Exhibit 4.21
THE SECURITIES
EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE
SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT
UNDER THE ACT AND SUCH
REGISTRATION OR QUALIFICATION AS
MAY BE NECESSARY UNDER
THE SECURITIES LAWS OF
ANY STATE, OR AN
EXEMPTION FROM
SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER THE ACT OR
SUCH STATE LAW.
PHC, INC.
________________________________________
CLASS A COMMON STOCK PURCHASE WARRANT
________________________________________
Dated as of June 13, 2007
Reference is made to that certain Amended and Restated Revolving Credit,
Term Loan and
Security Agreement dated as of the date hereof (as amended,
supplemented or
modified from time to time, the "Loan Agreement"), among PHC,
INC. a Massachusetts corporation (the "Company") and certain of its
subsidiaries
and CAPITALSOURCE
FINANCE LLC (the "Lender"), an affiliate of CSE EQUITY
HOLDINGS LLC, a Delaware limited liability company
("CapitalSource"), and to the
other Loan Documents,
pursuant to which the
Lender has agreed to make certain
loans to the Borrowers
(the "Loans").
This Warrant is issued
at Closing under
the Loan Agreement and
means and shall
include any and all warrants issued in
substitution for
and/or in replacement of this Warrant. The obligations of the
Lender to execute and deliver the Loan Documents and to consummate the
transactions
thereunder are conditioned on, among other things, the issuance
of
this Warrant to CapitalSource, and the Company has agreed to
issue this Warrant
to CapitalSource
in order to
induce such affiliate to enter into the Loan
Documents.
Capitalized terms used
in this Warrant and not elsewhere defined herein
shall have the
meanings set forth in
Schedule 1 to this Warrant or in the Loan
Agreement (if not defined herein).
1.
Grant. In consideration of the foregoing and other value
received, the
Company hereby
grants to CapitalSource and/or its assigns or transferees
(collectively, the
"Holder"),
at the exercise price set forth in Section 3
below, the right to
purchase up to 250,000
shares of Class A Common Stock (or
other security issued
in accordance with
Section 8) subject to adjustment from
time to time (the "Warrant Shares").
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2.
Exercise Period.
The right to exercise
this Warrant, in whole or in
part, begins on the date hereof and expires on the tenth
anniversary of the date
hereof (such date, the "Expiration Date").
3.
Exercise Price. The exercise price of this Warrant is $3.09 on
execution] per share (the "Exercise Price").
4.
Anti-Dilution Adjustment.
(a)
Dilutive Transactions. Each time the Company enters into a Dilutive
Transaction, the
number of Warrant
Shares issuable hereunder shall be
increased to the number determined by performing the following
calculation
and
rounding the resulting number to the nearest whole share:
divide: (i)
the
Non-Dilutive Price of
a Warrant Share then in effect multiplied by the
number of Warrant
Shares then issuable
hereunder,
by (ii) the
Weighted
Average Per Share Value.
(b)
Readjustment. If any
option, right or right to convert or exchange any
Common Stock
Equivalent issued in
connection with a Dilutive Transaction
expires without having
been exercised prior
to the exercise by the Holder
of
its rights
hereunder,
the number of Warrant Shares then issuable
hereunder shall forthwith be readjusted to such lesser number as
would have
been
issuable had the option, right or Common Stock Equivalent never been
issued.
(c)
Adjustment of Exercise
Price. Upon each adjustment of the number of
Warrant Shares as provided in Subsection 4(a), the Exercise Price shall
be
adjusted to the dollar
figure (calculated
to the nearest
hundredth of a
cent) 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 number of Warrant Shares purchasable
pursuant hereto
immediately following such adjustment.
5.
Other Adjustments.
(a)
Adjustment for Change in Class A Common Stock. If the Company (i) pays
a
dividend or makes a distribution on its Class A Common Stock in
shares of
its
Common Stock, (ii)
subdivides, splits or
reclassifies its outstanding
shares of Class A Common Stock into a greater number of shares, or (iii)
combines or
reclassifies its
outstanding
shares of Common
Stock into a
smaller number of
shares (each,
an "Adjustment Event"), the number of
Warrant Shares issuable hereunder immediately prior to such action
shall be
proportionately
adjusted so that the Holder will receive, upon exercise,
the
aggregate number and kind of shares of
capital stock of the
Company
which it would have owned immediately following such action if the
Holder
had
exercised this Warrant
in full immediately
prior to such
Adjustment
Event. The adjustment shall become effective immediately after the record
date
in the case of a dividend or distribution and immediately after the
effective date
in the case of a subdivision, combination or
reclassification. The
adjustment shall be made successively whenever any
Adjustment Event occurs.
