1
Exhibit 99.03
[MEDIQUAL LETTERHEAD]
__________, 1997
TO: The Holders of Warrants To Purchase MediQual Common Stock
("MediQual Warrants")
As you know, MediQual Systems, Inc. ("MediQual") has entered
into an Agreement and Plan of Merger dated as of May 27, 1997, which has been
amended and restated as of July 7, 1997 (the "Merger Agreement"), with Cardinal
Health, Inc. ("Cardinal") and Hub Merger Corp., a wholly owned subsidiary of
Cardinal ("Subcorp"), pursuant to which Subcorp will be merged (the "Merger")
with and into MediQual and each outstanding share of MediQual capital stock will
be converted into the right to receive a number of Common Shares of Cardinal
("Cardinal Common Shares") as determined pursuant to the share exchange formulas
set forth in the Merger Agreement and described in the accompanying Proxy
Statement/Prospectus. Capitalized terms used in this letter and not defined
herein have the meanings ascribed to such terms in the Merger Agreement.
It is a condition to the obligations of Cardinal and
Subcorp to complete the Merger that MediQual Warrants to purchase at
least 95% of the MediQual Common Stock issuable upon the exercise of all
MediQual Warrants outstanding on May 27, 1997, shall have been (a) exercised
effective as of or prior to the Effective Time of the Merger, or (b) duly
surrendered in exchange for Cardinal Warrants ("Cardinal Warrants") to purchase
a number of Cardinal Common Shares equal to the product of (x) the number of
shares of MediQual Common Stock issuable upon the exercise of the MediQual
Warrants being surrendered and (y) the Common Equivalent Exchange Ratio (as
defined in the Merger Agreement and described in the accompanying Proxy
Statement/Prospectus under the caption "The Merger Agreement--Merger
Consideration"). The Cardinal Warrants will have an exercise price equal to the
quotient obtained by dividing the current exercise price of the MediQual
Warrants of $0.80 by the Common Equivalent Exchange Ratio. In the event that
you would like to exercise your MediQual Warrant prior to the closing of the
Merger, you may do so either (i) for cash by using the form of exercise notice
attached to the back of the MediQual Warrant, or (ii) on a "net exercise"
basis, contingent upon the closing of the Merger. If you would like to choose
the contingent net exercise alternative for your Warrant, you should use the
Notice of Contingent Net Issue Exercise and Waiver attached as Exhibit A
hereto. If you execute and return this form with your MediQual Warrant, your
warrant will only be exercised in the event that the Merger is completed, and
then contemporaneous with such completion. Cardinal Warrants issued in exchange
for
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The Holders of Warrants to Purchase MediQual Common Stock
_________, 1997
Page 2
MediQual Warrants will be in the form of the Cardinal Warrant included as
Exhibit B to this letter, and a form of Contingent Agreement to Exchange Warrant
and Waiver is included as Exhibit C to this letter. Completed forms should be
returned promptly to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
MediQual Systems, Inc.
Suite ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The condition described above will not be staisfied if any
holder of a MediQual Warrant who does not exercise or surrender Mediqual
Warrants has advised Mediqual, in writing or otherwise, that such holder will
not surrender or exercise all of such holder's MediQual Warrants.
In addition, MediQual is required under the terms of the
Merger Agreement to use all reasonable efforts to cause all holders of MediQual
Warrants to exercise all of their MediQual Warrants effective as of or prior to
the Effective Time of the Merger. Holders who so exercise their Warrants will
receive Cardinal Common Shares in the Merger pursuant to the terms of the Merger
Agreement, which provides, among other things, that 6.5% of the Cardinal Common
Shares otherwise issuable to MediQual Stockholders in the Merger will be
deposited into escrow to secure certain indemnification obligations of the
MediQual Stockholders and to provide for the payment of the expenses of ▇▇▇▇ ▇.
▇▇▇▇▇ as the representative of the MediQual Stockholders. Subject to this
escrow requirement, holders of MediQual Warrants who exercise their warrants
will receive Cardinal Common Shares in the Merger that will be generally freely
tradeable. See "The Merger--Federal Securities Law Consequences" in the Proxy
Statement/Prospectus.
