1
EXHIBIT 4.2
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
MEDAPHIS CORPORATION
AND
SUNTRUST BANK, ATLANTA
Warrant Agent
------------------
WARRANT AGREEMENT
Dated as of July 8, 1998
------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2
THIS WARRANT AGREEMENT (this "Agreement"), dated as of July 8, 1998,
is by and between MEDAPHIS CORPORATION, a Delaware corporation (the "Company"),
and SUNTRUST BANK, ATLANTA, a Georgia corporation, having its principal office
in Atlanta, Georgia (said corporation, and any successor which shall become
such in the manner prescribed in this Agreement, are herein called the "Warrant
Agent").
WHEREAS, the Company proposes to issue warrants (the "Warrants") to
purchase an aggregate of 5,309,523 shares of its voting common stock, par value
$0.01 per share (the "Common Stock"), in connection with the settlement of
certain litigation entitled In Re: 1996 Medaphis Corporation Securities
Litigation, filed in the United States District Court for the Northern District
of Georgia, Civil Action No. 1:96-CV-2088-TWT (the "1996 Class Action
Settlement"); and
WHEREAS, the Company desires to enter into this Agreement to set forth
the terms and conditions of the Warrants and the rights of the holders thereof;
and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Warrants to be issued under this Agreement (the "Warrant Certificates") and the
exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1.
Appointment of Warrant Agent
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions in this Agreement hereinafter set
forth, and the Warrant Agent hereby accepts such appointment.
SECTION 2.
Date, Denomination and Execution of Warrant Certificates
The Warrant Certificates (and the Form of Election to Purchase and the
Form of Assignment to be printed on the reverse thereof) shall be in registered
form only and shall be substantially of the tenor and purport recited in
Exhibit A hereto, and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law, or with any rule or
1
3
regulation made pursuant thereto, or with any rule or regulation of any stock
exchange on which the Common Stock or the Warrants may be listed or any
automated quotation system, or to conform to usage. The Warrant Certificates
shall entitle the registered holders thereof, subject to the provisions of this
Agreement and the Warrant Certificate, to purchase, after the Registration Date
(as defined below), and on or before the close of business on July 8, 2003 (the
"Expiration Date"), one fully paid and nonassessable share of Common Stock for
each Warrant evidenced by such Warrant Certificate, at the price per share set
forth therein, subject to adjustment as provided in Section 6 hereof. The
Company covenants that it shall file as soon as reasonably practicable after
the Price Threshold Date (as defined below) a registration statement (the
"Registration Statement") with the Securities and Exchange Commission ("SEC")
registering under the Securities Act of 1933, as amended (the "Securities Act")
the shares of Common Stock issuable upon exercise of the Warrants, and
covenants to exercise reasonable commercial efforts to have the Registration
Statement declared effective by the SEC and to take such action under the laws
of the various states as may be required to cause the sale of the Common Stock
upon exercise of the Warrants to be lawful. The Company further covenants to
exercise reasonable commercial efforts to maintain the effectiveness of the
Registration Statement and such approvals or qualifications as may be required
under applicable state law until the Expiration Date; provided, however, that
the Company will have the right to: (A) delay the initial filing or
effectiveness of the Registration Statement for up to ninety (90) days, or (B)
after the SEC has declared the Registration Statement effective, to suspend the
effectiveness of such Registration Statement for up to ninety (90) days if, in
the good faith judgment of the Board of Directors of the Company, such delay or
suspension is necessary in light of the existence of material nonpublic
information (financial or otherwise) concerning the Company, disclosure of
which at the time is not, in the good faith determination of the Board of
Directors of the Company based upon advice of counsel (i) otherwise required
and (ii) in the best interests of the Company. The "Price Threshold Date" shall
be such date on or after August 8, 1998 as the average closing price of Common
Stock on the Nasdaq Stock Market (or on such exchange, market or quotation
service as the Common Stock is then traded, listed or quoted) for the preceding
twenty (20) consecutive trading days shall equal or exceed $11.00 per share,
which amount shall be appropriately adjusted for any stock splits,
reclassifications or similar transactions hereinafter declared or effected by
the Company. The "Registration Date" shall be the date the SEC declares the
Registration Statement effective under the Securities Act. The Company shall
provide the registered holders of the Warrants with notice of any suspension of
the effectiveness of the Registration Statement and the Warrants shall not be
exercisable during the pendency of any such suspension.
Each Warrant Certificate shall be dated the date on which the Warrant
Agent received valid issuance instructions from the Company or a transferring
holder of a Warrant Certificate or, if such instructions specify another date,
such other date.
Each Warrant Certificate shall be executed on behalf of the Company by
the Chairman of the Board, Chief Executive Officer, President or Vice President
of the Company, either manually or by facsimile signature printed thereon, and
be attested by the Secretary or Assistant Secretary of the Company, either
manually or by facsimile signature. The Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any purpose
unless so countersigned.
2
4
In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery thereof by the
Company, such Warrant Certificates nevertheless may be countersigned by the
Warrant Agent and issued and delivered with the same force and effect as though
the person who signed such Warrant Certificates had not ceased to be such
officer of the Company.
For purposes of this Agreement, the term "close of business" on any
given date shall mean 5 P.M. Atlanta, Georgia time, on such date; provided,
however, that if such date is not a business day it shall mean 5 P.M. Atlanta,
Georgia time, on the next succeeding business day. For purposes of this
Agreement, the term "business day" shall mean any day other than a Saturday,
Sunday or any other day on which banking institutions in Atlanta, Georgia are
authorized or obligated by law to be closed.
SECTION 3.
Subsequent Issue of Warrant Certificates
Subsequent to their original issuance, no Warrant Certificates shall
be reissued except (i) Warrant Certificates issued upon transfer thereof in
accordance with Section 4 hereof, (ii) Warrant Certificates issued upon any
combination, split-up or exchange of Warrant Certificates pursuant to Section 4
hereof, (iii) Warrant Certificates issued in replacement of mutilated,
destroyed, lost or stolen Warrant Certificates pursuant to Section 5 hereof,
(iv) Warrant Certificates issued upon the partial exercise of Warrant
Certificates to evidence the unexercised portion of such Warrant Certificates
pursuant to Section 7 hereof and (v) Warrant Certificates issued to reflect any
adjustment or change in the Purchase Price or the number or kind of shares
purchasable thereunder pursuant to Section 22 hereof. The Warrant Agent is
hereby irrevocably authorized to countersign and deliver, in accordance with
the provisions of said Sections 4, 5, 7 and 22, the new Warrant Certificates
required for purposes thereof, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly
executed on behalf of the Company for such purposes.
