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EX-7.4
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is entered into as
of this 10th day of May, 2001 by and among MATRIA HEALTHCARE, INC., a Delaware
corporation ("Matria"), XXXXXX MEDICAL MANAGEMENT, L.L.C., a Georgia limited
liability company ("GMM"), XXXX X. XXXXXX, a Florida resident ("MJG"), and SZ
INVESTMENTS, L.L.C., a Delaware limited liability company ("SZI").
Statement of Purpose
Certain MJG Affiliates (as defined below) and a certain SZI Affiliate
(as defined below) are members of GMM. GMM and Matria entered into a Purchase
and Sale Agreement dated as of December 21, 1998 (the "Purchase Agreement"),
pursuant to which Matria acquired substantially all of the assets of GMM,
including its interests in its subsidiaries, for consideration consisting, in
part, of Redeemable Preferred Stock, Warrants, Convertible Preferred Stock and
Earn-Out Notes (each as defined below) of Matria. In connection with the
consummation of the Purchase Agreement, MJG, SZI and Matria entered into a
Standstill Agreement dated as of January 19, 1999 (the "Standstill Agreement")
with respect to the ownership, voting and disposition of the Voting Securities
(as defined below) of Matria owned by the MJG Affiliates and/or the SZI
Affiliates. Now Matria wishes to purchase, and GMM wishes to sell to Matria, all
or part of the Redeemable Preferred Stock, Warrants, Convertible Preferred Stock
and Earn-Out Notes, and MJG, SZI and Matria wish to provide for termination of
the Standstill Agreement in the event the MJG Affiliates and the SZI Affiliates
no longer own any Voting Securities, the early termination of the Restrictive
Covenant Agreement, dated as of January 19, 1999, among GMM, MJG, SZI and Matria
(the "Restrictive Covenant Agreement"), other than the confidentiality covenant
contained therein, and the non-competition covenants contained in the Management
Agreement, dated as of January 19, 1999, by and between Matria, Lucor Holdings,
L.L.C., a Georgia limited liability company, MJG and J. Michael Highland (the
"Management Agreement"), all in accordance with the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties,
intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following terms shall have the
respective meanings specified below:
"Affiliate" shall have the meaning ascribed to such term pursuant to
Rule 12b-2 under the Exchange Act, as in effect on the date hereof; provided,
that in no event shall MJG and SZI be deemed to be Affiliates of each other.
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"Board" means the Board of Directors of Matria.
"Common Stock" means (a) the Common Stock of Matria, par value $.01 per
share, as described in the Certificate of Incorporation of Matria or any shares
of capital stock issued in exchange, redemption or conversion thereof, and (b)
any other class of capital stock of Matria whether currently outstanding or as
may be hereafter issued or authorized for issuance having the right to share in
distributions either of earnings or assets without limit as to amount or
percentage.
"Convertible Preferred Stock" means the Series A Convertible Preferred
Stock of Matria, par value $.01 per share, issued pursuant to the Purchase
Agreement and described in the Certificate of Incorporation of Matria.
"Demand" shall have the meaning ascribed to such term in the
Registration Rights Agreement.
"Earn-Out Notes" means, collectively, those Non-Negotiable Subordinated
Promissory Notes (i) in the principal amount of $13,553,148 issued by Matria to
GMM on June 9, 2000 and (ii) in the principal amount of $410,011 issued by
Matria to GMM on August 22, 2000, in each case pursuant to the Purchase
Agreement.
"Equity Securities" means (i) any class or series of common stock,
preferred stock or other capital stock, whether voting or non-voting, (ii) any
other equity securities whether now or hereafter authorized for issuance, (iii)
any debt, hybrid or other securities which are convertible into, exercisable for
or exchangeable for any other Equity Securities, whether now or hereafter
authorized for issuance, (iv) any equity equivalents (including, without
limitation, stock appreciation rights, phantom stock or similar rights), profits
interests or other similar rights, (v) any written or verbal rights, options,
warrants, subscriptions, calls, preemptive rights, rescission rights or other
rights to subscribe for, purchase or otherwise acquire any of the foregoing,
(vi) any written or verbal obligation to issue, deliver or sell, any of the
foregoing, and (vii) any bonds, debentures, notes or other indebtedness having
the right to vote (or convertible into, or exchangeable for other Equity
Securities having the right to vote) on any matters on which the stockholders of
the issuer may vote.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Full Disclosure Public Announcement" means a Public Announcement
disclosing a transaction in reasonable detail, including all material financial
and business terms.
"Investor" means GMM and any of the MJG Affiliates and the SZI
Affiliates individually, and "Investors" means GMM and all of the MJG Affiliates
and SZI Affiliates collectively.
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"Market Price" means, per share of Common Stock, as of a given date, if
such Common Stock is listed on a national securities exchange or traded on The
Nasdaq National Market System ("NMS"), the average during the five (5)
consecutive trading days ending on said date of the last price at which the
Common Stock shall have been sold on the national securities exchange (or if
traded on more than one such exchange, the principal exchange on which such
shares are traded) or the NMS on each such day, or (b) if the Common Stock shall
not be listed on a national securities exchange or traded on the NMS but shall
be traded in the over-the-counter market and quotations therefor are reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), the average during the five (5) consecutive trading days ending on
such date of the last price (if such last price is then reported on a real-time
basis) on each such day, or, if the last price is not then so reported, the mean
between the bid and asked prices last reported on each such day, by NASDAQ, or
(c) if at any time quotations for the Common Stock shall not be reported by
NASDAQ for the over-the-counter market and the Common Stock shall not be listed
on any national securities exchange or traded on the NMS, the fair market value
per share of Common Stock as determined by an independent investment banking
firm jointly selected by Matria and GMM on the basis of available prices for
such Common Stock or in such other manner as it deems reasonable.
"Matria Shares" shall have the meaning ascribed to such term in the
Registration Rights Agreement.
"MJG Affiliates" means MJG and any Affiliate of MJG (in each case
exclusive of any SZI Affiliate).
