EXHIBIT 10.96
EXCHANGE AGREEMENT
Exchange Agreement (the "Agreement") dated September 10, 1996,
by and among Ramsay Health Care, Inc., a Delaware corporation ("RHCI"), Xxxx
Xxxxxx Hospitals Pty. Limited, an Australian corporation ("Ramsay Hospitals"),
and Xxxx X. Xxxxxx ("Xxxxxx").
R E C I T A L S:
WHEREAS, the Board of Directors of RHCI has authorized the
exchange of outstanding options (the "Options") to purchase an aggregate of
476,070 shares of common stock, $.01 par value (the "Common Stock"), of RHCI
held by Ramsay for warrants (the "Warrants") to purchase an aggregate of 500,000
shares of Common Stock; and
WHEREAS, Ramsay has directed RHCI to issue the Warrants to
Ramsay Hospitals.
NOW, THEREFORE, in consideration of the foregoing, and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION I.
ISSUANCE OF WARRANTS
A. In exchange for the Warrants, Ramsay hereby surrenders and
delivers the Options to RHCI for cancellation and RHCI hereby acknowledges
receipt of option certificates dated November 10, 1995 representing the Options.
Ramsay hereby directs RHCI to issue the Warrants to Ramsay Hospitals. RHCI
hereby issues and delivers to Ramsay Hospitals the Warrants and Ramsay Hospitals
acknowledges receipt of a certificate representing the Warrants in the form of
Exhibit A hereto.
SECTION II
REPRESENTATIONS AND WARRANTIES OF RHCI
RHCI hereby represents and warrants to each of Ramsay
Hospitals and Ramsay, as of the date hereof, that:
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A. Organization; Good Standing. RHCI is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full corporate power and authority to own
its properties and to conduct the businesses in which it is now engaged.
B. Authority. RHCI has the corporate power and authority to
issue and deliver the Warrants in accordance with the terms hereof. RHCI has
duly authorized the execution and delivery of this Agreement and this Agreement
constitutes a valid and legally binding obligation of the Company enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws of general application relating to
or affecting the enforcement of creditors' rights or by general principles of
equity. The shares of Common Stock issuable upon the exercise of the Warrants,
when issued and paid for in accordance with the terms of the warrant certificate
evidencing the Warrants, will be validly issued, fully paid and nonassessable
shares of Common Stock.
C. No Legal Bar; Conflicts. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
violates any provision of the Certificate of Incorporation or By-Laws of RHCI or
any law, statute, ordinance, regulation, order, judgment or decree of any court
or governmental agency, or conflicts with or results in any breach of any of the
terms of or constitutes a default under or results in the termination of or the
creation of any lien pursuant to the terms of any contract or agreement to which
RHCI is a party or by which RHCI or any of its assets is bound.
SECTION III
REPRESENTATIONS AND WARRANTIES OF RAMSAY HOSPITALS
Ramsay Hospitals hereby represents and warrants to each of
RHCI and Ramsay, as of the date hereof, that:
A. Authority. Ramsay Hospitals has the corporate power and
authority to execute and deliver this Agreement and to perform all of its
obligations hereunder, and no consent or approval of any other person or
governmental authority is required therefor. The execution and delivery of this
Agreement by Ramsay Hospitals, the performance by Ramsay Hospitals of its
covenants and agreements hereunder and the consummation by Ramsay
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Hospitals of the transactions contemplated hereby have been duly authorized by
all necessary corporate action. This Agreement constitutes a valid and legally
binding obligation of Ramsay Hospitals, enforceable against Ramsay Hospitals in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws of general application relating to
or affecting the enforcement of creditors' rights or by general principles of
equity.
B. No Legal Bar; Conflicts. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
violates any law, statute, ordinance, regulation, order, judgment or decree of
any court or governmental agency, or conflicts with or results in any breach of
any of the terms of or constitutes a default under or results in the termination
of or the creation of any lien pursuant to the terms of any contract or
agreement to which Ramsay Hospitals is a party or by which Ramsay Hospitals or
any of its assets is bound.
C. Investment in RHCI.
(i) Ramsay Hospitals understands that RHCI proposes to
issue and deliver to Ramsay Hospitals the Warrants pursuant to this Agreement
without compliance with the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"); that for such purpose RHCI will rely
upon the representations and warranties of Ramsay Hospitals contained herein;
and that such non-compliance with registration is not permissible unless such
representations and warranties are correct.
(ii) Ramsay Hospitals understands that, under existing
rules of the Securities and Exchange Commission (the "SEC"), Ramsay Hospitals
may be unable to sell the Warrants or the underlying shares of Common Stock with
respect to which the Warrants are exercisable (the "RHCI Shares") except to the
extent that the Warrants or the RHCI Shares may be sold (i) pursuant to an
effective registration statement covering the Warrants or the RHCI Shares
pursuant to the Securities Act and applicable state securities laws or an
applicable exemption therefrom or (ii) in a bona fide private placement to a
purchaser who shall be subject to the same restrictions on any resale or (iii)
subject to the restrictions contained in Rule 144 under the Securities Act
("Rule 144").
(iii) Ramsay Hospitals is not relying on RHCI respecting
the financial, tax and other economic
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considerations of an investment in the Warrants and the Common Stock; Ramsay
Hospitals has relied on the advice of, or has consulted with, only its own
advisors.
(iv) Ramsay Hospitals is familiar with the provisions of
Rule 144 and the limitations upon the availability and applicability of such
rule.
(v) Ramsay Hospitals is a sophisticated investor familiar
with the type of risks inherent in the acquisition of restricted securities such
as the Warrants and the RHCI Shares and its financial position is such that it
can afford to retain such securities for an indefinite period of time without
realizing any direct or indirect cash return on its investment.
(vi) Ramsay Hospitals has such knowledge and experience in
financial, tax and business matters so as to enable it to utilize the
information made available to it in connection with the issuance of the Warrants
and the RHCI Shares to Ramsay Hospitals and to evaluate the merits and risks of
an investment in the Warrants and the RHCI Shares and to make an informed
investment decision with respect thereto.
(vii) Ramsay Hospitals is acquiring the Warrants and the
RHCI Shares as an investment for its sole account, and without any present view
towards the sale or other distribution thereof.
(viii) Ramsay Hospitals is an "accredited investor" as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act.
SECTION IV
REPRESENTATIONS AND WARRANTIES OF XXXX X. XXXXXX
Ramsay hereby represents and warrants to each of RHCI and
Ramsay Hospitals, as of the date hereof, that:
X. Xxxxxx has good and valid title to the Options, free and
clear of all liens, charges, encumbrances, security interests or adverse claims
whatsoever and has the right to transfer the Options to RHCI, and upon the
transfer of the Options to RHCI hereunder, RHCI will acquire good and marketable
title to the Options, free and clear of any lien, encumbrance, charge, security
interest or claim whatsoever.
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X. Xxxxxx has duly executed and delivered this Agreement,
and this Agreement constitutes a valid and legal binding obligation of Ramsay,
enforceable against him in accordance with its terms.
SECTION V
MISCELLANEOUS
A. Notices. All notices, requests or instructions
hereunder shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid, or sent via facsimile transmission as follows:
(1) if to RHCI:
Entergy Corporation Building
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
(2) if to Ramsay Hospitals:
c/o Ramsay Health Care Pty. Limited
Xxxxx 000
0xx Xxxxx, 000 Xxxxxxx Xxxxxxx
Xxxxxxxxx XXX 0000
Xxxxxxxxx
Attention: Xxxx X. Xxxxxx
Telecopier: 011-61-2-906-5205
Telephone: 000-00-0-000-0000
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, two days after the date of mailing, if mailed or on the day
of transmission, if sent via facsimile provided telephonic confirmation of
receipt is obtained promptly after completion of transmission.
B. Survival of Representations. Each representation,
warranty, covenant and agreement of the parties hereto herein contained shall
survive the execution of this Agreement, notwithstanding any investigation at
any time made by or on behalf of any party hereto.
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C. Entire Agreement. This Agreement and the documents
referred to herein contain the entire agreement between the parties hereto with
respect to the transactions contemplated hereby, and no modification hereof
shall be effective unless in writing and signed by the party against which it is
sought to be enforced.
D. Assignment. This Agreement shall not be assignable by
RHCI, Ramsay Hospitals or Ramsay except pursuant to a writing executed by each
of the parties hereto; provided, however, that Ramsay Hospitals may assign this
Agreement and the Warrants to any corporation or other entity directly or
indirectly controlled by Ramsay.
E. Invalidity, Etc. If any provision of this Agreement, or
the application of any such provision to any person or circumstance, shall be
held invalid by a court of competent jurisdiction, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid, shall not be affected thereby.
F. Expenses. Each of the parties hereto shall bear such
party's own expenses in connection with this Agreement and the transactions
contemplated hereby.
G. Headings; Gender. The headings of this Agreement are
for convenience of reference only and are not part of the substance of this
Agreement. In this Agreement references to a particular gender shall include the
other genders as the context requires.
H. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
I. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable in the
case of agreements made and to be performed entirely within such State.
J. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
* * *
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IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the date first above written.
RAMSAY HEALTH CARE, INC.
