1
EXHIBIT 10.23
WARRANT AGREEMENT
among
AMERICAN HOMEPATIENT, INC.
THE FINANCIAL INSTITUTIONS PARTIES HERETO
and
BANKERS TRUST COMPANY, AS AGENT
Dated as of May 25, 2001
2
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
1.1 Definitions................................................................1
1.2 Other Defined Terms........................................................5
ARTICLE 2
ISSUANCE OF WARRANTS
2.1 Initial Issuance...........................................................5
2.2 Percentage of Company Equity...............................................5
2.3 Representations and Warranties.............................................5
2.4 Warrant Certificates.......................................................7
2.5 Restricted Securities......................................................7
2.6 Legend.....................................................................7
2.7 Execution of Warrant Certificates..........................................7
2.8 REPRESENTATIONS AND WARRANTIES OF LENDERS AND AGENT........................7
ARTICLE 3
EXERCISE OF WARRANTS
3.1 Manner of Exercise.........................................................8
3.2 When Exercise Effective....................................................9
3.3 Delivery of Certificates, Etc..............................................9
3.4 Cancellation of Tranche 2 Warrants.........................................9
3.5 Warrant Holder Not Deemed a Stockholder...................................10
3.6 Registration Rights.......................................................10
ARTICLE 4
ADJUSTMENTS
4.1 Stock Dividends, Splits, etc..............................................10
4.2 Distributions.............................................................10
4.3 Issuance of Common Stock (or Other Securities) Rights, Options,
Warrants or Convertible Securities for Less Than Fair Value...............11
4.4 Adjustments for Mergers and Consolidations................................13
4.5 Notice of Adjustment of Exercise Price....................................16
4.6 Other Notices.............................................................16
-i-
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
4.7 No Change in Warrant Terms on Adjustment..................................16
4.8 Treasury Shares...........................................................16
4.9 Consideration for Stock...................................................16
4.10 Determination of Consideration in Connection with Certain Acquisitions....17
4.11 Certain Events............................................................18
4.12 Corporate Action..........................................................18
4.13 No Dilution by Company....................................................18
ARTICLE 5
WARRANT REGISTRATION
5.1 Registration..............................................................19
5.2 Transfer or Exchange......................................................19
5.3 Valid and Enforceable.....................................................19
5.4 Endorsement...............................................................19
5.5 Service Charge............................................................19
5.6 Payment of Taxes..........................................................20
5.7 Cancellation..............................................................20
5.8 Loss or Mutilation........................................................20
5.9 Agreement of Warrant Holders..............................................20
ARTICLE 6
ADDITIONAL COMPANY OBLIGATIONS
6.1 Notification of Certain Events............................................21
6.2 Reservation; Due Authorization, Etc.......................................22
6.3 Compliance With Law.......................................................22
6.4 Listing of Warrant Shares.................................................22
ARTICLE 7
MISCELLANEOUS
7.1 Notices...................................................................22
7.2 Governing Law and Consent to Forum........................................22
7.3 Alternative Dispute Resolution............................................23
7.4 Remedies..................................................................23
7.5 Right of Action...........................................................23
7.6 Benefits of this Agreement................................................23
7.7 Amendments................................................................23
7.8 Counterparts..............................................................24
7.9 Headings..................................................................24
7.10 Reservation of Rights.....................................................24
-ii-
4
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, is made and entered into as of May 25,
2001, by and among American HomePatient, Inc., a Delaware corporation (the
"Company"), each of the financial institutions listed on the signature pages
hereof (each a "Lender" and collectively the "Lenders") and Bankers Trust
Company, as agent for the Lenders (the "Agent") pursuant to the Fifth Amended
and Restated Credit Agreement, dated as of May 25, 2001 by and among the
Company, as borrower, the Lenders and the Agent, as amended (the "Credit
Agreement").
WITNESSETH:
WHEREAS, in connection with the Credit Agreement, the Company
has agreed to issue two series of warrants which, in aggregate, are exercisable
to purchase up to 3,265,315 shares of the Company's Common Stock, $0.01 par
value, constituting nineteen and nine hundred ninety-nine thousandths percent
(19.999%) of the Company's outstanding shares of Common Stock, subject to
adjustment and cancellation, in part, as provided herein, to the Lenders as
partial consideration for the promises and covenants contained under the Credit
Agreement; and
WHEREAS, the Company desires to enter into this Agreement to
set forth the terms and conditions of such warrants and the rights of the
holders thereof;
NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual agreements set forth herein, the Company, the Agent and the
Lenders hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used herein, the following terms have the
following respective meanings:
"AGENT" has the meaning given such term in the introduction
hereto.
"AGREEMENT" means this Warrant Agreement, as it may hereafter
be amended or modified.
"ACQUIRING COMPANY COMMON STOCK" means the common stock of the
successor entity or acquirer in a reorganization, merger or consolidation
transaction of the Company, or a transfer, sale or other disposition of all or
substantially all of the assets of the Company.
"BUSINESS DAY" means any day other than a Saturday or a Sunday
or a day on which commercial banking institutions in New York City, New York are
authorized or required
1
5
by law to be closed; PROVIDED THAT, in determining the period within which
certificates or Warrants are to be issued and delivered at a time when shares of
Common Stock (or Other Securities) are listed or admitted to trading on any
national securities exchange or in the over-the-counter market and in
determining the Fair Value of any securities listed or admitted to trading on
any national securities exchange or in the over-the-counter market, "Business
Day" shall mean any day when the principal exchange on which such securities are
then listed or admitted to trading is open for trading or, if such securities
are traded in the over-the-counter market in the United States, such market is
open for trading; AND PROVIDED FURTHER that any reference in this Agreement to
"days" (unless Business Days are specified) shall mean calendar days.
"COMBINATION MERGER" has the meaning specified in Section
4.4(c).
"COMMON STOCK" means the Company's Common Stock, par value
$0.01 per share.
"COMPANY" means American HomePatient, Inc., a Delaware
corporation, and any successor entity or acquirer thereof in a reorganization,
merger or consolidation transaction or a transfer, sale or other disposition of
all or substantially all of its assets.
"CONVERTIBLE SECURITIES" means any stock or securities
convertible or exercisable into or exchangeable for Common Stock (or Other
Securities).
"CREDIT AGREEMENT" has the meaning given such term in the
introduction hereto.
"EQUITY AND EQUITY LINKED SECURITIES" means Acquiring Company
Common Stock, securities of any Person (corporate or otherwise) which are
convertible into Acquiring Company Common Stock including preferred stock
convertible into Acquiring Company Common Stock or debt securities convertible
into Acquiring Company Common Stock (but in each case specifically excluding
non-convertible preferred stock or non-convertible debt securities) that the
holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock (or Other Securities), or that at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock (or Other
Securities).
"EQUITY MERGER" has the meaning specified in Section 4.4(a).
"EXERCISE PERIOD" means (a) with respect to a Tranche 1
Warrant, the period commencing on the Original Issue Date and ending on May 31,
2011 and (b) with respect to a Tranche 2 Warrant that has not been cancelled,
the period commencing on September 30, 2001 and ending on September 29, 2011.
"EXERCISE PRICE" means $0.01 per share, as adjusted pursuant
to Article 4.
2
6
"FAIR VALUE" means (a) with respect to property other than
cash, Common Stock (or Other Securities), Equity and Equity Linked Securities,
Non-Equity Securities or Convertible Securities, the fair value thereof as
determined reasonably and in good faith by the Board of Directors of the
Company, (b) if the Company's Common Stock (or Other Securities) is not traded
on a public market, the fair value thereof as determined reasonably and in good
faith by the Board of Directors of the Company, (c) if the Company shall have
effected a public offering of Common Stock (or Other Securities) and the Common
Stock (or Other Securities) is actively traded on a public market, Fair Value
means, with respect to Common Stock (or Other Securities), in each case if such
security is listed on one or more stock exchanges or quoted on the National
Market System of NASDAQ (the "National Market System"), the average of the
closing sales prices of a share of such Common Stock (or, if Other Securities,
in the minimum denomination in which such securities are traded) on the primary
national or regional stock exchange on which such security is listed or on the
National Market System if quoted thereon, or if the Common Stock (or Other
Securities) is not so listed or quoted but is traded in the over-the-counter
market (other than the National Market System), the average of the closing bid
and asked prices of a share of such Common Stock (or Other Securities) in each
case for the 30 Business Days (or such lesser number of Business Days as such
Common Stock (or Other Securities) shall have been so listed, quoted or traded)
next preceding the date of measurement; PROVIDED, HOWEVER, that if no such sales
price or bid and asked prices have been quoted during the preceding 30-Business
Day period or there is otherwise no established trading market for such
security, then "Fair Value" means the value of such Common Stock (or Other
Securities) as determined reasonably and in good faith by the Board of Directors
of the Company; PROVIDED FURTHER, HOWEVER, that in the event the current market
price of a share of such Common Stock (or of the minimum traded denomination of
such Other Securities) is determined during a period following the announcement
by the Company of (i) a dividend or distribution on the Common Stock (or Other
Securities) payable in shares of Common Stock (or Other Securities), or (ii) any
subdivision, combination or reclassification of the Common Stock (or Other
Securities), and prior to the expiration of 30 Business Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"Fair Value" shall be appropriately adjusted to take into account ex-dividend
trading, or (d) with respect to Equity and Equity Linked Securities, Non-Equity
Securities or Convertible Securities, Fair Value shall be determined in
substantially the same manner as Fair Value of Common Stock (or Other
Securities) is to be determined in accordance with clauses (b) and (c) above.
Anything herein to the contrary notwithstanding, in case the Company shall issue
any shares of Common Stock (or Other Securities) or Convertible Securities in
connection with the acquisition by the Company of the stock or assets of any
other Person or the merger of any other Person with or into the Company, the
Fair Value of the Common Stock (or Other Securities) so issued shall be
determined as of the date the number of shares of Common Stock (or Other
Securities) or Convertible Securities was determined (as set forth in a written
agreement between the Company and the other party to the transaction) rather
than on the date of issuance of such shares of Common Stock (or Other
Securities) or Convertible Securities. Notwithstanding anything herein to the
contrary, if any holder of Warrants contests any determination made by the Board
of Directors of the Company related to any of the Fair Value determinations
other than a determination made by reference to trading
3
7
prices during the preceding 30-Business Day period, then Fair Value shall be
determined pursuant to the procedures set forth in Section 7.3.
"LENDERS" has the meaning given such term in the introduction
hereto.
"NON-EQUITY MERGER" has the meaning specified in Section
4.4(b).
"NON-EQUITY SECURITIES" means all securities of the successor
entity or acquirer in a reorganization, merger or consolidation transaction of
the Company, or a transfer, sale or other disposition of all or substantially
all of the assets of the Company other than Equity and Equity-Linked Securities.
"ORIGINAL ISSUE DATE" means June 1, 2001.
"OTHER SECURITY" or "OTHER SECURITIES" means (a) any stock
(other than Common Stock and Non-Equity Securities) and other securities of the
Company or any other Person (corporate or otherwise) that the holders of the
Warrants at any time shall be entitled to receive, or shall have received, upon
the exercise of the Warrants, in lieu of or in addition to Common Stock, or (b)
that at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or any successor security thereto.
"PERSON" means any individual, partnership, limited liability
company, association, joint venture, corporation, insurance company, business,
trust, unincorporated organization, government or department, agency or
subdivision thereof, or other person or entity.
"REGISTRATION RIGHTS AGREEMENT" means an agreement among the
Company, the Agent and the Lenders, substantially in the form of Exhibit C
hereto, providing to the Warrant Holders rights to have the Warrant Shares
publicly registered by the Company.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"TRANCHE 1 WARRANTS" means, collectively, any and all Warrants
issued to the Lenders pursuant to Section 2.1(a) or Section 2.2 and evidenced by
a Tranche 1 Warrant Certificate.
"TRANCHE 1 WARRANT CERTIFICATE" means a certificate in
substantially the form attached hereto as Exhibit A.
"TRANCHE 2 WARRANTS" means, collectively, any and all Warrants
issued to the Lenders pursuant to Section 2.1(b) or Section 2.2 and evidenced by
a Tranche 2 Warrant Certificate.
"TRANCHE 2 WARRANT CERTIFICATE" means a certificate in
substantially the form attached hereto as Exhibit B.
4
8
"WARRANT CERTIFICATES" means, collectively, the Tranche 1
Warrant Certificates and the Tranche 2 Warrant Certificates.
"WARRANT HOLDER" means initially each Lender and thereafter
each Person to whom a Lender or other Warrant Holder may transfer any Warrants.
"WARRANTS" means, collectively, the Tranche 1 Warrants and the
Tranche 2 Warrants.
