EXHIBIT 4.4
THIS WARRANT AND THE SHARES OF NON-VOTING COMMON STOCK PURCHASABLE HEREUNDER
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR
OFFERED FOR SALE UNLESS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THIS
WARRANT AND THE SHARES OF NON-VOTING COMMON STOCK PURCHASABLE HEREUNDER ARE
SUBJECT TO AND HAVE THE BENEFIT OF A WARRANTHOLDERS RIGHTS AGREEMENT DATED AS OF
DECEMBER 23, 1998 AMONG APS HEALTHCARE, INC. AND THE STOCKHOLDERS AND
WARRANTHOLDERS LISTED ON THE SIGNATURE PAGES THEREOF, A COPY OF WHICH IS ON FILE
WITH APA HEALTHCARE, INC.
Dated: as of July 23, 2001
AMENDED AND RESTATED WARRANT
To Purchase up to 859,409 shares of Non-Voting
Common Stock of APS HEALTHCARE, Inc., subject to adjustment as provided herein
Expiring December 23, 2008
THIS TO CERTIFY THAT, for value received, BANK OF AMERICA, N.A.
(successor in interest to Banc of America Commercial Finance Corporation,
formerly known as NationsCredit Commercial Corporation) or any registered
assigns ("HOLDER") is entitled to purchase from APS HEALTHCARE, INC. (f/k/a
American Psych Systems Holdings, Inc.), a Delaware corporation (the "COMPANY"),
at any time or from time to time after 9:00 a.m., New York City time, on the
date hereof and prior to 5:00 p.m., New York City time, on December 23, 2008, at
the place where the Warrant Agency is located, at the Exercise Price, the number
of shares of Non-Voting Common Stock, par value $.001 per share (the "NON-VOTING
COMMON STOCK") of the Company shown above, subject to adjustment as provided in
Articles IV and V hereof, and upon the terms and conditions hereinafter
provided, and is entitled also to exercise the other appurtenant rights, powers
and privileges hereinafter described.
This Warrant is one of two warrants (the "WARRANTS") of the same form
and having the same terms as this Warrant, entitling the holders initially to
purchase up to an aggregate of 1,718,818 shares of Non-Voting Common Stock as
such amount may be from time to time adjusted as herein provided. The Warrants
have been issued by the Company pursuant to the Credit Agreement dated as of
December 23, 1998 as amended by that certain First Amendment to Credit Agreement
dated as of August 26, 1999, that certain Second Amendment to Credit Agreement
dated as of October 18, 1999, that certain Third Amendment to Credit Agreement
dated as of June 23, 2000, and that certain Fourth Amendment to Credit Agreement
dated as of September 15, 2000 (as the same may be further amended from time to
time, the "B OF A CREDIT AGREEMENT") among the Company, Psych Systems Holdings,
Inc., a Delaware corporation (the "BORROWER"), the lenders listed on the
signature pages thereof and Bank of America, N.A. (successor in interest to Banc
of America Commercial Finance Corporation, formerly known as NationsCredit
Commercial Corporation) as Agent for such lenders, in consideration of a loan to
the Borrower by such lenders. The Holder is entitled to certain benefits as set
forth therein and to certain benefits described in the Warrantholders Rights
Agreement. The B of A Credit Agreement and other agreements related thereto have
been assigned to CapitalSource Finance LLC ("CapitalSource") pursuant to the
terms of that certain Assignment of Loans, Financing Documents and Certain
Warrants and Rights Related Thereto (the "Assignment"). The B of A Credit
Agreement has further been amended and restated pursuant to the terms of that
certain Amended and Restated Credit Agreement, by and between APS Healthcare
Holdings, Inc. and CapitalSource, dated July 23, 2001 (the "CREDIT AGREEMENT").
The Company shall keep a copy of the Credit Agreement, the Warrantholders Rights
Agreement, the Assignment and any amendments thereto, at the Warrant Agency and
shall furnish, without charge, copies thereof to the Holder upon request.
Certain terms used in this Warrant are defined in Article VI.
The Warrants are issued in replacement for an existing Warrant issued
by the Company to NationsCredit Commercial Corporation for 1,718,817 shares of
Non-Voting Common Stock (the "Original Warrant"), which Original Warrant has
been split into two separate Warrants, each for 859,409 shares, issued to
CapitalSource Holdings LLC and Bank of America, N.A..
ARTICLE I
EXERCISE OF WARRANTS
1.1. METHOD OF EXERCISE. To exercise this Warrant in whole or in part,
the Holder shall deliver on any Business Day to the Company at the Warrant
Agency (a) this Warrant, (b) a written notice of the Holder's election to
exercise this Warrant, which notice shall specify the number of shares of
Non-Voting Common Stock to be purchased (which shall be a whole number of shares
if for less than all the shares then issuable hereunder), the denominations of
the share certificate or certificates desired and the name or names in which
such certificates are to be registered, and (c) payment of the Exercise Price
with respect to such shares. Such payment may be made, at the option of the
Holder, either (a) by cash, certified or bank cashier's check or wire transfer
in an amount equal to the product of (i) the Exercise Price times (ii) the
number of Warrant Shares as to which this Warrant is being exercised or (b) by
receiving from the Company the number of Warrant Shares equal to (i) the number
of Warrant Shares as to which this Warrant is being exercised minus (ii) the
number of Warrant Shares having an aggregate value, based on the Fair Market
Value of the Company per share of Common Stock on the Business Day immediately
prior to the date of such exercise, equal to the product of (x) the Exercise
Price times (y) the number of Warrant Shares as to which this Warrant is being
exercised.
The Company shall, as promptly as practicable and in any event within
seven days after receipt of such notice and payment, execute and deliver or
cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of shares of
Non-Voting Common Stock specified in said notice together with cash in lieu of
any fractions of a share as provided in Section 1.3. The share certificate or
certificates so delivered shall be in such denominations as may be specified in
such notice, and shall be issued in the name of the Holder or such other name or
names as shall be designated in such notice. This Warrant shall be deemed to
have been exercised and such certificate or certificates shall be deemed to have
been issued, and such Holder or any other Person so designated to be named
therein shall be deemed for all purposes to have become a holder of record of
shares, as of the date the aforementioned notice and payment is received by the
Company. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of such certificate or certificates, deliver to
the Holder a new Warrant evidencing the right to purchase the remaining shares
of Non-Voting Common Stock called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant, or, at the request of the
Holder, appropriate notation may be made on this Warrant which shall then be
returned to the Holder. The Company shall pay all expenses, taxes and other
charges payable in connection with the preparation, issuance and delivery of
share certificates and new Warrants, except that, if share certificates or new
Warrants shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all transfer taxes payable as a result of such
transfer shall be paid by the Holder at the time of delivery of the
aforementioned notice of exercise or promptly upon receipt of a written request
of the Company for payment.