By:________________________________
Name: Xxxxxxxx Xxxxxx
Title: President
XXXX XXXXXX HOSPITALS PTY. LIMITED
By:________________________________
Name: Xxxxx X. Xxxxx
Title: Director
-----------------------------------
Xxxx X. Xxxxxx
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EXHIBIT A
THIS WARRANT CERTIFICATE AND THE WARRANTS EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
BUT HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND MAY NOT
BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL
EITHER (i) THE HOLDER THEREOF SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY (AS HEREINAFTER DEFINED) THAT
REGISTRATION THEREOF UNDER THE SECURITIES ACT IS NOT REQUIRED OR (ii) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT WITH RESPECT THERETO SHALL HAVE
BECOME EFFECTIVE.
THIS WARRANT CERTIFICATE IS ISSUED PURSUANT TO AND IS SUBJECT TO THE TERMS AND
CONDITIONS OF AN EXCHANGE AGREEMENT (THE "EXCHANGE AGREEMENT") DATED SEPTEMBER
10, 1996 BY AND AMONG RAMSAY HEALTH CARE, INC., XXXX XXXXXX HOSPITALS, PTY.
LIMITED AND XXXX X. XXXXXX (A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE
OF THE COMPANY) AND IS ENTITLED TO THE BENEFITS THEREOF.
500,000 Warrants
WARRANT CERTIFICATE
To Subscribe for and Purchase shares of Common Stock, par
value $.01, of
RAMSAY HEALTH CARE, INC.
THIS CERTIFIES that, for value received, Xxxx Xxxxxx
Hospitals, Pty. Limited, an Australian corporation, or its registered successors
and assigns, is the owner of the number of warrants (the "Warrants") set forth
above, each of which entitles the owner thereof to purchase from Ramsay Health
Care, Inc., a Delaware corporation (herein called the "Company"), one share of
Common Stock, par value $.01, of the Company (individually, a "Common Share" and
collectively, the "Common Shares"), at an initial exercise price of $2.75 per
share, subject to adjustment from time to time pursuant to the provisions of
paragraph 2. The Warrants evidenced hereby may be exercised by the registered
holder hereof at any time during the period from December 31, 2002 through 5:00
P.M. New York City Time on June 30, 2003; provided, however, that
notwithstanding the foregoing, such Warrants may be exercised at any time after
the date hereof, if at the time of such exercise, the Market Price (as defined
in Section 2(a)(H) hereof, but calculated without giving effect to the last
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clause of the first sentence of such definition) shall have equalled or exceeded
$7.00 (the "Acceleration Price") on at least fifteen (15) trading days, which
need not be consecutive, subsequent to the date hereof. For purposes of this
Warrant Certificate, the term "Common Shares" shall mean the class of capital
stock of the Company designated common stock, par value $.01, as constituted on
the date hereof, and any other class of capital stock of the Company resulting
from successive changes or reclassifications of the Common Shares.
1. Exercise of Warrants. Subject to the foregoing, the
Warrants evidenced hereby may be exercised by the registered holder hereof, in
whole or in part, by the surrender of this Warrant Certificate, duly endorsed
(unless endorsement is waived by the Company), at the principal office of the
Company (or at such other office or agency of the Company as it may designate by
notice in writing to the registered holder hereof at such holder's last address
appearing on the books of the Company) and upon payment to the Company by
certified or official bank check or checks payable to the order of the Company
of the purchase price of the Common Shares purchased. The Company agrees that
the Common Shares so purchased shall be deemed to be issued to the registered
holder hereof on the date on which this Warrant Certificate shall have been
surrendered and payment made for such Common Shares as aforesaid; provided,
however, that no such surrender and payment on any date when the stock transfer
books of the Company shall be closed shall be effective to constitute the person
entitled to receive such Common Shares as the record holder thereof on such
date, but such surrender and payment shall be effective to constitute the person
entitled to receive such Common Shares as the record holder thereof for all
purposes immediately after the opening of business on the next succeeding day on
which such stock transfer books are open. The certificate(s) for such Common
Shares shall be delivered to the registered holder hereof within a reasonable
time, not exceeding five days, after the Warrants evidenced hereby shall have
been so exercised and a new Warrant Certificate evidencing the number of
Warrants, if any, remaining unexercised shall also be issued to the registered
holder within such time unless such Warrants shall have expired. No fractional
Common Shares of the Company, or scrips for any such fractional shares, shall be
issued upon the exercise of any Warrants.
2. Adjustment in Exercise Price and Number of Shares. The
initial exercise price of $2.75 per share shall be subject to adjustment from
time to time as hereinafter provided (such price, as last adjusted, being
hereinafter called the "Exercise Price"). Upon each adjustment of the Exercise
Price, the holder of this Warrant shall thereafter
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be entitled to purchase at the Exercise Price resulting from such adjustment,
the number of shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.
