successors and Assigns. This Agreement shall be binding on the
----------------------
parties hereto and their respective successors and assigns and shall insure to
the benefit of the parties hereto and the successors and assigns of the
Purchaser (including each Holder and its successors and assigns).
(g) Counterparts. This Agreement and any amendments, waivers, consents
------------
or supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
(h) Survival of Representation and Warranties, Entire Agreement. All
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representations and warranties contained herein or made in writing or on behalf
of the Company in connection herewith shall survive the execution and delivery
of this Agreement and the Warrant Shares and the transfer by the Purchaser of
any Warrant Shares or any portion thereof on interest therein, and may be relied
upon by the Purchaser regardless of any
27
investigation made at any time by or on behalf of the Purchaser. The Warrant
Documents embody the entire agreement and understanding between the parties
hereto relating and supersede all prior agreements and understandings, if any,
relating thereto to the subject matter hereof.
* * * * *
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
Notice Address: PHYSICIAN HEALTH CORPORATION
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000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000 By
Tel: ----------------------------------
Fax: Name:
Attention: Title:
Notice Address: PARIBAS CAPITAL FUNDING LLC
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By
----------------------------------
Name:
Title:
Paribas Capital Funding LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By
Tel: 212/000-0000 ----------------------------------
Fax: 212/000-0000 Name:
Attention: Xxxx Xxxxx Title:
