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EXHIBIT 4.7
WARRANT AGREEMENT
between
PHYSICIANS CLINICAL LABORATORY, INC.
and
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
Dated as of September 30, 1997
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TABLE OF CONTENTS
PAGE
Section 1. Definitions.................................................. 1
Section 2. Form of Warrant; Execution; Registration..................... 3
Section 3. Transfer and Exchange of Warrants............................ 4
Section 4. Term of Warrants; Exercise of Warrants; Compliance with
Government Regulation........................................ 5
Section 5. Payment of Taxes............................................. 7
Section 6. Mutilated or Missing Warrant; Certificates................... 7
Section 7. Reservation of Warrant Shares................................ 8
Section 8. Adjustment of Exercise Price; Number of Warrant Shares and
Shares of Capital Stock Warrants Are Exercisable Into ....... 8
Section 9. Fractional Interests......................................... 15
Section 10. No Rights as Stockholders; Notices to Holders................ 15
Section 11. Payments in U.S. Currency.................................... 16
Section 12. Merger or Consolidation or Change of Name of Warrant Agent... 16
Section 13. Appointment of Warrant Agent................................. 17
Section 14. Change of Warrant Agent...................................... 19
Section 15. Notices...................................................... 19
Section 16. Cancellation of Warrants..................................... 20
Section 17. Supplements and Amendments................................... 20
Section 18. Successors................................................... 20
Section 19. Applicable Law............................................... 20
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Section 20. Benefits of this Agreement................................... 21
Section 21. Counterparts................................................. 21
Section 22. Captions..................................................... 21
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THIS WARRANT AGREEMENT, dated as of September 30, 1997 (the "Effective Date"),
is between Physicians Clinical Laboratory, Inc., a Delaware corporation
(together with its successor after the Effective Date, the "Company"), and U.S.
Trust Company of California, N.A. (the "Warrant Agent"), acting as agent for the
holders of certain existing equity interests in the Company as named on Schedule
1 hereto.
W I T N E S S E T H:
WHEREAS, on November 8, 1996, Physicians Clinical Laboratory, Inc. and
four of its affiliates, filed voluntary petitions in the United States
Bankruptcy Court for the Central District of California, Los Angeles Division
(the "Bankruptcy Court"), Case Number SV96- 23185-GM, seeking reorganization
under Chapter 11 of Title 11 of the United States Code; and
WHEREAS, by Order dated April 23, 1997, the Second Amended Joint Plan of
Reorganization of Physicians Clinical Laboratory, Inc. and its Joint Affiliated
Debtors, filed with the Bankruptcy Court on February 7, 1997 (the "Plan"), was
confirmed by the Bankruptcy Court; and
WHEREAS, the Plan contemplates that the Company will enter into certain
agreements, including this Agreement by which the Company has agreed to issue
warrants (subject to adjustment as provided herein) (the "Warrants") for the
purchase by the Holders of an aggregate of 131,579 shares of the Common Stock of
the Company, $.01 par value, which amount constitutes five percent (5%) of the
shares of Common Stock issued and outstanding on the date hereof, on a fully
diluted basis; and
WHEREAS, the Company desires to issue the Warrants, each of which entitles
the holder thereof to purchase one share of the Common Stock (each of said
shares of Common Stock deliverable upon exercise of the Warrants, a "Warrant
Share"); and
WHEREAS, the Company wishes the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act in connection with the
issuance, division, transfer, exchange and exercise of Warrants.
NOW, THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective rights and
obligations thereunder of the Company and the registered owners of the Warrants
and any security into which they may be exchanged (the "Holders"), the Company
and the Warrant Agent hereby agree as follows:
Section 1. Definitions. The following terms, as used herein, have the following
meanings (all terms defined herein in the singular to have the correlative
meanings when used in the plural and vice versa):
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1.1 "Agreement" means this Warrant Agreement, as the same may be amended,
modified or supplemented from time to time.
1.2 "Assets" has the meaning ascribed to such term in Section 8.1(c)
hereof.
1.3 "Bankruptcy Court" has the meaning ascribed to such term in the
preamble hereto.
1.4 "Business Day" means a day other than (a) a Saturday or Sunday, (b)
any day on which banking institutions located in the City of New York, New York
are required or authorized by law or by local proclamation to close or (c) any
day on which the New York Stock Exchange is closed.
1.5 "Commercially Reasonable Efforts" when used with respect to any
obligation to be performed or term or provision to be observed hereunder, means
such efforts as a prudent Person seeking the benefits of such performance or
action would make, use, apply or exercise to preserve, protect or advance its
rights or interests, provided, that such efforts do not require such Person to
incur a material financial cost or a substantial risk of material liability
unless such cost or liability (a) would customarily be incurred in the course of
performance or observance of the relevant obligation, term or provision, (b) is
caused by or results from the wrongful act or negligence of the Person whose
performance or observance is required hereunder or (c) is not excessive or
unreasonable in view of the rights or interests to be preserved, protected or
advanced. Such efforts may include, without limitation, the expenditure of such
funds and retention by such Person of such accountants, attorneys or other
experts or advisors as may be necessary or appropriate to effect the relevant
action; the undertaking of any special audit or internal investigation that may
be necessary or appropriate to effect the relevant action; and the commencement,
termination or settlement of any action, suit or proceeding involving such
Person to the extent necessary or appropriate to effect the relevant action.
1.6 "Common Stock" means the common stock, par value $.01, of the Company.
1.7 "Convertible Securities" has the meaning ascribed to such term in
Section 8.1(d) hereof.
1.8 "Current Market Price" has the meaning ascribed to such term in
Section 8.1(e) hereof.
1.9 "Effective Date" means September 30, 1997.
1.10 "Exercise Period" has the meaning ascribed to such term in Section
4.1 hereof.
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1.11 "Exercise Price" means $13.30 per share of Common Stock, based upon
an implied enterprise value for the Company of $90,000,000, as adjusted pursuant
to Section 8 hereof.
1.12 "Holders" has the meaning ascribed to such term in the preamble
hereto.
1.13 "NASD" has the meaning ascribed to such term in Section 4.2 hereof.
1.14 "Person" means a natural person, a corporation, a partnership, a
trust, a joint venture, any regulatory authority or any other entity or
organization.
1.15 "Plan" has the meaning ascribed to such term in the preamble hereto.
1.16 "Price Per Share" has the meaning ascribed to such term in Section
8.1(e)(ii) hereof.
