This Warrant and any shares acquired upon the exercise of this Warrant have not
been registered under the Securities Act of 1933, as amended, and may not be
transferred, sold or otherwise disposed of except while such a registration is
in effect or pursuant to an exemption from registration under said Act.
PHYSICIAN COMPUTER NETWORK, INC.
Common Stock Purchase Warrant
("Warrant")
April 1, 1998
PHYSICIAN COMPUTER NETWORK, INC., a New Jersey corporation
(the "Company"), for value received, hereby certifies that JA Special Limited
Partnership, or registered assigns, is entitled to purchase from the Company
6,000,000 duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock, par value $.01 per share (the "Common Stock"), of the Company
at the purchase price per share of $1.00 (the "Initial Warrant Price"), at any
time from and after the first to occur of: (i) April 1, 1999 and (ii) a Trigger
Event (the "Exercise Date"), and prior to 5:00 p.m., Eastern Standard time, on
March 31, 2003 (the "Expiration Date"), all subject to the terms, conditions and
adjustments set forth below in this Warrant.
Certain capitalized terms used in this Warrant and Form of Subscription
attached hereto are defined in Section 13 hereof.
1. EXERCISE OR CONVERSION OF WARRANT.
1.1. Manner of Exercise or Conversion; Payment. This Warrant may be
exercised by the holder hereof, in whole or in part, at any time and from time
to time, except that this Warrant may not be exercised as to fewer than one
million (1,000,000) shares of Common Stock unless there are less than one
million (1,000,000) shares of Common Stock as to which this Warrant is then
exercisable. This Warrant may be exercised by the holder hereof, during normal
business hours on any Business Day from and
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after the Exercise Date, and prior to the Expiration Date, by surrender of this
Warrant to the Company at its office maintained pursuant to Section 12.2(a)
hereof, accompanied by a subscription in substantially the form attached to this
Warrant (or a reasonable facsimile thereof) duly executed by such holder and
accompanied by payment, in cash or by check payable to the order of the Company
(or by any combination of such methods), in the amount obtained by multiplying
(a) the number of shares of Common Stock (without giving effect to any
adjustment thereof) designated in such subscription by (b) the Initial Warrant
Price, and such holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities) determined as provided in Sections 2 through 4 hereof.
1.2. When Exercise Effective. The exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to the Company as
provided in Section 1.1 hereof. Upon such exercise the Person or Persons in
whose name or names any certificate or certificates for shares of Common Stock
(or Other Securities) shall be issuable upon such exercise as provided in
Section 1.3 hereof shall be deemed to have become the holder or holders of
record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as practicable after
the exercise of this Warrant, and in any event within five Business Days
thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the holder hereof, or, subject to Section 9 hereof, as such holder (upon payment
by such holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (or Other Securities) to which such holder
shall be entitled upon such exercise plus, in lieu of any fractional share to
which such holder would otherwise be entitled, cash in an amount equal to the
same fraction of the Market Price per share on the Business Day next preceding
the date of such exercise.
2. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.
2.1. General; Number of Shares; Warrant Price. The number of shares of
Common Stock which the holder of this Warrant shall be entitled to receive upon
the exercise hereof shall be deter mined by multiplying the number of shares of
Common Stock which
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would otherwise (but for the provisions of this Section 2) be issuable upon such
exercise, as designated by the holder hereof pursuant to Section 1.1 hereof, by
the fraction of which (a) the numerator is the Initial Warrant Price and (b) the
denominator is the Warrant Price in effect on the date of such exercise. The
"Warrant Price" (i) shall initially be the Initial Warrant Price, (ii) shall be
adjusted and readjusted from time to time as provided in this Section 2 and,
(iii) as so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by this Section 2.
2.2. Adjustment of Warrant Price; Issuance of Additional Shares of
Common Stock. In case the Company at any time or from time to time after the
date hereof shall issue or sell Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 2.3 or
2.4 hereof) without consideration or for a consideration per share less than the
greater of the Current Market Price or the Warrant Price in effect immediately
prior to such issue or sale, then, and in each such case, subject to Section 2.7
hereof, such Warrant Price shall be reduced, concurrently with such issue or
sale, to a price (calculated to the nearest .001 of a cent) determined by
multiplying such Warrant Price by a fraction:
(a) the numerator of which shall be (i) the number of
shares of Common Stock outstanding immediate ly prior to such
issue or sale plus (ii) the number of shares of Common Stock
which the aggregate consider ation received by the Company for
the total number of such Additional Shares of Common Stock so
issued or sold would purchase at the greater of such Current
Market Price and such Warrant Price; and
(b) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such
issue or sale.