1.2. SHARES TO BE FULLY PAID AND NONASSESSABLE. All shares of
Non-Voting Common Stock issued upon the exercise of this Warrant and all shares
of Voting Common Stock issued upon the conversion of such Non-Voting Common
Stock shall be validly issued, fully paid and nonassessable and, if such class
of Common Stock is then quoted on NASDAQ or listed on any national securities
exchange (as defined in the Exchange Act), shall be duly quoted or listed
thereon, as the case may be.
1.3. NO FRACTIONAL SHARES REQUIRED TO BE ISSUED. The Company shall not
be required to issue fractions of shares of Non-Voting Common Stock upon
exercise of this Warrant. If any fraction of a share would, but for this
Section, be issuable upon final exercise of this Warrant, in lieu of such
fractional share, the Company shall pay to the Holder in cash an amount equal to
the same fraction of the Fair Market Value of the Company per share of
outstanding Common Stock on the Business Day immediately prior to the date of
such exercise.
1.4. LEGEND. Each certificate for shares of Non-Voting Common Stock
issued upon exercise of this Warrant, unless at the time of exercise such shares
are registered under the Securities Act, shall bear the following legend:
This security has not been registered under the Securities Act of 1933
and may not be sold or offered for sale unless registered under said Act
and any applicable state securities laws or unless an exemption from such
registration is available. This security is also subject to and has the
benefit of a Warrantholders Rights Agreement dated as of December 23, 1998
among APS Healthcare, Inc and the Stockholders and Warrantholders listed on
the signature pages thereof, copies of which are on file with APS
Healthcare, Inc."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public offering pursuant to a registration statement under the Securities
Act) shall also bear such legend unless, in the opinion of counsel selected by
the Holder of such certificate (who may be an employee of such holder) and
reasonably acceptable to the Company, the securities represented thereby need no
longer be subject to restrictions on resale under the Securities Act.
1.5. RESERVATION. The Company has duly reserved, and will keep
available for issuance upon exercise of the Warrants, the total number of
Warrant Shares deliverable from time to time upon exercise of all Warrants from
time to time outstanding and the total number of shares of Voting Common Stock
deliverable upon conversion of such Warrant Shares to Voting Common Stock. The
Company will not take any actions during the term of this Warrant that would
result in any adjustment of the number of shares of Common Stock issuable upon
the exercise of the Warrant if (i) the total number of shares of Common Stock
issuable after such action upon exercise of this Warrant, (ii) all shares of
Common Stock issued and outstanding and (iii) all shares then issuable (y) upon
the exercise of all Options and (z) upon the conversion or exchange of all
Convertible Securities, would exceed the total number of shares of Common Stock
then authorized for issuance by the Company. The Company will not change the
Non-Voting Common Stock from par value $.001 per share to any higher par value
which exceeds the Exercise Price then in effect, and will reduce the par value
of the Non-Voting Common Stock upon any event described in Article IV that
provides for an increase in the number of shares of Non-Voting Common Stock
subject to purchase upon exercise of this Warrant, in inverse proportion to and
effective at the same time as such number of shares is increased. As of July 23,
2001, the Company had outstanding (i) 14,035,895 shares of Voting Common Stock,
par value $.001 per share, (the "Voting Common Stock"), (ii) no shares of
Non-Voting Common Stock, (iii) 7,887,545 shares of Series 1 Convertible
Preferred Stock, (iv) 2,500,886 shares of Series II Convertible Preferred Stock,
(v) warrants to acquire an additional 2,075,067 shares of Voting Common Stock,
(vi) options to acquire an additional 2,757,444 shares of Voting Common Stock
and (vii) no other shares of capital stock or any securities convertible into or
exchangeable for shares of capital stock or any rights, options or warrants to
purchase any shares of capital stock or any securities convertible into or
exchangeable for shares of capital stock. Neither the issuance of this Warrant
nor the issuance of Warrant Shares upon exercise of this Warrant violates or
conflicts with the Company's certificate of incorporation or bylaws or any
agreement to which the Company is a party.
ARTICLE II
WARRANT AGENCY;
TRANSFER, EXCHANGE AND REPLACEMENT OF WARRANTS
2.1. WARRANT AGENCY. As long as any Warrant remains outstanding, the
Company shall perform the obligations of and be the warrant agency with respect
to the Warrants (the "WARRANT AGENCY") at its address set forth in the Credit
Agreement or at such other address as the Company shall specify by notice to all
Warrantholders.
2.2. OWNERSHIP OF WARRANT. The Company may deem and treat the person
in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any person
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until due presentment of this Warrant for registration of
transfer as provided in this Article II.
2.3. TRANSFER OF WARRANT. The Company agrees to maintain at the
Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in whole
or in part, on such books, upon surrender of this Warrant at the Warrant Agency,
together with a written assignment of this Warrant duly executed by the Holder
or its duly authorized agent or attorney, with (if the Holder is a natural
person) signatures guaranteed by a bank or trust company or a broker or dealer
registered with the NASDAQ, and funds sufficient to pay any transfer taxes
payable upon such transfer. Upon surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in the instrument of
assignment (which shall be whole numbers of shares only) and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be canceled.
2.4. DIVISION OR COMBINATION OF WARRANTS. This Warrant may be divided
or combined with other Warrants upon presentment hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Warrant Agency,
together with a written notice specifying the names and denominations (which
shall be whole numbers of shares only) in which the new Warrant or Warrants are
to be issued, signed by the holders hereof and thereof or their respective duly
authorized agents or attorneys. Subject to compliance with Section 2.3 as to any
transfer or assignment which may be involved in the division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice.