If you elect to exercise your warrant on a contigent "net
exercise" basis, after completion of the Merger, a certificate for Cardinal
Common Shares and a check for cash in lieu of any fractional shares will be
sent to you at the address you provide in the Notice of Contingent Net
Issue Exercise and Waiver. You will also be notified of the number of Cardinal
Common Shares deposited into escrow on your behalf.
If you do not exercise your MediQual Warrant prior to the
Merger, Cardinal will issue a new Cardinal Warrant in the form of Exhibit B to
this letter in exchange for your MediQual Warrant as described above. However,
the liquidity of your Cardinal Warrant may be limited. Because there is no
public trading market for the Cardinal Warrants, the Cardinal Warrant
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The Holders of Warrants to Purchase MediQual Common Stock
_________, 1997
Page 3
issued in exchange for the MediQual Warrants will not be freely tradeable for
the first year following the Merger. See "The Merger--Federal Securities Law
Consequences" in the accompanying Proxy Statement/Prospectus. In addition,
certain of the terms of the Cardinal Warrant you will receive upon exchange
will be different from those of your existing MediQual Warrant. Unlike your
MediQual Warrant, the form of Cardinal Warrant included as Exhibit B to this
letter provides that Cardinal Common Shares are not required to be issued upon
exercise of the Cardinal Warrant except (1) pursuant to an effective
registration statement under the Securities Act of 1933 (the "Securities Act")
or (2) upon the holder first furnishing to Cardinal an opinion of counsel
satisfactory to Cardinal that such issuance is not in violation of the
registration requirements of the Securities Act or any applicable state
securities law. (Your MediQual Warrant requires such an opinion only in
connection with the sale of MediQual Common Stock acquired upon the exercise of
your MediQual Warrant.) Since Cardinal is not under any obligation to file, and
does not intend to file, a registration statement under the Securities Act
covering the issuance of any Cardinal Common Shares upon exercise of the
Cardinal Warrants, the Cardinal Warrants will only be exercisable pursuant to
an exemption from the registration requirements of the Securities Act, and then
only upon the holder of the Cardinal Warrant furnishing to Cardinal an opinion
of counsel satisfactory to Cardinal that an exemption from registration is
available. Cardinal may waive the requirement for an opinion of counsel at the
time of exercise if the availability of an exemption from registration is
readily apparent. Generally, Cardinal Common Shares issued upon the exercise of
a Cardinal Warrant by the surrender of Cardinal Common Shares having a fair
market value equal to the applicable exercise price of the Cardinal Warrant, or
by a so-called cashless or net exercise, which is permitted in the form of
Cardinal Warrant, may be an exempt security within the meaning of Section
3(a)(9) of the Securities Act and therefore, exempt from the registration
requirements of the Securities Act. By virtue of the initial registration of
the issuance of the Cardinal Warrants under the Securities Act, Cardinal
believes that Cardinal Common Shares issued upon the exercise of a Cardinal
Warrant pursuant to the exemption in Section 3(a)(9) of the Securities Act will
be freely tradeable, except that Cardinal Common Shares received by persons who
are "affiliates" (as such term is defined under the Securities Act) of Cardinal
or MediQual prior to the Merger may be sold by them only in transactions
permitted by the resale provisions of Rule 145 under the Securities Act
described in the Proxy Statement/Prospectus under the caption "The
Merger-Federal Securities Law Consequences."
The exercise of a Cardinal Warrant by the payment of the cash
exercise price will generally only be exempt if it meets the requirements for
the exemption provided in Section 4(2) of
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The Holders of Warrants to Purchase MediQual Common Stock
_________, 1997
Page 4
the Securities Act which involves the issuance of Cardinal Common Shares in a
transaction not involving a public offering. The availability of this exemption
or any other exemption will depend on the facts and circumstances existing at
the time of the proposed exercise and there can be no assurance that this
exemption will be available at the time a holder of a Cardinal Warrant wishes to
exercise, or at all. Any Cardinal Common Shares issued upon the exercise of
Cardinal Warrants pursuant to Section 4(2) of the Securities Act will be
"restricted securities" within the meaning of Rule 144 under the Act and may not
be publicly resold by the holder for a period of one year following the time of
exercise of the Cardinal ▇▇▇▇▇▇▇. Beginning one year after the time of exercise
of the Cardinal Warrant, the Cardinal Common Shares acquired upon the exercise
of the warrant pursuant to such exemption may be sold subject to the manner of
sale and volume limitations of Rule 144 described in "The Merger--Federal
Securities Law Consequences" in the Proxy Statement/Prospectus. Holders of
MediQual Warrants who exercise all of their MediQual Warrants prior to the
Effective Time and, therefore, receive Cardinal Common Shares in the Merger,
will not be subject to the foregoing limitations on the exercise of Cardinal
Warrants, although 6.5% of these shares will be placed into escrow at the
Effective Time.