SECTION 4.
Transfers and Exchanges of Warrant Certificates
The Warrant Agent will keep or cause to be kept books for registration
of ownership and transfer of the Warrant Certificates issued hereunder. Such
registers shall show the names and addresses of the respective holders of the
Warrant Certificates and the number of Warrants evidenced by each such Warrant
Certificate.
The Warrant Agent shall initially issue the Warrants in bulk Warrant
Certificates in accordance with the written instructions of the Company.
Following the completion of the claims administration process associated with
the 1996 Class Action Settlement, the Warrant Agent shall
3
5
issue Warrant Certificates evidencing the Warrants in such names and
denominations as the Company shall designate in writing to the Warrant Agent.
The Warrant Agent shall, from time to time, register the transfer of
any outstanding Warrants upon the books to be maintained by the Warrant Agent
for that purpose, upon surrender of the Warrant Certificate evidencing such
Warrants, with the Form of Assignment duly completed and executed with such
signature guaranteed by a banking institution or NASD member and such
supporting documentation as the Warrant Agent or the Company may reasonably
require, to the Warrant Agent, at its office in Atlanta, Georgia at any time at
or prior to the close of business on the Expiration Date, and upon payment to
the Warrant Agent for the account of the Company of an amount equal to any
applicable transfer tax. Payment of the amount of such tax may be in cash, or
by certified or official bank check, payable in lawful money of the United
States of America to the order of the Warrant Agent, who shall in turn make
prompt payment to the Company.
Upon receipt of a Warrant Certificate, with the Form of Assignment
duly completed and executed, accompanied by payment of an amount equal to any
applicable transfer tax and any other required documentation, the Warrant Agent
shall promptly cancel the surrendered Warrant Certificate and countersign and
deliver to the transferee a new Warrant Certificate for the number of full
Warrants transferred to such transferee; provided, however, in case the
registered holder of any Warrant Certificate shall elect to transfer fewer than
all of the Warrants evidenced by such Warrant Certificate, the Warrant Agent in
addition shall promptly countersign and deliver to such registered holder a new
Warrant Certificate or Certificates for the number of full Warrants not so
transferred.
Any Warrant Certificate or Certificates may be exchanged at the option
of the holder thereof for another Warrant Certificate or Certificates of
different denominations, of like tenor and representing in the aggregate the
same number of Warrants, upon surrender of such Warrant Certificate or
Certificates, with the Form of Assignment duly completed and executed, to the
Warrant Agent, at any time or from time to time prior to the close of business
on the Expiration Date. The Warrant Agent shall promptly cancel the surrendered
Warrant Certificate and deliver the new Warrant Certificate pursuant to the
provisions of this Section 4.
SECTION 5.
Mutilated, Destroyed, Lost or Stolen Warrant Certificates
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of any Warrant Certificate, and, in the case of loss, theft, or destruction, of
indemnity or security (such as a surety bond) reasonably satisfactory to them,
and reimbursement to them of all reasonable expenses incidental thereto, and,
in the case of mutilation, upon surrender and cancellation of the Warrant
Certificate, the Warrant Agent shall countersign and deliver a new Warrant
Certificate of like tenor for the same number of Warrants.
4
6
SECTION 6.
Adjustments of Number and Kind of Shares
Purchasable and Purchase Price
The number and kind of securities or other property purchasable upon
exercise of a Warrant and the Purchase Price shall be subject to adjustment
from time to time upon the occurrence, after August 14, 1997, of any of the
following events:
A. In case the Company shall (i) pay a dividend in, or make a
distribution of, shares of Common Stock or of capital stock
convertible into Common Stock on its outstanding Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number
of such shares or (iii) combine its outstanding shares of Common Stock
into a smaller number of such shares, the total number of shares of
Common Stock purchasable upon the exercise of each Warrant outstanding
immediately prior thereto shall be adjusted so that the holder of any
Warrant Certificate thereafter surrendered for exercise shall be
entitled to receive for the same aggregate Purchase Price the number
of shares of Common Stock which such holder would have owned or have
been entitled to receive immediately following the happening of any of
the events described above had such Warrant been exercised in full
immediately prior to the happening of such event. An adjustment made
pursuant to this Section 6(A) shall, in the case of a stock dividend
or distribution, become effective as of the record date therefor and,
in the case of a subdivision or combination, be made as of the
effective date thereof. If, as a result of an adjustment made pursuant
to this Section 6(A), the holder of any Warrant Certificate thereafter
surrendered for exercise shall become entitled to receive shares of
two or more classes of capital stock of the Company, the Board of
Directors of the Company (whose determination shall be evidenced by a
board resolution filed with the Warrant Agent) shall determine the
allocation of the adjusted Purchase Price between or among shares of
such classes of capital stock.
B. In the event of any adjustment of the total number of
shares of Common Stock purchasable upon exercise of the then
outstanding Warrants pursuant to Section 6(A) hereof, the Purchase
Price per share applicable to each such outstanding Warrant shall be
proportionately adjusted in order that the aggregate Purchase Price of
such Warrants shall remain unchanged.
C. In the event of any capital reorganization or any
reclassification of the Common Stock (except as provided in Section
6(A) and 6(D)), any holder of Warrants, upon exercise thereof, shall
be entitled to receive, in substitution of the Common Stock to which
such holder would have become entitled upon exercise immediately prior
to such reorganization or reclassification, the shares (of any class
or classes) or other securities or property (or cash) of the Company
that such holder would have been entitled to receive at
5
7
the same aggregate Purchase Price upon such reorganization or
reclassification if such holders Warrants had been exercised
immediately prior thereto; and in any such case, appropriate provision
(as determined by the Board of Directors of the Company, whose
determination shall be evidenced by a board resolution filed with the
Warrant Agent) shall be made for the application of this Section 6
with respect to the rights and interests thereafter of the holders of
Warrants (including, but not limited to, the allocation of the
adjusted Purchase Price between or among shares of classes of capital
stock), to the end that this Section 6 (including the adjustments of
the number of shares of Common Stock or other securities purchasable
and the Purchase Price thereof) shall thereafter be reflected, as
nearly as reasonably practicable, in all subsequent exercises of the
Warrants for any shares or securities or other property (or cash)
thereafter deliverable upon exercise of the Warrants.