2.5. LOSS, THEFT, DESTRUCTION OF WARRANT CERTIFICATES. Upon receipt of
evidence satisfactory to the Company of the ownership of and the loss, theft,
destruction or mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon receipt of indemnity or security satisfactory to the
Company (it being understood and agreed that if the holder of such Warrant is
Bank of America, N.A., then a written agreement of indemnity
given by Bank of America, N.A. alone shall be satisfactory to the Company and no
further security shall be required) or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant, the Company will make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
shares of Non-Voting Common Stock.
2.6. EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants hereunder.
ARTICLE III
CERTAIN RIGHTS
3.1. RIGHTS AND OBLIGATIONS UNDER THE WARRANTHOLDERS RIGHTS AGREEMENT.
This Warrant is entitled to the benefits and subject to the terms of the
Warrantholders Rights Agreement dated as of December 23, 1998 among the Company
and the Stockholders and Warrantholders listed on the signature pages thereof
(as amended from time to time, the "WARRANTHOLDERS RIGHTS AGREEMENT"). The
Company shall keep or cause to be kept a copy of the Warrantholders Rights
Agreement, and any amendments thereto, at the Warrant Agency and shall furnish,
without charge, copies thereof to the Holder upon request.
3.2. DETERMINATION OF FAIR MARKET VALUE. Subject to Section 3.3
hereof, each determination of Fair Market Value hereunder shall be made in good
faith by the Company. Upon each determination of Fair Market Value by the
Company hereunder, the Company shall promptly give notice thereof to all
Warrantholders, setting forth in reasonable detail the calculation of such Fair
Market Value and the method and basis of determination thereof (the "COMPANY
DETERMINATION").
3.3. CONTEST AND APPRAISAL RIGHTS. (a) If the holders of Warrants
entitling such holders to purchase a majority of the Non-Voting Common Stock
subject to purchase upon exercise of Warrants at the time outstanding (exclusive
of Warrants then owned by the Company or any Subsidiary (as defined in the
Credit Agreement) or Affiliate (as defined in the Credit Agreement) thereof (the
"REQUIRED INTEREST") disagree with the Company Determination and by notice to
the Company given within 30 days after receipt of notice of the Company
Determination (an "APPRAISAL NOTICE") elects to dispute the Company
Determination, such dispute shall be resolved as set forth in subsection (b) of
this Section.
(b) the Company shall within 30 days after an Appraisal Notice shall
have been given pursuant to subsection (a) of this Section engage an investment
bank or other qualified appraisal firm acceptable to the Required Interest (the
"APPRAISER") to make an independent determination of Fair Market Value (the
"APPRAISER DETERMINATION"). The
Appraiser Determination shall be final and binding on the Company and all
Warrantholders. If the Company Determination and the Appraiser Determination
differ by an amount of 15% or less of the Company Determination, then the costs
of conducting the appraisal shall be borne equally by the Company and the
Warrantholders; if the Company Determination is greater than the Appraiser
Determination by more than 15% of the Company Determination, then the costs of
conducting the appraisal shall be borne entirely by the Warrantholders; and if
the Appraiser Determination is greater than the Company Determination by more
than 15% of the Company Determination, then the costs of conducting the
appraisal shall be borne entirely by the Company; provided that in each case,
costs separately incurred by the Company and any Warrantholders shall be
separately borne by them.
3.4. BOARD MEETINGS. The Company shall give to Holder notice of all
meetings and actions by written consent of its board of directors and each
committee thereof, at the same time and in the same manner as notice of any
meetings of such board or committees is required to be given to directors who do
not waive such notice (or, if such action requires no notice, then 10 days
written notice thereof describing the matters upon which action is to be taken).
Holder shall have the right to send one (1) representative selected by Holder to
each such meeting, who shall be permitted to attend such meeting and any
adjournments thereof (other than any portion of such meeting devoted to
discussion of the Warrantholders solely in their respective capacities as
holders of the Warrants).
3.5. FINANCIAL STATEMENTS AND OTHER INFORMATION. Promptly upon
transmission thereof, the Company will deliver to the Holder copies of any and
all financial statements, proxy statements, notices and other reports as it may
send to its public stockholders and copies of all registration statements and
all reports which it files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to its functions). The Company also will,
and will cause its Subsidiaries to, deliver to the Holder, with reasonable
promptness, such other information or data with respect to the Company or any of
its Subsidiaries as from time to time may be reasonably requested by the Holder.
ARTICLE IV
ANTIDILUTION PROVISIONS
SECTION 4.1. GENERAL. The Exercise Price and the number of shares of
Non-Voting Common Stock (or other securities or property) issuable upon exercise
of this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events as provided in this Article IV; PROVIDED that
notwithstanding anything to the contrary herein, the Exercise Price shall not be
less than the par value of the Non-Voting Common Stock, as such par value is
reduced from time to time in accordance with Section 1.5.
SECTION 4.2. COMMON STOCK REORGANIZATION. If the Company shall
subdivide its outstanding shares of Common Stock (or any class thereof) into a
greater number
of shares or consolidate its outstanding shares of Common Stock (or any class
thereof) into a smaller number of shares (any such event being called a "COMMON
STOCK REORGANIZATION"), then (a) the Exercise Price shall be adjusted, effective
immediately after the effective date of such Common Stock Reorganization, to a
price determined by multiplying the Exercise Price in effect immediately prior
to such effective date by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding on such effective date before giving
effect to such Common Stock Reorganization and the denominator of which shall be
the number of shares of Common Stock outstanding after giving effect to such
Common Stock Reorganization, and (b) the number of shares of Non-Voting Common
Stock subject to purchase upon exercise of this Warrant shall be adjusted,
effective at such time, to a number determined by multiplying the number of
shares of Non-Voting Common Stock subject to purchase immediately before such
Common Stock Reorganization by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding after giving effect to such Common
Stock Reorganization and the denominator of which shall be the number of shares
of Common Stock outstanding immediately before such Common Stock Reorganization.
SECTION 4.3. COMMON STOCK DISTRIBUTION. (a) If at any time while the
Warrants or any Warrant Shares remain outstanding, the Company shall issue, sell
or otherwise distribute any shares of Common Stock, other than pursuant to this
Agreement or a Common Stock Reorganization (which is governed by Section 4.2
hereof) (any such event, including any event described in paragraphs (b) and (c)
below, being herein called a "COMMON STOCK DISTRIBUTION"), for a consideration
per share less than the Exercise Price then in effect or the Fair Market Value
of the Company per share of outstanding Common Stock on a Fully Diluted Basis on
the date of such Common Stock Distribution (before giving effect to such Common
Stock Distribution), then, effective upon such Common Stock Distribution, the
Exercise Price shall be reduced, if such consideration per share shall be less
than the Exercise Price then in effect but not less than the Fair Market Value
per share, to the lower of the prices, (calculated to the nearest one-thousandth
of one cent) determined as provided in clauses (i) and (ii) below or, if such
consideration per share shall be less than such Fair Market Value per share, to
the lowest of the prices (calculated to the nearest one thousandth of one cent)
determined as provided in clauses (i), (ii) and (iii) below:
(i) if the Company shall receive any consideration for the Common
Stock issued, sold or distributed, in such Common Stock Distribution, the
consideration per share of Common Stock received by the Company upon such
issue, sale or distribution;
(ii) by dividing (A) an amount equal to the sum of (1) the number of
shares of Common Stock outstanding immediately prior to such Common Stock
Distribution multiplied by the then existing Exercise Price, plus (2) the
consideration, if any, received by the Company upon such Common Stock
Distribution by (B) the total number of shares of Common Stock outstanding
immediately after such Common Stock Distribution; and
(iii) by multiplying the Exercise Price in effect immediately prior to
such Common Stock Distribution by a fraction, the numerator of which shall
be the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such Common Stock Distribution multiplied by such Fair
Market Value per share on the date of such Common Stock Distribution, plus
(B) the consideration, if any, received by the Company upon such Common
Stock Distribution, and the denominator of which shall be the product of
(1) the total number of shares of Common Stock outstanding immediately
after such Common Stock Distribution multiplied by (2) such Fair Market
Value per share on the date of such Common Stock Distribution.
If any Common Stock Distribution shall require an adjustment to the
Exercise Price pursuant to the foregoing provisions of this paragraph (a),
including by operation of paragraph (b) or (c) below, then, effective at the
time such adjustment is made, the number of shares of Non-Voting Common Stock
subject to purchase upon exercise of this Warrant shall be increased to a number
determined by multiplying the number of shares of Non-Voting Common Stock
subject to purchase immediately before such Common Stock Distribution by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately after giving effect to such Common Stock Distribution
and the denominator of which shall be the sum of the number of shares
outstanding immediately before giving effect to such Common Stock Distribution
(both calculated on a Fully Diluted Basis) plus the number of shares of Common
Stock which the aggregate consideration received by the Company with respect to
such Common Stock Distribution would purchase at the Fair Market Value of the
Company per share of outstanding Common Stock on a Fully Diluted Basis on the
date of such Common Stock Distribution (before giving effect to such Common
Stock Distribution). In computing adjustments under this paragraph, fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share.
The provisions of this paragraph (a), including by operation of
paragraph (b) or (c) below, shall not operate to increase the Exercise Price or
reduce the number of shares of Non-Voting Common Stock subject to purchase upon
exercise of this Warrant.
(b) If the Company shall issue, sell, distribute or otherwise grant
in any manner (including by assumption) any rights to subscribe for or to
purchase, or any warrants or options for the purchase of Common Stock or any
stock or securities convertible into or exchangeable for Common Stock (such
rights, warrants or options being herein called "OPTIONS" and such convertible
or exchangeable stock or securities being herein called "CONVERTIBLE
SECURITIES"), whether or not such Options or the rights to convert or exchange
any such Convertible Securities in respect of such Options are immediately
exercisable, and the price per share for which Common Stock is issuable upon the
exercise of such Options or upon conversion or exchange of such Convertible
Securities in respect of such Options (determined by dividing (i) the aggregate
amount, if any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of Options to acquire Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the issuance
or sale of such Convertible Securities and upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less
than the Exercise Price then in effect or less than the Fair Market Value of the
Company per share of outstanding Common Stock on a Fully Diluted Basis on the
date of granting such Options (before giving effect to such grant), then, for
purposes of paragraph (a) above, the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to have been issued as of the date of
granting of such Options and thereafter shall be deemed to be outstanding and
the Company shall be deemed to have received as consideration such price per
share, determined as provided above, therefor. Except as otherwise provided in
paragraph (d) below, no additional adjustment of the Exercise Price shall be
made upon the actual exercise of such Options or upon conversion or exchange of
such Convertible Securities.
(c) If the Company shall issue, sell or otherwise distribute
(including by assumption) any Convertible Securities, whether or not the rights
to exchange or convert thereunder are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or exchange
(determined by dividing (i) the aggregate amount received or receivable by the
Company as consideration for the issuance, sale or distribution 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 shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Exercise Price then in effect or less than the Fair Market Value
of the Company per share of outstanding Common Stock on a Fully Diluted Basis on
the date of such issuance, sale or distribution (before giving effect to such
issuance, sale or distribution), then, for purposes of paragraph (a) above, the
total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to have been issued
as of the date of the issuance, sale or distribution of such Convertible
Securities and thereafter shall be deemed to be outstanding and the Company
shall be deemed to have received as consideration such price per share,
determined as provided above, therefor. Except as otherwise provided in
paragraph (d) below, no additional adjustment of the Exercise Price shall be
made upon the actual conversion or exchange of such Convertible Securities.
(d) If (i) the purchase price provided for in any Option referred to
in paragraph (b) above or the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in paragraph
(b) or (c) above or the rate at which any Convertible Securities referred to in
paragraph (b) or (c) above are convertible into or exchangeable for Common Stock
shall change at any time (other than under or by reason of provisions designed
to protect against dilution upon an event which results in a related adjustment
pursuant to this Article IV), or (ii) any of such Options or Convertible
Securities shall have terminated, lapsed or expired, then the Exercise Price
then in effect shall forthwith
be readjusted (effective only with respect to any exercise of this Warrant after
such readjustment) to the Exercise Price which would then be in effect had the
adjustment made upon the issuance, sale, distribution or grant of such Options
or Convertible Securities been made based upon such changed purchase price,
additional consideration or conversion rate, as the case may be (in the case of
any event referred to in clause (i) of this paragraph (d)) or had such
adjustment not been made (in the case of any event referred to in clause (ii) of
this paragraph (d)).