1.17 "Rights" has the meaning ascribed to such term in Section 8.1(b)
hereof.
1.18 "SEC" means the United States Securities and Exchange Commission, or
any successor governmental agency or authority thereto.
1.19 "Subsidiary" has the meaning ascribed to such term in Section 8.1(c)
hereof.
1.20 "Transfer Agent" has the meaning ascribed to such term in Section 7
hereof.
1.21 "Warrant" has the meaning ascribed to such term in the preamble
hereto.
1.22 "Warrant Certificate" has the meaning ascribed to such term in
Section 2.1 hereof.
1.23 "Warrant Register" has the meaning ascribed to such term in Section
2.2 hereof.
1.24 "Warrant Share" has the meaning ascribed to such term in the preamble
hereto.
Section 2. Form of Warrant; Execution; Registration.
2.1 Form of Warrant; Execution of Warrants. The certificates evidencing
the Warrants (the "Warrant Certificates") shall be in registered form only and
shall be in the form set forth as Exhibit A hereto. The Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board, Chief
Executive Officer, President or one of its Vice Presidents. The signature of any
such officer on the Warrant Certificates may be manual or by facsimile. Any
Warrant Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate.
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Each Warrant Certificate shall be dated the date it is countersigned by the
Warrant Agent pursuant to Section 2.3 hereof.
2.2 Registration. The Warrant Certificates shall be numbered and shall be
registered on the books of the Company maintained at the principal office of the
Warrant Agent initially in Los Angeles, California (or such other place in the
continental United States as the Warrant Agent shall from time to time notify
the Company and the Holders in writing) (the "Warrant Register") as they are
issued. The Company and the Warrant Agent and the Warrant Agent shall be
entitled to treat the registered owner of any Warrant as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other person.
2.3 Countersignature of Warrants. The Warrant Certificates shall be
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. Warrant Certificates may be countersigned, however, by the
Warrant Agent and may be delivered by the Warrant Agent notwithstanding that the
persons whose manual or facsimile signatures appear thereon as proper officers
of the Company shall have ceased to be such officers at the time of such
countersignature, issuance or delivery. The Warrant Agent shall, upon written
instructions of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the Company,
countersign, issue and deliver Warrant Certificates entitling the Holders
thereof to purchase not more than an aggregate of 131,579 Warrant Shares
(subject to adjustment pursuant to Section 8 hereof) and shall countersign,
issue and deliver Warrant Certificates as otherwise provided in this Agreement.
Section 3. Transfer and Exchange of Warrants. Subject to the terms hereof, the
Warrant Agent shall initially countersign, register in the Warrant Register and
deliver Warrants hereunder in accordance with the written instructions of the
Company. Subject to the terms hereof and the receipt of such documentation as
the Warrant Agent may reasonably require, the Warrant Agent shall thereafter
from time to time register the transfer of any outstanding Warrants upon the
Warrant Register upon surrender of the Warrant Certificate or Certificates
evidencing such Warrants duly endorsed or accompanied (if so required by it) by
a written instrument or instruments of transfer in form reasonably satisfactory
to the Warrant Agent, duly executed by the registered Holder or Holders thereof
or by the duly appointed legal representative thereof or by a duly authorized
attorney. Subject to the terms of this Agreement, each Warrant Certificate may
be exchanged for another Warrant Certificate or Certificates entitling the
Holder thereof to purchase a like aggregate number of Warrant Shares as the
Warrant Certificate or Certificates surrendered then entitles such Holder to
purchase. Any Holder desiring to exchange a Warrant Certificate or Certificates
shall make such request in writing delivered to the Warrant Agent and shall
surrender, duly endorsed or accompanied (if so required by the Warrant Agent) by
a written instrument or instruments of transfer in form reasonably satisfactory
to the Warrant Agent, the Warrant Certificate or Certificates to be so
exchanged. Upon registration of transfer, the Company shall issue and the
Warrant Agent shall countersign and deliver by certified mail a new Warrant
Certificate or Certificates to the persons entitled thereto.
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No service charge shall be made for any exchange or registration of
transfer of a Warrant Certificate or of Warrant Certificates, but the Company
may require payment of a sum sufficient to cover any stamp tax or other tax or
other governmental charge that is imposed in connection with any such exchange
or registration of transfer pursuant to Section 5 hereof.
By accepting the initial delivery, transfer or exchange of Warrants,
each Holder shall be deemed to agree to the terms of this Agreement as it may be
in effect from time to time, including any amendments or supplements duly
adopted in accordance with Section 17 hereof.
Section 4. Term of Warrants; Exercise of Warrants; Compliance with Government
Regulation.
4.1 Term of Warrants. Subject to the terms of this Agreement, each Holder
shall have the right, which may be exercised at any time from 9:00 a.m., New
York City time, on October 1, 1997 to 5:00 p.m., New York City time, on
September 30, 2002 (five years after the Effective Date) (the "Exercise Period")
to receive from the Company the number of Warrant Shares which the Holder may at
the time be entitled to receive upon exercise of such Warrants and payment of
the Exercise Price then in effect for such Warrant Shares, and the Warrant
Shares issued to a Holder upon exercise of its Warrants shall be duly
authorized, validly issued, fully paid, nonassessable and shall not have been
issued in violation of or subject to any preemptive rights. Each Warrant not
exercised prior to the expiration of the Exercise Period shall become void, and
all rights thereunder and all rights in respect thereof under this Agreement
shall cease as of the expiration of the Exercise Period.
4.2 Exercise of Warrants. During the Exercise Period, each Holder may,
subject to this Agreement, exercise from time to time some or all of the
Warrants evidenced by its Warrant Certificate(s) by (a) surrendering to the
Company at the principal office of the Warrant Agent such Warrant Certificate(s)
with the form of election to purchase on the reverse thereof duly filled in and
signed, which signature shall be guaranteed by a bank or trust company having an
office or correspondent in the United States or a broker or dealer which is a
member of a registered securities exchange or the National Association of
Securities Dealers, Inc. (the "NASD"), and (b) paying to the Warrant Agent for
the account of the Company the aggregate Exercise Price for the number of
Warrant Shares in respect of which such Warrants are exercised. Warrants shall
be deemed exercised on the date such Warrant Certificate(s) are surrendered to
the Warrant Agent and tender of payment of the aggregate Exercise Price is made.