You may elect to exercise your MediQual Warrant for cash,
exercise your Warrant on a "net exercise" basis, contingent upon the completion
of the Merger, or agree to exchange your Warrant for a Cardinal Warrant,
regardless of whether or not you elect to vote or have your vote as a MediQual
Stockholder represented at the special meeting of the stockholders of MediQual
at which the Merger will be considered, and regardless of whether or not such
vote is cast in favor of or against the proposed Merger.
To exchange your MediQual Warrant for a Cardinal Warrant,
complete the Contingent Agreement to Exchange Warrant included as Exhibit C to
this letter and return it, together with your Warrant Certificates to ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ at the address set forth above.
Holders of MediQual Warrants should consult with their own
tax advisors with respect to the tax consequences of exercising their MediQual
Warrants or exchanging their MediQual Warrants for Cardinal Warrants. The
exercise of MediQual Warrants prior to the Merger, and the issuance of Cardinal
Common Shares in the Merger, are expected to be tax-free events to the MediQual
Warrant holders. See "Certain Federal Income Tax Consequences" in the
accompanying Proxy Statement/ Prospectus. However, holders of MediQual Warrants
are cautioned that under current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), and current regulations thereunder, the
issuance of Cardinal Warrants in exchange for MediQual Warrants may be a
taxable transaction, even if the Merger constitutes a tax-free reorganization
within the meaning of Section 368 of the Code.
If you have any questions relating to your MediQual Warrants,
please call Mr. Price at Mediqual at (▇▇▇) ▇▇▇-▇▇▇▇, extension 2338. Questions
relating to the Cardinal Warrants should be directed to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Cardinal's Assistant General Counsel, at (▇▇▇) ▇▇▇-▇▇▇▇.
MEDIQUAL SYSTEMS, INC.
By:
--------------------------------
CARDINAL HEALTH, INC.
By:
-------------------------------
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The Holders of Warrants to Purchase MediQual Common Stock
_________, 1997
Page 5
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Exhibit A
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NOTICE OF CONTINGENT NET ISSUE EXERCISE AND WAIVER
MEDIQUAL SYSTEMS, INC.
The undersigned (the "Warrant Holder") hereby irrevocably (i) elects to
exercise in full, by means of net exercise as provided in Section 2(a) of the
warrant (the "Warrant") accompanying this Notice of Contingent Net Issue
Exercise and Waiver (the "Notice"), the right represented by the Warrant to
purchase thereunder shares (the "Issued Shares") of common stock of MediQual
Systems, Inc. ("MediQual"), such exercise to be effective immediately prior to
and contingent upon the closing of the proposed merger (the "Merger") of
MediQual and a wholly-owned subsidiary of Cardinal Health, Inc. ("Cardinal") as
contemplated by the Amended and Restated Agreement and Plan of Merger, dated as
of July 7, 1997, by and among MediQual, Cardinal and a wholly-owned subsidiary
of Cardinal (the "Merger Agreement"), and (ii) waives the undersigned's rights
under Section 9(b) of the Warrant to receive notice of the record date of the
meeting of the shareholders of MediQual at which the Merger will be considered.
In the event that the Merger does not close prior to November 30, 1997, this
Notice shall be deemed null and void and the Warrant shall be promptly returned
to the Warrant Holder.
The Warrant Holder understands that, upon the closing of the Merger, it
will receive in lieu of shares of common stock of MediQual that number of
Cardinal common shares (determined pursuant to the provisions of the
Merger Agreement) otherwise issuable in the Merger in exchange for the MediQual
common stock for which the warrant is exercisable MINUS that number of Cardinal
common shares equal in value (determined in the same fashion) to the
aggregate exercise price of the Warrant.