(a) Adjustment of Warrant Exercise Price upon Issue of Common
Shares. Except in the case of the issuance from time to time of Excluded Shares
(as defined below), if and whenever after the date hereof the Company shall
issue or sell any Common Shares for a consideration per share less than the
Exercise Price in effect immediately prior to the time of such issue or sale, or
the Company shall issue or sell any Common Shares for a consideration per share
less than the Market Price (as hereinafter defined) of the Common Shares at the
time of such issue or sale, then, forthwith upon such issue or sale, the
Exercise Price shall be reduced (but not increased, except as otherwise
specifically provided in Section 2(a)(C)) to the lower of the prices (calculated
to the nearest cent) determined as follows:
(x) by dividing (i) an amount equal to the sum of (A)
the aggregate number of Common Shares outstanding immediately
prior to such issue or sale multiplied by the then existing
Exercise Price, and (B) the consideration, if any, received by
the Company upon such issue or sale, by (ii) the aggregate
number of Common Shares outstanding immediately after such
issue or sale; and
(y) by multiplying the Exercise Price in effect
immediately prior to the time of such issue or sale by a
fraction, the numerator of which shall be the sum of (i) the
aggregate number of Common Shares outstanding immediately
prior to such issue or sale multiplied by the Market Price of
the Common Shares immediately prior to such issue or sale plus
(ii) the consideration received by the Company upon such issue
or sale, and the denominator of which shall be the product of
(iii) the aggregate number of Common Shares outstanding
immediately after such issue or sale, multiplied by (iv) the
Market Price of the Common Shares immediately prior to such
issue or sale.
No adjustment of the Exercise Price, however, shall be made in an amount less
than $.01 per share, but any such lesser adjustment shall be carried forward and
shall be made upon the earlier of (i) the third anniversary of the issuance or
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deemed issuance of the securities requiring such adjustment hereunder, and (ii)
the time of and together with the next subsequent adjustment.
For purposes hereof, the term "Excluded Shares" shall mean
Common Shares issued to employees, officers, directors or affiliates of, or
consultants to, the Company (or any of its subsidiaries, direct or indirect),
pursuant to any agreement, plan (including without limitation stock option plans
and stock purchase plans), arrangement or stock option heretofore or hereafter
approved by the Board of Directors of the Company, including without duplication
pursuant to options or warrants to purchase or rights to subscribe for such
Common Shares, securities which by their terms are convertible into or
exchangeable for such Common Shares, and options and warrants to purchase or
rights to subscribe for such convertible or exchangeable securities.
For purposes of this Section 2(a), the following paragraphs
(A) to (I), inclusive, shall be applicable:
(A) Issuance of Rights or Options. In case at any
time after the date hereof the Company shall in any manner
grant (whether directly or by assumption in a merger or
otherwise) any rights to subscribe for or to purchase, or any
options for the purchase of Common Shares or any stock or
securities convertible into or exchangeable for Common Shares
(such convertible or exchangeable stock or securities being
herein called "Convertible Securities"), whether or not such
rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the
price per share for which Common Shares are issuable upon the
exercise of such rights or options or upon conversion or
exchange of such Convertible Securities (determined by
dividing (i) the total amount, if any, received or receivable
by the Company as consideration for the granting of such
rights or options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon
the exercise of such rights or options, or plus, in the case
of such rights or options which relate to Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange
thereof, by (ii) the total maximum number of Common Shares
issuable upon the exercise of such rights or options or
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upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such rights or
options) shall be less than the Exercise Price in effect
immediately prior to the time of the granting of such rights
or options or less than the Market Price of the Common Shares
determined as of the date of granting such rights or options,
as the case may be, then the total maximum number of Common
Shares issuable upon the exercise of such rights or options or
upon conversion or exchange of all such Convertible Securities
issuable upon the exercise of such rights or options shall be
deemed to be outstanding as of the date of the granting of
such rights or options and to have been issued for such price
per share, with the effect on the Exercise Price specified in
Section 2(a). Except as provided in subparagraph (C), no
further adjustment of the Exercise Price shall be made upon
the actual issue of such Common Shares or of such Convertible
Securities upon exercise of such rights or options or upon the
actual issue of such Common Shares upon conversion or exchange
of such Convertible Securities.