D. In case of any consolidation of the Company with, or
merger of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger which does not
result in any reclassification or change of the outstanding Common
Stock), or in case of any sale or conveyance to another corporation of
the property of the Company as an entirety or substantially as an
entirety, the corporation formed by such consolidation or merger or
the corporation which shall have acquired such assets, as the case may
be, together with any parent corporation thereto which has a class of
equity securities registered under the Securities Exchange Act of
1934, as amended, shall execute and deliver to the Warrant Agent a
supplemental warrant agreement providing that the holder of each
Warrant then outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such Warrant,
solely the kind and amount of shares of stock and other securities and
property (or cash) receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock of the
Company for which such Warrant might have been exercised immediately
prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments
provided in this Section 6. This Section 6(D) shall similarly apply to
successive consolidations, mergers, sales or transfers.
Notwithstanding the foregoing, in the event of a transaction subject
to this Section 6(D) in which the Common Stock purchasable upon the
exercise of a Warrant is converted into anything other than an equity
security registered under the Securities Exchange Act of 1934, as
amended, then the Company shall not enter into a supplemental warrant
agreement as contemplated above, but shall, in lieu thereof, redeem
all Warrants outstanding on the effective date of such transaction for
a per Warrant redemption price equal to the Fair Warrant Valuation (as
hereinafter defined). For purposes hereof, the "Fair Warrant
Valuation" shall mean the fair market value of a Warrant as determined
in good faith by an independent valuation expert retained by the
Warrant Agent, which fair market valuation shall be determined
utilizing the Black-Scholes method of valuation and shall take into
account such factors at the then remaining term of the Warrant
(without giving effect to the transaction contemplated by this Section
6(D)), the Purchase Price, the volatility associated with the
Company's Common Stock and such other factors as such independent
valuation expert shall deem necessary and appropriate in determining
the fair market value
6
8
of a Warrant. The fees and expenses of such independent valuation
expert shall be paid by the Company. In the event the Company redeems
the outstanding Warrants pursuant to this Section 6(D), the Company
shall provide the holders of Warrants with notice of its intention to
redeem such Warrants at least ten (10) days prior to the effective
date of the transaction subject to this Section 6(D), which notice
shall contain, among other things, a summary of the Fair Warrant
Valuation determined by the independent valuation expert as well as
instructions for tendering the Warrants and receiving the redemption
price therefor. The Company shall be obligated to deliver the
redemption price for the Warrants redeemed pursuant to this Section
6(D) to the holders of outstanding Warrants subject to such redemption
by certified or official bank check payable in lawful money of the
United States of America within ten (10) business days of the
effective date of the transaction subject to this Section 6(D).
The Warrant Agent shall not be under any responsibility to
determine the correctness of any provision contained in any such
supplemental warrant agreement relating to either the kind or amount
of shares of stock or securities or property (or cash) purchasable by
holders of Warrant Certificates upon the exercise of their Warrants
after any such consolidation, merger, sale or transfer or of any
adjustment to be made with respect thereto, but subject to the
provisions of Section 20 hereof, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in
relying upon, a certificate of a firm of independent certified public
accountants (who may be the accountants regularly employed by the
Company) with respect thereto.
E. Anything in this Section 6 to the contrary
notwithstanding, the Company shall be entitled, but not required, to
make such reductions in the Purchase Price, in addition to those
required by this Section 6, as in its discretion it shall determine to
be advisable, provided that any such reduction shall be effective for
a period of not less than 30 days from the date of mailing of notice
of such reduction to the registered holders of the Warrants in
accordance with Section 6(F).
F. Whenever the number of shares of Common Stock or other
securities purchasable upon exercise of a Warrant or the Purchase
Price is adjusted as provided in this Section 6, the Company will
promptly file with the Warrant Agent a certificate signed by the
Chairman of the Board, Chief Executive Officer, President or a Vice
President of the Company and by the Secretary or Assistant Secretary
of the Company setting forth the number and kind of shares purchasable
and the Purchase Price, as so adjusted, stating that such adjustments
in the number or kind of shares or other securities, or in the
Purchase Price, conform to the requirements of this Section 6, and
setting forth a brief statement of the facts accounting for such
adjustments. Promptly after receipt of such certificate, the Company,
or the Warrant Agent at the Company's request, will mail a brief
summary thereof (to be supplied by the Company) to the registered
holders of the Warrants by first-class, postage prepaid mail;
provided, however, that failure to file or to give any notice required
to be given
7
9
pursuant to this Section 6 hereof shall not affect the legality or
validity of any transaction listed in this Section 6.
G. Irrespective of any adjustments in the Purchase Price or
in the number or kind of shares issuable upon exercise of Warrants,
Warrant Certificates theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in
the similar Warrant Certificates initially issuable pursuant to this
Warrant Agreement.
H. The Company may retain a firm of independent public
accountants of recognized standing, which may be the firm regularly
retained by the Company, selected by the Board of Directors of the
Company, to make any computation required under this Section 6, and a
certificate signed by such firm shall in the absence of fraud or gross
negligence be conclusive evidence of the correctness of any
computation made under this Section 6.
I. For the purpose of this Section 6, the term "Common Stock"
shall mean (i) the class of voting stock designated as Common Stock in
the Restated Certificate of Incorporation of the Company, as amended,
at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to
no par value, or from no par value to par value. If at any time as a
result of an adjustment made pursuant to this Section 6, the holder of
any Warrant thereafter surrendered for exercise shall become entitled
to receive any shares of capital stock of the Company other than
shares of the Common Stock, thereafter the number of such other shares
so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in this Section 6, and all other provisions of this
Agreement, with respect to the Common Stock shall apply on like terms
to any such other shares.
SECTION 7.
Duration and Exercise of Warrants
The initial Purchase Price (as defined below) for the Common Stock
purchasable pursuant to the exercise of a Warrant shall be $12.00 per share of
Common Stock in lawful money of the United States of America, which Purchase
Price shall hereafter be subject to adjustment as provided in Section 6 hereof.
Except as the context otherwise requires, the term "Purchase Price" as used in
this Agreement shall mean the purchase price for a share of Common Stock
purchasable upon exercise of a Warrant in effect as of the relevant date and
shall reflect all adjustments made in accordance with the provisions of Section
6 hereof. Each Purchase Price shall continue in effect until further adjusted
pursuant to the provisions of Section 6 hereof.