(e) If the Company shall pay a dividend or make any other
distribution upon any capital stock of the Company payable in Common Stock,
Options or Convertible Securities, then, for purposes of paragraph (a) above,
such Common Stock, Options or Convertible Securities shall be deemed to have
been issued or sold without consideration.
(f) If any shares of Common Stock, Options or Convertible Securities
shall be issued, sold or distributed for cash, the consideration received
therefor shall be deemed to be the amount received by the Company therefor,
after deduction therefrom of any expenses incurred in connection therewith. If
any shares of Common Stock, Options or Convertible Securities shall be issued
sold or distributed for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be deemed to be the
Fair Market Value of such consideration, after deduction of any expenses
incurred in connection therewith. If any shares of Common Stock, Options or
Convertible Securities shall be issued in connection with any merger in which
the Company is the surviving corporation, the amount of consideration therefor
shall be deemed to be the Fair Market Value of such portion of the assets and
business of the non-surviving corporation as shall be attributable to such
Common Stock, Options or Convertible Securities, as the case may be. If any
Options shall be issued in connection with the issuance and sale of other
securities of the Company, together comprising one integral transaction in which
no specific consideration is allocated to such Options by the parties thereto,
such Options shall be deemed to have been issued without consideration.
SECTION 4.4. SPECIAL DIVIDENDS. If the Company shall issue or
distribute to any holder or holders of shares of Common Stock evidences of
indebtedness, any other securities of the Company or any cash, property or other
assets (excluding a Common Stock Reorganization or a Common Stock Distribution),
whether or not accompanied by a purchase, redemption or other acquisition of
shares of Common Stock (any such nonexcluded event being herein called a
"SPECIAL DIVIDEND"), (a) the Exercise Price shall be decreased, effective
immediately after the effective date of such Special Dividend, to a price
determined by multiplying the Exercise Price then in effect by a fraction, the
numerator of which shall be the Fair Market Value of the Company per share of
outstanding Common Stock as of such effective date less any cash and the then
Fair Market Value of any evidences of indebtedness, securities or property or
other assets issued or distributed in such Special Dividend with respect to one
share of Common Stock, and the denominator of which shall be such Fair Market
Value per share and (b) the number of shares of Non-Voting Common Stock subject
to purchase upon exercise of this Warrant shall be increased to a number
determined by multiplying the number of shares of Non-Voting Common Stock
subject to purchase immediately before such Special Dividend by a fraction, the
numerator of which shall be the
Exercise Price in effect immediately before such Special Dividend and the
denominator of which shall be the Exercise Price in effect immediately after
such Special Dividend. A reclassification of Common Stock (other than a change
in par value, or from par value to no par value or from no par value to par
value) into shares of Common Stock and shares of any other class of stock shall
be deemed a distribution by the Company to the holders of such Common Stock of
such shares of such other class of stock and, if the outstanding shares of
Common Stock shall be changed into a larger or smaller number of shares of
Common Stock as part of such reclassification, a Common Stock Reorganization.
SECTION 4.5. CAPITAL REORGANIZATIONS. If there shall be any
consolidation or merger to which the Company is a party, other than a
consolidation or a merger of which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a Common
Stock Reorganization) in, outstanding shares of Common Stock, or any sale or
conveyance of the property of the Company as an entirety or substantially as an
entirety, or any recapitalization of the Company (any such event being called a
"CAPITAL REORGANIZATION"), then, effective upon the effective date of such
Capital Reorganization, the Holder shall no longer have the right to purchase
Non-Voting Common Stock, but shall have instead the right to purchase, upon
exercise of this Warrant, the kind and amount of shares of stock and other
securities and property (including cash) which the Holder would have owned or
have been entitled to receive pursuant to such Capital Reorganization if this
Warrant had been exercised immediately prior to the effective date of such
Capital Reorganization. As a condition to effecting any Capital Reorganization,
the Company or the successor or surviving corporation, as the case may be, shall
(a) execute and deliver to the each Warrantholder and to the Warrant Agency an
agreement as to the Warrantholders' rights in accordance with this Section 4.5,
providing, to the extent of any right to purchase equity securities hereunder,
for subsequent adjustments as nearly equivalent as may be practicable to the
adjustments provided for in this Article IV and (b) provide each Regulation Y
Holder with an opinion of counsel reasonably satisfactory to such Regulation Y
Holder and such other assurances as any Regulation Y Holder may reasonably
request to the effect that the ownership and exercise by any Regulation Y Holder
of this Warrant after giving effect to such Capital Reorganization shall not be
prohibited by the BHC Act or the regulations thereunder. The provisions of this
Section 4.5 shall similarly apply to successive Capital Reorganizations.
SECTION 4.6. ADJUSTMENT RULES. Any adjustments pursuant to this
Article IV shall be made successively whenever an event referred to herein
occurs, except that, notwithstanding any other provision of this Article IV, no
adjustment shall be made to the number of shares of Non-Voting Common Stock to
be delivered to each Warrantholder (or to the Exercise Price) if such adjustment
represents less than 1% of the number of shares previously required to be so
delivered, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered. No adjustment shall be made pursuant to this Article
IV in respect of (i) the issuance from time to time of shares of Common Stock
upon the exercise of any Warrants, or (ii) upon the issuance from time to time
of shares of Common Stock upon the exercise of any warrants or options to
acquire Common Stock existing on the date hereof pursuant to the
terms and conditions of such warrant or option on the date thereof. If the
Company takes a record of the holders of its Common Stock for any purpose
referred to in this Article IV, then (i) such record date shall be deemed to be
the date of the issuance, sale, distribution or grant in question and (ii) if
the Company shall legally abandon such action prior to effecting such action, no
adjustment shall be made pursuant to this Article IV in respect of such action.
SECTION 4.7. PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As
a condition precedent to the taking of any action which would require an
adjustment pursuant to this Article IV, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that (a) the Company may thereafter validly and legally issue as fully
paid and nonassessable all shares of Non-Voting Common Stock which any
Warrantholder is entitled to receive upon exercise of a Warrant and (b) the
ownership and exercise of any Warrant by any Regulation Y Holder shall not be
prohibited by the BHC Act or the regulations thereunder.