The Warrant Holder further understands that, by exercising the Warrant
in this manner, approximately six and one half percent (6.5%) of the Cardinal
common shares issuable to the undersigned in exchange for the Issued Shares
as a result of the Merger (the "Escrowed Shares") will be required pursuant to
the Merger Agreement to be deposited into an escrow fund to be held for a
period of time not to exceed one year after the completion of the Merger
(except to the extent such escrow fund is subject to claims by Cardinal or the
MediQual Stockholders Representative appointed pursuant to the Merger
Agreement). The Warrant Holder acknowledges that this escrow fund will be used
to satisfy certain indemnification obligations of all of the stockholders with
respect to representations and warranties regarding MediQual's business made in
the Merger Agreement and pay the expenses of ▇▇▇▇ ▇. ▇▇▇▇▇ as the MediQual
Stockholders Representative and that THERE CAN BE NO ASSURANCE THAT ANY OR ALL
OF THE ESCROWED SHARES WILL EVER BE RETURNED TO THE WARRANT HOLDER.
Simultaneously with, or promptly after, the closing of the Merger,
please (i) issue a certificate or certificates issued in the name of the
Warrant Holder listed below for that number of Cardinal common shares issuable
in exchange for the Issued Shares in the Merger (less the Escrowed Shares) as
described above, (ii) provide the Warrant Holder with written confirmation of
the number of Cardinal common shares held as Escrowed Shares pursuant to the
Merger Agreement, and (iii) pay any cash for any fractional share to the
Warrant Holder, with all of the foregoing to be sent to the Warrant Holder
at the address listed below:
Name:
---------------------------------------------
Address:
---------------------------------------------
Signature*:
---------------------------------------------
Social Security No.:
---------------------------------------------
Date:
---------------------------------------------
*Note: The above signature should correspond exactly with the name(s) on the
first page of the Warrant.
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EXHIBIT B
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WARRANT
-------
WARRANT NO. W-__ _____ WARRANTS
SHARES ARE NOT REQUIRED TO BE ISSUED UPON EXERCISE
OF THIS WARRANT AND ANY SHARES SO ISSUED MAY NOT BE
TRANSFERRED EXCEPT (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933 (THE "ACT") OR (ii) UPON FIRST FURNISHING TO THE
COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH ISSUANCE OR TRANSFER IS NOT IN
VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE
ACT OR ANY APPLICABLE STATE SECURITIES LAW.
CARDINAL HEALTH, INC.
This warrant certificate (the "Warrant Certificate") certifies that,
for value received, __________________________ or registered assigns under
Section 8 hereof (the "Holder") is the owner of _____ warrants specified above
(the "Warrants") each of which entitles the Holder thereof to purchase one (1)
fully paid and nonassessable share of the Common Shares, without par value
("Common Shares"), of Cardinal Health, Inc., a corporation organized under the
laws of Ohio (the "Company"), or such other number of shares as may be
determined pursuant to an adjustment in accordance with Section 4 hereof, at the
price per share set forth in Section 4 hereof, subject to adjustment from time
to time pursuant to Section 4 hereof (the "Warrant Price") and subject to the
provisions and upon the terms and conditions set forth herein.
1. Term of Warrant.
----------------
Subject to Section 7 hereof, each Warrant is exercisable, at the option
of the Holder, at any time during the period commencing on the date hereof and
ending at 5:00 p.m. Eastern time on April 27, 2003, or if such date shall, in
the State of Ohio, be a holiday or a day on which banks are authorized to close,
then 5:00 p.m. Eastern time the next following day which in the State of Ohio is
not a holiday or a day on which banks are authorized to close.
2. Method of Exercise and Payment; Issuance of New Warrant
-------------------------------------------------------
Certificate; Contingent Exercise.