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(b)
Adjustment for Reorganization. Subject to Section 11.9, if there
occurs
any Change of Control, there
shall thereafter be deliverable, upon exercise
of
this Warrant
(in lieu of the
number of Warrant Shares theretofore
deliverable) the
number of shares of stock or other securities or property
to
which a holder of the
number of shares
of Class A Common
Stock that
would otherwise have been deliverable upon exercise of this Warrant
in full
would have been
entitled upon such
Change of Control if such Warrant had
been
exercised in full immediately prior to such Change of Control.
(c)
Adjustment of Exercise
Price. Upon each adjustment of the number of
Warrant Shares
issuable hereunder as provided in this Section 5, the
Exercise Price shall also be equitably and proportionately
adjusted.
(d)
Certificate
as to Adjustments. In each case of any adjustment or
readjustment in the number of shares, securities or other property
issuable
upon
exercise of this Warrant and/or in the Exercise Price, the Company at
its
expense will promptly
provide written notice to the Holder stating the
number of shares of Class A Common Stock, other securities or other
property then issuable
upon exercise of this Warrant and the
applicable
Exercise Price
after such adjustment, showing how such amounts were
calculated.
6.
Participation in Dividends, Distributions, Repurchases or Redemptions.
If the Company
declares any dividend or makes any distribution, in each case,
that is not in shares of Class A Common Stock, or repurchases or redeems any
of
its capital stock (except forfeitures by holders, and/or repurchases by the
Company, of any
shares of Class A Common Stock or options pursuant to any
employment agreements
with executives of the
Company or pursuant to any equity
incentive plan in
existence on the date hereof that has been
approved by the
stockholders of the
Company and qualifies as an incentive plan under the
Internal Revenue
Code
of 1986, as amended (collectively, "Permitted
Redemptions")), the
Company will pay the Holder the declared dividend, or offer
to include the Holder in such distribution, repurchase or redemption, as if
the
Holder had exercised this Warrant in full immediately prior to such
event or any
record date with
respect thereto.
If the Holder
elects to participate in a
repurchase or redemption, this Warrant shall be modified (as of the
date of such
event) so that the Holder shall be entitled to receive, upon exercise, the
number of Warrant
Shares issuable
hereunder less the
number of Warrant Shares
redeemed or repurchased.
7.
Prior Notice as to Certain Events.
(a)
Dividends, Distributions, Subscription Rights. If the
Company (i) pays
any
dividend, or makes any
distribution, or
repurchases or redeems any of
its
capital stock (except Permitted Redemptions), (ii) offers any
subscription rights to
the holders of its
capital stock to
purchase any
additional shares of stock of any class or any other rights, or (iii)
authorizes the
issuance of shares of Common Stock or Common Stock
Equivalents, then at
least 15 Business Days
prior to the action or record
date
for such action, the Company will send written notice to the Holder
of
the
dates on which (A) the
Company will
close its books or
take a record
for
such action, (B) such action will occur, and (C) the holders of
capital
stock of record will participate in such action.
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(b)
Change of Control. If the Company (i) enters into any Change of
Control
or
reclassification of its capital stock or equity securities,
(ii) is the
subject of a voluntary or involuntary dissolution, liquidation or winding
up
or (iii) receives a notice from any holder of its equity securities
that
such
holder desires to exercise its right to "put" or sell such
securities
back
to the Company or to have such securities redeemed or repurchased by
the
Company, then at least 15 Business Days prior to such action or
transaction, the
Company will send written notice to the Holder of the
dates on which (A) the
Company will
close its books or
take a record for
such
action, (B) such action will occur, and (C) if applicable, the
holders
of
capital stock of record may exchange their capital stock for
securities
or
other property deliverable upon such action.
8. Intentionally Omitted
9.
Reservation of Class A
Common Stock; Par Value. The Company now has and
will have upon the exercise of this Warrant such number of its authorized but
unissued shares of
Class A Common Stock
as will be sufficient
to permit the
exercise in full of this Warrant. Upon issuance, each of the
Warrant Shares will
be validly
issued, fully paid and nonassessable, free and clear of all
preemptive or similar
rights, liens, security interests, charges and other
encumbrances and/or
restrictions
on sale or otherwise.