"WARRANT SHARES" mean each share of Common Stock (or Other
Securities) issued or issuable upon the exercise of the Warrants.
1.2 Other Defined Terms. Capitalized terms used, but not
defined herein, shall have the meanings given them in the Credit Agreement.
ARTICLE 2
ISSUANCE OF WARRANTS
2.1 Initial Issuance. On the Original Issue Date, Company
shall deliver to the Agent: (a) Tranche 1 Warrant Certificates duly executed by
Company in the name of each Lender for the aggregate number of Tranche 1
Warrants set forth opposite such Lender's name on Schedule 1 hereto, (b) Tranche
2 Warrant Certificates duly executed by Company in the name of each Lender for
an equivalent number of Tranche 2 Warrants, and (c) a duly executed copy of the
Registration Rights Agreement. On the Original Issue Date, each of the Lenders
shall deliver to the Agent duly executed copies of the Registration Rights
Agreement.
2.2 Percentage of Company Equity. Company represents and
warrants that the Warrants issued pursuant to Section 2.1, assuming all such
Warrants were exercisable and had been exercised on the Original Issue Date, are
sufficient to purchase a number of shares representing at least nineteen and
nine hundred ninety-nine thousandths percent (19.999%) of the shares of the
Company's Common Stock outstanding on the Original Issue Date ("Minimum Warrant
Requirement"). If for any reason the number of Warrants issued in connection
herewith is less than the Minimum Warrant Requirement, then Company shall
deliver to the Agent on behalf of the each Lender Warrant Certificates for the
number of Warrants as is necessary to raise the total number of Warrants issued
and delivered pursuant to Section 2.1 to the Minimum Warrant Requirement; such
Warrants shall be issued to each Lender in accordance with each Lender's pro
rata share as set forth on Schedule 1 hereto; fifty percent (50%)of such
Warrants shall be issued as Tranche 1 Warrants and fifty percent (50%) shall be
issued as Tranche 2 Warrants.
2.3 Representations and Warranties. In order to induce the
Agent and the Lenders to enter into this Agreement, the Company represents and
warrants to the Agent and to each of the Lenders as of the date of execution
hereof and as of the Original Issue Date, which representations and warranties
shall survive the execution and delivery of this Agreement and the issuance of
the Warrants:
5
9
(a) The Company is duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) The Company has the corporate power to execute,
deliver and perform the terms and provisions of this Agreement
and the Warrants and has taken all necessary corporate action
to authorize the execution, delivery and performance of this
Agreement and the Warrants.
(c) The Company has duly executed and delivered this
Agreement and, upon the issuance thereof, will have duly
executed and delivered the Warrant Certificates.
(d) This Agreement constitutes and, upon the
execution and delivery thereof, the Warrant Certificates will
constitute, the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with
their respective terms, except as the enforcement thereof may
be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights generally and by general principles of equity
(regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
(e) Neither the execution and delivery of this
Agreement or the Warrant Certificates, nor the compliance by
the Company with the terms and provisions hereof or thereof:
(i) will contravene any provision of any law, statute, rule,
regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or
be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the
property or assets of the Company or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement, loan agreement or any other
agreement, contract or instrument to which the Company or any
of its Subsidiaries is a party or by which any of them or any
of their property or assets is bound or to which any of them
is subject, or (iii) violate any provision of its Certificate
of Incorporation or Bylaws.
(f) No order, consent, approval, license,
authorization or validation of, or filing, recording or
registration with or exemption by, any governmental
instrumentality is required to authorize, or is required in
connection with (i) the execution, delivery or performance by
the Company of this Agreement or the Warrants, or (ii) the
legality, validity, binding effect or enforceability of this
Agreement or the Warrants.
(g) 16,327,389 shares of Common Stock are issued and
outstanding on the date hereof and will be issued and
outstanding on the Original Issue Date, and other than such
shares of Common Stock the Company has not issued any shares
of preferred or other class of stock or equity securities nor
any other warrants,
6
10
options or other rights to purchase Common Stock or
Convertible Securities, other than approximately 3,081,478
options that have been issued pursuant to the Company's
directors and employee stock option plans, all of which were
issued at the closing price of the Common Stock on the day
next preceding the date of grant.
2.4 Warrant Certificates. Each Warrant Certificate shall be
dated as of the date on which it is signed by the Company, which shall be on the
Original Issue Date and, in the event of a division, exchange, substitution or
transfer of any of the Warrants, on the date of such event. The Warrant
Certificate may have such further legends and endorsements stamped, printed,
lithographed or engraved thereon as the Company reasonably 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 regulation pursuant thereto
or with any rule or regulation of any securities exchange on which the Warrants
may be listed.
2.5 Restricted Securities. The Company and each Lender
acknowledges that the Warrants are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Securities Act only in limited circumstances. In this
regard, the Company and each Lender represents that it is familiar with SEC Rule
144, as presently in effect, and that it understands the resale limitations
imposed thereby and by the Securities Act.
2.6 Legend. The Warrant Certificates issued on the Original
Issue Date, at any time during the following two years and at any time that the
Warrant Holder is an affiliate of the Company (as defined in SEC Rule 144(a)(1))
shall bear the following legend:
"These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold,
offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the
securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not
required."
2.7 Execution of Warrant Certificates. Warrant Certificates
shall be executed on behalf of the Company by its President, any Vice President,
its Treasurer or its Secretary, either manually or by facsimile signature
printed thereon.
2.8 Representations and Warranties of Lenders and Agent. In
order to induce the Company to enter into this Agreement, each of the Lenders
represents and warrants to the Company as of the date of execution hereof and as
of the Original Issue Date, which representations and warranties shall survive
the execution and delivery of this Agreement and the issuance of the Warrants,
that:
(a) the Company has made available to such Lender, or
to representatives of such Lender, the opportunity to ask
questions of its officers and to acquire such additional
information about the business and financial condition
7
11
of the Company as such Lender has requested (including but not
limited to any government investigations and pending or
threatened claims against the Company);
(b) each Lender or representatives of such Lender,
have reviewed the public securities filings of the Company
including, but not limited to, the Company's 2000 Annual
Report on Form 10-K filed on April 17, 2001 and its Quarterly
Report for the first quarter of fiscal year 2001 filed on May
15, 2001 (the "Disclosure Documents");
(c) such Lender has performed such additional due
diligence as it and its advisors have deemed prudent;
(d) such Lender is an "Accredited Investor" as such
term is defined in Rule 501 of Regulation D;
(e) such Lender has the power and authority to
execute, deliver and perform the terms and provisions of this
Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;
(f) such Lender does not have any current plan,
agreement, arrangement or understanding to make investment
decisions relating to the exercise of the Warrants or voting
decisions relating to the underlying Common Stock upon
exercise thereof;
(g) the Warrants are being acquired by such Lender
solely for such Lender's own account, for investment, with no
present intention of making or participating in a distribution
thereof within the meaning of the Securities Act;
(h) the financial condition of such Lender is such
that it can bear the risk of this investment indefinitely; and
(i) the offer and sale of the Warrants to such Lender
was made at the location set forth on the signature pages to
the Registration Rights Agreement.
ARTICLE 3
EXERCISE OF WARRANTS
3.1 Manner of Exercise. All or any of the Warrants represented
by a Warrant Certificate may be exercised by the registered holder thereof
during normal business hours on any Business Day, by surrendering such Warrant
Certificate, with the subscription form set forth therein duly executed by such
holder, by hand or by mail to the Company at its office addressed to the
Corporate Secretary at the Company's principal executive offices as provided in
Section
8
12
7.1, along with payment in an amount equal to the total Exercise Price for all
Warrants being exercised for the number of shares of Common Stock (or Other
Securities) in respect of which such Warrants are then being exercised, payable
as follows: (a) by payment to the Company of the Exercise Price in cash, by
check or wire transfer of funds, provided that a registration statement is in
effect with respect to the Common Stock to be issued upon exercise of the
Warrants or the Company has received an opinion of counsel satisfactory to the
Company that such registration is not required; (b) by surrender to the Company
for cancellation of securities of the Company having a Fair Value (or, in the
case of securities other than Common Stock (or Other Securities), fair value
determined in substantially the same manner as Fair Value of Common Stock (or
Other Securities) is to be determined pursuant to this Agreement) on the date of
exercise equal to the Exercise Price for such shares; or (c) by surrender to the
Company for cancellation of notes or debt securities of the Company having a
principal balance plus accrued interest on the date of exercise equal to the
Exercise Price for such shares or (b) by a combination of the methods described
in clauses (a), (b) and (c) above.
3.2 When Exercise Effective. Each exercise of any Warrant
pursuant to Section 3.1 shall be deemed to have been effected immediately prior
to the close of business on the Business Day on which the Warrant Certificate
representing such Warrant, duly executed, with accompanying payment, shall have
been delivered as provided in Section 3.1, and at such time the Person or
Persons in whose name or names the certificate or certificates for Common Stock
(or Other Securities) shall be issuable upon such exercise as provided in
Section 3.3 shall be deemed to have become the holder or holders of record
thereof.
3.3 Delivery of Certificates, Etc. As promptly as practicable
after the exercise of any Warrant by a Warrant Holder, and in any event within
five (5) Business Days thereafter, the Company at its expense (other than as to
payment of transfer taxes which will be paid by the Warrant Holder) will cause
to be issued and delivered to such Warrant Holder, or as such Warrant Holder may
otherwise direct in writing (subject to Section 5.6), a Warrant Certificate or
Warrant Certificates for the number of shares of Common Stock (or Other
Securities) to which such Warrant Holder is entitled, plus cash in lieu of
issuance of fractional shares (rounded to the nearest $0.01). In the event less
than all the Warrants represented by a Warrant Certificate are exercised by a
Warrant Holder, the Company shall promptly issue and deliver in the name of such
Warrant Holder or as such Warrant Holder may otherwise direct in writing
(subject to Section 5.6), in conjunction with such certificate or certificates,
a new Warrant Certificate or Certificates of the same tenor and for the
aggregate number of Warrants that were not exercised.
3.4 Cancellation of Tranche 2 Warrants. In the event that,
prior to September 30, 2001, the Loans and all other Obligations have been paid
in full and all Letters of Credit have been cancelled, expired or otherwise
provided for to the satisfaction of the Issuing Bank and the Revolving Loan
Commitments have been terminated, the Tranche 2 Warrant Certificates shall be
automatically cancelled and shall no longer be of any force or effect. In such
event, each Lender agrees to return promptly to the Company, upon request, each
Tranche 2 Warrant Certificate issued to it which has been cancelled as provided
herein.
9
13
3.5 Warrant Holder Not Deemed a Stockholder. Prior to the
exercise of any Warrants, no Warrant Holder (solely by reason of holding
Warrants) shall be entitled to any rights of a stockholder of the Company,
including, but not limited to, the right to vote, to receive dividends or other
distributions, to exercise any preemptive right or, except as otherwise provided
herein, to receive any notice of meetings of stockholders, and no such Warrant
Holder shall be entitled to receive notice of any proceedings of the Company
except as provided in this Agreement. Nothing contained in this Agreement shall
be construed as imposing any liabilities on such Warrant Holder to purchase any
securities or as a stockholder of the Company, whether such liabilities are
asserted by the Company or by creditors or stockholders of the Company or
otherwise.
3.6 Registration Rights. Each Warrant Holder shall be entitled
to the registration rights set forth in the Registration Rights Agreement.
ARTICLE 4
ADJUSTMENTS
4.1 Stock Dividends, Splits, etc. In case the Company shall at
any time after the Original Issue Date (a) pay a dividend or make a distribution
on its Common Stock (or Other Securities) which is paid or made (i) in Common
Stock (or Other Securities) or (ii) in rights to purchase Common Stock (or Other
Securities) if such rights are not exercisable or separable from the Common
Stock except upon the occurrence of a contingency, (b) subdivide its outstanding
Common Stock (or Other Securities) into a greater number of shares of Common
Stock (or Other Securities), (c) combine its outstanding shares into a smaller
number of shares of Common Stock (or Other Securities) or (d) issue by
reclassification of its Common Stock (or Other Securities) other securities of
the Company, then, in any such event the number of Warrant Shares purchasable
upon the exercise of each of the respective Warrants immediately prior thereto
shall be adjusted so that the Warrant Holder shall be entitled to receive upon
exercise of such Warrants the number of shares of Common Stock (or Other
Securities) that he, she or it would have owned or have been entitled to receive
after the happening of any of the events described above had such Warrants been
exercised immediately prior to the happening of such event. The Exercise Price
for the Warrants provided for herein for each Warrant Share shall also be
adjusted up or down by a percentage equal to the inverse proportion in the
diminution or increase in the number of outstanding shares of Common Stock (or
Other Securities) as a result of the happening of any of the above events, so
that the Exercise Price of the Warrants provided for herein for all Warrant
Shares shall not increase or decrease as a result of such an event. Adjustments
made pursuant to this paragraph shall become effective immediately after the
opening of business on the next Business Day following the record date in the
case of dividends or other distributions and shall become effective immediately
after the opening of business on the next Business Day following the effective
date in the case of a subdivision, combination or reclassification.