Payment of the aggregate Exercise Price shall be made in cash by wire transfer
of immediately available funds to the Warrant Agent for the account of the
Company or by certified or official bank check or checks to the order of the
Company or by any combination thereof.
Upon the exercise of any Warrants in accordance with this Agreement,
the Company shall issue and cause to be delivered with all reasonable dispatch,
to or upon
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the written order of the Holder and in such name or names as the Holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of such Warrants and shall take such other actions at
its sole expense as are necessary to complete the exercise of the Warrants
(including, without limitation, payment of any cash with respect to fractional
interests required under Section 9 hereof). The Warrant Agent shall have no
responsibility or liability for such issuance or the determination of the number
of Warrant Shares issuable upon such exercise. The certificate or certificates
representing such Warrant Shares shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become a holder
of record of such Warrant Shares as of the date the Warrants are exercised
hereunder. Each Warrant Share, when issued upon exercise of the Warrants, shall
be duly authorized, validly issued, fully paid and non-assessable and will not
have been issued in violation of or subject to any preemptive rights.
In the event that less than all of the Warrants evidenced by a
Warrant Certificate are exercised, the Holder thereof shall be entitled to
receive a new Warrant Certificate or Certificates as specified by such Holder
evidencing the remaining Warrant or Warrants, and the Warrant Agent is hereby
irrevocably authorized by the Company to countersign, issue and deliver the
required new Warrant Certificate or Certificates evidencing such remaining
Warrant or Warrants pursuant to the provisions of this Section 4.2 hereof and of
Section 3 hereof. The Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrant Certificates duly executed on behalf to
the Company for such purpose.
Upon delivery of the Warrant Shares issuable upon exercise in
accordance herewith and of any required new Warrant Certificates, the Company
shall direct the Warrant Agent by written order to cancel the Warrant
Certificates surrendered upon exercise. Such canceled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner permitted by applicable
laws and a certificate of destruction will be issued to the Company. The Warrant
Agent shall account promptly to the Company with respect to Warrants exercised
and concurrently pay to the Company all amounts received by the Warrant Agent
upon exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the Holders
during normal business hours at its office. The Company shall at its sole
expense supply the Warrant Agent from time to time with such numbers of copies
of this Agreement as the Warrant Agent may reasonably request.
4.3 Compliance with Government Regulations; Qualification under Securities
Laws. The Company covenants that if following a due demand to exercise Warrants
any shares of Common Stock required to be reserved for purposes of exercise of
such Warrants require, under any federal or state law, registration with or
approval of any governmental authority before such shares may be issued upon
exercise, the Company will, unless the Company has received an opinion of
counsel to the effect that such registration is not then permitted by such laws,
use its Commercially Reasonable Efforts to cause such shares to be duly so
registered or approved, as the case may be; provided,
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however, that the Company shall not be required to prepare, file or cause to be
effective or maintain the effectiveness of any registration statement or obtain
any such approval which would require the Company to make premature disclosure
of facts as to which the Company is required for reasonable business purposes to
remain confidential, including, without limitation, facts regarding pending and
proposed corporate transactions, the Company's customers, operations, products
or competitive conditions, or other material non-public information regarding
the Company's business (collectively, "Non-Public Information"), and the Company
shall notify the Warrant Agent as to the periods of time within which it is in
the best interest of the Company and its stockholders to defer disclosure of
Non-Public Information until such information has reached a more advanced stage;
provided further that in no event shall such shares of Common Stock be issued,
and the exercise of all such Warrants shall be suspended, for the period from
the date of such due demand for exercise until such registration or approval is
in effect; provided further that the Exercise Period for such Warrants (but only
such Warrants) shall be extended one day for each day (or portion thereof) that
any such suspension is in effect. The Company shall promptly notify the Warrant
Agent of any such suspension, and the Warrant Agent shall have no duty,
responsibility or liability in respect of any shares of Common Stock issued or
delivered prior to its receipt of such notice. The Company shall promptly notify
the Warrant Agent of the termination of any such suspension, and such notice
shall set forth the number of days that the Exercise Period with respect to such
Warrants shall be extended as a result of such suspension.
Section 5. Payment of Taxes. The Company will pay all documentary stamp and
other like taxes, if any, attributable to the initial issuance and delivery of
the Warrants and the initial issuance and delivery of the Warrant Shares upon
the exercise of Warrants, provided, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer of the
Warrants or involved in the issuance or delivery of any Warrant Shares in a name
other than that of the Holder of the Warrants being exercised, and the Warrant
Agent shall not register any such transfer or issue or deliver any Warrant
Certificate(s) or Warrant Shares unless or until the persons requesting the
registration or issuance shall have paid to the Warrant Agent for the account of
the Company the amount of such tax, if any, or shall have established to the
reasonable satisfaction of the Company that such tax, if any, has been paid.
Section 6. Mutilated or Missing Warrant; Certificates. In the event that any
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
shall issue, and at the direction of the Company by written order the Warrant
Agent shall countersign and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate or in lieu of and substitution
for the Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate
of like tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company and the Warrant Agent
of such loss, theft or destruction of such Warrant Certificate and an indemnity
or bond, if requested by the Company or the Warrant Agent, also reasonably
satisfactory to it. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable procedures as the Company or the Warrant
Agent may reasonably require.
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Section 7. Reservation of Warrant Shares. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock,
free of all preemptive rights, a number of shares of Common Stock sufficient to
provide for the exercise of the rights of purchase represented by the
outstanding Warrants. The transfer agent for the Common Stock and every
subsequent or other transfer agent for any shares of the Company's capital stock
issuable upon the exercise of the Warrants (each, a "Transfer Agent") will be
and are hereby irrevocably authorized and directed at all times to reserve such
number of authorized shares as shall be required for such purpose. The Company
will keep a copy of this Agreement on file with each Transfer Agent. The Warrant
Agent is hereby irrevocably authorized to requisition from time to time from the
Company or a Transfer Agent, as the case may be, the certificate for Warrant
Shares required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply its
Transfer Agents with duly executed stock certificates for such purposes and will
itself provide or otherwise make available any cash which may be payable as
provided in Section 9 hereof. The Company will furnish to its Transfer Agents a
copy of all notices of adjustments and certificates related thereto, transmitted
to each Holder pursuant to Section 8.3 hereof. The Company will give the Warrant
Agent prompt notice of any change in any Transfer Agent or any change of address
of any Transfer Agent.