Without limiting the
generality of the foregoing, the Company will (i) not permit
the par value, if
any, of its Class A Common Stock to exceed the then effective Exercise Price,
and in furtherance of
the foregoing,
shall promptly cause
the Certificate of
Incorporation of the
Company to be amended to reduce the par value of the Class
A Common Stock if the Exercise Price is reduced below the current
par value, and
(ii) not amend or modify any provision of the Certificate of Incorporation of
the Company or by-laws of the Company in any manner that would
adversely affect
in any way the powers,
preferences
or rights of the Class A Common Stock or
which would adversely affect the rights of the Holder.
10.
No Voting Rights;
Limitations of
Liability. Prior to
exercise, this
Warrant will not
entitle the Holder to any voting rights or other rights as a
stockholder of the Company not granted herein. No provision of this
Warrant, in
the absence of affirmative action by the Holder to exercise this
Warrant, and no
enumeration in this Warrant of the rights or privileges of the
Holder, will give
rise to any liability of such Holder for the Exercise Price.
11.
Registration Rights.
11.1 Effective Date. The rights of each Holder that holds
Registrable
Securities under this
Section 11 are
effective as of the date hereof
and shall remain in
full force and
effect for so long as
the Holder
continues to
hold any Registrable
Securities
and regardless of any
transfer of this Warrant or its termination upon its exercise in
full.
11.2 Intentionally Omitted.
11.3 Piggyback Registrations.
(1) RIGHT TO PIGGYBACK. Whenever the Company proposes to
register
any of its securities
under the Securities Act (other than
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pursuant to a
registration
on Form S-8 or Form S-4 or any
successor forms, a registration covering only an employee
benefit
plan (as defined in Rule 405 of the Securities Act) or a
registration covering
only securities
proposed to be issued
in
exchange for securities or assets of another corporation) and
the
registration form to
be used may be used for the registration of
Registrable Securities (a "Piggyback Registration"), the Company
will give
prompt written
notice to all
holders of
Registrable
Securities and (subject to subsections (2) and (3) below) shall
include in such
registration all
Registrable
Securities
with
respect to which the Company has received written requests for
inclusion therein
within 15 Business Days after the day on which
the Company's notice
is deemed delivered under the terms hereof.
The foregoing right
shall not apply to the Company registration
of shares of its Class A Common Stock on Form S-3 filed with
the
SEC prior to the date hereof and awaiting SEC effectiveness.
(2) PRIORITY ON INITIAL REGISTRATION. If a Piggyback
Registration
is an underwritten
registration
of shares being sold by the
Company, and the
managing
underwriter(s) 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 such offering without adversely affecting the
marketability of the
offering, the Company
will include in such
registration:
(i) first, the securities the Company proposes to sell;
(ii) second, to the extent a number of additional securities
are to be included
in the registration, the Registrable
Securities requested
to be included in such
registration;
and
(iii) third, to the extent a number of additional securities
are to be included in the registration, all other securities
requested to be
included in such
registration pursuant
to
the exercise of other piggyback registration rights granted
by the Company.
(3) PRIORITY
ON SUBSEQUENT REGISTRATION. If a Piggyback
Registration is
an underwritten registration other than a
registration of
shares being sold by the Company, and the
managing
underwriter(s) 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
such
offering without
adversely affecting the marketability of the
offering, the Company will include in such registration:
(i) first, Registrable
Securities requested
to be included
in such registration;
(ii) second, to the extent a number of additional securities
are to be included in the registration, the securities the
Company proposes to sell; and
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(iii) third, to the extent a number of additional securities
are to be included in the registration, all other securities
requested to be
included in such
registration pursuant
to
the exercise of other piggyback registration rights granted
by the Company.
11.4 Intentionally Omitted.
11.5 Registration
Procedures.
Whenever the holders of Registrable
Securities have
requested that any Registrable Securities be
registered pursuant to
this Agreement, the
Company will use its best
reasonable efforts
to effect the
registration
and the sale of
such
Registrable Securities
in accordance with the intended method of
disposition therefor,
and pursuant
thereto, the Company will, as
expeditiously as possible, do all of the following:
(1) REGISTRATION
STATEMENT.
Prepare and file with the U.S.