4.2 Distributions. If after the date hereof the Company shall
distribute to all holders of its shares of Common Stock (or Other Securities)
evidences of its indebtedness or
10
14
assets (excluding cash distributions made as a dividend payable out of earnings
or out of surplus determined in accordance with generally accepted accounting
principles and legally available for dividends under the laws of the
jurisdiction of incorporation of the Company) or rights to subscribe to shares
of Common Stock (or Other Securities), then in each such case the Exercise Price
of the Warrants provided for herein in effect immediately prior to such
distribution shall be adjusted to an amount determined by multiplying the
Exercise Price by a fraction, (a) the numerator of which is the Fair Value of a
share of the Common Stock (or Other Securities) at the date of such distribution
less the Fair Value of the assets or evidences of indebtedness so distributed on
a per share of Common Stock (or Other Securities) basis outstanding at the date
of such distribution and (b) the denominator of which is the Fair Value of a
share of Common Stock (or Other Securities) at such date. Such adjustment shall
be made whenever any such distribution is made, and shall become effective
retroactively on the date immediately after the record date for the
determination of stockholders entitled to receive such distribution. For the
purposes of the foregoing, a dividend other than in cash shall be considered
payable out of earnings or surplus (other than revaluation or paid-in-surplus)
only to the extent that such earnings or surplus are charged an amount equal to
the Fair Value of such dividend.
4.3 Issuance of Common Stock (or Other Securities) Rights,
Options, Warrants or Convertible Securities for Less Than Fair Value.
(a) Less than Fair Value Calculations. If at any time or from
time to time after the Original Issue Date (i) shares of Common Stock (or Other
Securities) shall be issued, distributed or sold to any Person for less than
Fair Value, (ii) the Company shall grant (whether directly or by assumption in a
merger or otherwise) any rights to subscribe for or to purchase, or any options
or warrants for the purchase of (A) Common Stock (or Other Securities) or (B)
Convertible Securities, whether or not such rights or options or warrants or the
right to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock (or Other
Securities) is issuable upon the exercise of such rights or options or warrants
or upon conversion or exchange of such Convertible Securities (determined as set
forth in Section 4.3(b)) is less than the Fair Value of such Common Stock (or
Other Securities) determined as of the date of the granting of such rights or
options or warrants, or (iii) the Company shall issue (whether directly or by
assumption in a merger or otherwise) or sell any Convertible Securities, whether
or not the rights to exchange or convert thereunder are immediately exercisable,
and the price per share for which Common Stock (or Other Securities) is issuable
upon such conversion or exchange (determined as set forth in Section 4.3(b))
shall be less than the Fair Value of such Common Stock (or Other Securities)
determined as of the date of such issuance or sale of such Convertible
Securities, (the Common Stock (or Other Securities) set forth in clause (i) and
the maximum number of shares of Common Stock (or Other Securities) issued
underlying the securities set forth in clauses (ii) and (iii), determined as of
the date of the grant, issuance or sale of such securities, as the case may be,
being referred to herein as the "Below Fair Value Shares"), then adjustments to
the Exercise Price and the number of Warrant Shares in respect of the Warrants
shall be made in accordance with Section 4.3(d) hereof. For purposes of such
adjustments, all Below Fair Value Shares underlying the securities set forth in
clauses (ii) and (iii) above shall be deemed to have been issued or sold as of
the date of the grant, issuance or sale of such securities set forth in clauses
(ii) and (iii) above.
11
15
(b) Rights, Options, Warrants, Convertible Securities. For
purposes of this Agreement, and except as otherwise provided herein, the Common
Stock (or Other Securities) underlying any rights, options, warrants or
Convertible Securities shall be deemed to have been issued for a consideration
per share determined by dividing:
(i) the total amount, if any, received and receivable by the
Company as consideration for the issuance, sale, grant or assumption of the
relevant rights, options, warrants or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision thereof for subsequent
adjustment of such consideration) payable to the Company upon the exercise in
full of such rights, options or warrants or the conversion or exchange of such
Convertible Securities (and in the case of rights, options or warrants for
Convertible Securities, the exercise of such rights, options or warrants and the
conversion or exchange of such Convertible Securities), by
(ii) the maximum number of shares of Common Stock issuable (as
set forth in the instruments relating thereto, without regard to any provision
thereof for subsequent adjustment of such number) upon the exercise of such
rights, options or warrants or the conversion or exchange of such Convertible
Securities (and in the case of rights, options or warrants for Convertible
Securities, the exercise of such rights, options or warrants and the conversion
or exchange of such Convertible Securities).
(c) Changes in Purchase Price for Rights, Options, Warrants,
Etc. For purposes of this Agreement, upon the happening of any of the following
events, namely, if the purchase price provided for in any right, option or
warrant referred to in clause (ii) of Section 4.3(a), the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Security referred to in clause (ii) or (iii) of Section 4.3(a), or
the rate at which any Convertible Securities referred to in clause (ii) or (iii)
of Section 4.3(a) are convertible into or exchangeable for Common Stock (or
Other Securities), shall change at any time, such change shall be treated as if
it were a new issuance of such securities. The parties agree that the purpose of
this clause is to protect the holders of the Warrants against further dilution
pursuant to changes in the terms of such securities which are not otherwise
accounted for under this Article 4, and the provisions of this Section 4.3(c)
shall be interpreted accordingly.
(d) (i) Adjustment to Exercise Price. If and whenever
subsequent to the issuance of the Warrants the Company shall issue or sell any
Below Fair Value Shares, then, forthwith upon such issue or sale, the Exercise
Price shall be reduced by multiplying the Exercise Price in effect immediately
prior to the time of such issue or sale by a fraction, the numerator of which
shall be the sum of (A) the number of shares of Common Stock (or Other
Securities) outstanding immediately prior to such issue or sale multiplied by
the Fair Value of the Common Stock (or Other Securities) immediately prior to
such issue or sale plus (B) the consideration received by the Company upon such
issue or sale, and the denominator of which shall be the product of (X) the
total number of shares of Common Stock outstanding immediately after such issue
or sale (i.e., giving effect to such issue or sale of Below Fair Value Shares),
multiplied by (Y) the Fair Value of the Common Stock (or Other Securities)
immediately prior to such issue or sale.
12
16
(i) Adjustment to Warrant Shares. Upon each adjustment of the
Exercise Price pursuant to section 4.3(d)(i), the holders of the Warrants shall
thereafter be entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of Warrant Shares obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
4.4 Adjustments for Mergers and Consolidations.
(a) Equity Mergers. In case the Company, after the date
hereof, shall effect a reorganization, shall merge or consolidate with another
Person or shall sell, transfer or dispose of all or substantially all of its
property, assets or business in each case in exchange for Equity and Equity
Linked Securities (but not, in any event, for cash or cash-equivalents) of the
successor entity or the acquirer (an "Equity Merger"), then, in the case of any
such Equity Merger, proper provision shall be made so that, upon the basis and
terms and in the manner provided in this Warrant Agreement, the Warrant Holders,
upon the exercise thereof at any time after the consummation of such Equity
Merger (subject to the Exercise Period), shall be entitled to receive (at the
Exercise Price in effect at the time of the transaction for all Common Stock (or
Other Securities) issuable upon such exercise immediately prior to such
consummation), in lieu of the Common Stock (or Other Securities) issuable upon
such exercise prior to such consummation, the greatest amount of Equity and
Equity Linked Securities to which such Warrant Holder would have been entitled
as a holder of Common Stock (or Other Securities) upon such consummation if such
Warrant Holder had exercised the rights represented by the Warrants held by such
holder immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided for
in Sections 4.1, 4.2 and 4.3 hereof.
Upon any Equity Merger, the Warrants shall continue in full
force and effect after the consummation of such reorganization, consolidation,
merger or transfer, as the case may be. The Company shall not effect any Equity
Merger unless prior to the consummation thereof the successor or acquiring
entity shall, by written instrument executed and mailed to each registered
Warrant Holder at the last address of such Warrant Holder appearing on the books
of the Company, (i) assume the obligation to deliver to such Warrant Holder such
Equity and Equity Linked Securities as such Warrant Holder may be entitled in
accordance with the foregoing provisions of this Section 4.4(a), and (ii) agree
to be bound by all the terms of the Warrants to the same extent as if the
successor or acquiring entity were the Company hereunder.
(b) Non-Equity Mergers. If the Company shall effect a
reorganization, shall merge or consolidate with another Person or shall sell,
transfer or otherwise dispose of all or substantially all of its property,
assets or business, as a result of which transaction the holders of Common Stock
(or Other Securities) shall be entitled to cash, cash-equivalent consideration,
Non-Equity Securities or other property (other than Equity and Equity-Linked
Securities) (such transaction, a "Non-Equity Merger"), then:
(i) Cash or Other Property. If the consideration to be
received in the Non-Equity Merger is cash, cash-equivalents or such other
property (other than Non-Equity
13
17
Securities) (with any such other property valued at its Fair Value), (such
consideration, the "Non-Equity Consideration") then:
(A) In the Money. In the event that the Exercise Price of
any Warrant is less than the amount of Non-Equity Consideration on a
per share basis of Common Stock (or Other Securities) paid in such
Non-Equity Merger (the "Per Share Consideration Paid"), the Warrant
Holder, upon surrender and cancellation thereof, before or concurrently
with the consummation of such Non-Equity Merger shall be entitled to
receive a payment, solely in the form of such Non-Equity Consideration,
from the Company or the successor or acquiring entity, per Warrant
Share equal to the difference between the Per Share Consideration Paid
and such Exercise Price in effect at the time of the transaction (the
"Price Difference");
(B) Out of the Money. In the event that the Exercise
Price of any Warrant is greater than the Per Share Consideration Paid,
the Warrant Holder, upon surrender and cancellation thereof, before or
concurrently with the consummation of such Non-Equity Merger shall be
entitled to receive from the Company or the successor or acquiring
entity consideration, solely in the form of such Non-Equity
Consideration, from the Company or the successor or acquiring entity
equal to the theoretical value of such Warrant, at the time of the
consummation of such transaction (assuming no such Non-Equity Merger as
further detailed below) as reasonably determined by the Board of
Directors of the Company in good faith utilizing such assumptions as
are applicable under customary investment banking practices and as are
consistent with this Agreement.
(ii) Non-Equity Combination Merger. If the consideration to be
received is (x) solely Non-Equity Securities, or (y) a combination of (A) cash,
cash-equivalents and/or other property (other than Equity and Equity-Linked
Securities), and (B) Non-Equity Securities (any such merger, a "Non-Equity
Combination Merger"), then
(A) Determination of Non-Equity Combination Per Share
Consideration Paid. The Non-Equity Combination Per Share Consideration
Paid for purposes of determining the considerations to be received by
Warrant Holders in such circumstances shall be calculated by adding (A)
the value of any cash and/or other property (the value of such other
property to be its Fair Value) to be paid, plus (B) a value that shall
be equal to the Fair Value of the Non-Equity Securities being received
in the merger or sale transaction, all on a per share basis of Common
Stock (or Other Securities) (the sum of (A) and (B) being the
"Non-Equity Combination Per Share Consideration Paid"); and
(B) Form and Amount of Consideration. A Warrant Holder,
upon surrender and cancellation thereof, before or concurrently with
the consummation of such Non-Equity Combination Merger shall be
entitled to receive consideration, solely in the form and/or in the
relative amounts of the Non-Equity Combination Per Share Consideration
Paid, from the Company or the successor or acquiring entity per Warrant
Share as follows:
14
18
(I) In the Money. In the event that the Exercise
Price of any Warrant is less than the amount of Non-Equity
Combination Per Share Consideration Paid, the Warrant Holder
shall be entitled to receive consideration equal to the
difference between the Non-Equity Combination Per Share
Consideration Paid and such Exercise Price in effect at the
time of the transaction;
(II) Out of the Money. In the event that the Exercise
Price of any Warrant is greater than the amount of Non-Equity
Combination Per Share Consideration Paid, the Warrant Holder
shall be entitled to receive consideration with a Fair Value
equal to the theoretical value of such Warrant applying
substantially the same principles as are set forth in Section
4.4(b)(i)(B).