SECTION 4.8. NOTICE OF ADJUSTMENT. Not less than 10 nor more than 30
days prior to the record date or effective date, as the case may be, of any
action which requires or might require an adjustment or readjustment pursuant to
this Article IV, the Company shall give notice to each Warrantholder of such
event, describing such event in reasonable detail and specifying the record date
or effective date, as the case may be, and, if determinable, the required
adjustment and the computation thereof. If the required adjustment is not
determinable at the time of such notice, the Company shall give notice to each
Warrantholder of such adjustment and computation promptly after such adjustment
becomes determinable.
ARTICLE V
PURCHASE, REDEMPTION AND
CANCELLATION OF WARRANTS
5.1. PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have the
right or obligation to purchase or otherwise acquire Warrants at such times, in
such manner and for such consideration as set forth below.
5.2. MANDATORY REDEMPTION OF WARRANTS. The Holder may (a) at any time
and from time to time on or after the earlier of repayment in full of all
principal of and premium and interest on the Notes (as defined in the Credit
Agreement) and the termination of the Loans (as defined in the Credit Agreement)
under the Credit Agreement, (b) on or within 30 days after the date on which the
Company shall have delivered a Refinancing Notice (any such redemption pursuant
to this clause (b), a "Refinancing Redemption"), or (c) at any time and from
time to time on or after the fifth anniversary of the Original Closing Date, by
notice to the Company demand a determination of the Redemption Price (a
"Determination Notice") for purposes of this Section 5.2. Within 30 days (or, in
the case of a Refinancing Redemption, 5 days) after the receipt of any
Determination Notice from the Holder, the Company shall give to the Holder
notice of the Redemption Price, including a reasonably detailed description of
the method of calculation thereof, determined as of the day preceding such
notice of the
Redemption Price. At any time within 30 days (or, in the case of a Refinancing
Redemption, 15 days) after receipt of notice of the Redemption Price the Holder
may demand redemption of this Warrant, in whole or in part, at the Redemption
Price by notice to the Company, payable on the third Business Day after receipt
of notice of such demand (or, in the case of a Refinancing Redemption, on the
closing date of such refinancing) (any such date, the "Redemption Due Date") in
immediately available funds to the Holder upon surrender of this Warrant at the
Warrant Agency or, if requested by the Holder, without surrender of this
Warrant, by wire transfer to any account in New York City specified by notice to
the Company. Thereupon, the right to purchase shares of Non-Voting Common Stock
theretofore represented by this Warrant as to which the Holder has demanded (and
the Company may effect) redemption shall terminate, and this Warrant shall
represent the right of the Holder to receive the full Redemption Price from the
Company in accordance with this Section. The Holder's right to demand redemption
of this Warrant pursuant to this Section 5.2 shall be referred to hereinafter as
the Holder's "Mandatory Redemption Right." Upon the occurrence of an even set
forth in subsections (a) and (b) above, the Company shall, within three (3) days
of the date thereof, give written notice of the occurrence of such event to
Holder pursuant to the terms of the Assignment.
5.3. OPTIONAL REDEMPTION. At any time and from time to time after the
sixth anniversary of the Original Closing Date, the Company shall have the right
to redeem all, but not less than all, of the outstanding Warrants at the
Optional Redemption Price, determined as of the day preceding the notice of
redemption. Irrevocable notice of such right of redemption shall be given by the
Company to all Warrantholders not more than 30 days nor less than 15 days prior
to the date scheduled for redemption, stating the date and price, including a
reasonably detailed description of the method of calculation thereof, of
redemption. Warrantholders may exercise Warrants until 5:00 p.m., New York City
time, on the Business Day preceding the date of redemption set forth in a valid
notice of redemption, at which time the right to purchase shares of Non-Voting
Common Stock theretofore represented by this Warrant shall terminate, and this
Warrant shall represent the right of the Holder to receive the Optional
Redemption Price from the Company in immediately available funds upon surrender
of this Warrant at the Warrant Agency. If the Optional Redemption Price shall be
disputed pursuant to Section 3.3, the Company shall pay to the affected
Warrantholders on the redemption date the Optional Redemption Price initially
determined by it and shall thereafter make supplemental payment of any increase
(and the affected Warrantholder shall remit to the Company any decrease) in the
Optional Redemption Price upon resolution of such dispute.
5.4. CANCELLATION OF WARRANTS. All Warrants purchased, redeemed or
otherwise acquired by the Company shall thereupon be canceled and retired. The
Warrant Agency shall cancel any Warrant surrendered for exercise or registration
of transfer or exchange and deliver such canceled Warrants to the Company.
5.5. NOTICE OF REFINANCING. The Company shall give notice to each of
the Warrantholders of any intent by the Company to refinance in their entirety
the Notes (as defined in the Credit Agreement) not less than 60 days prior to
the proposed closing date of such refinancing, setting forth such proposed
closing date and notifying each Warrantholder of
its rights under Section 5.2 (such notice, the "Refinancing Notice").
5.6. NO REDEMPTION WHILE CERTAIN AMOUNTS OUTSTANDING. Notwithstanding
anything to the contrary in Section 5 hereof, no redemption or payment can be
made by the Company under Section 5 prior to payment in full of all amounts
outstanding under the Credit Agreement, as well as payment in full of all
amounts outstanding under the Note and Stock Purchase Agreement dated as of
September 15, 2000 (the "Note Purchase Agreement") among the Company, the
Borrower and Canpartners Investments IV, LLC (other than any payments that may
be due with respect to any capital securities of the Company issued pursuant to
the Note Purchase Agreement). The Holder and the Purchasers (as defined in the
Note Purchase Agreement) are intended third party beneficiaries of this
Section 5.6. This Section 5.6 cannot be modified without the consent of the
Holder and the Purchasers holding a majority in interest in the Notes (each as
defined in the Note Purchase Agreement), until the Loans under the Credit
Agreement and under the Note Purchase Agreement have been paid in full.
ARTICLE VI
DEFINITIONS
The following terms, as used in this Warrant, have the following
meanings:
"APPRAISAL NOTICE" has the meaning set forth in Section 3.3(a).
"APPRAISER" has the meaning set forth in Section 3.3(b).
"APPRAISER DETERMINATION" has the meaning set forth in Section 3.3(b).