2.3. Treatment of Options and Convertible Securities. In case the Company
at any time for from time to time after the date hereof shall issue, sell, grant
or assume, or shall fix a record date for the determination of holders of any
class of securities entitled to receive, any Options or Convertible Securities,
then, and in each such case, the maximum number of Additional Shares of Common
Stock (as set forth in the instrument relating thereto, without regard to any
provisions contained therein for a subse quent adjustment of such number the
purpose of which is to protect against dilution) at any time issuable upon the
exercise
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of such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities and Options therefor,
shall be deemed to be Additional Shares of Common Stock issued as of the time of
such issue, sale, grant or assumption or, in case such a record date shall have
been fixed, as of the close of business on such record date (or, if the Common
Stock trades on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading); provided, however, that such Additional Shares of Common
stock shall not be deemed to have been issued unless the consideration per share
(determined pursuant to Section 2.5 hereof) of such shares would be less than
the greater of the Current Market Price or the Warrant Price in effect on the
date of and immediately prior to such issue, sale, grant or assumption or
immediately prior to the close of business on such record date (or, if the
Common Stock trades on an ex-dividend basis, on the date prior to the com
mencement of ex-dividend trading), as the case may be; and provided, further,
that:
(a) whether or not an adjustment of the Warrant Price
is required in connection with the issuance, sale grant or
assumption of such Options or Convertible Securities, no
adjustment or further adjustment of the Warrant Price shall be
made as a result of the exercise of such Options or the
conversion or exchange of such Convertible Securities and the
consequent issue or sale of Convertible Securities or shares
of Common Stock;
(b) in any case in which Additional Shares of Common
Stock are deemed to be issued, if such Options or Convertible
Securities by their terms provide, with the passage of time or
otherwise, for any increase in the consideration payable to
the Company, or decrease in the number of Additional Shares of
Common Stock issuable, upon the exercise, conversion or
exchange thereof (by change of rate or otherwise), the Warrant
Price computed on the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date,
or date prior to the commencement of ex-dividend trading, as
the case may be, with respect thereof), and any subsequent
adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options, or
the rights of conversion or exchange under such Convertible
Securities, which are outstanding at such time;
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(c) in any case in which Additional Shares of Common
Stock are deemed to be issued, upon the expira tion (or
purchase by the Company and cancellation or retirement) of any
such Options which shall not have been exercised, or the
expiration of any rights of conversion or exchange under any
such Convertible Securities the rights of conversion or
exchange under which shall not have been exercised, the
Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date,
or date prior to the commencement of ex-dividend trading, as
the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon (and effective as of)
such expiration (or such cancellation or retirement, as the
case may be), be recomputed as if:
(i) in the case of Options or Convertible
Securities, the only Additional Shares of Common
Stock issued or sold were the Additional Shares of
Common Stock, if any, actually issued or sold upon
the exercise of such Options or the conversion or
exchange of such Convertible Securities and the
consideration received therefor was the consider
ation actually received by the Company upon such
exercise, or for the issue or sale of all such
Convertible Securities which were actually con verted
or exchanged, plus the additional consider ation, if
any, actually received by the Company upon such
conversion or exchange, and
(ii) in the case of Options for Convertible
Securities, only the Convertible Securities, if any,
actually issued or sold upon the exercise of such
Options were issued at the time of the issue, sale,
grant or assumption of such Options, and the
consideration received by the Company for the
Additional Shares of Common Stock deemed to have then
been issued was the consideration actually received
by the Company for the issue, sale, grant or
assumption of all such Options, whether or not
exercised, plus the consideration deemed to have been
received by the Company (pursuant to Section 2.5
hereof) upon the issue or sale of such Con vertible
Securities with respect to which such Options were
actually exercised; and
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(d) no readjustment pursuant to clause (b) or (c)
above (either individually or cumulatively together with all
prior readjustments as made in respect of such Options or
Convertible Securities) shall have the effect of increasing
the Warrant Price by a proportion (relative to the Warrant
Price in effect immediately prior to such readjustment) in
excess of the inverse of the aggregate proportional adjustment
thereof made in respect of the issue, sale, grant or
assumption of such Options or Convertible Securities or the
fact that such Options or Convertible Securities were
outstanding at the time other shares of Common Stock, Options
or Convertible Securities were issued.
If the consideration provided for in any Option or the additional consideration,
if any, payable upon the conversion or exchange of any Convertible Security
shall be reduced, or the rate at which any Option is exercisable or any
Convertible Security is convert ible into or exchangeable for shares of Common
Stock shall be increased, at any time under or by reason of provisions with
respect thereto designed to protect against dilution, then, effective
concurrently with each such change, the Warrant Price then in effect shall first
be adjusted to eliminate the effects (if any) of the issuance (or deemed
issuance) of such Option or Convertible Security on the Warrant Price and then
readjusted as if such Option or Convertible Security had been issued on the date
of such change with the terms in effect after such change, but only if as a
result of such adjustment the Warrant Price then in effect hereunder is thereby
reduced.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the Company
at any time or from time to time after the date hereof shall declare or pay any
dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determina tion of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.