Before taking any action which would cause an adjustment pursuant to
Section 8 reducing the Exercise Price, the Company will take any and all
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares at the Exercise
Price as so adjusted.
Section 8. Adjustment of Exercise Price; Number of Warrant Shares and Shares of
Capital Stock Warrants Are Exercisable Into. The number and kind of securities
purchasable upon the exercise of each Warrant, and the Exercise Price, shall be
subject to adjustment from time to time upon the happening of certain events, as
hereinafter described.
8.1 Mechanical Adjustments. The number of Warrant Shares purchasable upon
the exercise of each Warrant and the Exercise Price shall be subject to
adjustment as follows:
(a) Adjustment for Change in Capital Stock. Subject to paragraphs
(f) and (h) below, in case the Company shall (i) pay a dividend on its
outstanding shares of Common Stock in shares of Common Stock or make a
distribution of shares of Common Stock on its outstanding shares of Common
Stock, (ii) make a distribution on its outstanding shares of Common Stock in
shares of its capital stock other than Common Stock, (iii) subdivide its
outstanding shares of Common Stock into a greater number of shares of Common
Stock, (iv) combine its outstanding shares of Common Stock into a smaller number
of shares of Common Stock, or (v) issue, by reclassification of its shares of
Common Stock, other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which the
Company is the surviving entity), then the number of Warrant Shares purchasable
upon exercise of each Warrant immediately prior thereto shall be adjusted so
that the Holder of each Warrant shall be
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entitled to receive the kind and number of Warrant Shares or other securities of
the Company which such Holder would have owned or have been entitled to receive
upon the happening of any of the events described above had such Warrant been
exercised in full immediately prior to the happening of such event or any record
date with respect thereto. If a Holder is entitled to receive shares of two or
more classes of capital stock of the Company pursuant to the foregoing upon
exercise of Warrants, the allocation of the adjusted Exercise Price between such
classes of capital stock shall be determined reasonably and in good faith by the
Board of Directors of the Company. After such allocation, the exercise privilege
and the Exercise Price with respect to each class of capital stock shall
thereafter be subject to adjustment on terms substantially identical to those
applicable to Common Stock in this Section 8. An adjustment made pursuant to
this paragraph (a) shall become effective immediately after the record date for
such event or, if none, immediately after the effective date of such event. Such
adjustment shall be made successively whenever such an event occurs.
(b) Adjustment for Rights Issue. Subject to paragraphs (f) and (h)
below, in case the Company shall issue rights, options or warrants
(collectively, "Rights") to all holders of its outstanding Common Stock
entitling them to subscribe for or purchase shares of Common Stock at a Price
Per Share (as defined in paragraph (e) below) which is lower at the record date
mentioned below than the then Current Market Price (as defined in paragraph (e)
below) per share of the Common Stock, the number of Warrant Shares thereafter
purchasable upon the exercise of each Warrant shall be determined by multiplying
the number of Warrant Shares theretofore purchasable upon exercise of each
Warrant by a fraction, the numerator of which shall be the number of shares of
the Common Stock outstanding on the date of issuance of such Rights plus the
additional Number of Shares (as defined in paragraph (e) below) of the Common
Stock offered for subscription or purchase in connection with such Rights and
the denominator of which shall be the number of shares of the Common Stock
outstanding on the date of issuance of such Rights plus the number of shares of
the Common Stock which the aggregate Proceeds (as defined in paragraph (e)
below) received or receivable by the Company upon exercise of such Rights would
purchase at the Current Market Price per share of the Common Stock at such
record date. Such adjustment shall be made whenever Rights are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive Rights.
(c) Adjustment for Other Distributions. Subject to paragraphs (f)
and (h) below, in case the Company shall distribute to all holders of its shares
of Common Stock (x) evidences of indebtedness or assets (excluding cash
dividends or distributions payable out of the consolidated earnings or surplus
legally available for such dividends or distributions and dividends or
distributions referred to in paragraphs (a) or (b) above) of the Company or any
corporation or other legal entity a majority of the voting equity or equity
interests of which are owned, directly or indirectly, by the Company (a
"Subsidiary"), or (y) shares of capital stock of a Subsidiary (such evidences of
indebtedness, assets and securities as set forth in clauses (x) and (y) above,
collectively, "Assets"), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Warrant Shares theretofore purchasable upon the
exercise of each Warrant by a fraction, the
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numerator of which shall be the Current Market Price per share of Common Stock
on the date of such distribution and the denominator of which shall be such
Current Market Price per share of Common Stock less the fair value as of such
record date as determined reasonably and in good faith by the Board of Directors
of the Company of the portion of the Assets applicable to one share of Common
Stock. Such adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the record
date for the determination of stockholders entitled to receive such
distribution.
(d) Adjustment for Common Stock and Convertible Securities Issue.
Subject to paragraphs (f) and (h) below, in case the Company shall issue shares
of its Common Stock, or securities convertible into, or exchangeable or
exercisable for Common Stock or Rights to subscribe for or purchase such
securities (collectively, the "Convertible Securities") (excluding the issuance
of (i) Common Stock or Convertible Securities issued in any of the transactions
described in paragraphs (a), (b) or (c) above or (ii) Warrant Shares issued upon
the exercise of the Warrants), at a Price Per Share of Common Stock, in the case
of the issuance of Common Stock, or at a Price Per Share of Common Stock
initially deliverable upon conversion or exercise or exchange of such
Convertible Securities, in each case, together with any other consideration
received by the Company in connection with such issuance, below the then Current
Market Price per share of Common Stock on the date the Company fixed the
offering, conversion or exercise or exchange price of such additional shares,
then the number of Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a fraction, the
numerator of which shall be the total number of shares of Common Stock
outstanding on such date plus the additional number of shares of Common Stock
offered for subscription or purchase and the denominator of which shall be the
number of shares of Common Stock outstanding on such date plus the number of
shares of Common Stock which the aggregate Proceeds of the total amount of
Convertible Securities so offered would purchase at the Current Market Price per
share of Common Stock at such record date. In case the Company shall issue and
sell Convertible Securities for a consideration consisting, in whole or in part,
of property other than cash or its equivalent, then in determining the "Price
Per Share" of Common Stock and the "consideration received by the Company" for
purposes of the first sentence and the immediately preceding sentence of this
paragraph (d), the Board of Directors of the Company shall reasonably and in
good faith determine the fair value of such property. The determination of
whether any adjustment is required under this paragraph (d), by reason of the
sale and issuance of any Convertible Securities and the amount of such
adjustment, if any, shall be made at such time and not at the subsequent time of
issuance of shares of Common Stock upon the exercise, conversion or exchange of
Convertible Securities.