"Notice Date" shall have the meaning set forth in Section 3.4.
"Option Closing Date" shall have the meaning set forth in Section 3.4.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental body or other entity of any kind.
"Public Announcement" means the issuance of a press release for wide
dissemination, or the filing of a Form 8-K or other SEC Report.
"Preferred Stock" means the Convertible Preferred Stock and the
Redeemable Preferred Stock.
"Redeemable Preferred Stock" means the Series B Redeemable Preferred
Stock of Matria, par value $.01 per share, issued pursuant to the Purchase
Agreement and described in the Certificate of Incorporation of Matria.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of January 19, 1999, entered into by and among Matria and GMM pursuant
to the Purchase Agreement.
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"Registration Statement" shall have the meaning ascribed to such term
in the Registration Rights Agreement.
"Revaluation Event" means any of the following, but only to the extent
pertaining to or arising in connection with a Revaluation Transaction that is
subsequently consummated: (i) the initiation, or continuation of discussions or
negotiations by or on behalf of Matria and/or any of its subsidiaries with any
one or more Third Parties; (ii) the provision or receipt of confidential,
non-public or proprietary information by or on behalf of Matria or any of its
subsidiaries from or to any Third Party; (iii) the engagement by or on behalf of
Matria or any of its subsidiaries of any investment banking firm or other
financial advisors; (iv) the entering into of any written term sheet, letter of
intent, agreement, arrangement or understanding (whether or not required to be
publicly disclosed under the Exchange Act or other applicable law or stock
exchange rules or regulations); or (v) the making of a Public Announcement by or
on behalf of Matria and/or any of its subsidiaries.
"Revaluation Transaction" means, whether direct or indirect: (i) the
sale by Matria and/or any of its subsidiaries to any Third Party, whether by
stock sale, sale of assets or otherwise, of more than 25% of the total assets or
revenues of Matria and its subsidiaries, taken as a whole; (ii) the merger or
consolidation of Matria or any of its significant subsidiaries representing more
than 25% of the total assets or revenues of Matria and its subsidiaries, taken
as a whole, with or into any Third Party; (iii) the merger of any Third Party
into Matria or any of its subsidiaries, or the purchase by Matria and/or any of
its subsidiaries of any assets, business or Equity Securities of a Third Party,
or any similar transaction, but in any case only where the transaction
represents more than 25% of the total assets or revenues of Matria and its
subsidiaries, taken as a whole; or (iv) the sale or issuance by Matria of Equity
Securities of Matria, other than in a public offering or pursuant to the
conversion of currently outstanding debentures or pursuant to any stock option,
stock purchase or similar plan maintained by Matria for the benefit of its
employees or directors, in a single transaction or any series of related
transactions, for an aggregate purchase price representing 10% or more of
Matria's total market capitalization as of the closing of such sale.
Notwithstanding the foregoing, the term "Revaluation Transaction" shall not
include any transaction referred to in the preceding sentence if (a) a Full
Disclosure Public Announcement of such transaction has been made by Matria at
least ten (10) trading days prior to the Notice Date, or (b) such transaction is
not consummated on or prior to (1) the date which is three hundred sixty-five
(365) days after the Option Closing Date, or (2) in the event a Revaluation
Trigger pertaining to such transaction occurs within ninety (90) days following
the Option Closing Date, the date which is three hundred sixty-five (365) days
following the date on which the Revaluation Trigger occurred.
"Revaluation Trigger" means any of the following, but only to the
extent pertaining to or arising in connection with a Revaluation Transaction
that is subsequently consummated: (i) the entering into of any written term
sheet, letter of intent, agreement, arrangement or understanding (whether or not
required to be publicly disclosed under the Exchange Act or other applicable law
or stock exchange rules or regulations); or (ii) the making of a Public
Announcement by or on behalf of Matria and/or any of its subsidiaries.
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"SEC Documents" shall have the meaning set forth in Section 4.2(c).
"Securities Act" means the Securities Act of 1933, as amended.
"subsidiaries" means any direct or indirect subsidiaries.
"SZI Affiliate" means SZI and any of its Affiliates (in each case
exclusive of any MJG Affiliates); provided, however, that, notwithstanding the
foregoing, no Person shall be deemed to be an SZI Affiliate unless (i) Xxx Xxxx
or any other executive officer of SZI has actual knowledge of the relevant
action to be attributed to the SZI Affiliate hereunder or (ii) in the case of
publicly held entities that might otherwise fall within this definition, unless
Xxx Xxxx or any other executive officer of SZI took any action, directly or
indirectly, to cause, suggest, encourage or assist such publicly held entity to
take the relevant action to be attributed to the SZI Affiliate hereunder.
"Third Party" means any one or more Persons, who or which is not an
Affiliate of Matria or any of its subsidiaries, and who or which is a party to a
Revaluation Transaction (directly or indirectly).
"Voting Securities" means, collectively, Common Stock, any preferred
stock of Matria that is entitled to vote generally for the election of
directors, any other class or series of Matria securities that is entitled to
vote generally for the election of directors and any other securities, warrants,
options or rights of any nature that are directly or indirectly convertible
into, exchangeable for, or exercisable for the purchase of, or otherwise give
the holder thereof any rights in respect of, Common Stock, Matria preferred
stock that is entitled to vote generally for the election of directors, or any
other class or series of Matria securities that is entitled to vote generally
for the election of directors.
"Warrants" means the warrants to purchase 1,000,000 shares of Common
Stock of Matria at $12.00 per share (subject to adjustment) issued on January
19, 1999 pursuant to the Purchase Agreement (each right to purchase one (1)
share of Common Stock thereunder being referred to individually as a "Warrant").
In addition to the terms defined in Article I, other terms will have
the definitions provided to them elsewhere in this Agreement.
ARTICLE II
INITIAL PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale of Shares. Subject to the terms and
conditions set forth in this Agreement, GMM shall sell, assign, transfer and
deliver to Matria, and Matria shall purchase from GMM (the "Initial Purchase"),
the following: (i) 7,500 shares of the Convertible Preferred Stock, and (ii)
15,000 shares of the Redeemable Preferred Stock. The aggregate amount to be
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paid by Matria to GMM in consideration of all shares to be purchased under this
Section 2.1 shall equal $18,931,351 (the "Initial Purchase Price").