8
10
The registered holder of any Warrant Certificate may exercise the
Warrants evidenced thereby, in whole at any time or in part from time to time,
after the close of business on the Registration Date and at or prior to the
Expiration Date (at which time the Warrant Certificates shall be and become
wholly void and of no value); provided, however, that the Company shall be
authorized to refuse to honor the exercise of any Warrant, if such exercise
would result in the good faith determination of the Board of Directors of the
Company upon the advice of counsel in the violation by the Company of any law,
including, but not limited to, a violation of the Securities Act or any
applicable state securities law.
Exercise of Warrants shall be accomplished upon the surrender of the
Warrant Certificate evidencing such Warrants, with the Form of Election to
Purchase on the reverse side thereof duly completed and executed, to the
Warrant Agent at its office in Atlanta, Georgia together with payment to the
Warrant Agent for the account of the Company of the Purchase Price (as of the
date of such surrender) for each share of Common Stock then being purchased and
an amount equal to any applicable transfer tax and, if requested by the
Company, any other taxes or governmental charges which the Company may be
required by law to collect in respect of such exercise. Payment of the Purchase
Price and other amounts may be made, either wholly or partly, in cash or by
certified or official bank check payable in lawful money of the United States
of America to the order of the Warrant Agent, who shall in turn make prompt
payment to the Company. No adjustment shall be made for any cash dividends,
whether paid or declared, on any securities issuable upon exercise of a
Warrant.
Upon receipt of a Warrant Certificate, with the Form of Election to
Purchase duly completed and executed, accompanied by payment of the Purchase
Price for the Common Stock to be purchased (and of an amount equal to any
applicable taxes or governmental charges as aforesaid), the Warrant Agent shall
promptly requisition from the transfer agent of the Common Stock of the Company
and deliver to or upon the order of the registered holder of such Warrant
Certificate, in such name or names as such registered holder may designate, a
certificate or certificates for the number of full shares of Common Stock to be
purchased, together with cash or scrip made available by the Company pursuant
to Section 8 hereof in respect of any fraction of a share of such Common Stock
otherwise issuable upon such exercise. If the Warrant is then exercisable to
purchase property other than securities, the Warrant Agent shall take
appropriate steps to cause such property to be delivered to or upon the order
of the registered holder of such Warrant Certificate.
In case the registered holder of any Warrant Certificate shall
exercise fewer than all of the Warrants evidenced by such Warrant Certificate,
the Warrant Agent shall promptly countersign and deliver to the registered
holder of such Warrant Certificate, or to his duly authorized assigns (provided
the Warrant Agent shall have received an amount equal to all applicable
transfer taxes, if any), a new Warrant Certificate or Certificates evidencing
the number of Warrants that were not so exercised.
Each person in whose name any certificate for shares of Common Stock
is issued upon the exercise of Warrants shall for all purposes be deemed to
have become the holder of record of the
9
11
Common Stock represented thereby as of , and such certificate shall be dated,
the date upon which the Warrant Certificate was duly surrendered in proper form
and payment of the Purchase Price (and of any applicable taxes or other
governmental charges) was made; provided, however, that if the date of such
surrender and payment is a date on which the stock transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares as of, and such certificate shall be dated, the next
succeeding business day on which the stock transfer books of the Company are
open. The Company covenants and agrees that it shall not cause its stock
transfer books to be closed for a period of more than twenty (20) consecutive
business days except upon consolidation, merger, sale of all or substantially
all of its assets, dissolution or liquidation or as otherwise provided by law.
Notwithstanding anything to the contrary set forth herein or in the
Warrant Certificate, the Company shall have the right, but not the obligation,
to redeem any Warrant submitted to the Warrant Agent for exercise at a
redemption price equal to the "current market price"(as defined in Section 8(B)
hereof) of a share of Common Stock on the Trading Day immediately proceeding
the date of such submission to the Warrant Agent less the Purchase Price of
such Warrant on the date of such submission and less any applicable transfer or
other taxes or governmental charges which the Company may be required by law to
collect in respect of such redemption. In the event the Company elects to
redeem any such Warrants submitted for exercise, the Company shall deliver to
the holder of such Warrants the above-described redemption price by certified
or official bank check payable in lawful money of the United States of America
within ten (10) business days after receipt of notice from the Warrant Agent
that such Warrants have been submitted for exercise.
SECTION 8.
Fractional Interests
A. The Company shall not be required to issue any Warrant Certificate
evidencing a fraction of a Warrant or to issue fractions of shares of Common
Stock on the exercise of the Warrants. If any fraction (calculated to the
nearest one-hundredth) of a share of Common Stock would, except for the
provisions of this Section 8, be issuable on the exercise of any Warrant, the
Company shall, at its option, either (I) purchase such fraction for an amount
in cash equal to the current value of such fraction computed on the basis of
the current market price (as defined in Section 8(B) hereof) of a share of
Common Stock on the Trading Day immediately preceding the day upon which such
Warrant Certificate was surrendered for exercise in accordance with Section 7
hereof or (ii) issue scrip of the Company in lieu thereof. If the Company
elects to issue scrip, the terms of such scrip shall be set forth in a
supplement to this Warrant Agreement entered into between the Company and the
Warrant Agent. By accepting a Warrant Certificate, the holder thereof expressly
waives any right to receive a Warrant Certificate evidencing any fraction of a
Warrant or to receive any fractional share of Common Stock upon exercise of a
Warrant.
10
12
B. For the purpose of any computation under Section 8(A) hereof and as
used elsewhere in this Agreement, the "current market price" per share of
Common Stock at any date shall be deemed to be the average of the "last
reported sales prices" for the 20 consecutive Trading Days commencing 25
Trading Days before the day in question. As used herein, the "last reported
sales price" for each day shall be (I) the last reported sales price of Common
Stock on the National Market System of the National Association of Securities
Dealers, Inc., Automated Quotation System, or any similar system of automated
dissemination of quotations of securities prices then in common use, if so
quoted, or (ii) if not quoted as described in clause (i), the mean between the
high bid and low asked quotations for Common Stock as reported by the National
Quotation Bureau Incorporated if at least two securities dealers have inserted
both bid and asked quotations for such class of stock on at least five of the
ten preceding Trading Days, or (iii) if the Common Stock is listed or admitted
for trading on any national securities exchange, the last reported sale price,
or the closing bid price if no sale occurred, of such class of stock on the
principal securities exchange on which such class of stock is listed. If the
Common Stock is quoted on a national securities or central market system, in
lieu of a market or quotation system described above, the last reported sales
price shall be determined in the manner set forth in clause (ii) of the
preceding sentence if bid and asked quotations are reported but actual
transactions are not or in the manner set forth in clause (iii) of the
preceding sentence if actual transactions are reported. If none of the
conditions set forth above is met, the last reported sales price of Common
Stock on any day or the average of such last reported sale prices for any
period shall be the fair market value of such class of stock as determined by a
member firm of the New York Stock Exchange, Inc. selected by the Company. As
used herein, the term "Trading Day" with respect to Common Stock means (i) if
such class of stock is quoted on the National Market System of the National
Association of Securities Dealers, Inc., Automated Quotation System or any
similar system of automated dissemination of quotations of securities prices,
any day on which trades may be made on such system, (ii) if such class of stock
is listed or admitted for trading on any national securities exchange, any day
on which the principal national securities exchange on which such class of
stock is listed or admitted for trading is open for business or (iii) if not
quoted or listed as described in clause (i) or (ii), any day on which the New
York Stock Exchange is open for business.