(B) Issuance of Convertible Securities. In case at
any time after the date hereof the Company shall in any manner
issue (whether directly or by assumption in a merger or
otherwise) or sell any Convertible Securities, whether or not
the right to exchange or convert thereunder is immediately
exercisable, and the price per share for which Common Shares
are issuable upon such conversion or exchange (determined by
dividing (i) the total amount, if any, received or receivable
by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon
the conversion or exchange thereof, by (ii) the total maximum
number of Common Shares issuable upon the conversion or
exchange of all such Convertible Securities) shall be less
than the Exercise Price in effect immediately prior to the
time of such issue or sale, or less than the Market Price of
the Common Shares determined as of the date of such issue or
sale of such Convertible Securities, as the case may be, then
the total maximum number of Common Shares issuable upon
conversion or exchange of all such Convertible Securities
shall be deemed to be outstanding as of the date of the issue
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or sale of such Convertible Securities and to have been issued
for such price per share, with the effect on the Exercise
Price specified in Section 2(a); provided, however, that (a)
except as otherwise provided in subparagraph (C), no further
adjustment of the Exercise Price shall be made upon the actual
issue of such Common Shares upon conversion or exchange of
such Convertible Securities, and (b) if any such issue or sale
of such Convertible Securities is made upon exercise of any
rights to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which adjustments
of the Exercise Price have been or are to be made pursuant to
the provisions of subparagraph (A), no further adjustment of
the Exercise Price shall be made by reason of such issue or
sale.
(C) Change in Option Price or Conversion Rate. Upon
the happening of any of the following events, namely, if the
purchase price provided for in any right or option referred to
in subparagraph (A), the additional consideration, if any,
payable upon the conversion or exchange of any Convertible
Securities referred to in subparagraphs (A) or (B), or the
rate at which any Convertible Securities referred to in
subparagraphs (A) or (B) are convertible into or exchangeable
for Common Shares shall change (other than under or by reason
of provisions designed to protect against dilution), the
Exercise Price then in effect hereunder shall forthwith be
readjusted (increased or decreased, as the case may be) to the
Exercise Price which would have been in effect at such time
had such rights, options or Convertible Securities still
outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may
be, at the time initially granted, issued or sold. On the
expiration of any such option or right referred to in
subparagraph (A), or the termination of any such right to
convert or exchange any such Convertible Securities referred
to in subparagraphs (A) or (B), the Exercise Price then in
effect hereunder shall forthwith be readjusted (increased or
decreased, as the case may be) to the Exercise Price which
would have been in effect at the time of such expiration or
termination had such right, option or Convertible Securities,
to the extent outstanding immediately prior to such expiration
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or termination, never been granted, issued or sold, and the
Common Shares issuable thereunder shall no longer be deemed to
be outstanding. If the purchase price provided for in any such
right or option referred to in subparagraph (A) or the rate at
which any Convertible Securities referred to in subparagraphs
(A) or (B) are convertible into or exchangeable for Common
Shares shall be reduced at any time under or by reason of
provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Shares upon
the exercise of any such right or option or upon conversion or
exchange of any such Convertible Securities, the Exercise
Price then in effect hereunder shall, if not already adjusted,
forthwith be adjusted to such amount as would have obtained
had such right, option or Convertible Securities never been
issued as to such Common Shares and had adjustments been made
upon the issuance of the Common Shares delivered as aforesaid,
but only if as a result of such adjustment the Exercise Price
then in effect hereunder is thereby reduced.
(D) Stock Dividends. In case at any time the Company
shall declare a dividend or make any other distribution upon
any class or series of stock of the Company payable in Common
Shares or Convertible Securities, any Common Shares or
Convertible Securities, as the case may be, issuable in
payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration with the effect
on the Exercise Price specified in Section 2(a).
(E) Consideration for Stock. In case at any time
Common Shares or Convertible Securities or any rights or
options to purchase any such Common Shares or Convertible
Securities shall be issued or sold for cash, the consideration
therefor shall be deemed to be the amount received by the
Company therefor, after deduction therefrom of any expenses
incurred or any underwriting commissions or concessions paid
or allowed by the Company in connection therewith. In case at
any time any Common Shares, Convertible Securities or any
rights or options to purchase any such Common Shares or
Convertible Securities shall be issued or sold for
consideration other than cash, the amount of the consideration
other than cash received by the Company shall be deemed to be
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the fair value of such consideration, as determined reasonably
and in good faith by the Board of Directors of the Company,
after deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in
connection therewith. In case at any time any Common Shares,
Convertible Securities or any rights or options to purchase
any Common Shares or Convertible Securities shall be issued in
connection with any merger or consolidation in which the
Company is the surviving corporation, the amount of
consideration received therefor shall be deemed to be the fair
value, as determined reasonably and in good faith by the Board
of Directors of the Company, of such portion of the assets and
business of the nonsurviving corporation as such Board of
Directors may determine to be attributable to such Common
Shares, Convertible Securities, rights or options, as the case
may be. In case at any time any rights or options to purchase
any shares of Common Stock or Convertible Securities shall be
issued in connection with the issue and sale of other
securities of the Company, together comprising one integral
transaction in which no consideration is allocated to such
rights or options by the parties thereto, such rights or
options shall be deemed to have been issued without
consideration. In the event of any consolidation or merger of
the Company in which stock or securities of another
corporation or other entity are issued in exchange for Common
Stock of the Company or in the event of any sale of all or
substantially all of the assets of the Company for stock or
other securities of any corporation or other entity, the
Company shall be deemed to have issued a number of shares of
its Common Stock for stock or securities of the other
corporation or other entity computed on the basis of the
actual exchange ratio on which the transaction was predicated
and for a consideration equal to the fair market value on the
date of such transaction of such stock or securities of the
other corporation or other entity, and if any such calculation
results in the adjustment of the Exercise Price, the
determination of the number of shares of Common Stock
receivable upon exercise of this Warrant Certificate
immediately prior to such merger, consolidation or sale, for
purposes of Section 2(c), shall be made after giving effect to
such adjustment of the Exercise Price.