2.2 Initial Closing Date. The Initial Purchase shall be
consummated at a closing (the "Initial Closing"), which shall take place at the
office of Xxxxxxxx Xxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000, Xxxxxxx,
Xxxxxxx 00000 at 10:00 a.m. Eastern Standard Time, or such other place as the
parties shall mutually agree, on such date and at such time as Matria shall
designate by no fewer than three days written notice to GMM (the "Initial
Closing Date"), but in no event later than June 30, 2001.
2.3 Deliveries by GMM at Initial Closing. At the Initial Closing,
GMM shall deliver, or cause to be delivered, to Matria the stock certificates
representing all of the shares to be purchased under this Article II, each of
which certificates shall be either endorsed in blank or attached to a duly
executed stock power, and such other instruments as shall be reasonably
necessary to evidence or consummate the transactions contemplated hereby.
2.4 Deliveries by Matria at Initial Closing. At the Initial
Closing, Matria shall deliver to GMM the Initial Purchase Price, plus all
accrued (calculated on a daily basis through the Initial Closing) and unpaid
dividends on the shares to be purchased under this Article II, by check or, at
the option of Matria, by wire transfer of immediately available funds to such
bank and account as is designated by GMM, and such other instruments as shall be
reasonably necessary to evidence or consummate the transactions contemplated
hereby.
2.5 Conditions to Obligations of GMM. The obligations of GMM to
effect the transactions contemplated by this Article II at the Initial Closing
shall be subject to the fulfillment of the following conditions:
(a) The representations and warranties of Matria
contained herein shall be true and correct in all material respects as of the
date of this Agreement, and, other than the representations and warranties set
forth in Section 4.2(d), shall be true and correct in all material respects as
of the Initial Closing Date with the same effect as though such representations
and warranties had been made on and as of such date; and
(b) Matria shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by it at or prior to the Initial Closing.
2.6 Conditions to Obligations of Matria. The obligations of Matria
to effect the transactions contemplated by this Agreement at the Initial Closing
shall be subject to the fulfillment of the following conditions:
(a) The representations and warranties of Investors
contained herein shall be true and correct in all material respects as of the
date of this Agreement, and, other than the representations and warranties set
forth in Sections 4.1(a)(iv), 4.1(b)(iii) and 4.1(c)(iii), shall be
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true and correct in all material respects as of the Initial Closing Date with
the same effect as though such representations and warranties had been made on
and as of such date;
(b) Investors shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by Investors at or prior to the Initial Closing;
(c) Matria shall have obtained financing for the Initial
Purchase on terms reasonably acceptable to Matria, in the amount of the Initial
Purchase Price, which funds shall be available to Matria on the Closing Date,
provided Matria shall have used good faith efforts to obtain such financing from
its existing lenders under the "Matria Credit Agreement" (as defined below);
provided, however, that the condition specified in this paragraph (c) shall
expire in its entirety as of June 15, 2001; and
(d) Matria shall have obtained any written consent
required under that Credit Agreement, dated January 29, 1999 and amended
November 19, 1999 and January 10, 2000, among Matria, certain other borrowers
from time to time party thereto, the banks and other financial institutions
party thereto, and First Union National Bank, as Administrative Agent (the
"Matria Credit Agreement"), to the Initial Purchase, the incurrence of any
indebtedness necessary for Matria to meet its obligations under this Article II,
and the mandatory repurchase of the Preferred Stock contemplated by Section 2.7;
provided Matria shall have used good faith efforts to obtain such consent;
provided, however, that the condition specified in this paragraph (c) shall
expire in its entirety as of June 15, 2001.
2.7 Mandatory Repurchase. Following the Initial Closing, and
subject to the rights of any class or series of Capital Stock of Matria ranking
senior to or on parity with the Preferred Stock in respect of a right to receive
dividends or to participate in any distribution upon liquidation, dissolution or
winding up of the affairs of Matria, if any, Matria shall purchase from GMM, out
of funds legally available therefor, and GMM shall sell, assign, transfer and
deliver to Matria, shares of the Preferred Stock as follows:
SCHEDULED NUMBER OF SHARES
PURCHASE DATE TO BE PURCHASED
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Sixth anniversary of date of issuance One-third of shares of each series then outstanding
Seventh anniversary of date of issuance One-half of shares of each series then outstanding
Eighth anniversary of date of issuance All remaining outstanding shares
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All of such Preferred Stock shares shall be purchased at a price of $1,000 per
share plus an amount equal to the accrued and unpaid dividends thereon to the
scheduled purchase date. The shares of Preferred Stock to be purchased shall be
purchased pro rata. If the funds of Matria legally available for purchase of
shares of the Preferred Stock are insufficient to purchase the total number of
such shares required to be purchased on a scheduled purchase date, those funds
which are legally available will be used to purchase the maximum possible number
of shares of Preferred Stock ratably among the two series of Preferred Stock and
the holders thereof. At any time thereafter when additional funds of Matria are
legally available for such purpose, such funds will immediately be used to
purchase the balance of the shares of Preferred Stock scheduled to have been
purchased on the previous scheduled purchase date. The purchase of shares of
Convertible Preferred Stock by Matria under this Section 2.7 shall be governed
by and is subject to all of the provisions set forth in paragraphs (d), (e),
(f), (g) and (h) of Section 6 of the Certificate of Designations, Preferences
and Relative, Participating, Optional and Other Special Rights ("COD") of the
Convertible Preferred Stock, as if the purchase were a redemption pursuant to
paragraph (c) of said Section 6. The purchase of shares of Redeemable Preferred
Stock by Matria under this Section 2.7 shall be governed by and is subject to
all of the provisions set forth in paragraphs (d), (e), (f), (g) and (h) of
Section 5 of the COD of the Redeemable Preferred Stock, as if the purchase were
a redemption pursuant to paragraph (c) of said Section 5. GMM may assign its
rights and obligations under this Section 2.7, in whole or in part, as
appropriate, to any Person to whom it sells any shares of the Preferred Stock.