(iii) Assumption of Obligations. The Company shall not effect
any Non-Equity Merger (including any Non-Equity Combination Merger) unless prior
to the consummation thereof the successor or acquiring entity shall, by written
instrument executed and mailed to each registered Warrant Holder at the last
address of such Warrant Holder appearing on the books of the Company, assume the
obligation to deliver to such Warrant Holder such consideration as such Warrant
Holder may be entitled to in accordance with the foregoing provisions of this
Section 4.4(b).
(c) Non-Equity Merger and Equity Merger Combination. In case
the Company, after the date hereof, shall effect a reorganization, shall merge
or consolidate with another Person or shall sell, transfer or dispose of all or
substantially all of its property, assets or business which would qualify, in
part, as an Equity Merger, and, in part, as a Non-Equity Merger (including any
Non-Equity Combination Merger) (a "Combination Merger"), then the provisions of
Section 4.4(a) shall apply with appropriate adjustments consistent with the
intent of the parties hereto; it being the agreement of the parties hereto that
the Warrants shall survive such transaction and be exercisable only for Equity
and Equity-Linked Securities of the successor or acquiring entity in the manner
provided for in respect of an Equity Merger, with an equitable adjustment of the
Exercise Price to compensate the Warrant Holders for the Fair Value of that
portion of the per share consideration payable to the holders of Common Stock
(or Other Securities) in such Combination Merger that is not Equity and
Equity-Linked Securities.
Upon any Combination Merger, the Warrants shall continue in
full force and effect after the consummation of such reorganization,
consolidation, merger or transfer, as the case may be. The Company shall not
effect any Combination Merger unless prior to the consummation thereof the
successor or acquiring entity shall, by written instrument executed and mailed
to each registered Warrant Holder at the last address of such Warrant Holder
appearing on the books of the Company, (i) assume the obligation to deliver to
such Warrant Holder such securities as such Warrant Holder may be entitled to
acquire in accordance with the foregoing provisions of this Section 4.4(c), and
(ii) agree to be bound by all the terms of the Warrants.
(d) Successive Mergers, Reorganizations, Etc. Subject to
Section 4.5 hereof, subsequent to any Equity Merger or Combination Merger, the
provisions of this Section 4.4 shall
15
19
similarly apply to successive reorganizations, mergers, consolidations, sales,
transfers or dispositions.
4.5 Notice of Adjustment of Exercise Price. Whenever the
Exercise Price and securities issuable upon exercise of the Warrants shall be
adjusted as provided in this Article 4, the Company shall forthwith send a
statement to each Warrant Holder, signed by the Chairman of the Board of
Directors, the Vice Chairman of the Board of Directors, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company, stating in detail the facts requiring such
adjustment, the Exercise Price that will be effective after such adjustment and
the impact of such adjustment on the number and kind of securities issuable upon
exercise of the Warrants, with such statement being accompanied by an opinion of
a firm of independent certified public accountants (which may be the regular
auditors of the Company) of recognized standing selected by the Board of
Directors of the Company, which opinion shall confirm the mathematical accuracy
of the information in such statement. The Company shall also cause a notice
setting forth any such adjustments to be sent by mail, first class, postage
prepaid, to each registered Warrant Holder at his, her or its address appearing
on the Warrant register.
4.6 Other Notices. In case the Company after the date hereof
shall propose to take any action of the type described in Sections 4.1, 4.2, 4.3
or 4.4, the Company shall give notice to each registered Warrant Holder in the
manner set forth in Section 4.5, which notice shall specify, in the case of
action of the type specified in Section 4.2, 4.3 or 4.4, the date on which a
record shall be taken with respect to any such action. Such notice shall be
given, in the case of any action of the type specified in Section 4.2, 4.3 or
4.4, at least twenty days prior to the record date with respect thereto. Where
appropriate, such notice may be included as part of a notice required to be
mailed under the provisions of Section 4.5.
4.7 No Change in Warrant Terms on Adjustment. Irrespective of
any adjustments in the Exercise Price or the number of shares of Common Stock
(or Other Securities) issuable upon exercise, Warrants theretofore or thereafter
issued may continue to express the same prices and number of shares as are
stated in the similar Warrants issuable initially, or at some subsequent time,
pursuant to this Agreement, and the Exercise Price and such number of shares
issuable upon exercise specified thereon shall be deemed to have been so
adjusted.
4.8 Treasury Shares. Shares of Common Stock (or Other
Securities) at any time owned or held by or for the account of the Company shall
not be deemed to be outstanding for the purposes of any computation under this
Article 4 and the disposition (but not a cancellation of such Shares by the
Company) of any such shares shall be considered an issuance or sale of Common
Stock (or Other Securities) for the purpose of this Article 4.
4.9 Consideration for Stock. In case any shares of Common
Stock (or Other Securities), or Convertible Securities or any rights or options
or warrants to purchase any such Common Stock (or Other Securities) or
Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the amount received by the Company
therefor. In case any shares of Common Stock (or Other Securities) or
Convertible Securities or
16
20
any rights or options or warrants to purchase any such Common Stock (or Other
Securities) or Convertible Securities shall be issued or sold in whole or in
part for a consideration other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the Fair Value of such
consideration, without deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith. In case any shares of Common Stock (or Other Securities) or
Convertible Securities or any rights or options or warrants to purchase any such
Common Stock (or Other Securities) or Convertible Securities shall be issued in
connection with any merger or consolidation in which the Company is the
surviving corporation, the amount of consideration therefor shall be deemed to
be the Fair Value of such portion of the assets and business of the
non-surviving corporation or corporations as shall be attributable to such
Common Stock (or Other Securities), Convertible Securities, rights, options or
warrants, as the case may be. In the event of any consolidation or merger of the
Company in which the Company is not the surviving corporation or in the event of
any sale of all or substantially all of the assets of the Company for stock or
other securities of any corporation, the Company shall be deemed to have issued
a number of shares of its Common Stock (or Other Securities) computed on the
basis of the actual exchange ratio on which the transaction was predicated and
for a consideration equal to the Fair Value on the date of such transaction of
such stock or securities of the other corporation, and if any such calculation
results in adjustment of the Exercise Price, the determination of the number of
shares of Common Stock (or Other Securities) issuable upon exercise of the
Warrants immediately prior to such merger, conversion or sale, for purposes of
Section 4.4 shall be made after giving effect to such adjustment of the Exercise
Price. If any event occurs as to which in the reasonable opinion of the Board of
Directors of the Company the provisions relating to the valuation of the
consideration received of this Section 4.9 are not strictly applicable or if
strictly applicable would not fairly and practicably protect the rights of the
Warrant Holder, the Board of Directors shall, in good faith, determine the value
of the consideration received.
4.10 Determination of Consideration in Connection with Certain
Acquisitions. Anything in Section 4.9 to the contrary notwithstanding, in the
case of an acquisition where all or part of the purchase price is payable in
Common Stock (or Other Securities) or Convertible Securities but is stated as a
dollar amount, where the Company upon making the acquisition pays only part of a
maximum dollar purchase price which is payable in Common Stock (or Other
Securities) or Convertible Securities and where the balance of such purchase
price is deferred or is contingently payable under a formula related to earnings
over a period of time, (a) the consideration received for any Common Stock (or
Other Securities) or Convertible Securities delivered at the time of the
acquisition shall be deemed to be such part of the total consideration as the
portion of the dollar purchase price then paid in Common Stock (or Other
Securities) or Convertible Securities bears to the total maximum dollar purchase
price payable in Common Stock (or Other Securities) or Convertible Securities,
and (b) in connection with each issuance of additional Common Stock (or Other
Securities) or Convertible Securities pursuant to the terms of the agreement
relating to such acquisition, the consideration received shall be deemed to be
that portion of the dollar purchase price then and theretofore paid pursuant to
such agreement in Common Stock (or Other Securities) or Convertible Securities
multiplied by a fraction, the numerator of which shall be such number of shares
(or in the case of Convertible Securities other than stock, the aggregate
principal amount) then issued pursuant to such agreement and the
17
21
denominator of which shall be the total number of shares (or in the case of
Convertible Securities other than stock, the aggregate principal amount) then
and theretofore issued under such agreement. In the event that only a part of
the purchase price for an acquisition is paid in Common Stock (or Other
Securities) or Convertible Securities in the manner referred to in this Section
4.10, the term "total consideration" as used in this Section 4.10 shall mean
that part of the aggregate consideration as is fairly allocable to the purchase
price paid in Common Stock (or Other Securities) or Convertible Securities in
the manner referred to in this Section 4.10, as reasonably determined in good
faith by the Board of Directors of the Company.
4.11 Certain Events. If any event occurs as to which in the
reasonable and good faith opinion of the Board of Directors of the Company the
other provisions of this Article 4 are not strictly applicable or if strictly
applicable would not fairly and practicably protect the rights of the Warrant
Holder in accordance with the essential intent and principles of such
provisions, then such Board shall make an equitable adjustment in the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such rights.
4.12 Corporate Action. If pursuant to the terms of this
Article 4 the Exercise Price is adjusted such that the Exercise Price per
Warrant Share would be less than the par value of such Warrant Share, then the
Exercise Price per Warrant Share after such adjustment shall not be the price as
calculated by the adjustment but instead shall be the par value of such Warrant
Share, provided that this subsection shall not affect the number of Warrant
Shares purchasable upon the exercise of the Warrants and the number of Warrant
Shares purchasable upon exercise of the Warrants shall be the number as
calculated by the adjustment.
4.13 No Dilution by Company. The Company will not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issuance or sale of
securities or any other voluntary action or omission, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement or any of the
Warrants issued hereunder, but will at all times in good faith observe and
perform all such terms and take all such action as may be necessary or
appropriate in order to protect the rights of each Warrant Holder of a Warrant
against dilution or other impairment of the kind specified herein; PROVIDED,
HOWEVER, that, subject to compliance with the applicable provisions of this
Agreement, the Company shall not be prohibited by this Section 4.13 or by any
provision of this Agreement from making decisions providing for, INTER ALIA, the
merger or consolidation of the Company or the sale of its assets which
transactions, in the reasonable judgment in good faith of the Company's Board of
Directors, are in the best interests of the Company and the stockholders.
Without limiting the generality of the foregoing, the Company (a) will not
permit the par value of any shares of stock receivable upon the exercise of any
Warrant to exceed the amount payable therefor upon such exercise, (b) will take
all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of stock upon the
exercise of all of the Warrants from time to time outstanding, (c) will not take
any action that results in any adjustment of the shares issuable upon exercise
of the Warrants if the total number of shares of Common Stock (or Other
Securities) issuable after such action upon the exercise of all of the Warrants
would exceed the total number of shares of Common Stock (or Other Securities)
then authorized by the Company's certificate of
18
22
incorporation and available for the purpose of issuance upon such exercise, (d)
will not issue any capital stock of any class that is preferred as to dividends
or as to the distribution of assets upon voluntary or involuntary dissolution,
liquidation or winding-up, unless such stock is sold for a consideration at
least equal to the amount of such preference upon voluntary or involuntary
dissolution, liquidation or winding-up and (e) will not take any other action
that would dilute or impair the right of the registered Warrant Holders to
purchase, in the aggregate, if all such Warrants were exercised on the Original
Issue Date, a number of shares of Common Stock (or Other Securities)
representing at least nineteen and nine hundred ninety-nine thousandths percent
(19.999%) of the Common Stock of the Company issued and outstanding on the
Original Issue Date (or, if the Tranche 2 Warrants are cancelled as provided in
Section 3.4, nine and nine hundred ninety-nine thousandths percent (9.999%)).
ARTICLE 5
WARRANT REGISTRATION
5.1 Registration. The Warrant Certificates shall be issued in
registered form only and shall be registered in the names of the record holders
of the Warrant Certificates to whom they are to be delivered. The Company shall
maintain or cause to be maintained a register in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Warrants and of transfers or exchanges of Warrant Certificates
as provided in this Agreement. Such register shall be maintained at the office
of the Company located at the address therefor as provided in Section 7.1. Such
register shall be open for inspection upon notice at all reasonable times by
each Warrant Holder.
5.2 Transfer or Exchange. At the option of the holder, Warrant
Certificates may be exchanged or transferred for other Warrant Certificates for
a like aggregate number of Warrants and like kind, upon surrender of the Warrant
Certificates to be exchanged at the office of the Company maintained for such
purpose at the address therefor as provided in Section 7.1, and upon payment of
the charges herein provided. Whenever any Warrant Certificates are so
surrendered for exchange or transfer, the Company shall execute the Warrant
Certificates that the holder making the exchange is entitled to receive.
5.3 Valid and Enforceable. All Warrant Certificates issued
upon any registration of transfer or exchange of Warrant Certificates shall be
the valid obligations of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such registration of transfer or exchange.