---------------------------------
(a) Subject to Sections 1 and 7 hereof, each Warrant may be
exercised by the Holder hereof by the surrender of this Warrant Certificate
(with the notice of exercise form attached hereto as EXHIBIT 1 duly executed) at
the principal office of the Company and by the payment to the Company of (i)
cash or a certified check or a wire transfer in an amount equal to the then
applicable Warrant Price multiplied by the number of Common Shares then being
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purchased or (ii) that number of Common Shares of the Company having a fair
market value (as defined below) equal to the then applicable Warrant Price
multiplied by the number of Common Shares then being purchased. In the
alternative, the Holder hereof may exercise its right to purchase some or all of
the Common Shares pursuant to this Warrant Certificate, on a net basis, such
that, without the exchange of any funds, the Holder hereof receives that number
of Common Shares subscribed to pursuant to this Warrant Certificate less that
number of Common Shares having an aggregate fair market value (as defined below)
at the time of exercise equal to the aggregate Warrant Price that would
otherwise have been paid by the Holder for the number of Common Shares
subscribed to under this Warrant Certificate. Fair market value shall be the
daily closing price per share on the last business day prior to the day of
exercise. The closing price for each day shall be the last sale price or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, in either case as reported on the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Common Shares are listed or admitted
to trading; or, if not listed or admitted to trading on any national securities
exchange, the last quoted price (or, if not so quoted, the average of the last
quoted high bid and low asked prices) in the over-the-counter market, as
reported by NASDAQ or such other system then in use; or, if on any such date no
bids are quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Company. If on any such date,
no market maker is making a market in the Common Shares, the fair market value
of such security on such date shall be determined reasonably and in good faith
by the Board of Directors of the Company. If the Common Shares are not publicly
held or not so listed or traded, "fair market value" shall mean the fair value
per share determined reasonably and in good faith by the Board of Directors of
the Company.
(b) The Company agrees that the Common Shares so purchased
shall be deemed to be issued to the Holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant Certificate
shall have been surrendered and payment made for such shares as aforesaid. In
the event of any exercise of the rights represented by this Warrant Certificate,
certificates for the Common Shares so purchased shall be delivered to the Holder
hereof within 15 days thereafter and, unless all of the Warrants represented by
this Warrant Certificate have been fully exercised or have expired pursuant to
Section 1 hereof, a new Warrant Certificate representing the Common Shares, if
any, with respect to which the Warrants represented by this Warrant Certificate
shall not then have been exercised, shall also be issued to the Holder hereof
within such 15 day period.
3. Shares Fully Paid; Reservation of Shares.
-----------------------------------------
All Common Shares which may be issued upon the exercise of the Warrants
will, upon issuance, be fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issue thereof. During the period within
which the rights represented by this Warrant Certificate may be exercised, the
Company will at all times have authorized, and reserved for the purpose of the
issuance upon exercise of the purchase rights evidenced by this Warrant
Certificate, a sufficient number of Common Shares to provide for the exercise of
the Warrants.
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4. Warrant Price; Adjustment of Warrant Price and Number of
--------------------------------------------------------
Shares.
-------
The Warrant Price shall be $_____ per Common Share, and the Warrant
Price and the number of Common Shares purchasable upon exercise of the Warrants
shall be subject to adjustment from time to time, as follows:
(a) RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of any
reclassification or change of outstanding securities of the class issuable upon
exercise of the Warrants, or in case of any consolidation or merger of the
Company with or into another corporation or entity, other than a consolidation
or merger with another corporation or entity in which the Company is the
continuing corporation and which does not result in any reclassification,
conversion or change of outstanding securities issuable upon exercise of the
Warrants, or in case of any sale of all or substantially all of the assets of
the Company, the holder of the Warrants shall thereafter be entitled to receive
upon the exercise of the Warrants, in lieu of each Common Share theretofore
issuable upon exercise of the Warrants, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification,
conversion, change, consolidation, or merger by a holder of one Common Share.
The provisions of this Section 4(a) shall similarly apply to successive
reclassifications, changes, consolidations, mergers and transfers.
(b) SUBDIVISIONS, COMBINATIONS AND STOCK DIVIDENDS. If the
Company at any time while this Warrant Certificate is outstanding and unexpired
shall subdivide or combine its Common Shares, or shall pay a dividend with
respect to Common Shares payable in, or make any other distribution with respect
to its Common Shares consisting of, Common Shares, then the Warrant Price shall
be adjusted, from and after the date of determination of shareholders entitled
to receive such dividend or distribution, to that price determined by
multiplying the Warrant Price in effect immediately prior to such date of
determination by a fraction (i) the numerator of which shall be the total number
of Common Shares outstanding immediately prior to such dividend or distribution
and (ii) the denominator of which shall be the total number of Common Shares
outstanding immediately after such dividend or distribution.
(c) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in
the Warrant Price pursuant to Section 4(b) hereof, the number of Common Shares
purchasable hereunder shall be adjusted, to the next larger whole share, to the
product obtained by multiplying the number of shares purchasable immediately
prior to such adjustment in the Warrant Price by a fraction (i) the numerator of
which shall be the Warrant Price immediately prior to such adjustment and (ii)
the denominator of which shall be the Warrant Price immediately thereafter.