2.8 Termination.
(a) This Agreement shall terminate automatically and
shall be of no further force or effect in the event the Initial Closing has not
occurred on or before June 30, 2001, unless the failure of the Initial Closing
to occur on or before such date is attributable to intentional delay by Matria
or any Investor, in which event Matria shall have the right to terminate this
Agreement, with respect to such a delay by any Investor, or GMM shall have the
right to terminate this Agreement, with respect to such a delay by Matria.
(b) This Agreement shall terminate automatically and
shall be of no further force or effect in the event either of the conditions set
forth in Section 2.6(c) or 2.6(d) has not been met as of June 15, 2001. Matria
shall notify Investors as to whether or not such conditions have been satisfied
no later than June 18, 2001, and shall provide written documentation as to the
satisfaction or failure of such conditions to Investors no later than June 22,
2001.
2.9 Registration Rights. Unless the Investors consent otherwise in
writing, in the event this Agreement is terminated pursuant to Section 2.8
hereof (unless such termination results from a failure of the Initial Closing to
occur on or before June 30, 2001 attributable to an intentional delay by any
Investor), on the next business day following termination, Matria shall file a
Registration Statement, meeting the requirements of Section 2.1(d) of the
Registration Rights Agreement, of all Matria Shares owned by the "Investors" (as
such term is defined in the Registration Rights Agreement), or subject to
acquisition by GMM upon conversion of the Convertible Preferred Stock or
exercise of the Warrants, on such date. Any registration of securities
contemplated by this Section 2.9 shall be deemed to have been effected pursuant
to a
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Demand for all purposes under the Registration Rights Agreement and shall be
subject to all the terms and conditions of the Registration Rights Agreement
applicable thereto (other than the demand and notice provisions of Section
2.1(a) and Section 2.1(b)).
ARTICLE III
CALL OPTION
3.1 Call Option. GMM hereby grants to Matria, effective upon the
Initial Closing and terminating on the date that is one (1) year following the
date of this Agreement (the "Option Term"), an option to purchase all or a
portion of the Preferred Stock remaining outstanding, to prepay all or a portion
of the Earn-Out Notes and to cancel all or a portion of the Warrants upon the
terms and conditions set forth in this Article III (the "Call Option").
3.2 Exercise Price. The purchase price payable by Matria upon
exercise of the Call Option shall be as follows:
(a) The price payable with respect to each share of the
Convertible Preferred Stock purchased (the "CP Repurchase Price") shall equal
$800, for an aggregate purchase price of $2,000,000 (the "CP Aggregate
Repurchase Price").
(b) The price payable with respect to each share of the
Redeemable Preferred Stock purchased (the "RP Repurchase Price") shall equal
$1,000, for an aggregate repurchase price of $20,000,000 (the "RP Aggregate
Repurchase Price").
(c) The Earn-Out Notes may be prepaid as set forth
therein.
(d) The price payable by Matria with respect to each
individual Warrant canceled (the "Warrant Cancellation Price") shall equal the
difference between (i) the Market Price, determined as of the Notice Date, of
the Common Stock subject to the Warrants, minus (ii) the "Purchase Price" (as
defined in the Warrants) in effect as of the Notice Date.
(e) If a Revaluation Event occurs at any time from the
date hereof until the Option Closing Date, or if a Revaluation Trigger occurs at
any time during the 90 days after the Option Closing Date, then, commensurate
with the closing of the Revaluation Transaction arising from or in connection
with such Revaluation Event or Revaluation Trigger (or, if the closing occurs
prior to or within ten (10) trading days following the first Full Disclosure
Public Announcement of the Revaluation Transaction, on the eleventh trading day
following the Full Disclosure Public Announcement), Matria shall pay to GMM: (i)
for each share of Common Stock issuable upon conversion of the Convertible
Preferred Stock purchased by Matria pursuant to the exercise of the Call Option
(assuming the Call Option had not been exercised, and the shares of Convertible
Preferred Stock actually purchased were instead converted into Common Stock in
accordance with the terms of the COD of the Convertible Preferred Stock as of
the Option Closing Date), an amount per share equal to the excess, if any, of
(A) the Market Price of the Common Stock, as of the end of the tenth trading day
immediately following the first Full Disclosure Public Announcement of the
Revaluation Transaction, over (B) the Market Price of
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the Common Stock, as of the end of the thirtieth calendar day immediately
preceding the first Full Disclosure Public Announcement of the Revaluation
Transaction; and (ii) for each Warrant cancelled by Matria under Section 3.3(d)
hereof, an amount per Warrant equal to the excess, if any, of (A) the Market
Price of the Common Stock, as of the end of the tenth trading day immediately
following the first Full Disclosure Public Announcement of the Revaluation
Transaction, over (B) the Market Price of the Common Stock, as of the end of the
thirtieth calendar day immediately preceding the first Full Disclosure Public
Announcement of the Revaluation Transaction.
During the 90 days after the Option Closing Date, GMM shall have the
right, from time to time, to request in writing advice from Matria as to whether
a Revaluation Trigger has occurred during such period. Within two (2) business
days after any such request, Matria shall advise GMM in reasonable detail in
writing of the occurrence of any Revaluation Trigger since the Option Closing.