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(F) Record Date. In case the Company shall take a
record of the holders of its Common Shares for the purpose of
entitling them (i) to receive a dividend or other distribution
payable in Common Shares or Convertible Securities, or (ii) to
subscribe for or purchase Common Shares or Convertible
Securities, then such record date shall be deemed to be the
date of the issue or sale of the Common Shares or Convertible
Securities deemed to have been issued or sold as a result of
the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(G) Treasury Shares. The number of Common Shares
outstanding at any given time shall not include shares owned
or held by or for the account of the Company, and the
disposition of any such shares shall be considered an issue or
sale of Common Shares for the purposes of Section 2(a).
(H) Definition of Market Price. The term "Market
Price" shall mean, for any day, the last sale price for the
Common Shares on the principal securities exchange on which
the Common Shares are listed or admitted to trading, or, if
not so listed or admitted to trading on any securities
exchange, the last sale price for the Common Shares on the
National Association of Securities Dealers National Market
System, or, if the Common Shares shall not be listed on such
system, the NASDAQ Small Cap Market, or, if the Common Shares
shall not be listed on such market, the average of the closing
bid and asked prices in the over-the-counter market, in each
such case, unless otherwise provided herein (including in the
second sentence of this Warrant Certificate), averaged over a
period of 20 consecutive business days prior to the day as of
which the Market Price is being determined. If at any time the
Common Shares are not listed on any such exchange, such system
or such market or quoted in the over-the-counter market, the
Market Price of the Common Shares shall be deemed to be the
higher of (i) the book value thereof, as determined in
accordance with generally accepted accounting principles
consistent with those then being applied by the Company, by
any firm of independent certified public accountants (which
may be the regular auditors of the Company) of recognized
17
national standing selected by the Board of Directors of the
Company, as of the last day of the month ending within 31 days
preceding the date as of which the determination is to be
made, and (ii) the fair value thereof, as determined in good
faith by an independent brokerage firm, Standard & Poor's
Corporation or Xxxxx'x Investors Service, as of a date which
is within 15 days preceding the date as of which the
determination is to be made.
(I) Certain Acquisitions. Anything herein to the
contrary notwithstanding, in case at any time after the date
hereof the Company shall issue any Common Shares or
Convertible Securities, or any rights or options to purchase
any Common Shares or Convertible Securities, in connection
with the acquisition by the Company of the stock or assets of
any other corporation or other entity or the merger of any
other corporation or other entity with and into the Company
under circumstances where on the date of the issuance of such
Common Shares or Convertible Securities, or such rights or
options, the consideration received for such Common Shares or
deemed to have been received for the Common Shares into which
such Convertible Securities are convertible or for which such
rights or options are exercisable is less than the Market
Price of the Common Shares, but on the date the number of
Common Shares or Convertible Securities, or in the case of
Convertible Securities other than stock, the aggregate
principal amount of Convertible Securities, or the number of
such rights or options was determined (as set forth in a
binding agreement between the Company and the other party to
the transaction) the consideration received for such Common
Shares or deemed to have been received for the Common Shares
into which such Convertible Securities are convertible or for
which such rights or options are exercisable would not have
been less than the Market Price of the Common Shares, such
Common Shares shall not be deemed to have been issued for less
than the Market Price of the Common Shares.
(b) Subdivision or Combination of Stock. In case the Company
shall at any time subdivide its outstanding Common Shares into a greater number
of shares, each of the Exercise Price and the Acceleration Price in effect
immediately prior to such subdivision shall be proportionately reduced, and
18
conversely, in case the outstanding Common Shares of the Company shall be
combined into a smaller number of shares, each of the Exercise Price and the
Acceleration Price in effect immediately prior to such combination shall be
proportionately increased.
(c) Reorganization, Reclassification, Consolidation, Merger.
If any capital reorganization, reclassification of the capital stock of the
Company, consolidation or merger of the Company with another corporation or
other entity, or sale, transfer or other disposition of all or substantially all
of the Company's properties to another corporation or other entity shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby each holder of Warrants shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the Common Shares immediately
theretofore issuable upon exercise of the Warrants, such shares of stock,
securities or properties as may be issuable or payable with respect to or in
exchange for a number of outstanding Common Shares equal to the number of Common
Shares immediately theretofore issuable upon exercise of the Warrants, had such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of each holder of Warrants to the
end that the provisions hereof (including, without limitation, provision for
adjustment of the Exercise Price and the Acceleration Price) shall thereafter be
applicable, as nearly equivalent as may be practicable in relation to any shares
of stock, securities or properties thereafter deliverable upon the exercise
thereof. The Company shall not effect any such consolidation, merger, sale,
transfer or other disposition, unless prior to or simultaneously with the
consummation thereof the successor corporation or other entity, if other than
the Company, resulting from such consolidation or merger, or the corporation or
other entity purchasing or otherwise acquiring such properties shall assume, by
written instrument executed and mailed or delivered to the holders of Warrants
at the last address of such holders appearing on the books of the Company, the
obligation to deliver to such holders such shares of stock, securities or
properties, in accordance with the foregoing provisions, as such holders may be
entitled to acquire. The above provisions of this subparagraph 2(c) shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers, or other dispositions.
19
(d) Liquidating Dividends. In case at any time the Company
shall distribute pro rata to all holders of its Common Shares evidences of its
indebtedness or assets (excluding cash dividends or cash distributions paid out
of retained earnings or retained surplus) then, forthwith upon such
distribution, the Exercise Price shall be reduced by the fair market value of
the evidences of indebtedness or assets so distributed applicable to one Common
Share (as conclusively determined by an investment banking firm designated by a
majority in interest of the holders of Warrants; it being understood that the
fees of such investment banking firm shall be borne by the Company).
(e) Notice of Determination. Except as otherwise provided
herein, upon any adjustment of the Exercise Price, then and in each such case
the Company shall promptly obtain the certification of a firm of independent
certified public accountants (which may be the regular auditors of the Company)
of recognized national standing selected by the Company's Board of Directors,
which certification shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of Common Shares
issuable upon exercise of the Warrants held by each holder of Warrants, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. The Company shall promptly mail a copy of such
accountants' certification to each holder of Warrants.
(f) Intent of Provisions. If any event occurs as to which, in
the opinion of the Board of Directors of the Company, the other provisions of
this Section 2 are not strictly applicable or if strictly applicable, would not
fairly protect the rights of the holders of the Warrants in accordance with the
essential intent and principles of such provisions, then such Board of Directors
shall appoint a firm of independent certified public accountants (which may be
the regular auditors of the Company) of recognized national standing, which
shall give their opinion upon the adjustment, if any, on a basis consistent with
such essential intent and principles, necessary to preserve, without dilution,
the rights of the holders of Warrants. Upon receipt of such opinion by the Board
of Directors of the Company, the Company shall forthwith make the adjustments
described therein; provided, however, that no such adjustment pursuant to this
Section 2(f) shall have the effect of increasing the Exercise Price as otherwise
determined pursuant to the other provisions of this Section 2 except in the
event of a combination of shares of the type contemplated in Section 2(b) and
then in no event to an
20
amount larger than the Exercise Price as adjusted pursuant to Section 2(b).
3. Other Notices. If at any time prior to the expiration of
the Warrants evidenced hereby:
(a) The Company shall declare any dividend on the Common
Shares payable in shares of capital stock of the Company, cash
or other property; or
(b) The Company shall authorize the issue of any options,
warrants or rights pro rata to all holders of Common Shares
entitling them to subscribe for or purchase any shares of
stock of the Company or to receive any other rights; or
(c) The Company shall authorize the distribution pro rata to
all holders of Common Shares of evidences of its indebtedness
or assets (excluding cash dividends or cash distributions paid
out of retained earnings or retained surplus); or
(d) There shall occur any reclassification of the Common
Shares, or any consolidation or merger of the Company with or
into another corporation or other entity (other than a
consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification
of the Common Shares) or a sale or transfer to another
corporation or other entity of all or substantially all of the
properties of the Company; or
(e) There shall occur the voluntary or involun tary
liquidation, dissolution or winding up of the affairs of the
Company;
then, and in each of such cases, the Company shall deliver to the registered
holder hereof at its last address appearing on the books of the Company, as
promptly as practicable but in any event at least 15 days prior to the
applicable record date (or determination date) mentioned below, a notice
stating, to the extent such information is available, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or rights,
or, if a record is not to be taken, the date as of which the holders of Common
Shares of record to be entitled to such dividend, distribution or rights are to
be determined, or (ii) the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up is expected to
become effective and the date as of which
21
it is expected that holders of Common Shares of record shall be entitled to
exchange their Common Shares for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up.