2.5. Computation of Consideration. For the purposes of this
Section 2:
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(a) the consideration for the issue or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment
of such consideration:
(i) insofar as it consists of cash, be computed at
the amount of cash actually received by the Company net of any
expenses paid or incurred by the Company or any commissions or
compensation paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in
connection with such issue or sale;
(ii) insofar as it consists of property (includ ing
securities) other than cash actually received by the Company,
be computed at the fair value thereof at the time of such
issue or sale, as determined in good faith by the Board of
Directors of the Company;
(iii) insofar as it consists neither of cash nor of
other property, be computed as having no value; and
(iv) in case Additional Shares of Common Stock are
issued or sold together with other stock or securi ties or
other assets of the Company for a consideration which covers
both, be the portion of such consideration so received,
computed as provided in clauses (i), (ii) and (iii) above,
allocable to such Additional Shares of Common Stock, all as
determined in good faith by the Board of Directors of the
Company;
(b) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 2.3 hereof shall be deemed to have been
issued for a consideration per share determined by dividing:
(i) the total amount of cash and other property, if
any, received and receivable by the Company as direct
consideration for the issue, sale, grant or assumption of the
Options or Convertible Securities in question, plus the
minimum aggregate amount of addi tional consideration (as set
forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such consideration the purpose of which is to protect against
dilution) payable to the Company upon the exercise in full of
such Options or the conversion or exchange of such Convertible
Securities or, in the case
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of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conver sion or
exchange of such Convertible Securities, in each case
computing such consideration as provided in the foregoing
clause (a),
by
(ii) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment
of such number the purpose of which is to protect against
dilution) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible securities; and
(c) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 2.4 hereof shall be deemed to have been
issued for no consideration.
2.6. Adjustments for Combinations, etc. In case the out standing shares
of Common Stock shall be combined or xxxxxxx dated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2.7. Minimum Adjustment of Warrant Price. If the amount of any
adjustment of the Warrant Price required pursuant to this Section 2 would be
less than one-tenth (1/10) of one percent (1%) of the Warrant Price in effect at
the time such adjustment is otherwise so required to be made, such amount shall
be carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least one tenth
(1/10) of one percent (1%) of such Warrant Price.
2.8. Shares Deemed Outstanding. For all purposes of the computations to
be made pursuant to this Section 2: (i) there shall be deemed to be outstanding
as of the date hereof all shares of Common Stock (a) issuable pursuant to the
exercise of Options and conversion of Convertible Securities outstanding at the
close of business on April 1, 1998, including, without limitation, this Warrant,
and (b) issuable pursuant to the exercise of any options heretofore or hereafter
granted under the Company's Stock Option Plans; (ii) immediately after any
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Additional Shares of Common Stock are deemed to have been issued pursuant to
Section 2.3 or 2.4 hereof, such Additional Shares shall be deemed to be
outstanding; (iii) treasury shares shall not be deemed to be outstanding; and
(iv) no adjustment shall be made in the Warrant Price upon the issuance of
shares of Common Stock pursuant to Options and Convertible Securities so deemed
to be outstanding, but this Section 2.8 shall not prevent other adjustments in
the Warrant Price arising by virtue of such outstanding Options or Convertible
Securities pursuant to the provisions of Section 2.3 hereof; provided, however,
that, for purposes of calculating adjustments to the Warrant Price, there shall
be deemed to be outstanding immediately after giving effect to any issuance of
shares of Common Stock, Options or Convertible Securities all shares of Common
Stock issuable upon the exercise of Options and conversion of Convertible
Securities then out standing (including without limitation the Warrants) after
giving effect to the antidilution provisions contained in all such outstanding
Options and Convertible Securities which cause an adjustment in the number of
shares of Common Stock so issuable, either by virtue of such issuance of shares
of Common Stock, Options or Convertible Securities or by virtue of the operation
of such antidilution provisions.
3. CONSOLIDATION, MERGER, ETC.
3.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securi ties shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person or otherwise consummate a Sale of the
Company, or (d) shall effect a capital reorganization or reclassification of the
Common Stock or Other Securities (other than a capital reorganization or
reclassification to the extent that such capital reorganization or
reclassification results in the issue of Additional Shares of Common Stock for
which adjustment in the Warrant Price is provided in Section 2.2.1 or 2.2.2.