In the event such disclosure by Matria includes material non-public information
("Restricted Information"), so long as such Restricted Information continues to
be material and non-public, GMM, MJG (whether directly or indirectly through any
MJG Affiliate), and SZI (whether directly or indirectly through any SZI
Affiliate) shall hold such Restricted Information in strict confidence, and
shall not disclose such Restricted Information to any Person other than the MJG
Affiliates, the SZI Affiliates and their directors, officers, employees, agents,
advisors and representatives (who shall be bound by the same restrictions with
respect to the Restricted Information as are set forth in this Section 3.2(e));
and (ii) GMM, MJG (whether directly or indirectly through any MJG Affiliate),
and SZI (whether directly or indirectly through any SZI Affiliate) shall not use
such Restricted Information in violation of United States federal securities
laws, including, without limitation, Rule 10b-5 under the Exchange Act. GMM
shall have the right, from time to time, to request in writing advice from
Matria as to whether there has occurred any change in facts or circumstances
concerning a Revaluation Trigger, with respect to which Restricted Information
was previously provided by Matria to GMM in accordance with this Section 3.2(e),
such that the information so provided is no longer material. As soon as
practicable, but no later than two (2) business days, after any such request,
Matria shall advise GMM in reasonable detail in writing of any such occurrence.
3.3 Terms of Exercise. Matria shall be entitled to exercise the
Call Option, in whole or in part, on a single occasion during the Option Term
and only in accordance with the following provisions:
(a) The aggregate purchase price for the Preferred Stock
and the prepayments of the principal of the Earn-Out Notes may not be less than
one-third, and may not be more than two-thirds unless it is 100%, of the total
of the CP Aggregate Repurchase Price, the RP Aggregate Repurchase Price and the
outstanding principal balance of the Earn-Out Notes on such date.
(b) Such payment shall be allocated prorata as nearly as
possible among the purchase of the Convertible Preferred Stock, the purchase of
the Redeemable Preferred Stock and the prepayment of the Earn-Out Notes.
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(c) The purchase of shares of Convertible Preferred Stock
by Matria under this Article III shall be governed by and is subject to all of
the provisions set forth in paragraphs (e), (f) and (g) of Section 6 of the COD
of the Convertible Preferred Stock, as if the purchase were a redemption
pursuant to paragraph (a) of said Section 6. The purchase of shares of
Redeemable Preferred Stock by Matria under this Article III shall be governed by
and is subject to all of the provisions set forth in paragraphs (e), (f) and (g)
of Section 5 of the COD of the Redeemable Preferred Stock, as if the purchase
were a redemption pursuant to paragraph (a) of said Section 5.
(d) If Matria purchases Preferred Stock under the Call
Option and/or makes prepayments on the Earn-Out Notes under the terms thereof,
then, upon payment of the CP Repurchase Price and the RP Repurchase Price for
all shares of Preferred Stock purchased and/or the making, from time to time, of
any such prepayments under the Earn-Out Notes, Matria shall be entitled, upon
payment of the Warrant Cancellation Price, to cancel a number of Warrants it
shall determine in its sole discretion, but not to exceed the number resulting
from multiplying the number of Warrants then outstanding by a fraction, the
numerator of which is the sum of the aggregate liquidation preference of the
shares of Preferred Stock purchased plus the principal balance of the Earn-Out
Notes so prepaid, and the denominator of which is the sum of the aggregate
liquidation preference of the shares of Preferred Stock outstanding immediately
prior to such repurchase plus the principal balance of the Earn-Out Notes
outstanding immediately prior to such prepayment.
3.4 Notice of Exercise/Closing. Matria may exercise the Call
Option as permitted by this Article III by delivering to GMM, on or before the
expiration of the Option Term, written notice of exercise (the "Notice of
Exercise") substantially in the form attached hereto as Exhibit A. The time and
date of the closing of the exercise of the Call Option (the "Option Closing
Date") shall be such date as Matria and GMM shall agree, but if Matria and GMM
do not agree, shall be a date designated by Matria in the Notice of Exercise not
earlier than one (1) day nor more than five (5) days after the date of the
Notice of Exercise by Matria to GMM (the "Notice Date"). The closing of the
exercise of the Call Option (the "Option Closing") shall occur by mail or in
such other manner or at such other time and place as Matria and GMM shall agree.
3.5 Deliveries by GMM at Option Closing. At the Option Closing,
GMM shall deliver to Matria such instruments as Matria reasonably deems
necessary to acknowledge and evidence the purchase of the shares of Preferred
Stock, the cancellation of the Warrants and/or the prepayment of the Earn-Out
Notes, including stock certificates representing any shares of Preferred Stock
purchased. Matria shall execute and deliver such other instruments as shall be
reasonably necessary to evidence or consummate the transactions contemplated
hereby.
3.6 Deliveries by Matria at Option Closing. At the Option Closing,
Matria shall deliver to GMM the CP Repurchase Price for all shares of
Convertible Preferred Stock purchased, the RP Repurchase Price for all shares of
Redeemable Preferred Stock purchased, the Warrant Cancellation Price for all
Warrants canceled, and/or the amount of any prepayment of the Earn-Out Notes
made on such date, plus all accrued and unpaid dividends on the shares of
Preferred Stock purchased and/or all accrued and unpaid interest on the portion
of the Earn-Out
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Note prepaid, by check or, at the option of Matria, by wire transfer of
immediately available funds to such bank and account as is designated by GMM.
Matria shall execute and deliver such other instruments as shall be reasonably
necessary to evidence or consummate the transactions contemplated hereby.
3.7 Special Representation, Warranty and Covenants. Matria hereby
represents and warrants to GMM as of the Option Closing Date that, except as
disclosed in any SEC Document filed with the Commission and publicly available
or any publicly disseminated press release issued no less than five (5) business
days before the Option Closing Date, or as disclosed by Matria to GMM in
reasonable detail in writing after the date of this Agreement, since the date of
this Agreement there has not been a Revaluation Trigger. In the event Matria
discloses any Restricted Information to GMM pursuant to this Section 3.7, then,
so long as such Restricted Information continues to be material and non-public:
(i) GMM, MJG (whether directly or indirectly through any MJG Affiliate), and SZI
(whether directly or indirectly through any SZI Affiliate) shall hold such
Restricted Information in strict confidence, and shall not disclose such
Restricted Information to any Person other than the MJG Affiliates, the SZI
Affiliates and their directors, officers, employees, agents, advisors and
representatives (who shall be bound by the same restrictions with respect to the
Restricted Information as are set forth in this Section 3.7); and (ii) GMM, MJG
(whether directly or indirectly through any MJG Affiliate), and SZI (whether
directly or indirectly through any SZI Affiliate) shall not use such Restricted
Information in violation of United States federal securities laws, including,
without limitation, Rule 10b-5 under the Exchange Act. GMM shall have the right,
from time to time, to request in writing advice from Matria as to whether there
has occurred any change in facts or circumstances concerning a Revaluation
Trigger, with respect to which Restricted Information was previously provided by
Matria to GMM in accordance with this Section 3.7, such that the information so
provided is no longer material. As soon as practicable, but no later than two
(2) business days, after any such request, Matria shall advise GMM in reasonable
detail in writing of any such occurrence.