5. Notice of Adjustments.
---------------------
Whenever any Warrant Price shall be adjusted pursuant to Section 4
hereof, the Company shall prepare a certificate signed by its chief financial
officer or treasurer setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, the Warrant Price after giving effect to such
adjustment and the number of Common Shares then purchasable upon exercise of the
Warrants, and shall cause copies of such certificate to be mailed to the Holder
hereof at the address specified in Section 9(c) hereof, or at such other address
as may be provided to the Company in writing by the Holder hereof.
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6. Fractional Shares.
------------------
No fractional Common Shares will be issued in connection with any
exercise hereunder, but in lieu of such fractional shares the Company shall make
a cash payment therefor upon the basis of the Warrant Price then in effect.
7. Compliance with Securities Act.
-------------------------------
The Holder of this Warrant Certificate, by acceptance hereof, agrees
that Common Shares are not required to be issued upon exercise hereby and any
shares so issued may not be transferred except (i) pursuant to an effective
registration statement under the Securities Act of 1933 (the "Act") or (ii) upon
first furnishing to the Company an opinion satisfactory to the Company that such
issuance is not in violation of the registration requirements of the Act or
applicable state securities laws. This Warrant Certificate and all Common Shares
issued upon exercise of the Warrants (unless registered under the Act) shall be
stamped or imprinted with a legend substantially in the following form:
SHARES ARE NOT REQUIRED TO BE ISSUED UPON EXERCISE
OF THIS WARRANT AND ANY SHARES SO ISSUED MAY NOT BE
TRANSFERRED EXCEPT (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933 (THE "ACT") OR (ii) UPON FIRST FURNISHING TO
THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT SUCH ISSUANCE OR TRANSFER IS NOT IN
VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE ACT
OR ANY APPLICABLE STATE SECURITIES LAW.
8. Transfer.
---------
The Warrants and all rights under this Warrant Certificate are
transferable, in whole or in part, at the principal office of the Company by the
Holder hereof, in person or by its duly authorized attorney, upon surrender of
this Warrant Certificate properly endorsed (with the instrument of transfer form
attached hereto as EXHIBIT 2 duly executed). Each Holder of this Warrant
Certificate, by taking or holding the same, consents and agrees that this
Warrant Certificate, when endorsed in blank, shall be deemed negotiable as
against the Holder; provided, however, that the last Holder of this Warrant
Certificate as registered on the books of the Company may be treated by the
Company and all other persons dealing with this Warrant Certificate as the
absolute owner of the Warrants for any purposes and as the person entitled to
exercise the rights represented by this Warrant Certificate or to transfer the
Warrants on the books of the Company, any notice to the contrary
notwithstanding, unless and until such Holder seeks to transfer registered
ownership of the Warrants on the books of the Company and such transfer is
effected.
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9. Miscellaneous.
--------------
(a) REPLACEMENT. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant Certificate and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement or bond reasonably satisfactory in form and
amount to the Company or, in the case of mutilation, on surrender and
cancellation of this Warrant Certificate, the Company, at its expense, will
execute and deliver, in lieu of this Warrant Certificate, a new warrant
certificate of like tenor.
(b) Notice of Capital Changes. In case:
(i) the Company shall declare any dividend or
distribution payable to the holders of Common Shares and payable in, or
consisting of, Common Shares;
(ii) there shall be any capital reorganization or
reclassification of the capital of the Company, or consolidation or
merger of the Company with or into another corporation or entity, other
than a consolidation or merger with another corporation or entity in
which the Company is the continuing corporation, or sale of all or
substantially all of its assets to, another corporation or business
organization; or
(iii) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company
then, in any one or more of said cases, the Company shall give the Holder hereof
written notice of such event, in the manner set forth in Section 9(c), below at
the same time notice thereof is provided to the Company's shareholders.
(c) NOTICE. All notices, requests, payments, instructions or
other documents to be given hereunder shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by certified mail, return
receipt requested, postage prepaid (effective five business days after
dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed, if to the Company, at its principal office to the attention of
its General Counsel, and, if to the Holder hereof, at its address as set forth
in the Company's books and records or at such other address as the Holder hereof
may have provided to the Company pursuant to this Section 9(c).