5.4 Endorsement. Every Warrant Certificate surrendered for
registration of transfer or exchange shall (if so required by the Company) be
duly endorsed, or be accompanied by an instrument of transfer in form reasonably
satisfactory to the Company and duly executed by the registered holder thereof
or such holder's officer or representative duly authorized in writing.
5.5 Service Charge. No service charge shall be made for a
request by any Warrant Holder to transfer or exchange any Warrant Certificates.
19
23
5.6 Payment of Taxes. The Company will pay any and all
documentary stamp or similar issue taxes payable to the United States of America
or any State, or any political subdivision or taxing authority thereof or
therein, in respect of the issuance or delivery of shares of Common Stock (or
Other Securities) upon exercise of the Warrants, PROVIDED that the Company shall
not be required to pay any tax that may be payable in respect of any transfer of
a Warrant or Warrants or any transfer involved in the issuance and delivery of
Common Stock (or Other Securities) in a name other than that of the registered
Warrant Holder of the Warrants to be exercised, and no such issuance or delivery
shall be made unless and until the person requesting such issuance has paid to
the Company the amount of any such tax or has established, to the reasonable
satisfaction of the Company, that such tax has been paid.
5.7 Cancellation. Any Warrant Certificate surrendered for
registration of transfer, exchange, exercise or cancellation of the Warrants
represented thereby shall, if surrendered to the Company, be promptly canceled
by the Company. Any such Warrant Certificate shall not be reissued by the
Company and, except as provided in Section 5.2 in case of an exchange or
transfer, in Section 5.8 in case of a mutilated Warrant Certificate and in
Article 3 in case of the exercise of less than all the Warrants represented
thereby, no Warrant Certificate shall be issued hereunder in lieu thereof.
5.8 Loss or Mutilation. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of an indemnity bond
reasonably satisfactory to it in form and amount, or in the case of mutilation
upon surrender and cancellation thereof, then, in the absence of notice to the
Company that the Warrants represented thereby have been acquired by a bona fide
purchaser or cancelled as provided in Section 3.4, the Company shall execute and
deliver to the registered holder of the lost, stolen, destroyed or mutilated
Warrant Certificate, in exchange for or in lieu thereof, a new Warrant
Certificate of the same tenor and for a like aggregate number of Warrants. Upon
the issuance of any new Warrant Certificate under this Section 5.8, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses in connection therewith. Every new Warrant Certificate executed and
delivered pursuant to this Section 5.8 in lieu of any lost, stolen, destroyed or
mutilated Warrant Certificate shall be entitled to the same benefits of this
Agreement equally and proportionately with any and all other Warrant
Certificates, whether or not the allegedly lost, stolen, destroyed or mutilated
Warrant Certificate shall be at any time enforceable by anyone. The provisions
of this Section 5.8 are exclusive and shall preclude (to the extent lawful) all
other rights or remedies with respect to the replacement of mutilated, lost,
stolen or destroyed Warrant Certificates.
5.9 Agreement of Warrant Holders. Every Warrant Holder, by
accepting the same, covenants and agrees with the Company and with every other
Warrant Holder that the Warrant Certificates are transferable on the registry
books of the Company only upon the terms and conditions set forth in this
Agreement, and the Company may deem and treat the Person in whose name the
Warrant Certificate is registered as the absolute owner for all purposes
whatsoever and the Company shall not be affected by any notice to the contrary.
20
24
ARTICLE 6
ADDITIONAL COMPANY OBLIGATIONS
6.1 Notification of Certain Events. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a regular periodic dividend
payable in cash out of earned surplus) or other distribution of any kind, or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right or
interest of any kind; or
(b) (i) any capital reorganization of the Company, (ii) any
reclassification of the capital shares of the Company (other than a change in
par value or from par value to no par value or from no par value to par value or
as a result of a split-up or combination), (iii) the consolidation or merger of
the Company with or into any other corporation (other than a consolidation or
merger in which the Company is the continuing corporation and which does not
result in any change in the shares of Common Stock (or Other Securities)), (iv)
the sale of the properties and assets of the Company as, or substantially as, an
entirety to another Person, or (v) an exchange offer for Common Stock (or Other
Securities); or
(c) the voluntary or involuntary dissolution, liquidation, or
winding up of the Company,
the Company shall mail to each Warrant Holder a notice specifying (x) the date
or expected date on which any such record is to be taken for the purpose of such
dividend, distribution, rights, event, transaction or amendment (or vote
thereon) and the amount and character of any such dividend, distribution,
exchange, rights, or vote, or, if a record is not to be taken, the date as of
which the holders of Common Stock (or Other Securities) of record to be entitled
to such dividend, distribution, exchange or rights are to be determined, and the
amount and character of such dividend, distribution or rights, or (y) the date
or expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, sale, transfer, exchange offer,
dissolution, liquidation or winding up is expected to become effective, and the
time, if any such time is to be fixed, as of which holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, sale, transfer, exchange offer, dissolution, liquidation or winding up
and in the case of a transaction which would cause the cancellation of any
outstanding Warrants, the effect of such transaction, if known. Such notice
shall be delivered not less than 20 days prior to such date therein specified,
in the case of any such date referred to in clause (x) of the preceding
sentence, and, to the extent practicable, not less than 30 days (but in no event
less than 20 days) prior to such date therein specified, in the case of any such
date referred to in clause (y) of the preceding sentence. Failure to give such
notice within the time provided or any defect therein shall not affect the
legality or validity of any such action.
21
25
6.2 Reservation; Due Authorization, Etc. The Company shall at
all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock (or out of authorized Other Securities),
solely for issuance and delivery upon exercise of Warrants, the full number of
shares of Common Stock (and Other Securities) from time to time issuable upon
the exercise of all Warrants. All shares of Common Stock (and Other Securities)
shall be duly authorized and, when issued upon such exercise, shall be duly and
validly issued, and (in the case of shares) fully paid and nonassessable, and
free from all taxes, liens, charges, security interests, encumbrances and other
restrictions created by or through the Company.
6.3 Compliance With Law. The Company will use its best
efforts, at its expense and on a continual basis, to assure that all shares of
Common Stock (and Other Securities) that may be issued upon exercise of Warrants
may be so issued and delivered without violation of any Federal or state
securities law or regulation, or any other law or regulation applicable to the
Company or any of its subsidiaries, PROVIDED THAT with respect to any such
exercise involving a sale or transfer of Warrants or any securities issuable
upon exercise thereof, the Company shall have no obligation to register such
Warrants or such securities, other than as provided in the Registration Rights
Agreement.
6.4 Listing of Warrant Shares. The Company, at its expense,
shall use its best efforts to cause all Warrant Shares to be listed (subject to
issuance or notice of issuance) on all stock exchanges, if any, on which the
Common Stock (or Other Securities) becomes listed.
ARTICLE 7
MISCELLANEOUS
7.1 Notices. Any notice, demand or delivery authorized by this
Agreement shall be sufficiently given or made if sent by registered or certified
mail, postage prepaid, addressed to any Warrant Holder at such Warrant Holder's
last known address appearing on the register of the Company, and if to the
Company:
American HomePatient, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
or such other address as shall have been furnished in writing, in accordance
with this Section 7.1, to the party giving or making such notice, demand or
delivery.
7.2 Governing Law and Consent to Forum. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY AND THE OTHER
PARTIES HERETO EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
22
26
SITTING IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PERSON TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
7.3 Alternative Dispute Resolution. Notwithstanding anything
else herein to the contrary, for purposes of this Agreement, if any dispute
arises between the Company and/or the Board of Directors of the Company, on the
one hand, and any Warrant Holder, on the other hand, with respect to any
determination by the Company and/or its Board of Directors of Fair Value of any
security, such dispute shall be settled by referring the dispute to a nationally
recognized investment banking firm as may be selected by the Company and such
Warrant Holder, whose determination as to Fair Value shall be conclusive, absent
manifest error; provided, however, that any dispute with respect to the
valuation described in Section 4.4(b) shall be settled in accordance with the
mechanism provided in Section 4.4(b).
7.4 Remedies. Subject to the provisions of Section 7.3, the
Company stipulates that the remedies at law of each Warrant Holder in the event
of any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Agreement are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
7.5 Right of Action. Subject to the provisions of Section 7.3,
all rights of action in respect of this Agreement are vested in the registered
holders of the Warrants. Any registered holder of any Warrant, without the
consent of the Company, may in such Warrant Holder's own behalf and for such
Warrant Holder's 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 Warrant Holder's right to exercise such holder's Warrants in
the manner provided in the Warrant Certificate representing such Warrants and
the Company's obligations under this Agreement and the Warrants.
7.6 Benefits of this Agreement. This Agreement shall be
binding upon and inure to the benefit of the Company and its respective
successors and assigns, and the registered and beneficial holders from time to
time of the Warrants and of holders of the Common Stock (or Other Securities)
issuable upon exercise of the Warrants, where applicable. Nothing in this
Agreement is intended or shall be construed to confer upon any other Person, any
right, remedy or claim under or by reason of this Agreement or any part hereof.
7.7 Amendments. No approval, consent, amendment or waiver of
this Agreement shall be effective unless in writing and signed by the Company
and all Warrant Holders affected by such amendment.
23
27
7.8 Counterparts. This Agreement may be executed in any number
of counterparts and each such counterpart shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the
same instrument.
7.9 Headings. The table of contents hereto and the descriptive
headings of the several sections hereof are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
7.10 Reservation of Rights. Notwithstanding anything to the
contrary herein, this Agreement shall not be interpreted to confer any greater
rights on Company than Company may have under the Credit Agreement, and no
provision of this Agreement shall modify any of the Company's obligations to
Agent and Lenders under the Credit Agreement or other Credit Documents.
Notwithstanding anything to the contrary herein, in the event of any conflict
between the terms of this Agreement and the Credit Agreement, the terms of the
Credit Agreement shall control.
[SIGNATURE PAGE FOLLOWS]
24
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
AMERICAN HOMEPATIENT, INC.
By:
----------------------------------------
Name:
Title:
S-1
29
BANKERS TRUST COMPANY, as Agent and
Individually
By:
----------------------------------------
Name:
Title:
S-2
30
BANK OF AMERICA SECURITIES
By:
----------------------------------------
Name:
Title:
S-3
31
BANK OF MONTREAL
By:
----------------------------------------
Name:
Title:
▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇:
----------------------------------------
Name:
Title:
S-5
33
BEAR ▇▇▇▇▇▇▇ & CO., INC.
By:
----------------------------------------
Name:
Title:
▇-▇
▇▇
▇▇▇▇▇▇▇▇, N.A.
By:
----------------------------------------
Name:
Title:
S-7
35
CONTINENTAL CASUALTY COMPANY
By:
----------------------------------------
Name:
Title:
S-8
36
EVEREST CAPITAL LIMITED
By: ___________________ as general partner
By:
----------------------------------------
Name:
Title:
S-9
37
FERNWOOD ASSOCIATES
By:
----------------------------------------
Name:
Title:
S-10
38
FRANKLIN FLOATING RATE TRUST
By:
----------------------------------------
Name:
Title:
S-11
39
▇▇▇▇▇▇▇▇ MASTER FUND LTD.
By:
----------------------------------------
Name:
Title:
S-12
40
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇,
INCORPORATED
By:
----------------------------------------
Name:
Title:
S-13
41
RCG CARPATHIA MASTER FUND, LTD.
By:
----------------------------------------
Name:
Title:
S-14
42
SATELLITE SENIOR INCOME FUND LLC
BY: SATELLITE ASSET MANAGEMENT, LP
By:
----------------------------------------
Name:
Title:
S-15
43
SUMITOMO MITSUI BANKING CORPORATION
By:
----------------------------------------
Name:
Title:
S-16
44
SCHEDULE 1
# of Tranche 1 Pro Rata
Lender Warrants Share(%)
----- -------- --------
Bankers Trust Company 320,002.00 19.6000565659
Bank of America Securities 22,867.00 1.▇▇▇▇▇▇▇▇▇▇
Bank of Montreal 102,041.00 6.▇▇▇▇▇▇▇▇▇▇
Barclays Capital PLC 59,186.50 3.6251624829
Bear, ▇▇▇▇▇▇▇ & Co., Inc. 419,830.50 25.7145532432
Citibank, N.A 99,823.50 6.1141790024
Continental Casualty Company 63,222.00 3.8723406349
Everest Capital Limited 53,803.50 3.2954684668
Fernwood Associates 198,731.00 12.1722509315
Franklin Floating Rate Trust 53,803.50 3.2954684568
▇▇▇▇▇▇▇▇ Master Fund Ltd. 26,902.00 1.▇▇▇▇▇▇▇▇▇▇
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, 90,040.50 5.5149568485
Incorporated
RCG Carpathia Master Fund, Ltd. 32,282.00 1.9772810801
Satellite Senior Income Fund, LLC 69,945.00 4.2841090069
Sumitomo Mitsui Banking Corporation 20,177.00 1.2358337117
-------------- --------------
3,265,315.00 100.00%
S-1
45
EXHIBIT A
FORM OF TRANCHE 1 WARRANT CERTIFICATE
Warrant No.