SECTION 9.
Reservation of Common Stock
The Company covenants that it will at all times reserve and keep
available, free from any pre-emptive rights, out of its authorized Common
Stock, solely for the purpose of issue upon exercise of the Warrants, such
number of shares of Common Stock as shall then be issuable upon the exercise of
all outstanding Warrants. The Company covenants that all shares of Common Stock
which shall be so issuable shall upon such issue be duly authorized, validly
issued and fully paid and non-assessable. Promptly after the Expiration Date of
the Warrants, the Warrant Agent shall certify to the Company the aggregate
number of Warrants then outstanding, and thereafter no shares of Common Stock
shall be subject to reservation in respect of such Warrants.
11
13
The Warrant Agent is hereby irrevocably authorized to requisition from
time to time the transfer agent of the Common Stock, and any subsequent
transfer agent of any shares of the Company's capital stock issuable upon the
exercise of the Warrants, for stock certificates required to honor outstanding
Warrants. The Company hereby irrevocably authorizes its present and any future
transfer agent to comply with all such requests. The Company will supply such
transfer agent with duly executed stock certificates for such purpose and will
itself provide or otherwise make available any cash or scrip which may be
issuable as provided in Section 8 hereof.
SECTION 10.
Delivery of Prospectuses
For so long as the Company may be required by the Securities Act or
any other applicable Federal or state law, to furnish a prospectus to the
registered holders of the Warrant Certificates upon their exercise of Warrants,
the Company shall promptly deliver upon request at the principal office of the
Warrant Agent (or successor warrant agent) sufficient quantities of such
prospectuses for delivery to the registered holders of the Warrant Certificates
upon their exercise of Warrants, and the Warrant Agent hereby agrees to deliver
such prospectuses to such registered holders of the Warrant Certificates
together with the shares of Common Stock or other securities receivable by such
registered holders of the Warrant Certificates upon their exercise of Warrants.
SECTION 11.
Reduction of Purchase Price Below Par Value
Before taking any action which would cause an adjustment pursuant to
Section 6 hereof reducing the Purchase Price below the then par value (if any)
of the shares of Common Stock issuable upon exercise of the Warrants, the
Company will in good faith and as expeditiously as reasonably possible endeavor
to take any corporate action which, in the opinion of its counsel, may be
necessary in order that the Company may validly and legally issue fully paid
and non-assessable shares of such Common Stock at such adjusted Purchase Price.
SECTION 12.
Notice of Certain Corporate Action
In case the Company, after the date hereof, shall propose to effect
(i) any reclassification of Common Stock (other than a reclassification
involving merely the subdivision or combination of outstanding shares of Common
Stock) or any capital reorganization, or (ii) any consolidation or merger to
which the Company is a party and for which approval of any stockholders of the
Company
12
14
is required, or any sale, transfer or other disposition of its property and
assets substantially as an entirety, or the liquidation, voluntary or
involuntary dissolution or winding-up of the Company, then, in each such case,
the Company shall file with the Warrant Agent, and the Company, or the Warrant
Agent on the Company's behalf, shall mail (by first-class, postage prepaid
mail) to all registered holders of the Warrant Certificates notice of such
proposed action, which notice shall specify the date on which the books of the
Company shall close or a record be taken for such reclassification or
reorganization or the date on which such consolidation, merger, sale, transfer,
other disposition, liquidation, voluntary or involuntary dissolution or
winding-up shall take place or commence, as the case may be, and which shall
also specify any record date for determination of holders of Common Stock
entitled to vote thereon or participate therein and shall set forth such facts
with respect thereto as shall be reasonably necessary to indicate any
adjustments in the Purchase Price and the number of and kind of shares or other
securities purchasable upon exercise of Warrants which will be required as a
result of such action. Such notice shall be filed and mailed in the case of any
action covered by clause (i) above at least ten days prior to the record date
for determining holders of the Common Stock for purposes of such action or, if
a record is not to be taken, the date as of which the holders of shares of
Common Stock of record are to be entitled to such offering; and, in the case of
any action covered by clause (ii) above, at least 20 days prior to the earlier
of the date on which such consolidation, merger, sale, transfer, other
disposition, liquidation, voluntary or involuntary dissolution or winding-up is
expected to become effective and the date as of which it is expected that
holders of shares of Common Stock of record on such date shall be entitled to
exchange their shares for securities or other property deliverable upon such
consolidation, merger, sale, transfer, other disposition, liquidation,
voluntary or involuntary dissolution or winding-up.
Failure to give any such notice or any defect therein shall not affect
the legality or validity of any transaction listed in this Section 12.
SECTION 13.
Disposition of Proceeds on
Exercise of Warrant Certificates, Etc.
The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay to the Company all moneys received
by the Warrant Agent for the purchase of shares of the Common Stock through the
exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement available for
inspection by registered holders of the Warrant Certificates during normal
business hours at its office in Atlanta, Georgia. Copies of this Agreement may
be obtained upon written request addressed to Secretary, Medaphis Corporation,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
13
15
SECTION 14.
Warrant Certificate Holder Not Deemed a Stockholder
No holder, as such, of any Warrant Certificate shall be entitled to
vote or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Warrants
represented thereby for any purpose whatever, nor shall anything contained
herein or in any Warrant Certificate be construed to confer upon the holder of
any Warrant Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger, conveyance or otherwise), or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 12 hereof), or to receive dividends or subscription rights, or
otherwise, until such Warrant Certificate shall have been exercised in
accordance with the provisions hereof and the receipt of the Purchase Price and
any other amounts payable upon such exercise by the Warrant Agent.
SECTION 15.