hereof), then, and in the case of each such transaction, proper provision shall
be made so that, upon the basis and the terms and in the manner provided in this
Warrant, the holder of
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this Warrant, upon the exercise hereof at any time after the consummation of
such transaction, shall be entitled to receive (at the aggregate Warrant Price
in effect at the time of such consummation for all Common Stock or Other
Securities issuable upon such exercise immediately prior to such consummation),
in lieu of the Common Stock or Other Securities issuable upon such exercise
prior to such consummation, the greatest amount of securities, cash or other
property to which such holder would actually have been entitled as a shareholder
upon such consummation if such holder had exercised the rights represented by
this Warrant immediately prior thereto, subject to adjustments (subsequent to
such consummation) as nearly equivalent as possi ble to the adjustments provided
for in Sections 2, 3 and 4 hereof; provided, however, that if a purchase, tender
or exchange offer shall have been made to and accepted by the holders of more
than 50% of the outstanding shares of Common Stock, and if the holder of the
Warrant so designates in a notice given to the Company on or before the date
immediately preceding the date of the consummation of such transaction, the
holder of the Warrant shall be entitled to receive the greatest amount of
securities, cash or other property to which such holder would actually have been
entitled as a shareholder if the holder of the Warrant had exercised the Warrant
prior to the expiration of such purchase, tender or exchange offer and accepted
such offer, subject to adjustments (from and after the consummation of such
purchase, tender or exchange offer) as nearly equivalent as possible to the
adjustments provided for in Sections 2, 3 and 4 hereof.
3.2. Assumption of Obligations. Notwithstanding anything contained in
the Warrants to the contrary, the Company will not effect any of the
transactions described in clauses (a) through (d) of Section 3.1 hereof unless,
prior to the consummation thereof, each person (other than the Company) which
may be required to deliver any stock, securities, cash or property upon the
exercise of this Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the holder of this Warrant, (b)
the obligations of the Company under this Warrant (and if the Company shall
survive the consum mation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any continuing obligations
of the Company under this Warrant), (c) the obliga tions of the Company under
the Registration Rights Agreement and (d) the obligation to deliver to such
holder such shares of stock, securities, cash or property as, in accordance with
the foregoing provisions of this Section 3, such holder may be entitled to
receive, and such Person shall have similarly deliv ered to such holder an
opinion of counsel for such Person, which
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counsel shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including without limitation all of the provisions of this Section 3) shall be
applicable to the stock, securities, cash or property which such Person may be
required to deliver upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
4. OTHER DILUTIVE EVENTS. In case any event shall occur as to which the
provisions of Section 2 or 3 hereof are not strictly applicable but the failure
to make any adjustment would not, in the opinion of the holder of this Warrant,
fairly protect the purchase rights represented by this Warrant in accordance
with the essential intent and principles of such Sections, then, in each such
case, at the request of such holder, the Company shall appoint a firm of
independent investment bankers of recognized national standing (which shall be
independent of the Company and shall be satisfactory to the holder of this
Warrant), which shall give their opinion upon the adjustment, if any, on a basis
consistent with the essential intent and principles established in Sections 2
and 3 hereof, necessary to preserve, without dilution, the purchase rights
represented by this Warrant. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to the holder of this Warrant and shall make the
adjust ments described therein.
5. NO DILUTION OR IMPAIRMENT. The Company will not, by amend ment of its
certificate of incorporation or through any xxxxxxx dation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of
this Warrant against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (a) will not permit the par value of
any shares of stock receivable upon the exercise of this Warrant to exceed the
amount payable therefor upon such exercise, (b) will take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock on the exercise of the
Warrants from time to time outstanding and (c) will not take any action which
results in any adjustment of the Warrant Price if the total number of shares of
Common Stock (or Other Securities) issuable after the action upon the exercise
of all of the Warrants would exceed the total number of shares of Common Stock
(or Other
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Securities) then authorized by the Company's certificate of incorporation and
available for the purpose of issue upon such exercise.
6. ACCOUNTANTS' REPORT AS TO ADJUSTMENTS. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable upon
the exercise of this Warrant, the Company at its expense will promptly compute
such adjustment or readjustment in accordance with the terms of this Warrant and
cause independent certified public accounts of recognized nation al standing
(which may be the regular auditors of the Company) selected by the Company to
verify such computation (other than any computation of the fair value of
property as determined in good faith by the Board of Directors of the Company)
and prepare a report setting forth such adjustment or readjustment and showing
in reasonable detail the method of calculation thereof and the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or to be received by the Company for any Additional
Shares of Common Stock issued or sold or deemed to have been issued, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c) the Warrant Price in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by Section 2 hereof) on account thereof.
The Company will forthwith mail a copy of each such report to the holder of this
Warrant and will, upon the written request at any time of the holder of this
Warrant, furnish to such holder a like report setting forth the Warrant Price at
the time in effect and showing in reasonable detail how it was calculated. The
Company will also keep copies of all such reports at its office maintained
pursuant to Section 12.2(a) hereof and will cause the same to be available for
inspection at such office during normal business hours by the holder of this
Warrant or any prospective purchaser of a Warrant designated by the holder
thereof.