3.8 Conditions to Obligations of GMM. The obligations of GMM to
effect the transactions contemplated by this Agreement at the Option Closing
shall be subject to the fulfillment of the following conditions:
(a) The representations and warranties of Matria
contained herein shall be true and correct in all material respects as of the
date of this Agreement, and shall be true and correct in all material respects
as of the Option Closing Date for all representations and warranties other than
those contained in Sections 4.2(c) and (d), and as of the Initial Closing Date
for those contained in Section 4.2(c), in each case with the same effect as
though such representations and warranties had been made on and as of such date;
and
(b) Matria shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by it at or prior to the Option Closing.
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3.9 Conditions to Obligations of Matria. The obligations of Matria
to effect the transactions contemplated by this Agreement at any Option Closing
shall be subject to the fulfillment of the following conditions:
(a) The representations and warranties of Investors
contained herein shall be true and correct in all material respects as of the
date of this Agreement, and, other than the representations and warranties set
forth in Sections 4.1(a)(iv), 4.1(b)(iii) and 4.1(c)(iii), shall be true and
correct in all material respects as of the Option Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date; and
(b) Investors shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by Investors at or prior to the Option Closing.
3.10 Reservation of Rights. The rights and obligations under this
Article III are in addition to, and not in lieu of, the rights and obligations
of the parties under the terms of the Preferred Stock and the Earn-Out Notes.
The parties hereto acknowledge that Matria is entitled, at any time and from
time to time, during the Option Term or otherwise, irrespective of this
Agreement and without complying with the terms of this Article III, without
paying any premium or penalty therefor, to redeem all or any portion of the
Convertible Preferred Stock and/or the Redeemable Preferred Stock, in any
proportion it desires, in each case at the price specified by their terms, and
to prepay all or any portion of the outstanding principal, accrued interest,
including, without limitation, Specified Interest (as defined in the Earn-Out
Notes), and other amounts, if any, due under the Earn-Out Notes in accordance
with and subject to the terms and conditions thereof; provided, however, that,
Matria shall not be entitled to cancel Warrants under Section 3.3(d) above in
respect of any optional redemption of Preferred Stock where Matria has failed to
comply with the provisions of Section 3.3(a), (b) and (c).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Investors:
(a) GMM represents and warrants to Matria as follows:
(i) GMM has full legal right, power and
authority to enter into and perform this Agreement. This Agreement is a
valid and binding obligation of GMM enforceable against GMM in
accordance with its terms, except that such enforcement may be subject
to (A) bankruptcy, insolvency, moratorium and other similar laws
affecting creditors' rights generally and (B) general principles of
equity (regardless of whether asserted at law or in equity).
(ii) Neither the execution and delivery of this
Agreement by GMM nor the consummation by GMM of the transactions
contemplated hereby conflicts with or constitutes a violation of or
default under any statute, law, regulation, order or decree
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applicable to GMM, or any contract, commitment, agreement, arrangement
or restriction of any kind to which GMM is a party or by which GMM is
bound.
(iii) GMM holds good, valid and marketable title
to all of the shares of Preferred Stock, the Warrants and the Earn-Out
Notes, free and clear of all liens, charges, security interests, claims
or other encumbrances (collectively, "Liens"), other than those
existing under the Standstill Agreement.
(iv) GMM, through its members, has received all
publicly available information regarding Matria.
(b) MJG represents and warrants to Matria as follows:
(i) MJG has full legal right, power and
authority to enter into and perform this Agreement. This Agreement is a
valid and binding obligation of MJG enforceable against MJG in
accordance with its terms, except that such enforcement may be subject
to (A) bankruptcy, insolvency, moratorium and other similar laws
affecting creditors' rights generally and (B) general principles of
equity (regardless of whether asserted at law or in equity).
(ii) Neither the execution and delivery of this
Agreement by MJG nor the consummation by MJG of the transactions
contemplated hereby conflicts with or constitutes a violation of or
default under any statute, law, regulation, order or decree applicable
to MJG, or any contract, commitment, agreement, arrangement or
restriction of any kind to which MJG is a party or by which MJG is
bound.
(iii) MJG has received all publicly available
information regarding Matria.
(c) SZI represents and warrants to Matria as follows:
(i) SZI has full legal right, power and
authority to enter into and perform this Agreement. The execution and
delivery of this Agreement by SZI and the consummation by SZI of the
transactions contemplated hereby have been duly authorized by all
necessary limited liability company or other action on behalf of SZI.
This Agreement is a valid and binding obligation of SZI enforceable
against SZI in accordance with its terms, except that such enforcement
may be subject to (A) bankruptcy, insolvency, moratorium and other
similar laws affecting creditors' rights generally and (B) general
principles of equity (regardless of whether asserted at law or in
equity).
(ii) Neither the execution and delivery of this
Agreement by SZI nor the consummation by SZI of the transactions
contemplated hereby conflicts with or constitutes a violation of or
default under the certificate of formation or other organizational or
governing documents of SZI, any statute, law, regulation, order or
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decree applicable to SZI, or any contract, commitment, agreement,
arrangement or restriction of any kind to which SZI is a party or by
which SZI is bound.
(iii) SZI, through its Affiliates, has received
all publicly available information regarding Matria.