Right of Action
All rights of action in respect to this Agreement are vested in the
respective registered holders of the Warrant Certificates; and any registered
holder of any Warrant Certificate, without the consent of the Warrant Agent or
of the holder of any Warrant Certificate, may, in such holders own behalf and
for such holders own benefit, enforce, and may institute and maintain, any
suit, action or proceeding against the Company suitable to enforce, or
otherwise in respect of, such holders right to exercise the Warrants evidenced
by such Warrant Certificate for the purchase of shares of the Common Stock in
the manner provided in such Warrant Certificate and in this Agreement.
SECTION 16.
Agreement of Holders of Warrant Certificates
Every holder of a Warrant Certificate by accepting the same consents
and agrees with the Company, the Warrant Agent and with every other holder of a
Warrant Certificate that:
(i) the Warrant Certificates are transferable on the registry
books of the Warrant Agent only upon the terms and conditions set
forth in this Agreement; and
(ii) the Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered thereunder
as the absolute owner of the Warrant
14
16
(notwithstanding any notation of ownership or other writing thereon
made by anyone other than the Company or the Warrant Agent) for all
purposes whatever and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
SECTION 17.
Cancellation of Warrant Certificates
In the event that the Company shall redeem, purchase or otherwise
acquire any Warrant Certificate or Certificates after the issuance thereof,
such Warrant Certificate or Certificates shall thereupon be delivered to the
Warrant Agent and be canceled by it and retired. The Warrant Agent shall also
cancel any Warrant Certificate delivered to it for exercise, in whole or in
part, or delivered to it by transfer, split-up, combination or exchange.
Warrant Certificates so canceled shall be delivered by the Warrant Agent to the
Company from time to time, or disposed of in accordance with the instructions
of the Company.
SECTION 18.
Concerning the Warrant Agent
The Company agrees to pay to the Warrant Agent from time to time, on
demand of the Warrant Agent, reasonable compensation for all services rendered
by it hereunder and also its reasonable expenses, including counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Warrant Agent for, and to hold it harmless
against, any loss, liability or expense incurred without gross negligence, bad
faith or willful misconduct on the part of the Warrant Agent, arising out of or
in connection with the acceptance and administration of this Agreement.
SECTION 19.
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 corporate 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. In case at
the time such successor to the Warrant Agent shall succeed to the agency
created by this Agreement any of the Warrant
15
17
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 have the full force provided in the Warrant Certificates 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 countersignature under its prior
name and deliver Warrant Certificates so countersigned, or the Warrant Agent
may countersign such Warrant Certificates in its changed name prior to their
delivery; and in all such cases such Warrant Certificates shall have the full
force provided in the Warrant Certificates and in this Agreement.
SECTION 20.
Duties of 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 of Warrant Certificates, by their acceptance thereof,
shall be bound:
A. The Warrant Agent may consult with counsel (who may be counsel for
the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with such opinion;
provided, however, that the Warrant Agent shall have exercised reasonable care
in the selection of such counsel. Any fees and expenses of such counsel to the
extent reasonable, shall be paid by the Company.
B. 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 actions
hereunder, such fact or matter (unless other evidence in respect thereof is
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, Chief
Executive Officer, President or a Vice President of the Company and by the
Secretary or Assistant 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.
C. The Warrant Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
16
18
D. The Warrant Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Warrant Certificates (except its countersignature on the Warrant Certificates
and such statements or recitals as describe the Warrant Agent or action taken
or to be taken by it) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
E. 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 hereby of the Warrant Agent) or in respect of the validity or
execution of any Warrant Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant Certificate; nor shall
it be responsible for the adjustment of the Purchase Price or the making of any
change in the number of shares of Common Stock purchasable upon exercise of a
Warrant required under the provisions of Section 6 hereof or responsible for
the manner, method or amount of any such change or the ascertaining of the
existence of facts that would require any such adjustment or change (except
with respect to the exercise of Warrant Certificates after actual notice of any
adjustment of the Purchase Price); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation
of any shares of Common Stock to be issued pursuant to this Agreement or any
Warrant Certificate or as to whether any shares of Common Stock will, when
issued, be validly issued, fully paid and non-assessable.
F. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or take any other action likely to involve
expense unless the Company or one or more registered holders of Warrant
Certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred. All rights of
action under this Agreement or any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrants 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 registered holders of the Warrant Certificates, as their respective
rights or interests may appear.
G. The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
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 was 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.
H. 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, Chief Executive Officer, President or a Vice President
of the Company and to apply to such officers for advice or
17
19
instructions in connection with the Warrant Agent's duties, and it shall not be
liable for any action taken or suffered or omitted by it in good faith in
accordance with instructions of any such officer.
I. The Warrant Agent will not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.
J. 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, agents or employees and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees or for any loss to the Company resulting
from such neglect or misconduct; provided, however, that reasonable care shall
have been exercised in the selection and continued employment of such
attorneys, agents and employees.
K. The Warrant Agent will not incur any liability or responsibility to
the Company or to any holder of any Warrant Certificate for any action taken,
or any failure to take action, in reliance on any notice, resolution, waiver,
consent, order, certificate or other paper, document or instrument reasonably
believed by the Warrant Agent to be genuine and to have been signed, sent or
presented by the proper party or parties.
L. The Warrant Agent will act hereunder solely as agent of the Company
in a ministerial capacity, and its duties will be determined solely by the
provisions hereof. The Warrant Agent will not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own gross negligence, bad faith or willful misconduct.
SECTION 21.
Change of Warrant Agent
The Warrant Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' prior notice in writing mailed to the
Company by registered or certified mail. The Company may remove the Warrant
Agent or any successor warrant agent upon thirty (30) days' prior notice in
writing, mailed to the Warrant Agent or successor warrant agent, as the case
may be, by registered or certified mail. 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 and shall, within fifteen (15) days
following such appointment, give notice thereof in writing to each registered
holder of the Warrant Certificates. If the Company shall fail to make such
appointment within a period of fifteen (15) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent, then (i) the
Company agrees to perform the duties of the Warrant Agent hereunder and (ii)
the registered holder of any Warrant Certificate may apply to any court of
competent jurisdiction for the appointment of a new warrant agent. After
appointment, the successor warrant agent shall be vested with the same
18
20
powers, rights, duties and responsibilities as if it had been originally named
as warrant agent without 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 execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any notice
provided for in this Section 21, 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.
SECTION 22.
Issuance of New Warrant Certificates
Notwithstanding any of the provisions of this Agreement or the Warrant
Certificates to the contrary, the Company may, at its option, issue new Warrant
Certificates in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price or the number or kind of
shares purchasable under the Warrant Certificates made in accordance with the
provisions of this Agreement.