(e) Current Market Price; Price Per Share. (i) For the purpose of
any computation under Section 4.2 hereof or this Section 8.1, the "Current
Market Price" per share of Common Stock at any date shall be the average of the
daily closing prices for the 20 consecutive trading days preceding the date of
such computation. The closing price for each day shall be (x) if the Common
Stock shall be then listed or admitted to
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trading on the New York Stock Exchange, the closing price on the NYSE -
Consolidated Tape (or any successor composite tape reporting transactions on the
New York Stock Exchange) or, if such a composite tape shall not be in use or
shall not report transactions in the Common Stock, or if the Common Stock shall
be listed on a stock exchange other than the New York Stock Exchange, the last
reported sales price regular way or, in case no such reported sale takes place
on such day, the average of the closing bid and asked prices regular way for
such day, in each case on the principal national securities exchange on which
the shares of the Common Stock are listed or admitted to trading (which shall be
the national securities exchange on which the greatest number of shares of the
Common Stock have been traded during such 20 consecutive trading days) or (y) if
the Common Stock is not listed or admitted to trading, the average of the
closing bid and asked prices of the Common Stock in the over-the-counter market
as reported by The Nasdaq National Market, the Nasdaq SmallCap Market or any
comparable system. In the absence of one or more such quotations, the Current
Market Price per share of the Common Stock shall be determined reasonably and in
good faith by the Board of Directors of the Company.
(ii) For purposes of this Section 8.1, "Price Per Share" shall
be defined and determined according to the following formula:
P = R/N
where
P = Price Per Share;
R = the "Proceeds" received or receivable by the Company which
(x) in the case of shares of Common Stock is the total
amount received or receivable by the Company in
consideration for the issuance and sale of such shares;
(y) in the case of Rights or of Convertible Securities
with respect to shares of Common Stock, is the total
amount received or receivable by the Company in
consideration for the issuance and sale of Rights or such
Convertible Securities, plus the minimum aggregate amount
of additional consideration, other than the surrender of
such Convertible Securities, payable to the Company upon
exercise, conversion or exchange thereof; and (z) in the
case of Rights to subscribe for or purchase such
Convertible Securities, is the total amount received or
receivable by the Company in consideration for the
issuance and sale of such Rights plus the minimum
aggregate amount of additional consideration, other than
the surrender of such Convertible Securities, payable upon
the conversion or exchange or exercise of such Convertible
Securities, provided that in each case the proceeds
received or receivable by the Company shall be the net
cash proceeds after deducting therefrom (x) any
compensation paid or discount allowed in
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the sale, underwriting or purchase thereof by underwriters
or dealers or others performing similar services, (y) the
fees and disbursements of counsel for the Company and of
its independent public accountants, and (z) the fees and
expenses of other Persons retained or employed by the
Company in connection with the Company's performance of or
compliance with this Agreement; and
N = the "Number of Shares," which (x) in the case of Common
Stock is the number of shares issued; and (y) in the case
of Rights or of Convertible Securities with respect to
shares of Common Stock, is the maximum number of shares of
Common Stock initially issuable upon exercise, conversion
or exchange thereof.
(f) When De Minimis Adjustment May Be Deferred. No adjustment in the
number of Warrant Shares purchasable hereunder shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the number of Warrant Shares purchasable upon the exercise of each Warrant,
provided that any adjustments which by reason of this paragraph (f) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest
one-thousandth of a Warrant Share and the nearest cent.
(g) Adjustment in Exercise Price. Whenever the number of Warrant
Shares purchasable upon the exercise of each Warrant is adjusted as herein
provided, the Exercise Price payable upon exercise of each Warrant immediately
prior to such adjustment shall be adjusted by multiplying such Exercise Price by
a fraction, the numerator of which shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment and the denominator of which shall be the number of Warrant Shares
purchasable immediately thereafter.
(h) When No Adjustment Required. No adjustment in the number of
Warrant Shares purchasable upon the exercise of each Warrant need be made under
this Section 8.1 in connection with: (i) the issuance of Common Stock pursuant
to the Plan, (ii) shares of Common Stock, options, rights, warrants or other
securities issued pursuant to any plan adopted by the Company or its
subsidiaries for the benefit of employees, directors or consultants; (iii)
shares of Common Stock, options, rights, warrants or other securities issued
pursuant to any employment agreement or arrangement approved by the Board of
Directors of the Company between the Company and an officer or other employee of
the Company or a subsidiary of the Company, (iv) shares of Common Stock,
options, rights, warrants or other securities issued pursuant to any share
purchase rights plan adopted by the Company; (v) any issuance of shares of
Common Stock or securities convertible into or exchangeable for shares of Common
Stock pursuant to an underwritten public offering for a price per share of
Common Stock in the case of an issuance of shares of Common Stock, or for a
price per share of Common Stock initially deliverable upon conversion or
exchange of such securities, that is equal to or greater
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than 95% of the Current Market price per share of the class of Common Stock on
the date the Company fixed the offering, conversion or exchange price of such
additional shares of Common Stock; (vi) sales of Common Stock pursuant to a plan
adopted by the Company for reinvestment of dividends or interest; or (vii)
shares of Common Stock issued to shareholders of any corporation that is
acquired by, merged into or made a part or subsidiary of the Company in an
arm's-length transaction. Additionally, no adjustment need be made if the
Company issues or distributes to each Holder of Warrants the shares, rights,
options, warrants, evidences of indebtedness, assets or other securities
referred to in those paragraphs which each Holder of Warrants would have been
entitled to receive had the Warrants been exercised for the number of Warrant
Shares for which Warrants are then exercisable prior to the happening of such
event or the record date with respect thereto. No adjustment in the number of
Warrant Shares will be made for a change in the par value of the shares of
Common Stock.
(i) Common Stock. For all purposes of this Agreement, the term
"shares of Common Stock" shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii) any other
class of stock resulting from successive changes or reclassification of such
shares consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any time, as a
result of an adjustment made pursuant to this Section 8.1, the Holders shall
become entitled to purchase any securities of the Company other than shares of
Common Stock, thereafter the number of such other shares so purchasable upon
exercise of each Warrant and the Exercise Price of such shares shall be subject
to adjustment from time to time in a manner and on terms substantially identical
to the provisions with respect to the Warrant Shares contained in paragraphs (a)
through (h) above, and the provisions of this Agreement with respect to the
Warrant Shares shall apply on like terms to any such other securities.