"BHC ACT" means the Bank Holding Company Act of 1956, as amended.
"BORROWER" has the meaning set forth in the second paragraph of this
Warrant.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York, Atlanta, Georgia or Chicago,
Illinois are authorized by law to close, unless there has been an offering of
Common Stock registered under the Securities Act, in which case "Business Day"
means (a) if Common Stock is listed or admitted to trading on a national
securities exchange, a day on which the principal national securities exchange
on which the Common Stock is listed or admitted to trading is open for business
or (b) if Common Stock is not so listed or admitted to trading, a day on which
the New York Stock Exchange is open for business.
"CAPITAL LEASE" of any Person means any lease of any property (whether
real, personal or mixed) by such Person as lessee which would, in accordance
with GAAP, be required to be accounted for as a capital lease on the balance
sheet of such Person.
"CAPITAL REORGANIZATION" has the meaning set forth in Section 4.5.
"CLOSING DATE" has the meaning set forth in the Credit Agreement.
"CLOSING PRICE" on any day means (a) if Common Stock is listed or
admitted for trading on a national securities exchange, the reported last sales
price regular way or, if no such reported sale occurs on such day, the average
of the closing bid and asked prices regular way on such day, in each case on the
principal national securities exchange on which Common Stock is listed or
admitted to trading, or (b) if Common Stock is not listed or admitted to trading
on any national securities exchange, the average of the closing bid and asked
prices in the over-the-counter market on such day as reported by NASDAQ or any
comparable system or, if not so reported, as reported by any New York Stock
Exchange member firm selected by the Company for such purpose.
"COMMON STOCK" means the Voting Common Stock or the Non-Voting Common
Stock, or both, as the context may require.
"COMMON STOCK DISTRIBUTION" has the meaning set forth in
Section 4.3(a).
"COMMON STOCK REORGANIZATION" has the meaning set forth in
Section 4.2.
"COMPANY" has the meaning set forth in the first paragraph of this
Warrant.
"COMPANY DETERMINATION" has the meaning set forth in Section 3.2.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Company in
its consolidated financial statements if such statements were prepared as of
such date.
"CONSOLIDATED TOTAL DEBT" means at any date the Debt of the Company
and its Consolidated Subsidiaries, determined on a consolidated basis at such
date.
"CONVERTIBLE SECURITIES" has the meaning set forth in Section 4.3(b).
"CREDIT AGREEMENT" has the meaning set forth in the second paragraph
of this Warrant.
"DEBT" of a Person means at any date, without duplication all
obligations of such Person which, in accordance with GAAP, would be included as
a liability on the balance sheet of such Person including, without limitation,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising and paid in the
ordinary course of business, (iv) all Capital Leases of such Person, (v) all
obligations of such Person to purchase securities (or other property) which
arise out of or in connection with the issuance or sale of the same or
substantially similar securities (or property), (vi) all contingent or
non-contingent obligations of such Person to reimburse any bank or other Person
in respect
of amounts paid under a letter of credit or similar instrument, (vii) all equity
securities of such Person subject to repurchase or redemption otherwise than at
the sole option of such Person, (viii) all Debt secured by a Lien on any asset
of such Person, whether or not such Debt is otherwise an obligation of such
Person, (ix) all Debt of others Guaranteed by such Person, and (x) all
obligations of such Person in respect of settlements (structured or otherwise)
of any litigation involving such Person.
"EBITDA" has the meaning set forth in the Credit Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
"EXERCISE PRICE" means $.01 per share of the Non-Voting Common Stock,
subject to adjustment pursuant to Article IV.
"FAIR MARKET VALUE" as at any date of determination means the fair
market value of the business or property or services in question as of such
date, as determined in good faith by the Board of Directors of the Company or
otherwise in accordance with Section 3.3 hereof. The Fair Market Value of the
Company as at any date of determination shall be the greatest of (i) the Fair
Market Value at such date of the Company and its Subsidiaries as a going
concern, (ii) the liquidation value at such date of the Company and its
Subsidiaries, (iii) the consolidated net worth of the Company and its
Subsidiaries as shown on its latest available consolidated balance sheet of the
Company, and (iv) the result of (A) EBITDA for the twelve consecutive months
recently ended prior to such date multiplied by 6.0 plus (B) cash and cash
equivalents at such date minus (c) Consolidated Total Debt at such date.
Notwithstanding the foregoing, if, at any date of determination the Company of
the Fair Market Value of the Company, the Common Stock shall then be publicly
traded, the Fair Market Value of the Company on such date shall be the greater
of (a) the amount determined in accordance with the immediately preceding
sentence and (b) the Market Price on such date multiplied by the number of
shares of Common Stock then outstanding. Determination of the Fair Market Value
of the Company per share of Common Stock, shall be made without giving effect to
any discount for (i) minority interests (ii) any lack of liquidity of the Common
Stock due to the fact that there may be no public market for the Common Stock or
(iii) the voting status of the Non-Voting Common Stock.
"FULLY DILUTED BASIS" means, with respect to any determination or
calculation, that such determination or calculation is performed on a fully
diluted basis determined in accordance with generally accepted accounting
principles as in effect from time to time.
"GAAP" has the meaning specified in the Credit Agreement.
"GUARANTY" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person: (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation (whether arising
by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"HOLDER" has the meaning set forth in the first paragraph of this
Warrant.
"MARKET PRICE" as at any date of determination means the average of
the daily Closing Prices of a share of Common Stock for the shorter of (i) the
20 consecutive Business Days ending on the most recent Business Day prior to the
Time of Determination and (ii) the period commencing on the date next succeeding
the first public announcement of the issuance, sale, distribution, grant or
exercise in question through such most recent Business Day prior to the Time of
Determination. "Time of Determination" means the time and date of the earliest
of (x) the determination of the stockholders entitled to receive such issuance,
sale, distribution or grant, (y) the determination of the Holders or the Company
to exercise their respective rights set forth in Section 5.2 or 5.3 hereof, and
(z) the commencement of "ex-dividend" trading in respect thereof.
"NASD" means The National Association of Securities Dealers, Inc.
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"NON-VOTING COMMON STOCK" has the meaning set forth in the first
paragraph of this Warrant, subject to change pursuant to Article IV.
"OPTIONS" has the meaning set forth in Section 4.3(b).