SECTION 23.
Notices
Notice or demand pursuant to this Agreement to be given to or made on
the Company by the Warrant Agent or by the registered holder of any Warrant
Certificate shall be sufficiently given or made if sent by first-class mail,
registered mail or recognized overnight courier service, postage prepaid,
addressed (until another address is filed in writing by the Company with the
Warrant Agent) as follows:
Medaphis Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
19
21
Subject to the provisions of Section 21, any notice pursuant to this
Agreement to be given or made by the Company or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made if
sent by first-class mail, registered mail or recognized overnight courier
service, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company) as follows:
SunTrust Bank, Atlanta
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Stock Transfer Department
Any notice or demand authorized to be given or made to the registered holder of
any Warrant Certificate under this Agreement shall be sufficiently given or
made if by first-class, registered mail or recognized overnight courier service
postage prepaid, to the last address of such holder as it shall appear on the
registry books maintained by the Warrant Agent.
SECTION 24.
Modification of Agreement
The Warrant Agent may, without the consent or concurrence of the
registered holders of the Warrant Certificates, by supplemental agreement or
otherwise, concur with the Company in making any changes or corrections in this
Agreement that the Warrant Agent shall have been advised by counsel (who may be
counsel for the Company) are necessary or desirable to cure any ambiguity or to
correct any defective or inconsistent provision or clerical omission or mistake
or manifest error herein contained, or to make any other provisions in regard
to matters or questions arising hereunder and which shall not be inconsistent
with the provisions of the Warrant Certificates and which shall not adversely
affect the interests of the holders of Warrant Certificates.
With the consent of the holders of at least a majority in number of
the Warrants at the time outstanding, the Company and the Warrant Agent may at
any time and from time to time, by supplemental agreement or amendment, add any
provisions to or change in any manner or eliminate any of the provisions of
this Agreement or of any supplemental agreement or modify in any manner the
rights and obligations of the registered holders of Warrant Certificates and of
the Company; provided, however, that no such supplemental agreement or
amendment shall, without the consent of the registered holder of each
outstanding Warrant Certificate affected thereby:
(1) alter the provisions of this Agreement so as to affect
adversely the terms upon which the Warrants are exercisable; or
20
22
(2) reduce the number of Warrants outstanding the consent of
whose holders is required for any such supplemental agreement or
amendment.
SECTION 25.
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 their respective successors and assigns hereunder.
SECTION 26.
Governing Law
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Georgia and for all
purposes shall be construed in accordance with the laws of said State, without
application of the choice of law rules of said State.
SECTION 27.
Termination
This Agreement shall terminate as of the close of business on the
Expiration Date, or such earlier date upon which all Warrants have been
exercised or are no longer outstanding, except that the Warrant Agent shall
account to the Company as to all Warrants outstanding and all cash held by
Company as of the close of business on the Expiration Date.
SECTION 28.
Benefits of this Agreement
Nothing in this Agreement or in the Warrant Certificates shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent, their respective successors and assigns hereunder and the
registered holders of the Warrant Certificates 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 assigns hereunder and the registered holders of the Warrant
Certificates.
21
23
SECTION 29.
Descriptive Headings
The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
SECTION 30.
Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all such counterparts shall together constitute
one and the same instrument.
22
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective seals to be hereunto affixed and
attested, all as of the day and year first above written.
MEDAPHIS CORPORATION
Dated: July 8, 1998
By: /s/ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
------------------------
Executive Vice President
Dated: July 8, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------
Vice President
23
25
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
Number of Warrants _______ Warrant Cusip No. 584028 11 2
VOID AFTER 5 P.M., ATLANTA, GEORGIA TIME,
ON July 8, 2003
MEDAPHIS CORPORATION
WARRANT TO PURCHASE COMMON STOCK
THIS CERTIFIES THAT ____________________, or the registered assigns
thereof, is the registered holder of the number of Warrants set forth above.
Each Warrant entitles the holder thereof to purchase from Medaphis Corporation,
a corporation incorporated under the laws of the State of Delaware (hereinafter
called the "Company"), subject to the terms and conditions set forth
hereinafter and in the Warrant Agreement hereinafter referred to, one fully
paid and non-assessable share of voting common stock, par value $0.01 per
share, of the Company (hereinafter called the "Common Stock"), upon
presentation and surrender of this Warrant Certificate, with the Form of
Election to Purchase duly executed and the instructions for the registration
and delivery of Common Stock completed, at any time after the Registration Date
(as defined in the Warrant Agreement) and at or prior to 5 P.M. Atlanta,
Georgia time on July 8, 2003, at the office in Atlanta, Georgia of SunTrust
Bank, Atlanta, Warrant Agent of the Company (hereinafter called the "Warrant
Agent"), or at the office of its successor warrant agent or, if there be no
successor warrant agent, at the corporate offices of the Company, and upon
payment of the Purchase Price (as hereinafter defined) and any applicable taxes
paid either in cash, or by certified or official bank check, payable in lawful
money of the United States of America to the order of the Warrant Agent. The
initial Purchase Price per share of Common Stock is $12.00. The Purchase Price
and the number and kind of shares of stock of the Company purchasable upon the
exercise of the Warrants represented hereby are subject to modification and
adjustment upon the happening of certain events set forth in the Warrant
Agreement. The term "Purchase Price" as used in this Certificate shall mean the
purchase price of a share of Common Stock upon exercise of this Warrant in
effect as of the relevant date and shall reflect all adjustments made thereto
in accordance with the Warrant Agreement. This Warrant Certificate is subject
to all of the terms, provisions and conditions of the Warrant Agreement, dated
as of July 8, 1998 (hereinafter called the "Warrant Agreement"), between the
Company and the Warrant Agent, to all of which terms, provisions and conditions
the registered holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement is hereby incorporated herein by reference and
made a part hereof. Reference to the Warrant Agreement is hereby made for a
full
A-1
26
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Warrant Agent, the Company and the registered
holders of the Warrant Certificates. Copies of the Warrant Agreement are
available for inspection at the corporate trust office of the Warrant Agent.
The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of shares, but shall
make adjustment therefor in cash on the basis of the current market value of
any fractional interest (computed as provided in the Warrant Agreement) or, at
its option, shall issue scrip in lieu thereof, all as provided in the Warrant
Agreement. In no event shall the Company be required to issue fractions of
Warrants.