Securities and
Exchange Commission
(the "SEC") a
registration
statement with respect to such Registrable Securities and use
its
best reasonable
efforts to cause such registration statement to
become effective
(provided that before filing a registration
statement or prospectus or any amendments or supplements
thereto,
the Company will
furnish to the counsel
selected by the holders
of a majority
of the Registrable Securities covered by such
registration statement
copies of all such documents proposed to
be filed, which
documents will be subject to the review and
approval of such counsel) and use its best reasonable efforts to
avoid the issuance of (or if issued, obtain the withdrawal of)
any order suspending the effectiveness of a registration
statement, or the
lifting of any suspension of the qualification
(or exemption
from qualification) of any of the Registrable
Securities for sale in any jurisdiction as soon as possible;
(2) AMENDMENTS & SUPPLEMENTS. Prepare and file with the SEC
such
amendments
and supplements to such registration statement and the
prospectus used in
connection
therewith as may be
necessary to
keep such registration statement effective for a period
necessary
to comply with the
provisions of the Securities Act with respect
to the disposition of all securities covered by such
registration
statement during such
period in accordance with the intended
methods of disposition by the sellers thereof, which period
shall
not be less than six months;
(3) FURNISH
COPIES. Furnish to each seller of Registrable
Securities such number of copies of such registration statement,
each amendment and supplement thereto, the prospectus included
therein (including
each preliminary
prospectus) and such
other
documents as such
seller may reasonably request in order to
facilitate the disposition of the Registrable Securities covered
by such registration statement;
(4) BLUE-SKY
COMPLIANCE.
Use its best
reasonable
efforts to
register or qualify such Registrable Securities under such other
securities or blue sky laws of such United States jurisdictions
as any seller
reasonably requests
and do any and all other acts
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and things which may
be reasonably
necessary or advisable to
enable such
seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such
seller
(provided that the
Company will not be required to (i)
qualify
generally to do business in any jurisdiction where it would not
otherwise be
required to qualify
for this subparagraph, (ii)
subject itself to
taxation in any such
jurisdiction,
or (iii)
consent to general
service of process in
any such
jurisdiction
other than with
respect to the
registration,
qualification or
exemption therefrom of the Registrable Securities);
(5) NOTIFICATIONS.
Notify
each seller of such Registrable
Securities at any time
when a registration statement related
thereto is effective
under the Securities
Act, of the happening
of any
event as a result of which the prospectus included in such
registration statement contains an untrue statement of a
material
fact or omits any fact necessary to make the statements therein
not misleading in light of the circumstances then existing,
and,
at the request of any such seller, the Company will prepare a
supplement or amendment to such prospectus so that, as
thereafter
delivered to the purchasers of such Registrable Securities,
such
prospectus will not
contain an untrue
statement of a material
fact or omit to state any fact necessary to make the statements
therein not misleading;
(6)
LISTING. Use its best
reasonable
efforts to cause all
such
Registrable Securities
to be listed on any nationally recognized
United States trading
market, if
applicable,
on which similar
securities of the same
class issued by the Company are then
listed;
(7) TRANSFER
AGENT; REGISTRAR. Provide a transfer agent and
registrar for all such Registrable Securities not later than the
effective date of such registration statement;
(8) OMITTED.
(9) SUPPLY
INFORMATION. Make
available for inspection by any
seller of Registrable
Securities,
underwriter
participating in
any disposition
pursuant to such
registration statement
and any
attorney, accountant
or other agent
retained by any such seller
or underwriter,
all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's
officers,
directors,
employees and
independent
accountants to supply all information reasonably requested by
any
such seller,
underwriter,
attorney, accountant or agent in
connection with such registration statement; and
(10) OBTAIN COLD COMFORT LETTER AND OPINIONS OF COUNSEL. Obtain
a
cold comfort
letter from the Company's independent public
accountants and opinions of counsel from the Company's
attorneys,
each in customary form and covering such matters as are
customarily given or
covered by independent
public accountants
and attorneys, as applicable, in an underwritten public
offering
of securities, addressed to the sellers.
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11.6
Registration
Expenses. The Company shall bear and pay all
expenses
incurred in connection with any registration, filing or qualification of
Registrable Securities
with respect to the registrations pursuant to this
Section 11, including,
without limitation,
all registration,
filing and
qualification
fees,
printing and accounting fees, listing fees and
expenses, fees and expenses of compliance with securities or blue
sky laws,
fees
and disbursements
of counsel for the
Company and the reasonable fees
and
disbursements of one counsel for the sellers of Registrable
Securities.
Underwriting discounts
and commissions relating to Reg