Number of Warrant(s): ____________
Exercisable During the Period Commencing June 1, 2001 and Ending May 31, 2011
WARRANT TO PURCHASE
COMMON STOCK
OF
AMERICAN HOMEPATIENT, INC.
This Certifies that [LENDER] ("Warrant Holder") or registered assigns, is the
owner of the number of WARRANTS set forth above, each of which represents the
right, at any time during the period commencing on June 1, 2001 and ending on
May 31, 2011, to purchase from American HomePatient, Inc., a Delaware
corporation (the "Company"), at the price of $.01 (the "Exercise Price"), one
share of Common Stock, $0.01 par value, of the Company, subject to adjustment as
provided in the Warrant Agreement hereinafter referred to, upon surrender
hereof, with the subscription form on the reverse hereof duly executed, by hand
or by mail to the Company, and simultaneous payment in full (in accordance with
the terms of the Warrant Agreement) of the Exercise Price in respect of each
Warrant represented by this Warrant Certificate that is so exercised, all
subject to the terms and conditions hereof and of the Warrant Agreement.
Upon any partial exercise of the Warrants represented by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate representing the Warrants that were not exercised.
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement, dated as of May 25, 2001 (the "Warrant Agreement"), among the
Company, Bankers Trust Company, as agent, and the financial institutions parties
thereto and is subject to the terms and provisions contained therein, all of
which terms and provisions the holder of this Warrant Certificate consents to by
acceptance hereof. Copies of the Warrant Agreement are on file at the Company
and may be obtained by writing to the Company.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT SET FORTH ON
THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
This Warrant Certificate shall not be valid for any purpose until it shall have
been manually countersigned by an authorized signatory of the Company.
Witness the facsimile seal of the Company and the signature of its duly
authorized officer.
Dated: May __, 2001 American HomePatient, Inc.
By:
-----------------------------
Name:
Title:
A-1
46
AMERICAN HOMEPATIENT, INC.
The transfer of this Warrant Certificate and all rights hereunder is registrable
by the registered holder hereof, in whole or in part, on the register of the
Company upon surrender of this Warrant Certificate at the address of the Company
as provided in the Warrant Agreement, duly endorsed or accompanied by a written
instrument of transfer duly executed and in form satisfactory to the Company, by
the registered holder hereof or the registered holder's attorney duly authorized
in writing and upon payment of any transfer tax or other governmental charge
imposed upon such transfer or registration thereof to the extent required by the
Warrant Agreement. Upon any partial transfer the Company will cause to be
delivered to such holder a new Warrant Certificate or Certificates with respect
to any portion not so transferred.
This Warrant Certificate may be exchanged at the address of the Company as
provided in the Warrant Agreement, for Warrant Certificates representing the
same aggregate number of Warrants, each new Warrant Certificate to represent
such number of Warrants as the holder hereof shall designate at the time of such
exchange.
Prior to the exercise of the Warrants represented hereby, the holder of this
Warrant Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company, including, but not limited to, the right to vote, to
receive dividends or other distributions, to exercise any preemptive right or,
except as provided in the Warrant Agreement, to receive any notice of meetings
of stockholders, and shall not be entitled to receive notice of any proceedings
of the Company except as provided in the Warrant Agreement. Nothing contained
herein shall be construed as imposing any liabilities upon the holder of this
Warrant Certificate to purchase any securities or as a stockholder of the
Company, whether such liabilities are asserted by the Company or by creditors or
stockholders of the Company or otherwise.
[Include on all Warrant Certificates issued during the period June 1, 2001-May
31, 2003 and on all Warrants issued to affiliates of the Company (as defined in
SEC Rule 144(a)(1)): THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNLESS SOLD
PURSUANT TO RULE 144.]
A-2
47
SUBSCRIPTION FORM
(TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT)
TO AMERICAN HOMEPATIENT, INC.
Attention:
---------------------------
The undersigned (i) irrevocably exercises ________ of the Warrants (the
"Exercised Warrants") represented by the within Warrant Certificate; (ii)
purchases one share of Common Stock of American HomePatient, Inc. (before giving
effect to the adjustments provided in the Warrant Agreement referred to in the
within Warrant Certificate) for each Exercised Warrant and herewith makes
payment in full of the purchase price of $______ in respect of each Exercised
Warrant as provided in the Warrant Agreement by, herewith, (1) paying an amount
equal to $_______ in cash, by check or by wire transfer of funds (payable to the
order, or for the account of, American HomePatient, Inc.), (2) surrendering
securities of American HomePatient, Inc. having a Fair Value (or, in the case of
securities other than Common Stock (or Other Securities), such fair value as is
determined pursuant to the Warrant Agreement) that equals $_________, and/or (3)
surrendering notes or debt securities of American HomePatient, Inc. having a
principal balance plus accrued interest equal to $_________; (iii) surrenders,
with respect to the Exercised Warrants, this Warrant Certificate and all right,
title and interest therein to American HomePatient, Inc.; and (iv) directs that
the securities or other property deliverable upon the exercise of such Exercised
Warrants be registered or placed in the name and at the address specified below
and delivered thereto.
Dated: , 20
------------ ---
(Owner)*
(Signature of Authorized
Representative)
(Street Address)
(City) (State) (Zip Code)
Securities or property to be
issued and delivered to:
-------------------------------------
Signature Guaranteed**
Please insert taxpayer
identification number
Name
--------------------------------------------------------------------------
Street Address
----------------------------------------------------------------
City, State and Zip Code
-----------------------------------------------------
* The 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.
** The signature must be guaranteed by a securities transfer agents medallion
program ("stamp") participant or an institution receiving prior approval from
American HomePatient, Inc.
A-3
48
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the within Warrant
Certificate hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under the within Warrant Certificate, with
respect to the number of Warrants set forth below:
Name of No. of
ASSIGNEE ADDRESS WARRANTS
---------------------------------------------------------------------
Please insert taxpayer
identification number
of Assignee
and does hereby irrevocably constitute and appoint __________ attorney to make
such transfer on the books of American HomePatient, Inc. maintained for the
purpose, with full power of substitution in the premises.
Dated: , 20
---------- ---
Name *
-----------------------------------------------------
Signature of Authorized
Representative
--------------------------------------------
Signature Guaranteed **
--------------------------------------
* The 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.
** The signature must be guaranteed by a securities transfer agents medallion
program ("stamp") participant or an institution receiving prior approval from
American HomePatient, Inc.
A-4
49
EXHIBIT B
FORM OF TRANCHE 2 WARRANT CERTIFICATE
Warrant No.
Number of Warrant(s):
------------------------
Exercisable During the Period Commencing September 30, 2001 and Ending September
29, 2011.
WARRANT TO PURCHASE
COMMON STOCK
OF
AMERICAN HOMEPATIENT, INC.
This Certifies that [LENDER] ("Warrant Holder") or registered assigns, is the
owner of the number of WARRANTS set forth above, each of which represents the
right, for the period commencing September 30, 2001 and ending September 29,
2011, subject to cancellation as provided in the Warrant Agreement, to purchase
from American HomePatient, Inc., a Delaware corporation (the "Company"), at the
price of $.01 (the "Exercise Price"), one share of Common Stock, $0.01 par
value, of the Company, subject to adjustment as provided in the Warrant
Agreement hereinafter referred to, upon surrender hereof, with the subscription
form on the reverse hereof duly executed, by hand or by mail to the Company, and
simultaneous payment in full (in accordance with the terms of the Warrant
Agreement) of the Exercise Price in respect of each Warrant represented by this
Warrant Certificate that is so exercised, all subject to the terms and
conditions hereof and of the Warrant Agreement.
Upon any partial exercise of the Warrants represented by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate representing the Warrants that were not exercised.
This Warrant Certificate is subject to cancellation prior to September 30, 2001
in the circumstances described in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement, dated as of May 25, 2001 (the "Warrant Agreement"), among the
Company, Bankers Trust Company, as agent, and the financial institutions parties
thereto and is subject to the terms and provisions contained therein, all of
which terms and provisions the holder of this Warrant Certificate consents to by
acceptance hereof. Copies of the Warrant Agreement are on file at the Company
and may be obtained by writing to the Company.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT SET FORTH ON
THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
This Warrant Certificate shall not be valid for any purpose until it shall have
been manually countersigned by an authorized signatory of the Company.
Witness the facsimile seal of the Company and the signature of its duly
authorized officer.
Dated: May , 2001 American HomePatient, Inc.
--
By:
---------------------------
Name:
Title:
B-1
50
AMERICAN HOMEPATIENT, INC.
The transfer of this Warrant Certificate and all rights hereunder is registrable
by the registered holder hereof, in whole or in part, on the register of the
Company upon surrender of this Warrant Certificate at the address of the Company
as provided in the Warrant Agreement, duly endorsed or accompanied by a written
instrument of transfer duly executed and in form satisfactory to the Company, by
the registered holder hereof or the registered holder's attorney duly authorized
in writing and upon payment of any transfer tax or other governmental charge
imposed upon such transfer or registration thereof to the extent provided in the
Warrant Agreement. Upon any partial transfer the Company will cause to be
delivered to such holder a new Warrant Certificate or Certificates with respect
to any portion not so transferred.
This Warrant Certificate may be exchanged at the address of the Company as
provided in the Warrant Agreement, for Warrant Certificates representing the
same aggregate number of Warrants, each new Warrant Certificate to represent
such number of Warrants as the holder hereof shall designate at the time of such
exchange.
Prior to the exercise of the Warrants represented hereby, the holder of this
Warrant Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company, including, but not limited to, the right to vote, to
receive dividends or other distributions, to exercise any preemptive right or,
except as provided in the Warrant Agreement, to receive any notice of meetings
of stockholders, and shall not be entitled to receive notice of any proceedings
of the Company except as provided in the Warrant Agreement. Nothing contained
herein shall be construed as imposing any liabilities upon the holder of this
Warrant Certificate to purchase any securities or as a stockholder of the
Company, whether such liabilities are asserted by the Company or by creditors or
stockholders of the Company or otherwise.
[TO BE INCLUDED ON WARRANT CERTIFICATES ISSUED DURING THE PERIOD COMMENCING JUNE
1, 2001 AND ENDING ON MAY 31, 2003 AND ON ALL WARRANTS ISSUED TO AFFILIATES (AS
DEFINED IN SEC RULE 144(A)(1)): THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.]
B-2
51
SUBSCRIPTION FORM
(TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT)
TO AMERICAN HOMEPATIENT, INC.
Attention: _________________
The undersigned (i) irrevocably exercises ________ of the Warrants (the
"Exercised Warrants") represented by the within Warrant Certificate; (ii)
purchases one share of Common Stock of American HomePatient, Inc. (before giving
effect to the adjustments provided in the Warrant Agreement referred to in the
within Warrant Certificate) for each Exercised Warrant and herewith makes
payment in full of the purchase price of $______ in respect of each Exercised
Warrant as provided in the Warrant Agreement by, herewith, (1) paying an amount
equal to $_______ in cash, by check or by wire transfer of funds (payable to the
order, or for the account of, American HomePatient, Inc.), (2) surrendering
securities of American HomePatient, Inc. having a Fair Value (or, in the case of
securities other than Common Stock (or Other Securities), such fair value as is
determined pursuant to the Warrant Agreement) that equals $_________, and/or (3)
surrendering notes or debt securities of American HomePatient, Inc. having a
principal balance plus accrued interest equal to $_________; (iii) surrenders,
with respect to the Exercised Warrants, this Warrant Certificate and all right,
title and interest therein to American HomePatient, Inc.; and (iv) directs that
the securities or other property deliverable upon the exercise of such Exercised
Warrants be registered or placed in the name and at the address specified below
and delivered thereto.
Dated: , 20
------------- ---
(Owner)*
(Signature of Authorized
Representative)
(Street Address)
(City) (State) (Zip Code)
Securities or property to be
issued and delivered to:
-------------------------------------
Signature Guaranteed**
Please insert taxpayer
identification number
Name
-----------------------------------------------------
Signature of Authorized
Representative
--------------------------------------------
Signature Guaranteed
--------------------------------------
* The 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.