In certain cases, the sale of Common Stock by the Company upon the
exercise of Warrants would violate the securities laws of the United States,
certain states thereof or other jurisdictions. The Company has agreed to file a
registration statement under the Securities Act of 1933, as amended as soon as
reasonably practicable following the Price Threshold Date (as defined in the
Warrant Agreement) and has agreed to exercise reasonable commercial efforts to
maintain the effectiveness of such registration statement until the Expiration
Date and to take such action under the laws of various states as may be
required to cause the sale of Common Stock pursuant to exercise of the Warrants
to be lawful. However, the Company will not be required to honor the exercise
of Warrants if, in the good faith determination of the Board of Directors upon
advice of counsel, the sale of Common Stock upon such exercise would be
unlawful. In certain cases, the Company may, but is not required to, redeem
Warrants submitted for exercise at a redemption price equal to the current
market price per share of Common Stock (as defined in the Warrant Agreement) on
the trading date immediately prior to the date of such submission less the
Purchase Price of such Warrant on such date and less any applicable transfer or
other taxes or other governmental charges which the Company may be required by
law to collect in respect of such redemption, any such redemptions to be
subject to the terms and conditions of the Warrant Agreement. In certain other
cases, the Company shall be required to redeem all outstanding Warrants for a
redemption price equal to the Fair Warrant Valuation (as defined in the Warrant
Agreement).
This Warrant Certificate, with or without other Certificates, upon
surrender to the Warrant Agent, any successor warrant agent or, in the absence
of any successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or
Certificates so surrendered. If the Warrants evidenced by this Warrant
Certificate shall be exercised in part, the holder hereof shall be entitled to
receive upon surrender hereof another Warrant Certificate or Certificates
evidencing the number of Warrants not so exercised.
No holder of this Warrant Certificate, as such, shall be entitled to
vote on or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any
purpose whatsoever, nor shall anything contained in the Warrant Agreement or
herein be construed to confer upon the holder of this Warrant Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or give or withhold consent to any
A-2
27
corporate action (whether upon any recapitalization, issue of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise) or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Warrant Agreement), or to receive dividends or subscription rights or
otherwise, until the Warrants evidenced by this Warrant Certificate shall have
been exercised and the Common Stock purchasable upon the exercise thereof shall
have become deliverable as provided in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Common Stock or other class
of stock purchasable upon the exercise of the Warrants evidenced by this
Warrant Certificate are closed for any purpose, the Company shall not be
required to make delivery of certificates for shares purchasable upon such
exercise until the date of the reopening of said transfer books.
Every holder of this Warrant Certificate by accepting the same
consents and agrees with the Company, the Warrant Agent and every other holder
of a Warrant Certificate that:
(a) this Warrant Certificate is transferable on the registry
books of the Warrant Agent only upon the terms and conditions set
forth in the Warrant Agreement; and
(b) the Company and the Warrant Agent may deem and treat the
person in whose name this Warrant Certificate is registered thereunder
as the absolute owner hereof (notwithstanding any notation of
ownership or other writing thereon made by anyone other than the
Company or the Warrant Agent) for all purposes whatever and neither
the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
The Company shall not be required to issue or deliver any certificate
for shares of Common Stock or other securities upon the exercise of Warrants
evidenced by this Warrant Certificate until any tax which may be payable in
respect thereof shall have been paid, such tax being payable by the holder of
this Warrant Certificate at the time of surrender.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
[CORPORATE SEAL]
MEDAPHIS CORPORATION
Dated:_____________ By:________________________________
Authorized Officer
A-3
28
ATTEST:
By:________________________________
Secretary
Countersigned:
SUNTRUST BANK, ATLANTA
Warrant Agent
By: _________________________
Authorized Officer
A-4
29
MEDAPHIS CORPORATION
FORM OF ELECTION TO PURCHASE
(To Be Executed by the Registered Holder Upon Exercise
of Warrants Evidenced by the Within Warrant Certificate)
MEDAPHIS CORPORATION:
The undersigned hereby (1) irrevocably elects to exercise ______
Warrants, evidenced by the within Warrant Certificate, and to purchase
thereunder _____ full shares of the Common Stock issuable upon exercise of said
Warrants; (2) makes payment in full of the Purchase Price of such shares and
any applicable taxes by payment of cash or official bank or certified check,
payable to the order of SunTrust Bank, Atlanta or its successor warrant agent,
(3) requests that certificates for such shares of Common Stock be issued in the
name of and delivered to the following:
-------------------------------------------------------------------------------
Name and Social Security or other Identifying Tax Number
-------------------------------------------------------------------------------
Street Address or Post Office Box
-------------------------------------------------------------------------------
City, State, Zip Code
and (4) if said number of Warrants shall not be all the Warrants evidenced by
the within Warrant Certificate, requests that a new Warrant Certificate
evidencing the Warrants not so exercised be issued in the name of and delivered
to the following:
-------------------------------------------------------------------------------
Name and Social Security or other Identifying Tax Number
-------------------------------------------------------------------------------
Street Address or Post Office Box
-------------------------------------------------------------------------------
City, State, Zip Code
A-5
30
Dated: ____________, _____ Signature:_______________________________
(Signature of Registered Holder
or Assignee)
Social Security or other
Identifying Tax Number of
Registered Holder or
Assignee:_______________
NOTICE: The above signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without alteration
or enlargement or any change whatsoever, or if signed by any other person the
Form of Assignment hereon must be duly executed and if the certificate
representing the shares of Common Stock or any Warrant Certificate representing
Warrants not exercised is to be registered in a name other than that in which
the within Warrant Certificate is registered, the signature of the holder
hereof must be guaranteed by an eligible guarantor institution as provided
below.
FORM OF ASSIGNMENT
(To Be Executed by the Registered Holder In order to
Assign Warrants evidenced by the Within Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers __________ Warrants represented by this Warrant Certificate to
-------------------------------------------------------------------------------
(PRINT NAME, ADDRESS AND SOCIAL SECURITY OR OTHER IDENTIFYING TAX
NUMBER OF ASSIGNEE)
and does hereby irrevocably constitute and appoint_____________________________
______________________________________________________________________ attorney
to transfer said Warrants on the books of the Company, with full power of
substitution.
Dated: _______________________________________________________________________
Social Security or other Identifying Tax Number of Registered
Holder:_______________________
-------------------------------------------------------------------------------
(SIGNATURE OF REGISTERED HOLDER)
NOTE: THE ABOVE SIGNATURE MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE WITHIN WARRANT CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
A-6
31
SIGNATURE GUARANTEED:
By:____________________________________________________________________________
THE SIGNATURE MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE
17 Ad-5).
A-7