"OPTIONAL REDEMPTION PRICE" means, as of any date of determination, a
price for each share of Non-Voting Common Stock issuable upon exercise of the
Warrants equal to 110% of the Redemption Price, determined as of such date.
"ORIGINAL CLOSING DATE" means December 23, 1998.
"PERSON" means any natural person, corporation, limited liability
company, limited partnership, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, and any government
agency or political subdivision thereof.
"REDEMPTION DUE DATE" has the meaning set forth in Section 5.2 hereof.
"REDEMPTION PRICE" means as of any date of determination, a price for
each
share of Non-Voting Common Stock issuable upon exercise of the Warrants equal to
the excess of (a)(i) the Fair Market Value of the Company, PLUS the aggregate
Exercise Price of all Warrants either being redeemed or then outstanding and not
being redeemed divided by (ii) the number of shares of Common Stock outstanding
on a Fully Diluted Basis over (b) the Exercise Price then in effect.
"REFINANCING NOTICE" has the meaning set forth in Section 5.5 hereof.
"REGULATION Y HOLDER" means the Holder or a holder of Warrant Shares,
if such Holder or holder of Warrant Shares is a bank holding company within the
meaning of the BHC Act or a subsidiary thereof subject to Regulation Y under the
BHC Act.
"REQUIRED INTEREST" has the meaning set forth in Section 3.3(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and any
successor Federal statute and the rules and regulations of the Securities and
Exchange Commission (or its successors) thereunder, all as the same shall be in
effect from time to time.
"SPECIAL DIVIDEND" has the meaning set forth in Section 4.4.
"SUBSIDIARY" has the meaning specified in the Credit Agreement.
"VOTING COMMON STOCK" means the Voting Common Stock, par value $.001
per share, of the Company.
"WARRANT AGENCY" has the meaning set forth in Section 2.1.
"WARRANT SHARES" means the shares of Non-Voting Common Stock issuable
upon the exercise of the Warrants.
"WARRANTHOLDER" means a holder of a Warrant.
"WARRANTHOLDERS RIGHTS AGREEMENT" has the meaning set forth in
Section 3.1.
"WARRANTS" has the meaning set forth in the second paragraph of this
Warrant.
All references herein to "DAYS" shall mean calendar days unless
otherwise specified.
ARTICLE VII
MISCELLANEOUS
7.1. NOTICES. Notices and other communications provided for herein
must be in writing and may be given by mail, courier, confirmed telex or
facsimile transmission and shall, unless otherwise expressly required, be deemed
given when received or, if mailed, four Business Days after being deposited in
the United States mail with postage prepaid and properly addressed. In the case
of the Holder, such notices and communications shall be addressed to its address
as shown on the books maintained by the Warrant Agency, unless the Holder shall
notify the Warrant Agency that notices and communications should be sent to a
different address (or telex or facsimile number), in which case such notices and
communications shall be sent to the address (or telex or facsimile number)
specified by the Holder.
7.2. WAIVERS; AMENDMENTS. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on the Company in any case shall entitle the
Company to any other or future notice or demand in similar or other
circumstances. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the holders of Warrants entitling
such holders to purchase a majority of the Common Stock subject to purchase upon
exercise of such Warrants at the time outstanding (exclusive of Warrants then
owned by the Company or any Subsidiary (as defined in the Credit Agreement) or
Affiliate (as defined in the Credit Agreement) thereof); provided, however, that
no such amendment, modification or waiver shall, without the written consent of
the holders of all Warrants at the time outstanding, (a) change the number of
shares of Non-Voting Common Stock subject to purchase upon exercise of this
Warrant, the Exercise Price or provisions for payment thereof or (b) amend,
modify or waive the provisions of this Section or Article III or IV or
Section 1.5, 5.2, 5.3 or 5.5. The provisions of the Credit Agreement and the
Warrantholders Rights Agreement may be amended, modified or waived only in
accordance with the respective provisions thereof.
Any such amendment, modification or waiver effected pursuant to and in
accordance with the provisions of this Section or the applicable provisions of
the Credit Agreement or the Warrantholders Rights Agreement shall be binding
upon the holders of all Warrants and Warrant Shares, upon each future holder
thereof and upon the Company. In the event of any such amendment, modification
or waiver, the Company shall give prompt notice thereof to all holders of
Warrants and Warrant Shares and, if appropriate, notation thereof shall be made
on all Warrants thereafter surrendered for registration of transfer or exchange.
7.3. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW).
7.4. TRANSFER; COVENANTS TO BIND SUCCESSOR AND ASSIGNS. All covenants,
stipulations, promises and agreements in this Warrant contained by or on behalf
of the Company or the Holder shall bind its successors and assigns, whether so
expressed or not. This Warrant shall be transferable and assignable by the
Holder hereof in whole or from time to time in part to any other Person and the
provisions of this Warrant shall be binding upon and inure to the benefit of the
Holder hereof and its successors and assigns.
7.5. SEVERABILITY. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
7.6. SECTION HEADINGS. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
7.7. TAX BASIS. The Company and the Holder agree pursuant to Treasury
Regulation Section 1.1273-2(h) that, for Federal income tax purposes, (i) the
Warrants together with the Revolving Credit Loans and Term Loans (as such terms
as defined in the B of A Credit Agreement) constitute an investment unit and
(ii) the aggregate issue price of the Revolving Credit Loans and Term Loans is
$24,975,000 and the aggregate purchase price of each of the Warrants is
$11,589.47. Neither the Company nor the Holder hereof shall voluntarily take
(nor shall the Company permit the Company voluntarily to take) any action
inconsistent with the agreement set forth in this Section 7.7.
7.8. RIGHT TO SPECIFIC PERFORMANCE. The Company acknowledges and
agrees that in the event of any breach of the foregoing covenants and
agreements, the Holder would be irreparably harmed and could not be made whole
only by the award of monetary damages. Accordingly, the Company agrees that the
Holder, in addition to any other remedy to which the Holder may be entitled at
law or equity, will be entitled to seek and obtain an award of specific
performance of any of the foregoing covenants and agreements.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized, and its
corporate seal to be hereunto affixed, attested by its Secretary or an Assistant
Secretary, all as of the day and year first above written.
APS HEALTHCARE, INC.
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