4. Representations and Warranties of the Company. The Company
represents and warrants to and covenants with the registered holder hereof as
follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, is duly
qualified and in good standing under the laws of any foreign jurisdiction where
the failure to be so qualified would have a material adverse effect on its
ability to perform its obligations under the Warrants evidenced by this Warrant
Certificate and it has full corporate power and authority to issue the Warrants
and to carry out the provisions of the Warrants evidenced by this Warrant
Certificate.
(b) The issuance, execution and delivery of this Warrant
Certificate has been duly authorized by all necessary corporate action on the
part of the Company and each of the Warrants evidenced by this Warrant
Certificate constitutes the valid and legally binding obligation of the Company,
enforceable against it in accordance with the terms hereof, except as such
enforceability may be limited by bankruptcy, insolvency or other laws affecting
generally the enforceability of creditors' rights, by general principles of
equity and by limitations on the availability of equitable remedies.
(c) Neither the execution and delivery of the Warrants
evidenced by this Warrant Certificate by the Company, nor compliance by the
Company with the provisions hereof, violates any provision of its Certificate of
Incorporation or By-Laws, as amended, or any law, statute, ordinance,
regulation, order, judgment or decree of any court or governmental agency, or
conflicts with or will result in any breach of the terms of or constitute a
default under or result in the termination of or the creation of any lien
pursuant to the terms of any agreement or instrument to which the Company is a
party or by which it or any of its properties is bound.
5. Company to Provide Stock. The Company covenants and agrees
that all shares of capital stock of the Company which may be issued upon the
exercise of the Warrants evidenced hereby will be duly authorized, validly
issued and fully paid and nonassessable and free from all
22
taxes, liens and charges with respect to the issue thereof to the registered
holder hereof. The Company further covenants and agrees that during the period
within which the Warrants evidenced hereby may be exercised, the Company will at
all times reserve such number of shares of its capital stock as may be
sufficient to permit the exercise in full of the Warrants evidenced hereby.
6. Registered Holder. The registered holder of this Warrant
Certificate shall be deemed the owner hereof and of the Warrants evidenced
hereby for all purposes. The registered holder of this Warrant Certificate shall
not be entitled by virtue of ownership of this Warrant Certificate to any rights
whatsoever as a shareholder of the Company.
7. Transfer. This Warrant Certificate and the Warrants
evidenced hereby may be sold, transferred, pledged, hypothecated or otherwise
disposed of; provided that this Warrant Certificate and the Warrants evidenced
hereby may not be sold, transferred, pledged, hypothecated or otherwise disposed
of unless, in the opinion of counsel reasonably satisfactory to the Company,
such transfer would not result in a violation of the provisions of the
Securities Act. Any transfer of this Warrant Certificate and the Warrants
evidenced hereby, in whole or in part, shall be effected upon surrender of this
Warrant Certificate, duly endorsed (unless endorsement is waived by the
Company), at the principal office or agency of the Company referred to in
Section 1 hereof. If all of the Warrants evidenced hereby are being sold,
transferred, pledged, hypothecated or otherwise disposed of, the Company shall
issue a new Warrant Certificate registered in the name of the appropriate
transferee(s). If less than all of the Warrants evidenced hereby are being sold,
transferred, pledged, hypothecated or otherwise disposed of, the Company shall
issue new Warrant Certificates, in each case in the appropriate number of
Warrants, registered in the name of the registered holder hereof and the
transferee(s), as applicable. Any Common Shares of the Company issued upon any
exercise hereof may not be sold, transferred, pledged, hypothecated or otherwise
disposed of unless, in the opinion of counsel reasonably satisfactory to the
Company, such transfer would not result in a violation of the Securities Act.
Each taker and holder of this Warrant Certificate, the Warrants evidenced hereby
and any shares of capital stock of the Company issued upon exercise of any such
Warrants, by taking or holding the same, consents to and agrees to be bound by
the provisions of this Section 7.
* * *
23
IN WITNESS WHEREOF, RAMSAY HEALTH CARE, INC. has caused this
Warrant Certificate to be signed by a duly authorized officer and this Warrant
Certificate to be dated September 10, 1996.
RAMSAY HEALTH CARE, INC.
By
Name: Xxxxxxxx Xxxxxx
Title: President
24
FORM OF EXERCISE
(to be executed by the registered holder hereof)
The undersigned hereby exercises ____ Warrants to subscribe
for and purchase shares of common stock, par value $.01 ("Common Shares"), of
RAMSAY HEALTH CARE, INC. evidenced by the within Warrant Certificate and
herewith makes payment of the purchase price in full. Kindly issue certificates
for the Common Shares in accordance with the instructions given below. The
certificate for the unexercised balance of the Warrants evidenced by the within
Warrant Certificate, if any, will be registered in the name of the undersigned.
Dated:
Instructions for registration of shares
Name (please print)
Social Security or Other Identifying
Number:
Address:
_________________________________
Street
_________________________________
City, State and Zip Code