4.2 Representations and Warranties of Matria. Matria hereby
represents and warrants to each Investor as follows:
(a) Matria has full legal right, power and authority to
enter into and perform this Agreement. The execution and delivery of this
Agreement by Matria and the consummation by Matria of the transactions
contemplated hereby have been duly authorized by all necessary corporate or
other action on behalf of Matria. This Agreement is a valid and binding
obligation of Matria enforceable against Matria in accordance with its terms,
except that such enforcement may be subject to (i) bankruptcy, insolvency,
moratorium and other similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether asserted at law or in
equity).
(b) Neither the execution and delivery of this Agreement
by Matria nor the consummation by Matria of the transactions contemplated hereby
conflicts with or constitutes a violation of or default under the charter or
by-laws of Matria, any statute, law, regulation, order or decree applicable to
Matria, or any contract, commitment, agreement, arrangement or restriction of
any kind to which Matria is a party or by which Matria is bound.
(c) Matria has filed with the Securities and Exchange
Commission (the "Commission") all reports, schedules, forms, proxy, registration
and other statements and other documents (collectively, the "SEC Documents")
required to be filed since January 1, 2001. As of the date of this Agreement,
the last SEC Document filed by Matria was Matria's Proxy Statement for the 2001
Annual Meeting of Stockholders. As of their respective filing dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act, or the Exchange Act as the case may be, and the rules and
regulations of the Commission promulgated thereunder applicable to the SEC
Documents. As of their respective filing dates, none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent such statements have been modified or
superseded by a later SEC Document filed and publicly available. The
consolidated financial statements of Matria and its subsidiaries included in the
SEC Documents (as amended or supplemented by any later SEC Document filed and
publicly available prior to the date of this Agreement or the Initial Closing
Date, as the case may be), comply as to form in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto, have been prepared in accordance with generally
accepted accounting principals ("GAAP") (except, in the case of unaudited
statements, as permitted by Form 10-Q of the Commission) applied on a consistent
basis during the periods involved (except as may be indicated in notes thereto)
and fairly present the consolidated financial position, assets and liabilities
of Matria and its subsidiaries as of the dates thereof and
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the consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(d) Except as disclosed in the SEC Documents, and except
for this Agreement and the transactions contemplated herein, since December 31,
2000, Matria and its subsidiaries have conducted their businesses, in all
material respects, only in the ordinary course and in a manner consistent with
past practice, and there has not occurred any event, condition, circumstance,
change or development (other than in the ordinary course of business), that
could reasonably be expected to result in a Revaluation Event. Without limiting
the generality of the foregoing, except as disclosed in any SEC Documents filed
with the Commission and publicly available prior to the date of this Agreement,
or as contemplated herein, since December 31, 2000, there has not been (i) any
change by Matria in its accounting methods, principles or practices, (ii) any
revaluation by Matria of any of its or any of its subsidiary's material assets
other than in the ordinary course of business consistent with past practice,
(iii) any entry outside the ordinary course of business by Matria or any of its
subsidiaries into any commitments or transactions material, individually or in
the aggregate, to Matria and its subsidiaries taken as a whole, (iv) any
declaration, setting aside or payment of any dividends or distributions in
respect of the shares of Matria's capital stock (other than Preferred Stock) or,
any redemption, purchase or other acquisition of any of its securities, or (v)
any Revaluation Event.
ARTICLE V
OTHER AGREEMENTS
5.1 Restrictions on Certain Action by Investors. Until the
expiration of the Option Term, GMM, MJG (whether directly or indirectly through
any MJG Affiliate) and SZI (whether directly or indirectly through any SZI
Affiliate), shall not:
(a) acquire or announce an intention to acquire Common
Stock in open market transactions, exercise any Warrants or convert any shares
of Convertible Preferred Stock;
(b) except in accordance with this Agreement, sell or
transfer any Warrants or any shares of Preferred Stock or allow the imposition
or the creation of any Lien on the Warrants or the Preferred Stock; or
(c) exercise any rights under the Registration Rights
Agreement.
5.2 Restrictions on Certain Activities by Matria. Until the
earlier to occur of the exercise in full of the Call Option or the expiration of
the Option Term, Matria shall not acquire, announce an intention to acquire,
offer or propose to acquire or agree to acquire any Voting Securities except (i)
in accordance with this Agreement, (ii) pursuant to or in connection with any of
Matria's employee benefit plans or directors' option plans, or (iii) upon
conversion of currently outstanding debentures.
5.3 Standstill Agreement. The restrictions on the activities of
Investors set forth in this Article V are in addition to and not in lieu of any
restrictions set forth in the Standstill
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Agreement, which shall remain in full force and effect following the execution
of this Agreement. Nevertheless, the parties hereto agree as follows:
(a) effective upon the Initial Closing, the Standstill
Agreement shall be amended to delete Sections 3.2(c) and 3.2(f) thereof in their
entirety; provided, however, that such provisions will again become effective
for the remainder of the term set forth in the Standstill Agreement in the event
that, upon expiration of the Option Term, Matria shall not have purchased or
redeemed 100% of the then outstanding Redeemable Preferred Stock pursuant to the
Call Option or in accordance with the COD of the Redeemable Preferred Stock, as
the case may be; and
(b) the Standstill Agreement shall terminate
automatically upon the MJG Affiliates and the SZI Affiliates no longer owning
any Voting Securities.
5.4 Rights Agreement. Effective upon the Initial Closing, Matria
shall be entitled to seek the termination, consistent with Section 5.3(a)
hereof, of the provisions implemented by that Amendment to Rights Agreement
dated as of January 30, 2000 between Matria and SunTrust Bank, Atlanta, and to
enter into an agreement with SunTrust Bank, Atlanta, or any successor Rights
Agent, to that effect.
5.5 Termination of Non-Competition Covenants. Notwithstanding
anything to the contrary in said agreements, effective upon the Initial Closing,
the Restrictive Covenant Agreement and the Management Agreement shall be amended
to provide that Sections 3 through 7 inclusive of the Restrictive Covenant
Agreement, and, unless sooner terminated by the terms of said agreement,
Sections 10.1 through 10.5 of the Management Agreement, shall terminate
automatically on July 19, 2003.
5.6 SZI Designee to Board of Directors. Without limiting the
generality of Section 5.3(b), in the event Matria exercises the Call Option in
full, the right of SZI under Sections 4.1 and 4.2 of the Standstill Agreement to
designate an individual to serve on the Board of Directors of Matria shall
terminate automatically.
5.7 Survival of Representations and Warranties. The
representations and warranties contained in Sections 4.1 and 4.2(a) and (b)
shall survive the Initial Closing and the Option Closing indefinitely. The
representations and warranties contained in Sections 4.2(c) and (d) shall
survive the Initial Closing and the Option Closing, if any, until six months
after the earlier of the Option Closing Date or the expiration of the Option
Term.
5.8 Miscellaneous.
(a) Liability of Investors. Any liability or obligation
of any kind whatsoever under this Agreement shall be several and not joint as
between any MJG Affiliate(s), on the one hand, and any SZI Affiliate(s), on the
other hand. Notwithstanding anything to the contrary in this Agreement, in no
event shall any MJG Affiliate be responsible in any manner for any liability or
obligation of, or the breach of any provision of this Agreement by, any Person
or
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group who is not an MJG Affiliate. Notwithstanding anything to the contrary in
this Agreement, in no event shall any SZI Affiliate be responsible in any manner
for any liability or obligation of, or the breach of any provision of this
Agreement by, any Person or group who is not an SZI Affiliate.
(b) Interpretation. For all purposes of this Agreement,
the term Matria Common Stock shall include any securities of any issuer entitled
to vote generally for the election of directors of such issuer which securities
the holders of Matria Common Stock shall have received or as a matter of right
be entitled to receive as a result of (i) any capital reorganization or
reclassification of the capital stock of Matria, (ii) any consolidation, merger
or share exchange of Matria with or into another corporation or (iii) any sale
of all or substantially all the assets of Matria.
(c) Enforcement.
(i) The Investors, on the one hand, and Matria,
on the other, acknowledge and agree that irreparable damage would occur
if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.
Accordingly, the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically its provisions in any court of the United States or any
state having jurisdiction, this being in addition to any other remedy
to which they may be entitled at law or in equity.
(ii) No failure or delay on the part of either
party in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
(iii) MJG and SZI each shall take all action as
may be necessary to cause its respective controlled Affiliates to
comply with the terms of this Agreement and any violation of this
Agreement by any MJG Affiliate or SZI Affiliate shall be deemed a
violation by MJG or SZI, as the case may be.
(d) Entire Agreement. This Agreement constitutes the
entire understanding of the parties with respect to the transactions
contemplated hereby. This Agreement may be amended only by an agreement in
writing executed by all the parties.
(e) Severability. If any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable, the remaining
provisions shall remain in full force and effect. It is declared to be the
intention of the parties that they would have executed the remaining provisions
without including any that may be declared unenforceable.
(f) Heading. Descriptive headings are for convenience
only and will not control or affect the meaning or construction of any provision
of this Agreement.
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(g) Counterparts. This Agreement may be executed in two
or more counterparts, and each such executed counterpart will be an original
instrument.
(h) Notices. All notices, consents, requests,
instructions, approvals and other communications provided for in this Agreement
and all legal process in regard to this Agreement will be validly given, made or
served, if in writing and delivered personally, by telecopy (except for legal
process) or sent by registered mail postage paid.
If to Matria:
Matria Healthcare, Inc.
0000 Xxxxxxx Xxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxx LLP
Bank of America Plaza, Suite 5200
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, III, Esq.
Telecopy Number: (000) 000-0000
If to GMM or MJG:
Xxxxxx Medical Management, L.L.C.
c/o Lucor Holdings, LLC
00000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx Xxxxxx, Xxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
If to SZI:
SZ Investments, L.L.C.
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Vice-President
Telecopy Number: (000) 000-0000
or to such other address or telecopy number as any party may, from time to time,
designate in a written notice given in a like manner. Notice by telecopy shall
be deemed delivered on the day telephone confirmation of receipt is given.
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(i) Successors and Assigns. This Agreement shall bind the
successors and assigns of the parties, and inure to the benefit of any successor
or assign of any of the parties; provided, however, that, except as otherwise
expressly provided herein, no party may assign this Agreement without the other
party's prior written consent.
(j) Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the internal laws of the State of
Georgia, without giving effect to the conflict of laws principles thereof.
[Signatures begin on next page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
MATRIA HEALTHCARE, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Title: President and Chief Executive Officer
---------------------------------------
XXXXXX MEDICAL MANAGEMENT, L.L.C.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Title: CEO
---------------------------------------
/s/ Xxxx X. Xxxxxx
-------------------------------------------------
XXXX X. XXXXXX
SZ INVESTMENTS, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------------------
Title: Vice President
---------------------------------------
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EXHIBIT A
NOTICE OF EXERCISE
TO: Xxxxxx Medical Management, L.L.C.
FROM: Matria Healthcare, Inc.
DATE:
--------------------------
RE: Exercise of Rights Under the Securities Purchase Agreement
dated May ___, 2001
The undersigned, pursuant to the provisions set forth in the Securities Purchase
Agreement, dated as of May __, 2001 by and among Matria Healthcare, Inc., Xxxxxx
Medical Management, L.L.C., Xxxx X. Xxxxxx and SZ Investments, L.L.C., hereby
irrevocably elects to [PURCHASE AND/OR PREPAY] [NUMBER OF SHARES OF CONVERTIBLE
PREFERRED STOCK, REDEEMABLE PREFERRED STOCK TO BE PURCHASED AND/OR WARRANTS TO
BE CANCELED AND/OR AMOUNT OF THE EARN-OUT NOTE TO BE PREPAID] and will make
payment therefor at the price provided for by Securities Purchase Agreement. The
undersigned requests that GMM take all actions necessary to consummate the
exercise of the Call Option granted in the Securities Purchase Agreement on
______________, 200__ at [LOCATION] in accordance with the provisions thereof.
MATRIA HEALTHCARE, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