7. NOTICES OF CORPORATE ACTION. In the event of
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, reclas
sification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and
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any other Person or any transfer of all or substantially all the
assets of the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquida
tion or winding-up of the Company,
(d) any issuance of any Common Stock, Convertible
Security or Option by the Company, or
(e) any Sale of the Company,
the Company will mail to the holder of this Warrant a notice specifying (i) the
date or expected date on which any record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribu tion or right, (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolida tion, merger,
transfer, dissolution, liquidation, winding-up or Sale of the Company is to take
place, the time, if any such time is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up and a description in reasonable detail of the transaction and (iii)
the date of such issuance, together with a description of the security so issued
and the consideration received by the Company therefor. Such notice shall be
mailed at least 30 days prior to the date therein specified.
8. REGISTRATION OF COMMON STOCK. If any shares of Common Stock required to be
reserved for purposes of exercise of this Warrant require registration with or
approval of any governmental author ity under any federal or state law (other
than the Securities Act) before such shares may be issued upon exercise, the
Company will, at its expense and as expeditiously as possible, use its best
efforts to cause such shares to be duly registered or approved, as the case may
be. This Warrant and the shares of Common Stock (or Other Securities) issuable
upon exercise of this Warrant shall constitute Registrable Securities (as such
term is defined in the Registration Rights Agreement). The holder of this
Warrant shall be entitled to all of the benefits afforded to a holder of any
such Registrable Securities under the Registra tion Rights Agreement and such
holder, by its acceptance of this Warrant, agrees to be bound by and to comply
with the terms and
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conditions of the Registration Rights Agreement applicable to such holder as a
holder of such Registrable Securities. As promptly as practicable following the
issuance of this Warrant to the Initial Holder and, in any event within 15
Business Days thereafter, the Company will, at its expense, arrange for the
listing, upon official notice of issuance, of the shares of Common Stock
issuable upon exercise hereof. At any such time as the Warrants are listed on
any national securities exchange or the Common Stock is listed on any other
national securities exchange, the Company will, at its expense, obtain promptly
and maintain the approval for listing on each such exchange, upon official
notice of issuance, of the shares of Common Stock issuable upon exercise of the
Warrant and maintain the listing of such shares or Warrant, as the case may be,
after their issuance; and the Company will also list on such national securities
exchange, will register under the Exchange Act and will maintain such listing
of, any Other Securities that at any time are issuable upon exercise of the
Warrant, if and at the time that any securities of the same class shall be
listed on such national securities exchange by the Company.
9. RESTRICTIONS ON TRANSFER.
9.1. Restrictive Legend. Except as otherwise permitted by this Section
9, each certificate for Common Stock (or Other Securities) issued upon the
exercise of this Warrant, each certificate issued upon the direct or indirect
transfer of any such Common Stock (or Other Securities), this Warrant and any
Warrant issued upon direct or indirect transfer or in substitu tion for this
Warrant pursuant to Section 12 hereof shall bear the legend set forth on the
face of this Warrant and shall be transferable only upon satisfaction of the
conditions specified in this Section 9.
9.2. Notice of Proposed Transfer, Opinion of Counsel. Prior
to any transfer of any Restricted Securities which are not
registered under an effective registration statement under the
Securities Act, the holder thereof will give written notice to
the Company of such holder's intention to effect such transfer
and to comply in all other respects with this Section 9.2. Each
such notice (a) shall describe the manner and circumstances of
the proposed transfer, and (b) shall designate counsel for the
holder giving such notice. The holder giving such notice will
submit a copy thereof to the counsel designated in such notice.
The following provisions shall then apply:
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(a) If in the opinion of such counsel the proposed transfer
may be effected without registration of such Restricted Securities
under the Securities Act, such holder shall thereupon be entitled to
transfer such Restricted Securities in accordance with the terms of the
notice delivered by such holder to the Company. Except as provided in
Section 9.3 hereof, each certificate representing such Restricted
Securities issued upon or in connection with such transfer shall bear
the restrictive legends required by Section 9.1 hereof.
(b) If in the opinion of such counsel the proposed transfer
may not legally be effected without registration of such Restricted
Securities under the Securities Act (such opinion to state the basis of
the legal conclusions reached therein), such holder shall not be
entitled to transfer such Restricted Securities until either (x)
receipt by the Company of a further notice from such holder pursuant to
the foregoing provisions of this Section 9.2 and fulfillment of the
provisions of clause (a) and (y) such Restricted Securi ties have been
effectively registered under the Securities Act.
The Company will pay the reasonable fees and disbursements of counsel for any
holder of Restricted Securities and of counsel for the Company in connection
with all opinions rendered by them pursuant to this Section 9.2 and pursuant to
Section 9.3 hereof. Notwithstanding any other provision of this Section 9, no
opinion of counsel shall be necessary for a transfer of Restricted Securities by
the holder thereof to a subsidiary, shareholder or affiliate of such holder, if
the transferee agrees in writing to be subject to the terms hereof to the same
extent as if such transferee were the Initial Holder hereof.
9.3. Termination of Restrictions. The restrictions imposed by this
Section 9 upon the transferability of Restricted Securi ties shall cease and
terminate as to any particular Restricted Securities (a) when such Restricted
Securities shall have been effectively registered under the Securities Act, or
(b) when, in the opinions of both counsel for the holder thereof and counsel for
the Company, such restrictions are no longer required in order to insure
compliance with the Securities Act. Whenever such restrictions shall cease and
terminate as to any Restricted Securities, the holder thereof shall be entitled
to receive from the Company, without expense (other than applicable transfer
taxes, if any), new securities of like tenor not bearing the applicable legends
required by Section 9.1 hereof.
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9.4. Warrant Transfer. Anything contained in this Warrant to the
contrary notwithstanding, this Warrant may be transferred, sold or assigned in
whole or in part, at any time and from time to time, except that this Warrant
may not be transferred, sold or assigned as to fewer than one million
(1,000,000) shares of Common Stock unless there are less than one million
(1,000,000) shares of Common Stock as to which this Warrant is then exercisable.
10. AVAILABILITY OF INFORMATION. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company will comply with the reporting requirements of Sections 13 and 15(d) of
the Exchange Act and will comply with all other public information reporting
requirements of the Commission (including Rule 144 promulgated by the Commission
under the Securities Act) from time to time in effect and relating to the
availability of an exemption from the Securities Act for the sale of any Re
stricted Securities. The Company will also cooperate with each holder of any
Restricted Securities in supplying such information as may be necessary for such
holder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Restricted Securi ties.
The Company will furnish to the holder of this Warrant, promptly upon their
becoming available, copies of all financial statements, reports, notices and
proxy statements sent or made available generally by the Company to its
stockholders, and copies of all regular and periodic reports and all
registration statements and prospectuses filed by the Company with any securi
ties exchange or with the Commission.
11. RESERVATION OF STOCK, ETC. The Company will at all times reserve and keep
available, solely for issuance and delivery upon exercise of the Warrant, the
number of shares of Common Stock of each class (or Other Securities) from time
to time issuable upon exercise of the Warrant. All shares of Common Stock (or
Other Securities) issuable upon exercise of the Warrant shall be duly authorized
and, when issued upon such exercise, shall be validly issued and, in the case of
shares, fully paid and nonassessable with no liability on the part of the
holders thereof.
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12. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANT.
12.1. Ownership of Warrant. The Company may treat the person in whose
name this Warrant is registered on the register kept at the office of the
Company maintained pursuant to Section 12.2(a) hereof as the owner and holder
thereof for all purposes, except that, if and when the Warrant is properly
assigned in blank, the Company shall treat the assignee thereof as the owner of
the Warrant for all purposes. Subject to Section 9 hereof, the Warrant, if
properly assigned, may be exercised by a new holder without a new Warrant first
having been issued.
12.2. Office; Transfer and Exchange of Warrant.
(a) The Company will maintain an office (which may be an
agency maintained at a bank) in New York or New Jersey where notices,
presentations and demands in respect of this Warrant may be made upon
it. Such office shall be main tained at 0000 Xxx Xxxxxxxx Xxxx, Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000, until such time as the Company shall notify
the holder of the Warrant of any change of location of such office.
(b) The Company shall cause to be kept at its office
maintained pursuant to Section 12.2(a) hereof a register for the
registration and transfer of the Warrant. The name and address of the
holder of the Warrant, the transfers thereof and the names and
addresses of transferees of the Warrant shall be registered in such
register. The Person in whose name the Warrant shall be so registered
shall be deemed and treated as the owner and holder thereof for all
purposes of this Warrant, and the Company shall not be affected by any
notice or knowledge to the contrary.
(c) Upon the surrender of the Warrant, properly endorsed, for
registration of transfer or for exchange at the office of the Company
maintained pursuant to Section 12.2(a) hereof, the Company at its
expense will (subject to compliance with Section 9 hereof, if
applicable) execute and deliver to or upon the order of the holder
thereof a new Warrant of like tenor, in the name of such holder or as
such holder (upon payment by such holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face
or faces of the Warrant so surrendered.
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12.3. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant and, in the case of any such loss, theft or destruction of the Warrant
held by a Person other than the Initial Holder or any institutional investor,
upon delivery of indemnity reasonably satisfactory to the Company in form and
amount or, in the case of any such mutilation, upon surrender of the Warrant for
cancellation at the office of the Company maintained pursuant to Section 12.2(a)
hereof, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor and dated the date hereof.
13. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective
meanings:
Additional Shares of Common Stock: All shares (including treasury
shares) of Common Stock issued or sold (or, pursuant to Section 2.3 or 2.4
hereof, deemed to be issued) by the Company after the date hereof, whether or
not subsequently reacquired or retired by the Company, other than the shares of
Common Stock issued: (i) upon the exercise of the Warrant; (ii) upon the
exercise of options granted pursuant to the Company's Stock Option Plan, as the
same may be amended from time to time; (iii) in connection with the financing of
the acquisition by the Company of VERSYSS Incorporated; or (iv) in connection
with the exercise of any Options or the conversion of any Convertible Securities
which are deemed to be outstanding in accordance with Section 2.8 hereof.
Book Value: Shall mean, in respect of any share of Common Stock on any
date herein specified, the quotient of (a) the amount by which (i) the Company's
consolidated total assets exceeds (ii) the Company's consolidated total
liabilities, in each case determined (A) as of the last day of the most recent
fiscal year of the Company ended prior to such date, or (B) as of the last day
of the most recent calendar month ended prior to such date, whichever is higher,
divided by (b) the number of Fully Diluted Outstanding shares of Common Stock.
Business Day: Any day other than a Saturday or a Sunday or a day on
which commercial banking institutions in New York, New York are authorized by
law to be closed. Any reference to "days" (unless Business Days are specified)
shall mean calendar days.
-18-
Commission: The Securities and Exchange Commission or any
other federal agency at the time administering the Securities
Act.
Common Stock: As defined in the introduction to this Warrant, such term
to include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Company the holders of
which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distri butions on any shares entitled to preference.
Company: As defined in the introduction to this Warrant, such term to
include any corporation which shall succeed to or assume the obligations of the
Company hereunder in compliance with Section 3 hereof.
Convertible Securities: Any evidences of indebtedness, shares of stock
(other than Common Stock) or other securities directly or indirectly convertible
into or exchangeable for Additional Shares of Common Stock.
Current Market Price: On any date specified herein, the average daily
Market Price during the period of the most recent 20 days, ending on such date,
on which the national securities exchanges were open for trading, except that if
no class of the Common Stock is then listed or admitted to trading on any nation
al securities exchange or quoted in the over-the-counter market, the Current
Market Price shall be the Market Price on such date; provided, however, that in
the event that the Company has entered into a firm commitment underwriting
agreement with an underwriter (i) pursuant to which the Company and such
underwriter have determined an offering price for the sale of Common Stock in a
public offering as a result of arms length negotiations within the 20 day period
described above or (ii) relating to the public offering of Convertible
Securities then, in the case of (i), the Current Market Price of shares of
Common Stock issued and sold in such public offering shall be such offering
price and in the case of (ii), the Current Market Price shall be the lower of
Current Market Price or Market Price on the date immediately preceding the date
the offering price of such Convertible Securities was determined in connection
with the filing of the Registration Statement which is declared effective
covering such Convertible Securities filed pursuant to the Securities Act.
-19-
Exercise Date: As defined in the introduction to this
Warrant.
Exchange Act: The Securities Exchange Act of 1934, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
Expiration Date: As defined in the introduction to this
Warrant.
Fully Diluted Outstanding: When used with reference to Common Stock,
shall mean at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock outstanding at such date and all shares
of Common Stock issuable in respect of this Warrant outstanding on such date and
other options or warrants to purchase, or securities convertible into, shares of
Common Stock outstanding on such date which would be deemed outstanding in
accordance with generally accepted accounting principles as from time to time in
effect for purposes of deeming book value or net income per share.
Initial Holder: JA Special Limited Partnership.
Market Price: On any date specified herein, the amount per share of
Common Stock equal to (a) the last sale price of Common Stock, regular way, on
such date or, if no such sale takes place on such date, the average of the
closing bid and asked prices thereof on such date, in each case as officially
reported on the principal national securities exchange on which Common Stock is
then listed or admitted to trading, or (b) if Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the NASD, the last trading price of Common
Stock on such date, or (c) if there shall have been no trading on such date or
if Common Stock is not so designated, the average of the closing bid and asked
prices of Common Stock on such date as shown by the NASD automated quotation
system, or (d) if Common Stock is not then listed or admitted to trading on any
national exchange or quoted in the over-the-counter market, the higher of (x)
Book Value per share or (y) the fair value thereof determined in good faith by
the Board of Directors of the Company as of a date which is within 15 days of
the date as of which the determination is to be made.
NASD: The National Association of Securities Dealers, Inc.
-20-
Options: Rights, options or warrants to subscribe for, purchase or
otherwise acquire either Additional Shares of Common Stock or Convertible
Securities other than options granted pur suant to the Company's Stock Option
Plan as the same may be amended from time to time.
Other Securities: Any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securi ties pursuant to
Section 3 hereof or otherwise.
Person: A corporation, an association, a partnership, an
organization, a business, an individual, a government or xxxxxx
xxx subdivision thereof or a governmental agency.
Registration Rights Agreement: The Registration Rights
Agreement, dated as of February 22, 1993, between the Company and
Xxxxxx X. Picower.
Restricted Securities: All of the following: (a) the Warrant bearing
the applicable legend or legends referred to in Section 9.1 hereof, (b) any
shares of Common Stock (or Other Securities) which have been issued upon the
exercise of Warrants and which are evidenced by a certificate or certificates
bearing the applicable legend or legends referred to in such Section, (c) unless
the context otherwise requires, any shares of Common Stock (or Other Securities)
which are at the time issuable upon the exercise of Warrants and which, when so
issued, will be evidenced by a certificate or certificates bearing the
applicable legend or legends referred to in such Section.
Sale of the Company: any of: (i) the sale by one or more of the
shareholders of the Company in one or more transactions of a majority of the
outstanding common stock of the Company; (ii) the merger or consolidation of the
Company with or into any other Person, in a transaction in which the
shareholders of the Company immediately prior to the consummation of such
transaction collectively own less than 50% of the common stock and voting power
of the entity surviving; such transaction (or any other business combination
transaction having a similar effect); or (iii) the sale of all or substantially
all of the assets of the Company in a single transaction or a series of related
transactions.
-21-
Securities Act: The Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
Stock Option Plan: Collectively, the Company's Amended and Restated
1993 Incentive and Non-Incentive Stock Option Plan, as amended from time to
time, the Company's Amended and Restated 1993 Non-Employee Directors
Non-Incentive Stock Option Plan, as amended from time to time, and the Company's
Value Added Reseller Stock Option Plan, as amended from time to time.
Trigger Event: Trigger Event: The earlier to occur of: (i) five (5)
business days preceding the Sale of the Company; or (ii) in the event that the
Sale of the Company shall require the approval of the holders of the Common
Stock, five (5) business days prior to the date fixed by the Company as the
record date for determination of the holders of Common Stock entitled to vote
thereon.
Warrant Price: As defined in Section 2.1 hereof.
Warrants: As defined in the introduction to this Warrant.
14. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
15. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in this Warrant
shall be construed as conferring upon the holder hereof any rights as a
stockholder of the Company or as imposing any obligation on such holder to
purchase any securities or as imposing any liabilities on such holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company or otherwise.
16. NOTICES. All notices, requests, demands and other communi cations provided
for hereunder shall be in writing (including telegraphic communication) and
mailed, telecopied, telegraphed or delivered:
-22-
If to the Holder:
JA Special Limited Partnership
00 Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
If to the Company to:
Physician Computer Network, Inc.
0000 Xxx Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
or at such other address as shall be designated in a written notice to the other
parties complying as to delivery with the terms of this Section 16.
All such notices, requests, demands and other communications shall, when
mailed (registered mail, return receipt requested,postage prepaid), personally
delivered, or telegraphed, to be effective four days after deposit in the mails,
when personally delivered, or when delivered to the telegraph company, respec
tively, addressed as aforesaid, unless otherwise provided herein and, when
telecopied, shall be effective upon actual receipt.
17. FILING FEES. In the event that prior to and in connection with the exercise
or conversion of this Warrant or any other option or warrant held by the holder
of this Warrant, any filing or notice is required to be made with any
governmental authority or agency (including, without limitation, pursuant to the
Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended, and any
regulations promulgated thereunder) then the Company shall bear and reimburse
such holder for all filings fees and similar costs required to be paid in
connection therewith.
[INTENTIONALLY BLANK]
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18. MISCELLANEOUS. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of the State of New York. The section headings in
this Warrant are for purposes of convenience only and shall not constitute a
part hereof.
PHYSICIAN COMPUTER NETWORK, INC.
By: /s/ Xxxx Xxxxxxxx
----------------------------------
Title: Vice President
-------------------------------
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FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
To Physician Computer Network, Inc.
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder ------------
shares of the Common Stock and herewith makes payment of $ therefor, and
requests that the certificates for such shares be issued in the name of, and
delivered to , whose address is
.
Insert here the number of shares called for on the face of this Warrant
without making any adjustment for Additional Shares of Common Stock or any other
stock or other securities or property or cash which, pursuant to the adjustment
provisions of this Warrant, may be delivered upon exercise.
Dated: ----------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of Warrant)
----------------------------------
(Street Address)
----------------------------------
(City) (State) (Zip Code)
-25-
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the
within Warrant hereby sells, assigns and transfer unto
the right represented by such Warrant to purchase --
-----------
Insert here the number of shares called for on the face of this Warrant
without making any adjustment for Additional Shares of Common Stock or any other
stock or other securities or property or cash which, pursuant to the adjustment
provisions of this Warrant, may be delivered upon exercise.
Dated: -----------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of Warrant)
-----------------------------------
(Street Address)
-----------------------------------
(City) (State) (Zip Code)
Signed in the presence of:
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