** The signature must be guaranteed by a securities transfer agents medallion
program ("stamp") participant or an institution receiving prior approval from
American HomePatient, Inc.
B-3
52
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the within Warrant
Certificate hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under the within Warrant Certificate, with
respect to the number of Warrants set forth below:
Name of No. of
ASSIGNEE ADDRESS WARRANTS
---------------------------------------------------------------------
Please insert taxpayer
identification number
of Assignee
and does hereby irrevocably constitute and appoint __________ attorney to make
such transfer on the books of American HomePatient, Inc. maintained for the
purpose, with full power of substitution in the premises.
Dated: , 20
----------- --
Name *
--------------------------------------
Signature of Authorized
Representative
----------------------------
Signature Guaranteed **
-----------------------
* The 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.
** The signature must be guaranteed by a securities transfer agents medallion
program ("stamp") participant or an institution receiving prior approval from
American HomePatient, Inc.
B-4
53
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is made and entered into as
of May 25, 2001 (this "Agreement"), by and between American HomePatient, Inc, a
Delaware corporation (the "Company"), and each of the financial institutions set
forth on the signature pages hereof (each an "Investor" and collectively the
"Investors").
WHEREAS, pursuant to that certain Warrant Agreement, dated as
of May 25, 2001 (the "Warrant Agreement"), by and among the Company, Bankers
Trust Company, as agent, and the Investors, the Company has agreed to issue
warrants (the "Warrants") to acquire 3,265,315 shares of its Common Stock, par
value $.01 per share; and
WHEREAS, in connection with the Warrant Agreement, the Company
has agreed to register for sale by each of the Holders (as defined below), the
Registrable Shares (as defined below) ; and
WHEREAS, the parties hereto desire to enter into this
Agreement to evidence the foregoing agreement of the Company and the mutual
covenants of the parties relating thereto.
NOW, THEREFORE, in consideration of the foregoing and the
covenants of the parties set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
subject to the terms and conditions set forth herein, the parties hereby agree
as follows:
Section 1. Certain Definitions. In this Agreement the
following terms shall have the following respective meanings:
"Accredited Investor" shall have the meaning set forth in Rule
501 of the General Rules and Regulations promulgated under the Securities Act.
"Affiliate" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
Person specified.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the relevant time.
"Holders" shall mean initially each Investor and thereafter
each Person to whom an Investor or other Holder may transfer any Warrants.
C-1
54
"Indemnified Party" shall have the meaning ascribed to it in
Section 6(c) of this Agreement.
"Indemnifying Party" shall have the meaning ascribed to it in
Section 6(c) of this Agreement.
"Person" shall mean any individual, partnership, limited
liability company, association, joint venture, corporation, insurance company,
business, trust, unincorporated organization, government or department, agency
or subdivision thereof, or other person or entity.
"Piggyback Notice" shall have the meaning ascribed to it in
Section 3(a) of this Agreement.
"Piggyback Registration" shall have the meaning ascribed to it
in Section 3(a) of this Agreement.
"Registrable Shares" shall mean (i) the Common Stock (or Other
Securities) (as defined in the Warrant Agreement) issued or issuable upon
exercise of the Warrants, and (ii) any other securities issued or issuable as a
result of or in connection with any stock dividend, stock split or reverse stock
split, combination, recapitalization, reclassification, merger or consolidation,
exchange, distribution or similar transaction in respect of the Common Stock (or
Other Securities), except that as to any particular Registrable Shares, such
securities shall cease to be Registrable Shares when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, or (b) such securities shall
have been sold or are capable of being sold in accordance with Rule 144 (or any
successor provision) under the Securities Act, without any restriction as to
amount under Rule 144(e).
"Registration Expenses" shall mean all out-of-pocket expenses
(excluding Selling Expenses) incurred by the Company in connection with any
attempted or completed registration pursuant to Sections 2, 3 and 4 hereof,
including, without limitation, the following: (a) all registration, filing and
listing fees; (b) fees and expenses of compliance with federal and state
securities laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with state securities qualifications of
the Registrable Shares under the laws of such jurisdictions as the Holders may
reasonably designate); (c) printing (including, without limitation, expenses of
printing or engraving certificates for the Registrable Shares in a form eligible
for deposit with The Depository Trust Company and otherwise meeting the
requirements of any securities exchange on which they are listed and of printing
registration statements and prospectuses), messenger, telephone, shipping and
delivery expenses; (d) fees and disbursements of counsel for the Company; (e)
fees and disbursements of all independent public accountants of the Company
(including, without limitation, the expenses of any annual or special audit and
"cold comfort" letters required by the managing underwriter); (f) Securities Act
liability insurance if the Company so desires; (g) fees and expenses of other
Persons reasonably necessary in connection with the registration, including any
experts, retained by the Company; (h) fees and expenses incurred in connection
with the listing of the Registrable Shares on each securities exchange on which
securities of the same class or series are then listed; (i) fees and expenses
associated with any filing with the National Association of Securities Dealers,
Inc. required
C-2
55
to be made in connection with the registration statement; (j) fees and expenses
of one counsel for the Holders selected by the Holders of a majority of the
Registrable Shares being registered (on a Common Stock equivalent basis); and
(k) reasonable out-of-pocket expenses incurred by the Holders.
"Registration Request" shall have the meaning ascribed to it
in Section 2(a) of this Agreement.
"Rule 144" shall mean Rule 144 promulgated by the Commission
under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the relevant time.
"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to any sale of
Registrable Shares.
"Warrants" shall have the meaning ascribed to them in the
recitals to this Agreement.
Section 2. Demand Registration.
(a) Upon receipt of a written request (a "Registration
Request") from Holders holding at least a majority of the then outstanding
Registrable Shares requesting that the Company effect the registration under the
Securities Act of Registrable Shares at any time that the Company's Common Stock
is traded on a public market with a Fair Value (as defined in the Warrant
Agreement) of the Registrable Shares of $5.00 or more (as adjusted to reflect
any stock dividend, stock split or reverse stock split, combination,
recapitalization, reclassification, merger or consolidation, exchange,
distribution or similar transaction), the Company shall (i) promptly give notice
of the Registration Request to all non-requesting Holders and (ii) prepare and
file with the Commission, within 45 days after its receipt of such Registration
Request a registration statement for the purpose of effecting a registration of
the Registrable Shares which the Company has been so requested to register by
the requesting Holders and any other Holder who requests to have its Registrable
Shares included in such registration statement within 10 days after receipt of
notice by such Holder of the Registration Request. The Company shall use its
reasonable best efforts to effect such registration as soon as practicable but
not later than 120 days after its receipt of such Registration Request
(including, without limitation, the execution of an undertaking to file
post-effective amendments and appropriate qualification under applicable state
securities laws); and shall keep such registration continuously effective until
the earlier of (i) the second anniversary of the date hereof, and (ii) the date
on which all Registrable Shares registered pursuant to such registration have
been sold pursuant to such registration statement or Rule 144; provided,
however, that the Company shall not be obligated to take any action to effect
any such registration, qualification or compliance pursuant to this Section 2 in
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction.
Notwithstanding the foregoing, the Company shall have the
right (the "Suspension Right") to defer such filing (or suspend sales under any
filed registration statement or defer the
C-3
56
updating of any filed registration statement and suspend sales thereunder) for a
period of not more than 60 days during any twelve-month period, if the Company
shall furnish to the Holders a certificate signed by an executive officer or any
director of the Company stating that, in the good faith and reasonable judgment
of the Company, it would be materially detrimental to the Company and its
stockholders to file such registration statement or amendment thereto at such
time (or continue sales under a filed registration statement) and therefore the
Company has elected to defer the filing of such registration statement (or
suspend sales under a filed registration statement).
(b) The Company shall not be required to effect more than two
demand registrations pursuant to this Section 2; provided that if any
registration is suspended or otherwise adversely affected by the issuance of a
stop order by the Commission or any state securities commission or any
injunction is issued by any court or other governmental agency that results in a
suspension of the registration statement or otherwise adversely affects the
registration, the Holders shall be entitled to an additional demand
registration.
Section 3. Piggyback Registrations.
(a) If the Company proposes to register under the Securities
Act any of its common equity securities (other than pursuant to (i) a
registration on Form S-4 or any successor form, or (ii) an offering of
securities in connection with an employee benefit, share dividend, share
ownership or dividend reinvestment plan), or (iii) a registration statement
filed pursuant to Section 2), the Company will give prompt written notice to all
Holders of Registrable Shares of its intention to effect such a registration
(each a "Piggyback Notice") at least 20 days before the anticipated filing date
of such registration statement, and, subject to Section 3(c) below, the Company
will include in such registration all Registrable Shares with respect to which
the Company has received written requests for inclusion therein within 15 days
after the date of sending the Piggyback Notice (a "Piggyback Registration"),
unless, if the Piggyback Registration is not an underwritten offering, the
Company in its reasonable and good faith judgment determines that, or in the
case of an underwritten Piggyback Registration, the managing underwriters advise
the Company in writing that in their opinion, the inclusion of Registrable
Shares would materially adversely interfere with such offering. Nothing herein
shall affect the right of the Company to withdraw any such registration in its
sole discretion.
(b) If a Piggyback Registration is a primary registration on
behalf of the Company and, if the Piggyback Registration is not an underwritten
offering, the Company in its reasonable and good faith judgment determines that,
or in the case of an underwritten Piggyback Registration, the managing
underwriters advise the Company in writing that in their opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner within a price range acceptable to the
Company, the Company will include in such registration (i) first, the securities
the Company proposes to sell and (ii) second, the Registrable Shares requested
to be included in such registration and any other securities requested to be
included in such registration, pro rata among the holders of Registrable Shares
requesting such registration and the holders of such other securities on the
basis of the number of shares requested for inclusion in such registration by
each such holder.
C-4
57
(c) If a Piggyback Registration is a secondary registration on
behalf of holders of the Company's securities other than the holders of
Registrable Shares, and, if the Piggyback Registration is not an underwritten
offering, the Company determines in its reasonable and good faith judgment that,
or in the case of an underwritten Piggyback Registration, the managing
underwriters advise the Company in writing that in their opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering within a price range
acceptable to the holders initially requesting such registration, the Company
will include in such registration the securities requested to be included
therein by the holders requesting such registration and the Registrable Shares
requested to be included in such registration, pro rata among the holders of
securities requesting such registration on the basis of the number of shares
initially requested for inclusion in such registration by each such holder.
(d) In the case of an underwritten Piggyback Registration, the
Company will have the right to select the investment banker(s) and manager(s) to
administer the offering. In a registration pursuant to Section 2(a), the Holders
requesting registration shall have the right to select the investment banker(s)
and manager(s) to administer the offering, which shall be reasonably acceptable
to the Company. If requested by the underwriters for any underwritten offerings
by Holders, under a registration requested pursuant to Section 2(a), the Company
will enter into a customary underwriting agreement with such underwriters for
such offering, to contain such representations and warranties by the Company and
such other terms as are customarily contained in agreements of that type. The
Holders shall not be required to make any representations or warranties to or
agreement with the Company or the underwriters other than representations,
warranties or agreements regarding the Holders and the Holders' intended method
of distribution and any other representation or warranties required by law.
(e) The Holders shall have a right to review the registration
statement and all other materials filed with the Commission prior to the filing
thereof.
Section 4. Registration Procedures.
(a) The Company shall promptly notify the Holders of the
occurrence of the following events:
(i) when any registration statement relating to the
Registrable Shares or post-effective amendment thereto filed with the Commission
has become effective;
(ii) the issuance by the Commission of any stop order
suspending the effectiveness of any registration statement relating to the
Registrable Shares;
(iii) the suspension of an effective registration
statement by the Company in accordance with the last paragraph of Section 2(a)
hereof;
(iv) the Company's receipt of any notification of the
suspension of the qualification of any Registrable Shares covered by a
registration statement for sale in any jurisdiction; and
C-5
58
(v) the existence of any event, fact or circumstance that
results in a registration statement or prospectus relating to Registrable Shares
or any document incorporated therein by reference containing an untrue statement
of material fact or omitting to state a material fact required to be stated
therein or necessary to make the statements therein not misleading during the
distribution of securities.
The Company agrees to use its reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of any such
registration statement or any state qualification as promptly as possible. Each
Holder agrees by acquisition of the Registrable Shares that upon receipt of any
notice from the Company of the occurrence of any event of the type described in
Section 4(a)(ii), (iii), (iv) or (v) to immediately discontinue its disposition
of Registrable Shares pursuant to any registration statement relating to such
securities until such Holder's receipt of written notice from the Company that
such disposition may be made. The Company shall use its best efforts to limit
the duration of any discontinuance with respect to the disposition of
Registrable Shares pursuant to this paragraph.
(b) The Company shall provide to the Holders, at no cost to
the Holders, a copy of the registration statement and any amendment thereto used
to effect the registration of the Registrable Shares, each prospectus contained
in such registration statement or post-effective amendment and any amendment or
supplement thereto and such other documents as the requesting Holders may
reasonably request in order to facilitate the disposition of the Registrable
Shares covered by such registration statement. The Company consents to the use
of each such prospectus and any supplement thereto by the Holders in connection
with the offering and sale of the Registrable Shares covered by such
registration statement or any amendment thereto. The Company shall also file a
sufficient number of copies of the prospectus and any post-effective amendment
or supplement thereto with any securities exchange or market on which the Common
Stock, par value $ .01 per share, of the Company is then listed so as to enable
the Holders to have the benefits of the prospectus delivery provisions of Rule
153 under the Securities Act.
(c) The Company agrees to use its reasonable best efforts to
cause the Registrable Shares covered by a registration statement to be
registered with or approved by such state securities authorities as may be
necessary to enable the Holders to consummate the disposition of such shares
pursuant to the plan of distribution set forth in the registration statement;
provided, however, that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to this
Section 4 in any particular jurisdiction in which the Company would be required
to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction.
(d) Subject to the Company's Suspension Right, if any event,
fact or circumstance requiring an amendment to a registration statement relating
to the Registrable Shares or supplement to a prospectus relating to the
Registrable Shares shall exist, immediately upon becoming aware thereof the
Company agrees to notify the Holders and prepare and furnish to the Holders a
post-effective amendment to the registration statement or supplement to the
prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Shares, the prospectus will not contain an untrue statement of a
material
C-6
59
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(e) The Company agrees to use its reasonable best efforts
(including the payment of any listing fees) to obtain the listing of all
Registrable Shares covered by the registration statement on each securities
exchange on which securities of the same class or series are then listed.
(f) The Company agrees to use its reasonable best efforts to
comply with the Securities Act and the Exchange Act in connection with the offer
and sale of Registrable Shares pursuant to a registration statement, and, as
soon as reasonably practicable following the end of any fiscal year during which
a registration statement effecting a registration of the Registrable Shares
shall have been effective, to make available to its security holders an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act.
(g) The Company agrees to cooperate with the selling Holders
to facilitate the timely preparation and delivery of certificates representing
Registrable Shares to be sold pursuant to a registration and not bearing any
Securities Act legend; and enable certificates for such Registrable Shares to be
issued for such numbers of shares and registered in such names as the Holders
may reasonably request at least two business days prior to any sale of
Registrable Shares.
(h) The Company agrees to use its reasonable best efforts to
take all action necessary or advisable to effect the registration of the
Registrable Shares in the manner contemplated by this Agreement.
Section 5. Expenses of Registration. The Company shall pay all
Registration Expenses incurred in connection with the registration,
qualification or compliance pursuant to Sections 2, 3 and 4 hereof. All Selling
Expenses incurred in connection with the sale of Registrable Shares by any of
the Holders shall be borne by the Holder selling such Registrable Shares.
Section 6. Indemnification and Contribution.
(a) The Company will (i) indemnify each Holder, each Holder's
officers, directors, employees, partners, principals, equity holders, managed or
advised accounts, advisors, representatives and agents, and each Person
controlling such Holder or such other Person within the meaning of Section 15 of
the Securities Act, against all expenses, claims, losses, damages and
liabilities (including reasonable legal fees and expenses), arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement or prospectus relating to the
Registrable Shares, or any amendment or supplement thereto, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(ii) reimburse each Holder for all reasonable legal or other fees and expenses
incurred in connection with investigating or defending any such action or claim
as such fees or expenses are incurred, provided, however, that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with information furnished in writing to the Company by such Holder
for inclusion therein; and provided further, that in the case of a
nonunderwritten offering, the Company shall not be liable in
C-7
60
any such case with respect to any preliminary prospectus or preliminary
prospectus supplement to the extent that any such expenses, claims, losses,
damages and liabilities result from the fact that Registrable Shares were sold
to a person as to whom it shall be established that there was not sent or given
at or prior to the written confirmation of such sale a copy of the prospectus as
then amended or supplemented under circumstances were such delivery is required
under the Securities Act, if the Company shall have previously furnished copies
thereof to such Indemnified Party in sufficient quantities to enable such
Indemnified Party to satisfy such obligations and the expense, claim, loss,
damage or liability of such Indemnified Party results from an untrue statement
or omission of a material fact contained in the preliminary prospectus or the
preliminary prospectus supplement which was corrected in the prospectus. The
Company shall also indemnify underwriters of the Registrable Shares, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, and their officers, directors, employees,
partners, principals, equity holders, advisors, representatives and agents, and
each Person controlling such underwriters or other Persons within the meaning of
Section 15 of the Securities Act, to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Shares and other
specified Persons. This indemnity is in addition to any liability that the
Company may otherwise have.
(b) Each Holder selling shares pursuant to a Registration
(and, in the case of a nonunderwritten offering, any agents of each Holder that
facilitate the distribution of Registrable Shares) will (i) indemnify the
Company, each of its directors and each of its officers who signs the
registration statement, each underwriter, if any, of the Company's securities
covered by such registration statement, and each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act,
against all expenses, claims, losses, damages and liabilities (including
reasonable legal fees and expenses) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
registration statement or prospectus, or any amendment or supplement thereto, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement or prospectus, in reliance upon and in
conformity with information furnished in writing to the Company by such Holder
for inclusion therein, and (ii) reimburse the Company for all reasonable legal
and other fees or expenses incurred in connection with investigating or
defending any such action or claim as such fees or expenses are incurred.
(c) Each party entitled to indemnification under this Section
6 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, but the
omission to so notify the Indemnifying Party shall not relieve the Indemnifying
Party from any liability which the Indemnifying Party may have to the
Indemnified Party pursuant to the provisions of this Section 6 except to the
extent of the actual damages suffered by such delay in notification. The
Indemnifying Party shall assume the defense of such action, including the
employment of counsel to be chosen by the Indemnifying Party to be reasonably
satisfactory to the Indemnified Party, and payment of the fees and expenses of
such counsel. The Indemnified Party shall have the right to employ its own
counsel in any such case, but the legal fees and expenses of such counsel shall
be at the expense of the Indemnified Party, unless the employment of such
counsel shall
C-8
61
have been authorized in writing by the Indemnifying Party in connection with the
defense of such action, or the Indemnifying Party shall not have employed
counsel to take charge of the defense of such action or the Indemnified Party
shall have reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified Party),
in any of which events such fees and expenses of the Indemnifying Party's
counsel shall be borne by the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. An Indemnifying Party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such Indemnifying Party with respect to such claim, as well as
one local counsel in each relevant jurisdiction.
(d) If the indemnification provided for in this Section 6 is
unavailable to a party that would have been an Indemnified Party under this
Section 6 in respect of any expenses, claims, losses, damages and liabilities
referred to herein, then each party that would have been an Indemnifying Party
hereunder shall, in lieu of indemnifying such Indemnified Party, contribute to
the amount paid or payable by such Indemnified Party as a result of such
expenses, claims, losses, damages and liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and such Indemnified Party on the other in connection with the statement or
omission which resulted in such expenses, claims, losses, damages and
liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Indemnifying Party or such Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
expenses, losses, claims, damages and liabilities referred to above shall be
deemed to include, subject to the limitations set forth herein, any legal or
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. The Company and each Holder agree that it would not
be just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 6(d).
(e) No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) In no event shall any Holder be liable for any expenses,
claims, losses, damages or liabilities pursuant to this Section 6 in excess of
the net proceeds to such Holder of any Registrable Shares sold by such Holder.
Section 7. Information to be Furnished by Holders. Each Holder
shall furnish to the Company such information as the Company may reasonably
request and as shall be required in
C-9
62
connection with the registration and related proceedings referred to in Section
2 or Section 3 hereof. If any Holder fails to provide the Company with such
information within 10 days of receipt of the Company's request, the Company's
obligations under Section 2 or Section 3 hereof, as applicable, with respect to
such Holder or the Registrable Shares owned by such Holder, shall be suspended
until such Holder provides such information.
Section 8. Rule 144 Sales.
(a) The Company covenants that it will use its best efforts to
file the reports required to be filed by the Company under the Exchange Act, so
as to enable any Holder to sell Registrable Shares pursuant to Rule 144 under
the Securities Act.
(b) In connection with any sale, transfer or other disposition
by any Holder of any Registrable Shares pursuant to Rule 144 under the
Securities Act, the Company shall cooperate with such Holder to facilitate the
timely preparation and delivery of certificates representing Registrable Shares
to be sold and not bearing any Securities Act legend, and enable certificates
for such Registrable Shares to be for such number of shares and registered in
such names as the selling Holder may reasonably request at least two business
days prior to any sale of Registrable Shares.
Section 9. Transfer of Registration Rights. The rights and
obligations of a Holder under this Agreement may be transferred or otherwise
assigned to a transferee or assignee of Registrable Shares provided that (i)
such transferee or assignee becomes a party to this Agreement or agrees in
writing to be subject to the terms hereof to the same extent as if such
transferee or assignee were an original party hereunder and (ii) the Company is
given written notice by such Holder of such transfer or assignment stating the
name and address of such transferee or assignee and identifying the securities
with regard to which such rights and obligations are being transferred or
assigned.
Section 10. Miscellaneous.
(a) Governing Law; Consent to Forum. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. THE COMPANY AND THE OTHER PARTIES
HERETO EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE CITY
OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OR RELATING
TO THIS AGREEMENT, AND EACH IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PERSON TO SERVE PROCESS IN
ANY MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
(b) Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.
C-10
63
(c) Amendment. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
Company and the Holders of at least a majority of the Registrable Shares then
outstanding.
(d) Notices, etc. Any notice, demand or delivery authorized by
this Agreement shall be sufficiently given or made if sent by registered or
certified mail, postage prepaid, addressed to any Holder at such Holder's last
known address appearing on the register of the Company, and if to the Company:
American HomePatient, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
or such other address as shall have been furnished in writing, in accordance
with this Section 10(d), to the party giving or making such notice, demand or
delivery.
(e) Counterparts. This Agreement may be executed in any number
of counterparts, each of which may be executed by fewer than all of the parties
hereto (provided that each party executes one or more counterparts), each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
(f) Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision.
(g) Section Titles. Section titles are for descriptive
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text.
(h) Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns.
(i) Remedies. The Company and each Investor acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that the Company and each
Holder, in addition to any other remedy to which it may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations of
another party under this Agreement in accordance with the terms and conditions
of this Agreement in any court of the United States or any State thereof having
jurisdiction.
(j) Attorneys' Fees. If the Company or any Holder brings an
action to enforce its rights under this Agreement, the prevailing party in the
action shall be entitled to recover its costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, incurred in connection with
such action, including any appeal of such action.
[signature page follows]
C-11
64
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------------------
Name:
Title:
C-12
65
BANKERS TRUST COMPANY,
as Agent and Individually
By:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
C-13
66
[Page left intentionally blank]
C-14
67
BANK OF AMERICA SECURITIES
By:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
C-15
68
BANK OF MONTREAL
By:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
C-17
70
BEAR, ▇▇▇▇▇▇▇ & CO., INC.
By:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇, N.A.
By:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
C-19
72
CONTINENTAL CASUALTY COMPANY
By:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
C-20
73
EVEREST CAPITAL LIMITED
By: , as general partner
----------------------------
By:
-----------------------------------------------
Name:
Title:
Address:
Fax Number:
C-21
74
FERNWOOD ASSOCIATES
By:
----------------------------------------------
Name:
Title:
Address:
Fax Number:
C-22
75
[Page left intentionally blank]
C-23
76
FRANKLIN FLOATING RATE TRUST
By:
--------------------------------------------
Name:
Title:
Address:
Fax Number:
C-24
77
▇▇▇▇▇▇▇▇ MASTER FUND LTD.
By:
-----------------------------------------------
Name:
Title:
Address:
Fax Number:
C-25
78
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇,
INCORPORATED
By:
-----------------------------------------------
Name:
Title:
Address:
Fax Number
C-26
79
RCG CARPATHIA MASTER FUND, LTD.
By:
-----------------------------------------------
Name:
Title:
Address:
Telephone:
Fax Number:
C-27
80
SATELLITE SENIOR INCOME FUND LLC
c/o SATELLITE ASSET MANAGEMENT, LP
By:
-----------------------------------------------
Name:
Title:
Address:
Fax Number:
C-28
81
SUMITOMO MITSUI BANKING CORPORATION
By:
------------------------------------------------
Name:
Title:
Address:
Fax Number:
C-29