(j) Expiration of Rights, etc. Upon the expiration of any Rights or
conversion or exchange or exercise rights, if any thereof shall not have been
exercised, the Exercise Price and the number of Warrant Shares purchasable upon
the exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter be such as it would have been had it been originally adjusted
(or had the original adjustment not been required, as the case may be) as if (A)
the only shares of Common Stock so issued were the shares of Common Stock, if
any, actually issued or sold upon the exercise of such Rights or conversion or
exchange or exercise rights and (B) such shares of Common Stock, if any, were
issued or sold for the consideration actually received by the Company upon such
exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale or grant of all of such Rights or conversion or
exchange or exercise rights whether or not exercised, provided that no such
readjustment shall have the effect of increasing the Exercise Price or
decreasing the number of Warrant Shares purchasable upon the exercise of each
Warrant by an amount in excess of the amount of the adjustment initially made in
respect of the issuance, sale or grant of such Rights or conversion or exchange
or exercise rights.
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8.2 Voluntary Adjustment by the Company. The Company may at its sole
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount deemed appropriate by the Board of Directors of the
Company.
8.3 Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Exercise Price of Warrant
Shares is adjusted, as herein provided, the Company shall cause the Warrant
Agent promptly to mail to each Holder, at the sole expense of the Company by
first class mail, postage prepaid, notice of such adjustment or adjustments and
shall deliver to the Warrant Agent a certificate of a firm of independent public
accountants (who may be the regular accountants employed by the Company) or a
certificate of an officer of the Company setting forth the number of Warrant
Shares purchasable upon the exercise of each Warrant and the Exercise Price of
Warrant Shares after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth in reasonable detail the
computations by which such adjustment was made. The Warrant Agent shall be
entitled to rely on such certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the same,
from time to time, to any Holder requesting an inspection thereof during
reasonable business hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any Holder to determine whether any facts exist which
may require any adjustment of the Exercise Price or the number of Warrant Shares
or other stock or property purchasable on exercise of Warrants, or with respect
to the nature or extent of any such adjustment when made, or with respect to the
method employed in making such adjustment.
8.4 Preservation of Purchase Rights upon Merger or Consolidation. In case
of any consolidation of the Company with or merger of the Company into another
entity, the Company or such successor entity shall execute and deliver to the
Warrant Agent an agreement, which shall be binding on the Holders, providing
that each Holder shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action (after giving effect to any
applicable adjustments under Section 8.1 hereof) to purchase upon exercise of
each Warrant the kind and amount of shares and other securities and property
(including cash) which such Holder would have owned or have been entitled to
receive after the happening of such consolidation or merger had such Warrant
been exercised immediately prior to such action. The Company shall at its sole
expense mail by first class mail, postage prepaid, to each Holder notice of the
execution of any such agreement. Such agreement shall provide for adjustments,
which shall be substantially identical to the adjustments provided for in this
Section 8. In addition, the Company shall not merge or consolidate with or into,
any other entity unless the successor entity (if not the Company), shall
expressly assume, by supplemental agreement reasonably satisfactory in form and
substance to the Warrant Agent in its sole judgement and executed and delivered
to the Warrant Agent, the due and punctual performance and observance of each
and every covenant and condition of this Agreement to be performed and observed
by the Company. The provisions of this Section 8.4 shall similarly apply to
successive consolidations or mergers. The Warrant Agent shall be under a good
faith duty and responsibility to determine the correctness of any provisions
contained in any such agreement relating to the kind or amount of shares of
stock or other securities or property receivable upon exercise of Warrants or
with respect to the
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method employed and provided therein for any adjustments and shall be entitled
to rely upon the provisions contained in any such agreement.
8.5 Statement on Warrants. Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express the
same Exercise Price and number and kind of Warrant Shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 9. Fractional Interests. Neither the Company nor the Warrant Agent shall
be required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be exercised at the same time by the same Holder,
the number of full Warrant Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Warrants so exercised.
If any fraction of a Warrant Share would, except for the provisions of this
Section 9, be issuable on the exercise of any Warrant, the Company shall pay an
amount in cash equal to the closing price for one share of Common Stock on the
date the Warrant Certificate is presented for exercise (determined in accordance
with the second sentence of Section 8.1(e)(i) hereof), multiplied by such
fraction.
Section 10. No Rights as Stockholders; Notices to Holders. Nothing contained in
this Agreement or in any of the Warrants shall be construed as conferring upon
the Warrant Agent or the Holders or their transferees the right to vote or to
receive dividends or to consent or to receive notice as stockholders in respect
of any meeting of stockholders for the election of directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or
warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of securities or assets (other than cash
dividends); or
(c) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the conveyance or transfer of a substantial portion of the properties
and assets of the Company for which approval of any stockholders of the
Company is required, or of any reclassification or change of Common Stock
issuable upon exercise of the Warrants (other than a change in par value,
or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), or a tender offer or
exchange offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
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then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each Holder at its address appearing on the Warrant Register, at
least twenty (20) days prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record date,
by first class mail, postage prepaid, a written notice stating (i) the date as
of which the holders of record of shares of Common Stock entitled to receive any
such rights, options, warrants or distribution are to be determined, or (ii) the
initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (iii) the date on which any such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, as well as the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation, or winding up. The failure to give the
notice required by this Section 9 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation, winding up or action, or the vote upon any of the foregoing.
Section 11. Payments in U.S. Currency. All payments required to be made
hereunder shall be made in lawful money of the United States of America.
Section 12. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
corporation trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 14 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, any of the
Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in the name
of the successor Warrant Agent; and in all such cases such Warrant Certificates
shall be fully valid and effective as provided therein and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignatures under its prior
name and deliver such Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned, the
Warrant Agent may countersign such Warrant Certificates either in its prior name
or in its changed name; and in all such cases such Warrant Certificates shall be
fully valid and effective as provided therein and in this Agreement.
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Section 13. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company hereunder and in accordance with
the terms and conditions hereof, and the Warrant Agent hereby accepts such
appointment.
13.1 Concerning the Warrant Agent. The Warrant Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders, by their acceptance of
Warrant Certificates, shall be bound:
13.2 Correctness of Statements. The statements contained herein and in the
Warrant Certificates shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of the same
except such as described the Warrant Agent or action taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates or Warrants except as herein otherwise provided.
13.3 Breach of Covenants. The Warrant Agent shall not be responsible for
any failure of the Company to comply with any of the covenants contained in this
Agreement or in the Warrant to be complied with by the Company.
13.4 Performance of Duties. The Warrant Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents and shall not be responsible for
the misconduct or negligence of any attorney or agent (which shall not include
an employee of the Warrant Agent) appointed with due care.
13.5 Reliance on Counsel. The Warrant Agent may consult at any time with
legal counsel satisfactory to it (who may be counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company or to
any Holder in respect to any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
13.6 Proof of Actions Taken. Whenever in the performance of its duties
under this Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed conclusively to
be proved and established by a certificate signed by the Chairman of the Board,
the President, a Vice President, the Treasurer or the Secretary of the Company
and delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
13.7 Compensation. The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the performance
of its duties under this Agreement, to reimburse the Warrant Agent for all
reasonable expenses, taxes and governmental charges and other charges of any
kind and nature
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incurred by the Warrant Agent in the performance of its duties under this
Agreement (including but not limited to legal fees and expenses), and to
indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent or any of its agents in the performance of its
duties under this Agreement, except as a result of the Warrant Agent's gross
negligence or willful misconduct as determined in a final judgment of a court of
competent jurisdiction and authority. The Company's obligations under this
Section 13.7 and any claim arising hereunder shall survive the resignation or
removal of the Warrant Agent and the termination or discharge of the Company's
obligations under this Agreement.
13.8 Legal Proceedings. The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or any one or more Holders shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred or any liabilities which may arise, but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such security
or indemnity. All rights of action of any Holder under this Agreement or under
any of the Warrants may be enforced by the Warrant Agent without the possession
of any of the Warrant Certificates or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent,
and any recovery of judgment shall be for the ratable benefit of the Holders, as
their respective rights or interests may appear.
13.9 Other Transactions in Securities of Company. The Warrant Agent and
any stockholders, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or any other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
interested or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
13.10 Liability of Warrant Agent. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
negligence or bad faith.
13.11 Reliance on Documents. The Warrant Agent will not incur any lability
or responsibility to the Company or to any Holder for any action taken in
reliance on any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument reasonably believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
13.12 Validity of Agreement. The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or in
respect of the
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validity or execution of any Warrant Certificate (except its countersignature
thereof) or any Warrant; nor shall the Warrant Agent by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Warrant Shares (or other securities) to be issued pursuant to
this Agreement or any Warrant, or as to whether any Warrant Shares (or other
securities) will, when issued, be validly issued, fully paid and nonassessable,
or as to the Exercise Price or the number or amount of Warrant Shares or other
securities or any Assets or other property issuable upon exercise of any
Warrant.
13.13 Instructions from Company. The Warrant Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President, a Vice
President, the Treasurer or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and shall not
be liable for any action taken or suffered to be taken by it in accordance with
instructions of any such officer or officers.
Section 14. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company thirty
(30) days' notice in writing. The Warrant Agent may be removed by like notice to
the Warrant Agent and the Holders from the Company, such notice to specify the
date when removal shall become effective. If the Warrant Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after such removal or
notification in writing of such registration or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who shall with such notice submit
his Warrant Certificate or Certificates for inspection by the Company), then any
Holder may apply to any court of competent jurisdiction for the appointment of a
successor to the Warrant Agent. Any successor Warrant Agent, whether appointed
by the Company or such a court, shall be a bank or trust Company, in good
standing, incorporated under the laws of the United States of America or any
state thereof and having at the time of its appointment as Warrant Agent a
combined capital and surplus of at least $50,000,000. After appointment and
acceptance of such appointment in writing, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent with out further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor Warrant Agent
any property at the time held by it hereunder, and shall execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
file any notice provided for in this Section 14, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor Warrant Agent, as the case may
be. In the event of such resignation or removal, the successor Warrant Agent
shall mail, by first class mail, postage prepaid, to each Holder, written notice
of such removal or resignation and the name and address of such successor
Warrant Agent.
Section 15. Notices. Any notice pursuant to this Agreement by the Company or by
any Holder to the Warrant Agent, or by the Warrant Agent or by any Holder to the
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Company, shall be in writing and shall be delivered in person or by facsimile
transmission, or mailed first class, postage pre-paid, (a) to the Company, at
its offices at ββββ β ββββββ, ββββββββββ, ββββββββββ βββββ, Attention: J. ββββββ
ββββββββββ, Telecopier No.: (βββ) βββ-ββββ, (b) to the Warrant Agent at its
offices at βββ β. ββββββ ββββββ, ββββ βββββ, βββ βββββββ, ββββββββββ βββββ,
Attention: ββββββ βββββ, Telecopier No.: βββ-βββ-ββββ. Each party hereto may
from time to time change the address to which notices to its are to be delivered
or mailed hereunder by notice to the other party.
Any notice mailed pursuant to this Agreement by the Company or the Warrant
Agent to the Holders shall be in writing and shall be mailed first class,
postage prepaid, or otherwise delivered, to such Holders at their respective
addresses in the Warrant Register. The initial address of each Holder shall be
as provided by the Company to the Warrant Agent. Any Holder may change its
address by notice to the Company and the Warrant Agent given in accordance with
this Section 15.
Section 16. Cancellation of Warrants. In the event the Company shall purchase or
otherwise acquire Warrants, the same shall thereupon be delivered to the Warrant
Agent and be cancelled by it and retired. The Warrant Agent shall cancel any
Warrant certificate surrendered for exchange, substitution, transfer or exercise
in whole or in part.
Section 17. Supplements and Amendments. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement, the Warrants and the
Warrant Certificates without approval of any Holder, in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to comply with
the requirements of any national securities exchange or The Nasdaq National
Market or The Nasdaq Small-Cap Market (including but not limited to the deletion
of Section 8.2), or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agreement may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrants and this Agreement. Any other supplement or amendment to this
Agreement may be made with the approval of the Holders of a majority of the then
outstanding Warrants; provided, however, that any such amendment or supplement
that (i) increases the Exercise Price; (ii) decreases the number of shares of
Common Stock issuable upon exercise of a Warrant; or (iii) shortens the period
during which the Warrants may be exercised shall require the consent of each
Holder of a Warrant affected thereby.
Section 18. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of the Company or the Warrant Agent and shall bind and inure to the
benefit of their respective successors hereunder.
Section 19. Applicable Law. This Agreement and each Warrant issued hereunder
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflict of laws thereof.
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Section 20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person, corporation or other entity other than the
Company, the Warrant Agent or the Holders any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent, their respective
successors, and the Holders of the Warrants.
Section 21. Counterparts. This Agreement may be executed in any number of
counterparts; each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the
same instrument.
Section 22. Captions. The captions of the Sections and subsections of this
Agreement have been inserted for convenience only and shall have no substantive
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
PHYSICIANS CLINICAL LABORATORY, INC.,
By:
--------------------------------------
Name: J. ββββββ ββββββββββ
Title: Chief Executive Officer
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
By:
--------------------------------------
Name: ββββββ' Parks
Title: Vice President
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EXHIBIT A
FEDERAL AND CERTAIN STATE LAWS PROHIBIT THE COMPANY FROM BILLING FOR BUSINESS
REFERRED TO THE COMPANY BY A PHYSICIAN IF THE PHYSICIAN OR ANY OF THE
PHYSICIAN'S IMMEDIATE FAMILY MEMBERS HAVE CERTAIN PROSCRIBED RELATIONSHIPS
WITH THE COMPANY, INCLUDING OWNERSHIP OF ITS COMMON STOCK AND/OR OWNERSHIP
OF WARRANTS TO PURCHASE ITS COMMON STOCK. ACCORDINGLY, ANY RECIPIENT OF THIS
WARRANT WHO IS A PHYSICIAN IN A POSITION TO REFER BUSINESS TO THE COMPANY, OR
AN IMMEDIATE FAMILY MEMBER OF THE RECIPIENT OF THIS WARRANT WHO IS A
PHYSICIAN IN A POSITION TO REFER BUSINESS TO THE COMPANY, SHOULD NOT REFER
BUSINESS TO THE COMPANY.
FORM OF WARRANT CERTIFICATE
No. _____________________________ Warrants
Warrant Certificate
BIO-CYPHER LABORATORIES LTD.
This Warrant Certificate certifies that ________________, or registered assigns,
is the registered holder of __________________ Warrants (the "Warrants")
expiring at 5:00 p.m., New York City time, on September 30, 2002 (the
"Expiration Date"), to purchase Common Stock, $.01 par value per share (the
"Common Stock") of BIO-CYPHER LABORATORIES LTD., a Delaware corporation (the
"Company"). The Warrants may be exercised at any time from 9:00 a.m., New York
City time, on October 1, 1997 to 5:00 p.m., New York City time, on the
Expiration Date. Each Warrant entitles the holder upon exercise to receive from
the Company, if exercised before 5:00 p.m., New York City time, on the
Expiration Date, one fully paid and nonassessable share of Common Stock (a
"Warrant Share") at the Exercise Price (as defined in the Warrant Agreement
referred to on the reverse side hereof), payable in lawful money of the United
States of America, upon surrender of this Warrant Certificate and payment of the
Exercise Price, but only subject to the conditions set forth herein and in the
Warrant Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.
WARRANTS NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 30, 2002 SHALL BECOME VOID.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
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This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
IN WITNESS WHEREOF, BIO-CYPHER LABORATORIES LTD., has caused this Warrant
Certificate to be duly executed.
BIO-CYPHER LABORATORIES LTD.
By:
--------------------------------------
J. ββββββ ββββββββββ, President
By:
--------------------------------------
Dated:
-----------------------------
Countersigned:
U.S. TRUST COMPANY OF CALIFORNIA, N.A., as Warrant Agent
By:
--------------------------------
Authorized Signatory
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date, entitle the holder
on exercise to receive shares of Common Stock of the Company and are issued or
to be issued pursuant to a Warrant Agreement dated as of September 30, 1997 (the
"Warrant Agreement"), duly executed and delivered by the Company to the Warrant
Agent (as defined in the Warrant Agreement), which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company, the Warrant Agent and the
holders (the words "holder" or "holder" meaning the registered holders or
registered holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to the Company. By accepting
initial delivery, transfer or exchange of this Warrant, the duly registered
holder shall be deemed to have agreed to the terms of the Warrant Agreement as
it may be in effect from time to time, including any amendments or supplements
duly adopted in accordance therewith.
The holder of Warrants evidenced by this Warrant Certificate may exercise
them by surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with payment
of the Exercise Price in the manner described below at the office of the Warrant
Agent. In the event that upon any exercise of Warrants evidenced hereby the
number of Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued to the holder hereof or its assignee a
new Warrant Certificate evidencing the number of Warrants not exercised.
Payment of the Exercise Price may be made in cash by wire transfer to the
Warrant Agent for the account of the Company or by certified or official bank
check or checks to the order of the Company or by any combination thereof.
The Warrant Agreement provides that upon the occurrence of certain events
the number of shares of Common Stock issuable upon the exercise of each Warrant,
and the Exercise Price of each Warrant, may, subject to certain conditions, be
adjusted. No fractions of a share of Common Stock will be issued upon the
exercise of any Warrant, but the Company shall pay the cash value thereof
determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant Agent
by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
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Upon due presentation for registration of transfer of this Warrant
Certificate, a new Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be issued to the
transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
β-β
ββ
ββββββββ FORM
The undersigned hereby irrevocably elects to exercise this Warrant,
according to the terms and conditions hereof, to the extent of purchasing
____________ shares of Common Stock and hereby makes payment of $______________
in payment of the exercise price thereof. If the number of shares shall not be
all of the shares purchasable under this Warrant, a new Warrant Certificate for
the balance remaining shall be issued in the name of the undersigned or its
assignee as indicated on the Assignment Form.
Dated: _________________
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:___________________________________________________________________________
(please typewrite or print in block letters)
Address: ______________________________________________________________________
Signature:________________________________________________________________
Note: The signature must conform in all respects to name of
holder as specified on the face of this Warrant Certificate
Signature Guaranteed:
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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
Name:___________________________________________________________________________
(please typewrite or print in block letters)
Address: ______________________________________________________________________
its right to purchase __________ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint __________ Attorney,
to transfer the same on the books of the Company, with full power of
substitution in the premises.
Dated:_______________
________________________ Signature:__________________________________________
Social Security or other Note: The signature
identifying number of must conform in all
holder respects to name of holder as
specified on the face of this
Warrant Certificate
Signature Guaranteed:
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