(d) NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Warrant Certificate.
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(e) GOVERNING LAW. This Warrant Certificate shall be governed
by and construed in accordance with the laws of the State of Ohio.
This Warrant Certificate has been executed as of this _____ day of
_____________, 1997.
CARDINAL HEALTH, INC.
By:
----------------------------
Name:
-----------------------
Title:
----------------------
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EXHIBIT 1
---------
NOTICE OF EXERCISE
------------------
TO: CARDINAL HEALTH, INC.
1. The undersigned hereby elects to purchase ___________________ Common
Shares of Cardinal Health, Inc. pursuant to the terms of the attached Warrant.
2. Please issue a certificate or certificates representing said Common
Shares in the name of the undersigned or in such other name as is specified
below:
-------------------------
(Name)
-------------------------
-------------------------
(Address)
Dated:
------------------------------
Signature
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EXHIBIT 2
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FORM OF ASSIGNMENT
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For value received, the undersigned hereby sells, assigns and transfers
unto _____________ the rights represented by the within Warrant Certificate to
purchase __________ Common Shares of Cardinal Health, Inc. to which the within
Warrant Certificate relates and appoints _________ to transfer such rights on
the books of Cardinal Health, Inc. with full power of substitution in the
premises.
Dated:
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Signature
15
Exhibit C
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CONTINGENT AGREEMENT TO EXCHANGE WARRANT AND WAIVER
MEDIQUAL SYSTEMS, INC.
The undersigned (the "Warrant Holder"), hereby irrevocably (i) agrees
with MediQual Systems, Inc. ("MediQual") and Cardinal Health, Inc. ("Cardinal"),
that it is hereby surrendering the warrant (the "Warrant") to purchase common
stock, $.01 par value, of MediQual ("MediQual Stock") attached to this
Contingent Agreement to Exchange Warrant and Waiver to MediQual and Cardinal to
be exchanged, simultaneously with and contingent upon, the closing of the
proposed merger (the "Merger") of MediQual and a wholly-owned subsidiary of
Cardinal ("Subcorp") as contemplated by the Amended and Restated Agreement and
Plan of Merger, dated as of July 7, 1997, by and among MediQual, Cardinal and
Subcorp (the "Merger Agreement"), for a warrant (the "Exchange Warrant") to
purchase that number of common shares, without par value, of Cardinal ("Cardinal
Common Shares") which would be issuable in the Merger in exchange for the shares
of MediQual Stock otherwise issuable upon exercise of the Warrant, and (ii)
waives the undersigned's rights under Section 9(b) of the Warrant to receive
notice of the record date of the meeting of the stockholders of MediQual at
which the Merger will be considered. The undersigned acknowledges that the form
of the Exchange Warrant will not be identical to the form of the Warrant in
that, among other things, the Exchange Warrant will only be exercisable after
the effective time of the Merger to the extent that the shares issuable upon
exercise of the Exchange Warrant have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or Cardinal is delivered an opinion
of counsel satisfactory to Cardinal that the issuance of Cardinal Common Shares
upon the exercise of the Exchange Warrant is not in violation of the
registration requirements of the Securities Act or any applicable state
securities law. The aggregate exercise price for all Cardinal Common
Shares issuable upon exercise of the Exchange Warrant shall be the same as the
aggregate exercise price for all shares of MediQual Stock issuable upon exercise
of the Warrant, and the per share exercise price shall be adjusted accordingly.
MediQual shall hold the Warrant and this Agreement pending the closing of the
Merger. In the event that the Merger does not close on or prior to November 30,
1997, this Contingent Agreement to Exchange Warrant and Waiver shall be deemed
null and void and the Warrant shall be promptly returned to the Warrant Holder.
Simultaneously with, or promptly after, the closing of the Merger,
Cardinal shall issue in the name of the Warrant Holder listed below a warrant
certificate or certificates, and shall send such Exchange Warrant to the
Warrant Holder at the address listed below:
Name:
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Address:
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Signature*:
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Social Security No.:
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Date:
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*Note: The above signature should correspond exactly with the name(s) on the
first page of the Warrant.
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Agreed and accepted:
CARDINAL HEALTH, INC. MEDIQUAL SYSTEMS, INC.
By: By:
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Title: Title: