SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
WHITMAN EDUCATION GROUP, INC.
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
966524-10-0
(Cusip Number)
RICHARD C. PFENNIGER, JR., 4400 BISCAYNE BOULEVARD, MIAMI, FL 33137
(305) 575-6000 (Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of the Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ] (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filed out for a reporting person's
initial on this form with respect to the subject class of securities, and for
any subsequent amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
<PAGE>
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CUSIP NO. 966524-10-0 13D PAGE 2
------------
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1 NAME OF REPORTING
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PHILIP FROST, M.D.
SS# ###-##-####
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2 Check the appropriate Box if a Member of a Group (a) [X]
(b) [ ]
- - --------------------------------------------------------------------------------
3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- - --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- - --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALY OWNED 0
OWNED BY EACH
REPORTING PERSON
WITH ---------------------------------------------------------
8 SHARED VOTING POWER
5,289,628
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,289,628
- - --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,289,628
- - --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- - --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.3%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
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CUSIP NO. 966524-10-0 13D PAGE 3
--------------
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NAME OF REPORTING
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FROST-NEVADA, LIMITED PARTNERSHIP
IRS I.D. #59-2749083
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2 Check the appropriate Box if a Member of a Group (a) [X]
(b) [ ]
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3 SEC USE ONLY
- - --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- - --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEVADA
- - --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALY OWNED 0
OWNED BY EACH
REPORTING PERSON
WITH
---------------------------------------------------------
8 SHARED VOTING POWER
5,289,628
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,289,628
- - --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,289,628
- - --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- - --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.3%
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14 TYPE OF REPORTING PERSON
PN
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<PAGE>
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CUSIP NO. 966524-10-0 13D PAGE 4
-----------
- - ---------------------------------- ------------------------------
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1 NAME OF REPORTING
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FROST-NEVADA CORPORATION
IRS I.D. #59-274-9057
- - --------------------------------------------------------------------------------
2 Check the appropriate Box if a Member of a Group (a) [X]
(b) [ ]
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3 SEC USE ONLY
- - --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- - --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEVADA
- - --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALY OWNED 0
OWNED BY EACH
REPORTING PERSON
WITH -----------------------------------------------------
8 SHARED VOTING POWER
5,289,628
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,289,628
- - --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,289,628
- - --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- - --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.3%
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14 TYPE OF REPORTING PERSON
CO
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<PAGE>
Item 1. SECURITY AND ISSUER.
This is Amendment No. 2 to the Schedule 13D previously filed by
Phillip Frost, M.D., Frost-Nevada, Limited Partnership (the "Partnership"), and
Frost-Nevada Corporation (collectively, the "Reporting Persons"), with respect
to Common Stock, no par value (the "Shares") of Whitman Education Group, Inc.
(the "Issuer"). The principal executive officers of the Issuer are located at
4400 Biscayne Boulevard, Miami, Florida, 33137-3227. Information regarding each
of the Reporting Persons is set forth below.
Item 2. IDENTITY AND BACKGROUND.
Item 2 is amended and restated in its entirety as follows:
Dr. Frost's present principal occupation is as Chairman of the
Board of Directors and Chief Executive Officer of IVAX Corporation, a Florida
corporation, which through its subsidiaries is engaged primarily in the
research, development, manufacturing, marketing and distribution of health care
products. Dr. Frost's principal business address is 4400 Biscayne Boulevard,
Miami, Florida 33137.
The Partnership is a limited partnership organized and existing
under the laws of the State of Nevada with its principal office and business
address located at 3500 Lakeside Court, Suite 200, Reno, Nevada 89509. The
principal business of the Partnership is the investment in marketable
securities, precious metals and commodities and real estate located in Nevada.
Frost-Nevada Corporation is the sole general partner, and Dr. Frost is the sole
limited partner, of the Partnership.
Frost-Nevada Corporation is a corporation organized and existing
under the laws of the State of Nevada with its principal office and business
address located at 3500 Lakeside Court, Suite 200, Reno, Nevada 89509. The
principal business of Frost-Nevada Corporation is acting as the general partner
of the Partnership. Dr. Frost is the sole shareholder and a director of
Frost-Nevada Corporation. Neil Flanzraich is a director and the sole officer of
Frost- Nevada Corporation. Neil Flanzraich's present principal occupation is as
an attorney with the law firm of Heller, Ehrman, White & McAuliffe. Mr.
Flanzraich's principal business address is 525 University Avenue, Palo Alto,
California 94301-1900.
To the best knowledge of each of the Reporting Persons, neither
such Reporting Person nor Mr. Flanzraich has been convicted in any criminal
proceeding (excluding traffic violations and similar misdemeanors), or was a
party to any civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activity
subject to, federal or state securities laws or finding any violation with
respect to such laws during the last five years. Each of Dr. Frost and Mr.
Flanzraich is a citizen of the United States.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is amended and supplemented as follows:
The aggregate purchase price of Shares of the Issuer purchased by
the Partnership and Phillip Frost, M.D. reported in this Amendment No. 2,
including the payment of commissions, was $219,192.25 and $54,670, respectively.
The source of funds used by the Partnership and Phillip Frost, M.D. in making
these purchases was working capital of the Partnership and the personal funds of
Phillip Frost, M.D. No portion of the consideration used
Page 5
<PAGE>
by the Partnership or Phillip Frost, M.D. in making the purchases described
above was borrowed or otherwise obtained for the purpose of acquiring, holding,
trading or voting the Shares.
Item 4. PURPOSE OF TRANSACTION.
Item 4 is amended in its entirety and restated as follows:
The Shares were acquired by one or more of the Reporting Persons
as an investment. The Reporting Persons intend to monitor their investment in
the Shares on a continuing basis. The Reporting Persons may acquire additional
Shares (subject to availability of Shares of prices deemed favorable) in the
open market, in privately negotiated transactions, by tender offer or otherwise.
Alternatively, the Reporting Persons reserve the right to dispose of some or all
of their Shares in the open market or in privately negotiated transactions or
otherwise depending upon the course of actions that the Reporting Persons or the
Issuer pursue, market conditions and other factors. Although the foregoing
represents the range of activities presently contemplated by the Reporting
Persons with respect to the Shares, it should be noted that the possible
activities of the Reporting Persons are subject to change at any time.
Except as otherwise stated herein, none of the Reporting Persons
have any present plans or proposals which relate to or would result in any of
the actions described in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is amended in its entirety and restated as follows:
AMOUNT OF SHARES PERCENTAGE
NAME BENEFICIALLY OWNED CLASS*
Phillip Frost, M.D. 5,289,628** 47.3%
Frost-Nevada Corporation 5,289,628** 47.3%
Frost-Nevada, Limited 5,289,628** 47.3%
Partnership
- - ----------------------------
* Based on 8,833,524 Shares outstanding on March 31, 1996, as reported by
Continental Stock Transfer and Trust Company and assumes the exercise by
(i) the Partnership and Phillip Frost, M.D. of warrants to purchase
850,000 and 1,300,000 Shares, respectively and (ii) Dr. Frost of options
to purchase 200,000 Shares. Exercise of these warrants and options are
subject to the restrictions of the New Jersey Shareholders Protection
Act. The number of shares, warrants and options noted here have been
restated to properly reflect the effects of a 2-for-1 stock split
effected by the issuer on May 14, 1996.
** These Shares are owned of record by one or more of the Reporting
Persons. As the sole limited partner of the Partnership and the sole
shareholder and a director of Frost-Nevada Corporation, the general
partner of the Partnership, Dr. Frost may be deemed a beneficial owner
of the Shares. Record ownership of the Shares may be transferred from
time to time among any or all of the Reporting Persons. Accordingly,
solely for purposes of reporting beneficial ownership of the Shares
pursuant to section 13(d) under the Securities Exchange Act of 1934, as
amended, each Reporting Person will be deemed to be the beneficial owner
of Shares held by any other Reporting Person.
Page 6
<PAGE>
The Partnership shares the power to vote or dispose of the Shares
beneficially owned by it with Frost-Nevada Corporation and Dr. Frost.
Frost-Nevada Corporation, in its capacity as the general partner of the
Partnership, has the power to vote or direct the vote of these Shares or to
dispose or direct the disposition of these Shares for the Partnership.
Frost-Nevada Corporation will be deemed the beneficial owner of the Shares owned
by the Partnership by virtue of this relationship to the Partnership. Dr. Frost,
in his capacity as the sole shareholder and a director of Frost-Nevada
Corporation, the general partner of the Partnership, will be deemed the
beneficial owner of all Shares owned by the Partnership by virtue of his power
to vote or direct the vote of the Shares or to dispose or direct the disposition
of the Shares owned by the Partnership.
Other than as reported on Exhibit 2 attached hereto, none of the
Reporting Persons has engaged in any transaction involving Shares of the Issuer
during the past sixty days.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Item 6 is amended in its entirety and restated as follows:
Except as described herein, none of the Reporting Persons is a
party to any contract, arrangement, understanding of relationship with any
person with respect to any securities of the Issuer.
Unless otherwise indicated, all of the Share information and
exercise prices for warrants and options to acquire Shares in this Item 6 have
been adjusted to reflect a 2-for-1 stock split effected by the Issuer on May 14,
1996.
On January 27, 1995, the Issuer granted the Partnership warrants
to purchase 1,150,000 Shares at $3.125 per Share which expire on January 26,
2000. These warrants were issued in exchange for the guaranty of a loan. On
March 31, 1995 warrants to purchase 150,000 of these Shares (without giving
effect to the May 14, 1996 stock split) were exercised at a reduced exercise
price of $3.51.
On February 26, 1996, the Issuer granted to Dr. Frost warrants to
purchase 1,300,000 Shares at $4.25 per Share which expire on February 25, 2001.
These warrants were issued in exchange for the guaranty of a loan.
On November 20, 1992, the Issuer granted Dr. Frost options to
purchase 50,000 Shares at $3.75 per Share which expire on November 19, 2002. On
October 1, 1993, the Issuer granted Dr. Frost options to purchase 50,000 Shares
at $5.875 per Share which expire on September 30, 2003. On October 21, 1994, the
Issuer granted Dr. Frost options to purchase 50,000 Shares at $2.4375 per Share
which expire on October 20, 2004. On November 9, 1995, the Issuer granted Dr.
Frost options to purchase 50,000 Shares at $3.1875 per Share which expire on
November 8, 2005. These options are subject to the terms and conditions of the
Issuer's 1986 Directors and Consultants Stock Option Plan.
The exercise of the warrants and options are subject to the
restrictions of the New Jersey Shareholders Protection Act.
The descriptions of the Stock Purchase Warrants and the Stock
Option Agreements contained herein is not intended to be complete and is
qualified in its entirety by reference to these Agreements which are attached
hereto as Exhibits 5 through 10 and incorporated herein by reference.
Page 7
<PAGE>
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement.
2. Description of transactions in the Issuer's Shares by
Frost-Nevada, Limited Partnership.
3. Description of transactions in the Issuer's Shares by Phillip
Frost, M.D.
4. Power of Attorney granted to Phillip Frost, M.D. by Neil
Flanzraich.
5. Second Amended and Restated Agreement of Frost-Nevada, Limited
Partnership, Frost-Nevada Corporation and Phillip Frost, M.D.
filed pursuant to Rule 13d-l(f)(l)(iii) of the Securities and
Exchange Commission.
6. Whitman Medical Corp. Stock Purchase Warrants issued January
27, 1995.
7. Whitman Medical Corp. Stock Purchase Warrant issued February
26, 1996.
8. Director and Consultants Stock Option Agreement, dated
November 20, 1992, between Whitman Medical Corp. and Phillip
Frost, M.D.
9. Director and Consultants Stock Option Agreement, dated October
1, 1993, between Whitman Medical Corp. and Phillip Frost, M.D.
10. Director and Consultants Stock Option Agreement, dated October
21, 1994, between Whitman Medical Corp. and Phillip Frost, M.D.
11. Director and Consultants Stock Option Agreement, dated November
9, 1995, between Whitman Medical Corp. and Phillip Frost, M.D.
Page 8
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
Statement is true, complete and correct.
Date: June 19, 1996 /s/ Phillip Frost
----------------------------
Phillip Frost, M.D.
FROST-NEVADA, LIMITED
PARTNERSHIP
*
Date: June 19, 1996 ----------------------------
Neil Flanzraich
President of Frost-Nevada Corporation,
General Partner
FROST-NEVADA CORPORATION
*
Date: June 19, 1996 ----------------------------
Neil Flanzraich
President
*By /s/ Phillip Frost
------------------------------
Phillip Frost, M.D.
(Attorney-in-fact pursuant
to Power of Attorney)
Page 9
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
1 Joint Filing Agreement.
2 Description of transactions in the Issuer's Shares by
Frost-Nevada, Limited Partnership.
3 Description of transactions in the Issuer's Shares by Phillip
Frost, M.D.
4 Power of Attorney granted to Phillip Frost, M.D. by Neil
Flanzraich.
5 Second Amended and Restated Agreement of Frost-Nevada,
Limited Partnership, Frost-Nevada Corporation and Phillip
Frost, M.D. filed pursuant to Rule 13d-l(f)(l)(iii) of the
Securities and Exchange Commission.
6 Whitman Medical Corp. Stock Purchase Warrants issued
January 27, 1995.
7 Whitman Medical Corp. Stock Purchase Warrant issued
February 26, 1996.
8 Director and Consultants Stock Option Agreement, dated
November 20, 1992, between Whitman Medical Corp. and
Phillip Frost, M.D.
9 Director and Consultants Stock Option Agreement, dated
October 1, 1993, between Whitman Medical Corp. and Phillip
Frost, M.D.
10 Director and Consultants Stock Option Agreement, dated
October 21, 1994, between Whitman Medical Corp. and Phillip
Frost, M.D.
11 Director and Consultants Stock Option Agreement, dated
November 9, 1995, between Whitman Medical Corp. and
Phillip Frost, M.D.
EXHIBIT 1
The undersigned hereby agree that this Amendment to the Schedule 13D
filed by us with respect to the Common Stock of Whitman Education Group, Inc. is
filed on behalf of each of us.
Date: June 19, 1996 /s/ Phillip Frost
----------------------------
Phillip Frost, M.D.
FROST-NEVADA, LIMITED
PARTNERSHIP
*
Date: June 19, 1996 ----------------------------
Neil Flanzraich
President of Frost-Nevada Corporation,
General Partner
FROST-NEVADA CORPORATION
*
Date: June 19, 1996 ----------------------------
Neil Flanzraich
President
*By /s/ Phillip Frost
------------------------------
Phillip Frost, M.D.
(Attorney-in-fact pursuant
to Power of Attorney)
EXHIBIT 2
Set forth below is a summary of acquisitions of beneficial ownership in
the Shares of the Issuer by Frost-Nevada, Limited Partnership effected from
January 27, 1995 through the date of this Amendment No. 2.
NUMBER OF SHARES PRICE PER TYPE OF
DATE ACQUIRED SHARE TRANSACTION
- - ---- ---------------- --------- -----------
7/24/95 2,000 5.00 Open Market Transaction
7/24/95 500 5.125 Open Market Transaction
7/24/95 500 5.1875 Open Market Transaction
7/24/95 2,000 5.00 Open Market Transaction
11/2/95 1,000 5.781 Open Market Transaction
11/2/95 10,000 5.50 Open Market Transaction
11/21/95 25,000 5.25 Open Market Transaction
EXHIBIT 3
Set forth below is a summary of acquisitions of beneficial ownership in
the Shares of the Issuer by Phillip Frost, M.D., through his IRA account
effected from January 27, 1995 through the date of this Amendment No. 2.
NUMBER OF SHARES PRICE PER TYPE OF
DATE ACQUIRED SHARE TRANSACTION
4/11/96 100 10.87O Open Market Transaction
4/12/96 4,900 10.87 Open Market Transaction
EXHIBIT 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, in his capacity as
President of Frost-Nevada Corporation, a Nevada corporation (the "Corporation"),
does hereby make, constitute and appoint PHILLIP FROST, M.D. his true and lawful
attorney-in-fact, for him and in his name, place and stead, for the sole and
limited purpose of signing any and all statements or reports pursuant to the
Securities Exchange Act of 1934, and any amendments thereto, on behalf of the
Corporation, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 24th day of May, 1996.
/s/ NEIL FLANZRAICH
--------------------------
NEIL FLANZRAICH, President
EXHIBIT 5
SECOND
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FROST-NEVADA LIMITED PARTNERSHIP
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP (the "Agreement") is made and entered into as of the 28th day of
December, 1995, by and among FROST-NEVADA CORPORATION, a Nevada corporation, as
the general partner (the "General Partner") and PHILLIP FROST, as the limited
partner (the "Limited Partner").
W I T N E S S E T H:
WHEREAS, on December 30, 1986, the General Partner executed a
Certificate of Limited Partnership forming a limited partnership known as
"FROST-NEVADA LIMITED PARTNERSHIP" (the "Partnership"), under the Nevada Uniform
Limited Partnership Act (the "Act") as in effect at that time in the State of
Nevada, which Certificate of Limited Partnership was filed in the Public Records
of the Secretary of State of Nevada on December 30, 1986; and
WHEREAS, the General Partner and Limited Partner have
previously executed a First Amended and Restated Certificate of Limited
Partnership of FROST-NEVADA LIMITED PARTNERSHIP on February 16, 1987 and a
certificate thereof was filed m the Public Records of the Secretary of State of
Nevada on March 16, 1989;
WHEREAS, the General Partner and the Limited Partner have
executed this Second Amended and Restated Agreement of Limited Partnership of
FROST-NEVADA LIMITED PARTNERSHIP as of December 28, 1995; and
WHEREAS, this Agreement, dated as of December 27, 1995, is
made and entered into by and between the General Partner and the Limited Partner
for the purpose of setting forth the rights, obligations, and duties of the
General Partner and the Limited Partner.
NOW, THEREFORE, the parties hereto hereby agree that the
Partnership shall be governed and operated pursuant to the terms of this
Agreement of Limited Partnership as hereinafter set forth.
<PAGE>
ARTICLE I
NAME, TERM, PRINCIPAL ADDRESS AND REGISTERED AGENT
1.1 NAME. The name of the Partnership is the FROST-NEVADA
LIMITED PARTNERSHIP.
1.2 TERM. The term of the Partnership will continue in full force and
effect until December 31, 2055, unless sooner terminated in accordance with the
Act (as such term is defined herein) or provisions of this Agreement.
1.3 PRINCIPAL PLACE OF BUSINESS. The office and principal place of
business of the Partnership shall be maintained at 3500 Lakeside Court Reno,
Washoe County, Nevada 89509. The General Partner may from time to time change
such office and principal place of business and in such event the General
Partner shall notify the other Partners, in writing, at least ten (10) days
prior to the effective date of any such change. The General Partner may
establish additional places of business of the Partnership when and where
required by the Partnership's business.
1.4 ADDRESSES. The address of each Partner is as follows:
GENERAL PARTNER:
Frost-Nevada Corporation
3500 Lakeside Court
Reno, Nevada 89509
LIMITED PARTNER:
Phillip Frost, M.D.
8800 N.W. 36th Street
Miami, Florida 33178
A Partner may change its address by written notice to the Partnership and each
of the other Partners.
1.5 REGISTERED OFFICE AND REGISTERED AGENT. The location of the
Registered Office of the Partnership shall be at 3500 Lakeside Court, Reno,
Nevada 89509 and the name of the Registered Agent of the Partnership at such
office shall be Walther, Key, Maupin, Oats, Cox, Klaich & Legoy. Said Registered
Agent shall keep and maintain at such address the records of the Partnership
required to be kept and maintained at such address by the Act.
- 2 -
<PAGE>
ARTICLE II
BUSINESS OF THE PARTNERSHIP
2.1 PURPOSE. The purpose of the Partnership is to invest in all types
of (i) securities, including without limitation, stocks, bonds, limited
partnership interests and option contracts for the purchase or sale of
securities or any group or index of securities, (ii) precious metals, including
without limitation, contracts for the future delivery of precious metals and
option contracts for the purchase or sale of precious metals or futures
contracts on precious metals; (iii) commodities, including without limitation,
contracts for the future delivery of commodities and option contracts for the
purchase or sale of commodities or future contracts on commodities, and (iv)
real property on the State of Nevada through the acquisition, holding,
construction, development, operation, improvement, leasing, sale or other
dealings in real property.
2.2 POWERS. Incident to its purpose, the Partnership is authorized to
purchase, invest, hold, mortgage, pledge, sell, lease, manage, construct,
renovate, operate, improve, alter, transfer, joint venture or otherwise convey
and encumber all or any portion of the Partnership properties and exercise all
other rights, powers and privileges and other incidences of ownership with
respect thereto at any time and from time to time, to borrow or raise moneys
without limitations and to do all other things necessary or appropriate to carry
out the foregoing purpose.
ARTICLE III
CERTAIN DEFINITIONS
3.1 ACT. The Revised Nevada Uniform Limited Partnership
Act, as from time to time amended.
3.2 ADJUSTED CAPITAL CONTRIBUTION. The amount contributed
to the capital of the Partnership by a Partner as provided in
Article IV.
3.3 AFFILIATE. Any person or entity that directly or indirectly
controls, is controlled by or is under common control with any other person or
entity. For this purpose, the term "control" shall mean the direct or indirect
ownership of twenty-five (25 %) or more of the beneficial interests or voting
power of any entity or the spouse, lineal ascendants, lineal descendants and the
brothers and sisters of a Person, as applicable.
3.4 AUTHORIZED EXPENSES. Expenses that: (a) are specifically consented
to in writing by the Limited Partner; (b) are authorized as part of an operating
budget that is consented to in writing by the Limited Partner; or (c) do not,
when aggregated with all other Partnership expenses that are not authorized by
parts (a) or (b) above, total more than $2,500 in a single calendar year.
- 3 -
<PAGE>
3.5 AVAILABLE CASH. All cash of the Partnership resulting from normal
business operations (as distinguished from Extraordinary Events or the sale of
all or substantially all of the Partnership's property and/or the dissolution of
the Partnership), including, without limitation, dividend income, rental income,
and any other income derived from the Partnership property which the General
Partner, in its sole and absolute discretion, determines is available for
distribution to the Partners after payment of all Partnership cash expenditures,
including but not limited to, real and personal property taxes, use taxes,
principal and interest payments then due on all loans, (including any mortgages
encumbering the Partnership's property), expenses incident to the construction
and rental of the Partnership property, insurance, present maintenance,
including, but not limited to management fees, brokerage fees, or other fees
incurred by the Partnership, capital improvements, accounting and legal fees,
and other costs and expenses of the Partnership, and the setting aside of any
amounts which the General Partner may determine, in its discretion, to be
necessary as a reserve for operating expenses, capital improvements and
contingencies.
3.6 CAPITAL ACCOUNT. The account established and maintained by
the Partnership for each Partner, as set forth in Section 4.6 hereof.
3.7 CAPITAL CONTRIBUTION. The amount of money and the initial
fair market value of any property (other than money) contributed to the
Partnership by a Partner with respect to the Partnership Interest held by such
Partner.
3.8 CERTIFICATE. The certificate of limited partnership filed
with the Secretary of State of the State of Nevada, as the same may be amended
from time to time.
3.9 CODE. The Internal Revenue Code of 1986, as same may
be amended from time to time.
3.10 EXTRAORDINARY EVENT. Any financing, refinancing, insurance
award (other than for substantially complete destruction of all or substantially
all of the Partnership's property) and sale of Partnership assets (but less than
all or substantially all of such assets), which in accordance with generally
accepted accounting principles are attributable to capital but which do not
result in a dissolution of the Partnership.
3.11 ORIGINAL CAPITAL CONTRIBUTION. The amount contributedto the
capital of the Partnership by a Partner as provided in Article IV.
3.12 PARTNERS. Collectively, the Limited Partner and the General
Partner.
3.13 PARTNERSHIP. FROST-NEVADA LIMITED PARTNERSHIP, a Nevada
limited partnership.
3.14 PARTNERSHIP INTEREST. The entire ownership interest
of a Partner in the Partnership at the relevant time, including the right of
such Partner to any and all benefits to which a Partner
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may be entitled as provided in this Agreement, together with the obligations of
such Partner to comply with all the terms and provisions of this Agreement. A
Partnership Interest does not include any rights or obligations that a Partner
may have for providing services or goods for which it is separately compensated
as a Person who is not a Partner.
3.15 PERSON. Any individual, corporation, trust, partnership or
other form of association.
3.16 PROFITS AND LOSSES. The Partnership's income or loss, as the case
may be, for each fiscal year of the Partnership determined in accordance with
Code Section 703(a) (including all items of income, gain, deduction or loss that
are required to be separately stated). The Partnership's Profits and Losses
shall also include: (i) income of the Partnership which is exempt from tax; and
(ii) the excess of the deductions for depletion over the basis of the property
subject to depletion. Similarly, the Partnership's Losses shall include
expenditures for the Partnership which are not deductible in computing its
taxable income and are not properly chargeable to a capital account.
Notwithstanding anything to the contrary in this Agreement, Profits and Losses
shall not include allocations under Code Section 704(c) (which are set forth at
Section 4.10 hereof or Regulatory Allocations).
3.17 REGULATORY ALLOCATIONS. The allocations set forth at
Sections 4.10, 4.11, 4.12, 4.13 and 4.15.
3.18 SERVICE. Internal Revenue Service.
3.19 SUBSTITUTED LIMITED PARTNER. A person who has acquired a
Partnership Interest from a Limited Partner and who has been
admitted to the Partnership as a Limited Partner pursuant to Article
VI.
ARTICLE IV
CONTRIBUTIONS TO CAPITAL; DISTRIBUTIONS; ALLOCATIONS
4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS.
4.1.1 CAPITAL CONTRIBUTIONS OF THE GENERAL
PARTNER. The General Partner has contributed $1,085,690.23 in
marketable securities to the Partnership.
4.1.2 CAPITAL CONTRIBUTIONS OF THE LIMITED
PARTNER. The Limited Partner has contributed the assets set forth at
Exhibit 4.1.2.
4.2 WITHDRAWAL AND RETURN OF CAPITAL. Except upon the dissolution and
liquidation of the Partnership, a Partner shall have no right to withdraw any of
its Capital Contributions without the consent of the General Partner. Under
circumstances requiring a return of a
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Partner's Capital Contributions, no Partner shall have the right to receive
property other than cash except as may be specifically provided herein.
4.3 ADDITIONAL CAPITAL CONTRIBUTIONS. The Partnership may
accept additional Capital Contributions to the extent that such contributions
are authorized by the General Partner and are in accordance with the
requirements of Section 5.3 hereof.
4.4 LOANS TO THE PARTNERSHIP. The Partners may make loans to the
Partnership from time to time, as authorized by the General Partner (subject to
the requirements of Section 5.3 hereof), in excess of their contributions to the
capital of the Partnership, and any such loans shall not be treated as a
contribution to the capital of the Partnership for any purposes hereunder, nor
shall any such loans entitle such Partner to any increase in his share of the
profits, losses or distributions of the Partnership. The amount of any such loan
shall be an obligation of the Partnership to such Partner and shall bear
interest at a rate agreed to by the General Partner. Any such loan shall be
repaid prior to any distributions being made to the Partners pursuant to
Sections 4.8.2 and 9.3 hereof.
4.5 CAPITAL ACCOUNTS. A separate Capital Account shall be determined
and maintained for each Partner in accordance with the rules of Treas. Reg.
/section/ 1.704-l(b)(2)(iv). Except as otherwise provided in Treas. Reg.
/section/ 1.704-l(b)(2)(iv), each Partner's Capital Account shall initially
consist of such Partner's Capital Contribution and shall be further credited
with each Partner's additional Capital Contributions and allocable share of the
Partnership's income, as determined in Section 4.6 below, and shall be debited
by all distributions made by the Partnership to a Partner together with each
such Partner's allocable share of the Partnership's losses, as determined in
Section 4.6 below. In the event that the Partnership, in conformity with the
above Regulations, has property on its books at a value ("book value") greater
than or less than its adjusted tax basis, the Partners' Capital Accounts shall
be adjusted to reflect only allocations to them of depreciation, amortization
and gain or loss as computed for book purposes (and not for tax purposes) with
respect to such property. In such event, items of book depreciation,
amortization and gain or loss shall be calculated in conformity with the rules
of Treas. Reg. /section/ 1.704-l(b)(2)(iv)(g). For purposes of calculating a
Partner's Capital Account, the following adjustments shall be included as
Profits and Losses:
(a) any and all adjustments made to Capital Accounts
pursuant to Treas. Reg. /section/ 1.704-l(b)(2)(iv)
(f) (optional revaluation of Capital Accounts), as it
may be amended or supplemented from time to time;
(b) any and all adjustments made to Capital Accounts
pursuant to Treas. Reg. /section/ 1.704-l(b)(2)(iv)
(e) (adjustment resulting from property
distribution), as it may be amended or supplemented
from time to time; and
(c) any and all adjustments made to Capital Accounts
pursuant to Treas. Reg. /section/ 1.704-l(b)(2)(iv)
(n)(4) (as it may be amended or supplemented from
time
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to time), as it relates to distributions other
than in liquidation of a Partner's Interest in the
Partnership.
4.6 ALLOCATION OF INCOME AND LOSSES.
All items of Profits and Losses incurred by the Partnership
shall be allocated to the Partners as follows:
General Partner 1 %
Limited Partner 99 %
4.7 PRINCIPLES OF ALLOCATION. It is the intention of the Partners
that the allocations of Profits and Losses hereunder have substantial economic
effect in accordance with the tests therefor set forth in the Treasury
Regulations under Section 704(b) of the Internal Revenue Code. Accordingly,
allocations not specifically provided for in this Agreement shall be made in
such a manner as shall conform to the allocation rules and principles as set
forth in such Regulations as in effect from time to time, and the Capital
Accounts of the Partners shall be maintained in accordance with the provisions
hereof construed and interpreted in the light of such Regulations.
4.8 DISTRIBUTIONS.
4.8.1 Available Cash shall be distributed periodically, as
determined by the General Partner in its sole discretion, to the Partners as
follows:
General Partner 1 %
Limited Partner 99%
4.8.2 Net Proceeds from an Extraordinary Event which are
not reinvested in other real property shall, to the extent determined by the
General Partner as being available for distribution, be distributed as
expeditiously as possible, in the following order of priority:
(a) first, to the payment of any unpaid
principal and interest on any third-party financing then
due;
(b) next, to the prepayment of any unpaid
principal and interest on any third-party financing, if and
to the extent determined by the General Partner;
(c) next, to the repayment of any loans made by
the Partners to the Partnership pursuant to Section 4.4 hereof, in
proportion to the total amount of principal and interest payable to
each such Partner, such distributions being treated first as in payment
of accrued interest on such loans and next as in payment of principal
of such loans:
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(d) next, to the Partners in proportion to their
positive capital account balances until such Capital Account balances
have been reduced to zero; and
(e) the balance, if any, as follows:
General Partner 1 %
Limited Partner 99 %
4.8.3 Distributions in connection with the sale
of all or substantially all of the Partnership's property and/or the dissolution
and winding up of the Partnership shall be made in accordance with Section 9.3
of this Agreement.
4.8.4 The Partnership, with the Partners' mutual consent, may
make additional distributions of Partnership property.
4.9 ALLOCATIONS OF CERTAIN TAX ITEMS. If the fair market value of any
Partnership property differs from its adjusted basis as of the day it is
contributed to the Partnership, then items of income, gain, loss, deductions and
credit related to such property for tax purposes shall be allocated between the
Partners so as to take into account the variation between the adjusted basis of
the property for tax purposes and its fair market value in the manner provided
for under Code Section 704(c). Except as may be otherwise required by Code
/section/ 704(c), depreciation, amortization and gain or loss, as computed for
tax purposes with respect to Partnership property which has a book value greater
or less than its adjusted tax basis, shall be allocated among the Partners in a
manner that takes into account the variation between the adjusted tax basis and
the book value of such property, in the same manner as variations between the
adjusted tax basis and fair market value of property contributed to the
Partnership are taken into account in determining the Partners' share of tax
items under Code ss. 704(c), as required by Treas. Reg. /section/1.704-l(b)(2)
(iv)(f)(4) and Treas. Reg. /section/ 1.704-l(b)(4)(i). In complying with the
requirements of Code ss. 704(c), the General Partner is authorized to utilize
any method permitted by the Treasury Regulations under Code ss. 704(c).
Allocations pursuant to this Section 4.9 are solely for purposes of complying
with federal, state and local tax requirements, and shall not affect, or in any
way be taken into account, in computing any Partner's share of income, gain,
loss, deduction or credit.
4.10 MINIMUM GAIN CHARGEBACK. Notwithstanding any other provision of
this Article IV, if there is a net decrease in partnership minimum gain (as such
term is defined in Treas. Reg. /section/ 1.704-2(f)) during any Partnership
fiscal year, a Partner shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal
to its share of the net decrease in the minimum gain. The items to be so
allocated shall be determined in accordance with Section 1.704-2(f) of the
Treasury Regulations. This Section 4.10 is intended to comply with the minimum
gain chargeback requirement in such Section of the Treasury Regulations and
shall be interpreted consistently therewith.
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4.11 PARTNER NONRECOURSE DEDUCTIONS. Any partner nonrecourse deductions
for any fiscal year or other period shall be allocated to the Partner who bears
the risk of loss with respect to the loan to which such partner nonrecourse
deduction is attributable in accordance with Regulations Section 1.704-2(i), if
such sections of the Regulations become applicable to the Partnership. Partner
nonrecourse debt minimum gain shall be charged back to the Partners in
accordance with Regulations Section 1.704-2(i)(4).
4.12 QUALIFIED INCOME OFFSET. In the event the Limited
Partner unexpectedly receives any adjustments, allocations, or distributions
described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations, items of Partnership income
and gain shall be specially allocated to each such Partner in an amount and
manner sufficient to eliminate, to the extent required by the Regulations, the
adjusted capital account deficit (as such term is used in Section 1.704-2(fl of
the Treasury Regulations) of the Limited Partner as quickly as possible,
provided that an allocation pursuant to this Section 4.12 shall be made only if
and to the extent that the Limited Partner would have an adjusted capital
account deficit after all other allocations provided for in this Article IV have
been tentatively made as if this Section 4.12 were not in the Agreement. This
Section 4.12 is intended to constitute a "qualified income offset" within the
meaning of Section 1.704-1(b)(2)(ii)(d)(3) of the Treasury Regulations, and is
to be interpreted, to the extent possible, to comply with the requirements of
such Regulation as it may be amended or supplemented from time to time.
4.13 LOSS LIMITATION. The Losses allocated to the Limited Partner
pursuant to Section 4.7 hereof shall not exceed the maximum amount of Losses
that can be so allocated without causing the Limited Partner to have a deficit
Capital Account at the end of any Fiscal Year after: (a) increasing a Limited
Partner's Capital Account by amounts that he is obligated to restore pursuant to
this Agreement or is deemed obligated to restore pursuant to the penultimate
sentences of Treas. Reg. /section/ 1.704-2(g)(1) and 1.704-2(i)(5), as they may
be amended or supplemented from time to time; and (b) decreasing a Limited
Partner's Capital Account by the items described in Treas. Reg. /section/
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(d)(5) and 1.704- 1(b)(2)(d)(6), as it may
be amended or supplemented from time to time (an "Adjusted Deficit Capital
Account"). All Losses in excess of the limitations set forth in this Section
4.13 shall be allocated to the General Partner.
4.14 FUTURE AMENDMENTS; REVALUATION OF PARTNERSHIP PROPERTY. The
General Partner will have complete discretion to amend the provisions of this
Agreement if such amendment would not have a material adverse effect on the
Partners and if, in the opinion of counsel for the Partnership, such amendment
is advisable for purposes of complying with Section 1.704-1 and 1.704-2 of the
Treasury Regulations (as it may be amended or supplemented from time to time).
The General Partner may, in its sole and absolute discretion, revise the
Partners' Capital Accounts to reflect a revaluation of the Partnership property,
provided that the revaluation adheres to the requirements of Section
1.704-1(b)(2)(iv)(fl of the Treasury Regulations.
4.15 GROSS INCOME ALLOCATION. In the event the Limited Partner has a
deficit Capital Account at the end of any Partnership fiscal year which is in
excess of the sum of (i) the amount
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the Limited Partner is obligated to restore pursuant to any provision of this
Agreement, and (ii) the amount the Limited Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Treas. Reg. /section/
1.704-2(g)(1) and 1.704-2(i)(5), the Limited Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section 4.15
shall be made only if and to the extent that the Limited Partner would have a
deficit Capital Account in excess of such sum after all other allocations
provided for in this Article 4 have been made, as if Article 4.12 hereof and
this Section 4.15 were not in the Agreement.
4.16 CURATIVE ALLOCATIONS. In the event that income, loss or items
thereof are allocated to one or more Partners pursuant to Sections 4.10, 4.11,
4.12, 4.13, and 4.15, above, subsequent income and loss first will be allocated
(subject to the provisions of Sections 4.10, 4.11, 4.12, 4.13, and 4.15) to the
Partners in a manner designed to result in each Partner having a Capital Account
balance equal to what it would have been if the original allocation of income or
loss pursuant to Sections 4.10, 4.11, 4.12, 4.13, and 4.15 had not occurred.
ARTICLE V
MANAGEMENT OF THE PARTNERSHIP
5.1 RIGHTS AND DUTIES OF THE GENERAL PARTNER. Except as otherwise
provided herein, the General Partner shall have full, exclusive and complete
authority and discretion in the management and control of the business of the
Partnership and shall make all decisions affecting the business of the
Partnership. Further, the General Partner shall have all of the rights and
powers of a general partner as provided in the Act and as otherwise provided by
law or this Agreement, and any action taken by the General Partner shall
constitute the act of and serve to bind the Partnership. The General Partner
shall manage and control the affairs of the Partnership to the best of its
ability and shall use its best efforts to carry out the business of the
Partnership as set forth in Article II.
5.2 PARTNERSHIP CHECKS. Any check or checks to be made or issued by the
Partnership (with respect to any transaction or series of related transactions)
shall require the signature of a person who is designated as an authorized
signatory by the General Partner. Notwithstanding the foregoing, the General
Partner may delegate its check signing authority to any other person and the
exercise of the authority granted pursuant to such delegation shall constitute
the act of the General Partner who delegated such authority.
5.3 LIMITATIONS ON POWERS OF GENERAL PARTNER.Notwithstanding the
generality of Section 5.1 hereof, the General Partner shall not be empowered,
without the written consent of the Limited Partner, to:
(a) do any act in contravention of this Agreement;
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(b) change or reorganize the Partnership into any
other legal form;
(c) sell, exchange, encumber, assign, pledge, or
otherwise transfer or grant a security interest in any or
all of the assets of the Partnership;
(d) incur, renew, extend, refinance, pay, or
otherwise discharge indebtedness of the Partnership, other
than in the ordinary course of the Partnership's business
hereof;
(e) pay or incur expenses (including) that do not
qualify as Authorized Expenses;
(f) settle a lawsuit or any other dispute (including,
but not limited to, a dispute concerning the income tax
liabilities associated with income and loss reported by the
Partnership);
(g) enter into an insurance policy;
(h) agree to lease a rental space;
(i) set aside a reserve;
(j) confess a judgment against the Partnership;
(k) amend this Agreement except as provided for in
Section 4.14;
(1) require additional Capital Contributions from one
or more of the Partners; or
(m) offer additional Partnership Interests.
5.4 ROLE OF LIMITED PARTNER. The Limited Partner shall not participate
in or have any control over the Partnership business or shall have any authority
or right to act for or bind the Partnership. The Limited Partner hereby consents
to the exercise by the General Partner of the powers conferred upon it by this
Agreement.
5.5 DUTIES AND OBLIGATIONS OF GENERAL PARTNER.
5.5.1 As more fully set forth in Section 5.1
hereof, the General Partner shall take all actions which may be necessary or
appropriate for the continuation of the Partnership's valid existence as a
limited partnership under the laws of the State of Nevada and to enable the
Partnership to conduct the business in which it is engaged.
5.5.2 The General Partner shall devote such time to the
Partnership as may be sufficient for the proper performance of its duties
hereunder.
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5.6 PARTNERSHIP AGREEMENTS WITH AFFILIATES OF GENERAL PARTNER. The
General Partner may utilize the services of Affiliates, as designated by the
General Partner. Affiliates of the General Partner may be engaged to perform
services, including but not limited to, the following: investment advice,
renovation, marketing, acquisition of insurance, obtaining of financing,
recordkeeping, participation at shareholder meetings, data processing,
procurement of licenses, services ordinarily performed by independent
contractors, and other administrative activities. The validity of any
transaction, agreement or payment involving the Partnership and any Affiliate of
the General Partner otherwise permitted by the terms of this Agreement shall not
be affected by reason of the relationship between the General Partner and such
Affiliate or the approval of said transaction, agreement or payment by the
General Partner.
5.7 PAYMENT OF EXPENSES. All expenses of the Partnership shall be paid
by the Partnership. In the event the Partnership expenses are not billed
directly to and paid by the Partnership, it shall reimburse the General Partner
or pay their respective Affiliates for such expenses, including but not limited
to: (a) organizational costs, including, legal and accounting fees; (b) the
actual cost to the General Partner of goods, services and materials used for or
by the Partnership; and (c) all other direct expenses actually incurred by the
General Partner or their respective Affiliates for or on behalf of the
Partnership.
5.8 INDEMNIFICATION OF THE GENERAL PARTNER. The General Partner and all
Affiliates of the General Partner and their respective shareholders, partners,
officers, directors and employees (hereinafter referred to individually as an
"Indemnitee") shall not be liable to the Partnership or any other Partner for
any loss incurred in connection with any action or inaction of an Indemnitee, if
such Indemnitee, in good faith, determined that such course of conduct was in
the best interest of the Partnership and did not constitute negligence of such
Indemnitee. An Indemnitee shall be indemnified and held harmless by the
Partnership against any and all losses, judgments, liabilities, expenses, costs
(including attorney's fees) actually and necessarily incurred by said Indemnitee
in connection with the defense of any suit or action (including, without
limitation, all costs of appeal) to which the Indemnitee is made a party by
reason of its position herein, to the fullest extent permitted under the
provisions of the Act or any other applicable statute. Nothing herein shall make
any Affiliate of the General Partner liable in any way for the acts, omissions,
obligations or liabilities of the General Partner.
5.9 TAX MATTERS PARTNER. If the Partnership is required by the Code or
the Treasury Regulations to have a Tax Matters Partner ("TMP"), the General
Partner shall serve as the TMP for the Partnership. The TMP agrees to act as a
liaison between the Partnership and the Service in connection with all
administrative and judicial proceedings involving tax controversies of the
Partnership, and agrees to assume all the rights and duties of a TMP as set
forth in the Code and the Regulations promulgated thereunder. These rights and
duties include, but are not limited to:
(a) the duty to notify and keep all other Partners informed of
all administrative and judicial proceedings, as required by Section
6223(g) of the Code, and to furnish to
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each Partner, who so requests in writing, a copy of each notice or other
communication received by the TMP from the Service;
(b) the right to settle any claims by the Service
against the Partnership;
(c) the right to initiate judicial proceedings
contesting adverse determinations by the Service against
the Partnership;
(d) the right to enter into an agreement to extend
the statute of limitations;
(e) the right to employ experienced tax counsel to
represent the Partnership in connection with any audit or investigation
of the Partnership by the Service, and in connection with all
subsequent administrative and judicial proceedings arising out of such
audit. The fees and expenses of such counsel shall be a Partnership
expense and shall be paid by the Partnership. Such counsel shall be
responsible for representing the Partnership; it shall be the
responsibility of the General Partner and of the Limited Partner, at
their expense, to employ tax counsel to represent their respective
separate interests; and
(f) arrange for the preparation and delivery of
Partnership information returns and Schedule K's to the
Partners.
The TMP shall be entitled to be reimbursed for all expenses incurred when acting
in its capacity as TMP.
5.10 PARTNERSHIP BASIS ELECTIONS. In the event of a distribution of
property by the Partnership within the meaning of Section 734 of the Code, or
the transfer of any interest in the Partnership within the meaning of Section
743 of the Code, the General Partner, in its sole and absolute discretion, may
cause the Partnership to elect to adjust the basis of its assets pursuant to
Section 754 of the Code. The Partners affected by this election, if made, shall
supply to the Partnership any information that may be required to make such
election.
ARTICLE VI
LIABILITY OF PARTNERS AND TRANSFERABILITY OF INTERESTS
6.1 LIMITED LIABILITY OF LIMITED PARTNER. Except as otherwise provided
in the Act or any other applicable law, the Limited Partner is not personally
liable for the expenses, liabilities or obligations of the Partnership beyond
the amount of his Capital Contribution.
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6.2 TRANSFER OF LIMITED PARTNER'S INTEREST.
The Limited Partner shall not transfer, sell, encumber, assign
or otherwise dispose (a "Transfer") of any portion of his Partnership Interest.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNER AND THE
PARTNERSHIP. The General Partner and the Partnership jointly and severally
represent and warrant to the Limited Partner that, as of the date hereof, the
Partnership is duly and validly organized as a limited partnership under the
laws of the State of Nevada with full power and authority to own and operate its
property and to conduct the business in which it engages and will be authorized
and qualified under the laws of all other jurisdictions in which such
authorization or qualification is necessary to protect the limited liability of
the Limited Partner, to enable it to engage in its business, and to engage in
the business of the Partnership.
ARTICLE VIII
ADMISSION AND WITHDRAWAL OF GENERAL PARTNER
8.1 ADMISSION. The General Partner may select and admit additional
general partner(s), provided that the Limited Partner agrees upon the additional
general partner(s) to be admitted. Unless it shall be provided otherwise upon
the admittance of said additional general partner(s), said additional general
partner(s) shall be deemed to have acquired a share of the general partner's
interest hereunder, such that the additional general partner(s) shall not be
entitled to share in the net income, net loss or distributions of the
Partnership otherwise allocable to the Limited Partner hereunder.
8.2 WITHDRAWAL. The General Partner may withdraw from the Partnership
provided that the withdrawing General Partner shall give to the Limited Partner
ninety (90) days' prior written notice and, if necessary under applicable
rulings and regulations for the Partnership to be treated for federal income tax
purposes as a partnership and not as an association taxable as a corporation,
shall propose a new general partner or general partners qualified and willing to
manage the Partnership's business and with the minimum net worth required. The
withdrawing General Partner shall be entitled to receive the fair market value
of its interest upon the date of its withdrawal.
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ARTICLE IX
TERMINATION OF THE PARTNERSHIP
9.1 DISSOLUTION. The Partnership shall be dissolved upon
the happening of any of the following events:
(a) The adjudication of bankruptcy, filing of a
petition pursuant to a chapter of the Federal Bankruptcy Act, the
withdrawal, dissolution, or cessation of business of the General
Partner, death of an individual General Partner, if any, or any other
"event of withdrawal of a general partner" as such term is defined in
the Act, unless:
(i) the remaining General Partner(s), if
any, elects to continue the business of the Partnership or if
the remaining General Partner(s) does not so elect or if there
is no remaining General Partner, within sixty (60) days after
such event, the Limited Partner elects a substitute General
Partner to continue the business of the Partnership and such
substitute General Partner agrees in writing to accept such
election; and
(ii) in the case of the withdrawal of a
General Partner, the applicable provisions of Article
VIII shall have been complied with.
(b) The sale or other disposition, not including
an exchange, of all or substantially all of the
Partnership's property;
(c) The Transfer by any Partner of part or all
of its Partnership Interest; or
(d) The unanimous written consent of the
Partners.
9.2 EFFECTIVENESS. Dissolution of the Partnership shall be effective on
December 31, 2055, or the day on which the event occurs giving rise to the
dissolution, but the Partnership shall not terminate until the Certificate shall
have been cancelled and the assets of the Partnership shall have been
distributed as provided in Section 9.3 below. Notwithstanding the dissolution of
the Partnership, prior to the termination of the Partnership, as aforesaid, the
business of the Partnership and the affairs of the Partners, as such, shall
continue to be governed by this Agreement.
9.3 LIQUIDATION. Upon dissolution of the Partnership, the General
Partner shall wind up the affairs of the Partnership, apply and distribute its
assets or the proceeds thereof as contemplated by this Agreement and cause the
cancellation of the Certificate. As soon as possible after the dissolution of
the Partnership, a full account of the assets and liabilities of the Partnership
shall be taken, and a statement shall be prepared by a certified public
accountant to
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be selected by the General Partner, setting forth the assets and liabilities of
the Partnership. A copy of such statement shall be furnished to each of the
Partners within thirty (30) days after such dissolution. Thereafter, the General
Partner shall, in its sole and absolute discretion, either liquidate the assets
as promptly as is consistent with obtaining in so far as possible the fair value
thereof or determine to distribute all or part of the assets in kind. Any
proceeds from liquidation, together with any assets which the General Partner
determines to distribute in kind shall be applied to the following order:
(a) first, to the payment of debts and liabilities of the
Partnership other than to Partners, to the expenses of liquidation, and
to the setting up of such reserves as may be deemed reasonably
necessary for any known contingent or unforeseen liabilities or
obligations of the Partnership arising out of or in connection with the
Partnership or its liquidation. Such reserves shall be held for the
purpose of disbursement in payment of any of the aforementioned
contingencies, and at the expiration of such period as the General
Partner shall deem advisable, the Partnership shall distribute the
balance remaining in the manner provided for herein;
(b) next, to the repayment of any debts and liabilities of the
Partnership to Partners not in respect of their Partnership Interests,
including, without limitation, unpaid expense accounts or advances made
to or for the benefit of the Partnership;
(c) next, to the Partners in proportion to their then
Capital Account balances until such Capital Account
balances have been reduced to zero; and
(d) the balance, if any, as follows:
General Partner 1 %
Limited Partner 99 %
9.4 GENERAL PARTNER CONTRIBUTIONS. Upon the liquidation of the General
Partner's interest in the Partnership, the General Partner will contribute to
the Partnership an amount equal to the deficit balance in its Capital Account
after taking into account all Capital Account adjustments for the Partnership's
taxable year during which such liquidation occurs. Except as provided for in the
previous sentence, no Partner shall be required to contribute funds to the
Partnership to restore its deficit capital account.
9.5 GAIN OR LOSS FROM DISSOLUTION. The net gain or loss,
if any, resulting from such dissolution and termination shall be
allocable to the Partners as provided in Section 4.6 hereof.
-16-
<PAGE>
ARTICLE X
BOOKS AND RECORDS; REPORTS
10.1 BOOKS AND RECORDS. The General Partner shall keep adequate books
and records at one or more of its places of business, setting forth a true and
accurate account of all business transactions arising out of and in connection
with the conduct of the Partnership. Partners or their designated
representatives shall have the right, at any reasonable time, to have access to
and inspect and copy the contents of said books or records.
10.2 ANNUAL REPORTS. The Partners shall be furnished annually by the
Partnership with an unaudited financial statement for the year then ended. Upon
request by any Partner, the Partnership shall furnish an audited financial
statements, with such costs being borne by the Partnership.
ARTICLE XI
POWER OF ATTORNEY
11.1 POWER OF ATTORNEY. In order to facilitate amendments of this
Agreement which require the signatures of the Partners, or a proposed additional
or substituted partner, and the preparation and signing of any other
documentation in connection with the Partnership including the Certificate of
Limited Partnership or any amendments thereto or cancellation thereof, each
Partner by his or his signature hereto irrevocably makes, constitutes and
appoints the General Partner, and each person who shall hereafter become a
General Partner, his true and lawful attorney in his name, place and stead, with
the power from time to time to make, execute, swear to, acknowledge, verify,
deliver, file, record and publish:
(a) any certificates or other instruments which may be
required to be filed by the Partnership under the laws of the State of
Nevada or of any other state or jurisdiction in which the Partnership
shall transact business or in which the General Partner shall deem it
advisable to file;
(b) all documents, certificates or other instruments which may
be required or deemed desirable by the General Partner to effectuate
the provisions of any part of this Agreement and to continue the
Partnership under the laws of the State of Nevada and of any state or
jurisdiction in which it shall do business; and
(c) all documents, certificates or other instruments which may
be required to effectuate the dissolution and termination of the
Partnership or the organization of any new limited partnership
occurring by reason of the withdrawal, dissolution, death, bankruptcy,
or adjudication of incompetency of the General Partner.
-17-
<PAGE>
11.2 IRREVOCABILITY. The foregoing power of attorney is a special power
of attorney coupled with an interest in favor of the General Partner, and as
such shall be irrevocable, and shall survive the dissolution, death, bankruptcy
or adjudication of incompetency of a Partner.
11.3 EFFECT OF ASSIGNMENT. The foregoing power of attorney shall
survive the delivery of an assignment by any Partner of the whole or any portion
of his Partnership Interest, except that where an assignee of a Limited
Partner's interest has been approved as a Substituted Limited Partner, the
foregoing power of attorney of the assignor Limited Partner shall survive the
delivery of such assignment for the sole purpose of enabling the General Partner
to execute, swear to, acknowledge and file any and all instruments necessary to
effect such substitution.
ARTICLE XII
GENERAL PROVISIONS
12.1 NOTICES. Any notice, payment, demand or communication required or
permitted to be given by any provision of this Agreement shall be in writing and
delivered personally, sent by overnight courier or sent by registered or
certified mail, return receipt requested, to a party at the address specified in
Section 1.4 hereof. Any such notice shall be deemed to be given as of the date
of receipt or refusal of receipt to the party at its address. Any Partner may
from time to time specify a different address by notice to the Partnership.
12.2 JURISDICTION AND APPLICABLE LAW. Each party hereto and with regard
solely to matters arising out of, or in connection with, this Agreement hereby
designates the laws of the State of Nevada, both substantive and procedural,
without reference to the conflicts of the law provisions thereof, as the law
applicable hereto, and each voluntarily submits itself to the courts of the
State of Nevada as having jurisdiction over the subject matter hereof and the
parties hereto.
12.3 SURVIVAL OF RIGHTS. Except as otherwise provided, this Agreement
shall be binding upon and inure to the benefit of the Partners, their personal
representative, successors and assigns.
12.4 VALIDITY. In the event that any provision of this Agreement shall
be held to be invalid, the same shall not affect in any respect whatsoever the
validity of the remainder of this Agreement.
12.5 AGREEMENTS IN COUNTERPARTS. This Agreement may be executed in
several counterparts, and as executed shall constitute one Agreement, binding on
all the parties hereto, notwithstanding that all the parties are not signatory
to the original or to the same counterpart.
-18-
<PAGE>
12.6 WAIVER OF PARTITION. The Partners hereby waive any
right of partition as to the Partnership's property or any right to take any
other action which otherwise might be available to them for the purpose of
severing their relationship in connection with Partnership property.
12.7 HEADINGS. The headings, titles and subtitles used in this
Agreement are for ease of reference only and shall not control or affect the
meaning or construction of any provision hereof.
12.8 AMENDMENTS. This Agreement may be amended by the
General Partner as permitted by Section 4.14 hereof and, to the extent
necessary, the General Partner shall file or cause to be filed without any
additional consent of the Limited Partner any amendment to the Certificate.
12.9 ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding of the parties with respect to the subject
matter hereof. This Agreement replaces and supersedes all
previous agreements and amendments entered into by the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 27th day of December, 1995.
GENERAL PARTNER:
Attest:
FROST-NEVADA CORPORATION, a Nevada
Corporation
By:
- - ----------------------------- -------------------------
Neil Flanzraich, President
[Corporate Seal]
LIMITED PARTNER:
Witness:
-----------------------------
- - ------------------------------- PHILLIP FROST, M.D.
-19-
EXHIBIT 6
STOCK PURCHASE WARRANT
TO PURCHASE COMMON STOCK OF
WHITMAN MEDICAL CORP.
<PAGE>
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
(COLLECTIVELY THE "SECURITIES") HAVE BEEN ACQUIRED FOR INVESTMENT ONLY AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO WHITMAN
MEDICAL CORP. SUCH REGISTRATION IS AVAILABLE.
Void after 5:00 p.m. New York Time, on January 26, 2000.
Warrant to Purchase up to 575,000 shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
WHITMAN MEDICAL CORP.
This is to Certify That, FOR VALUE RECEIVED, Frost-Nevada Limited
Partnership ("Frost-Nevada"), or assigns (collectively, "Holder"), is entitled
to purchase, subject to the provisions of this Warrant, from Whitman Medical
Corp., a New Jersey corporation ("Company"), up to 575,000 fully paid, validly
issued and nonassessable shares of Common Stock, no par value per share, of the
Company ("Common Stock") at a price of $6.25 per share at any time or from time
to time during the period from January 27, 1995 to January 26, 2000, but not
later than 5:00 p.m. New York City Time, on January 26, 2000. The number of
shares of Common Stock to be received upon the exercise of this Warrant and the
price to be paid for each share of Common Stock may be adjusted from time to
time as hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price".
(a) EXERCISE OF WARRANT. This Warrant may be exercised in
whole or in part at any time or from time to time on or after January 27, 1995
and until January 26, 2000, provided, however, that (i) if either such day is a
day on which banking institutions in the State of New Jersey are authorized by
law to close, then on the next succeeding day which shall not be such a day, and
(ii) in the event of any merger, consolidation or sale of substantially all the
assets of the Company as an entirety, resulting in any distribution to the
Company's stockholders, prior to January 26, 2000, the Holder shall have the
right to exercise this Warrant commencing at such time through January 26, 2000
into the kind and amount of shares of stock and other securities and property
(including cash) receivable by a holder of the number of shares of Common Stock
into which this
<PAGE>
Warrant might have been exercisable immediately prior thereto. This Warrant may
only be exercised subject to the limitations imposed by the New Jersey
Shareholders Protection Act (N.J.S.A. 14:10A-1 et seq.), including, without
limitation, the prohibitions against entering into a"business combination" with
an "interested shareholder", provided however, that if at the time of exercise
the Company is not subject to such act, no such limitations shall apply. This
Warrant may be exercised by presentation and surrender hereof to the Company at
its principal office, or at the office of its stock transfer agent, if any, with
the Purchase Form annexed hereto duly executed and accompanied by payment of the
Exercise Price for the number of Warrant Shares specified in such form. As soon
as practicable after each such exercise of the warrants, but not later than
seven (7) days from the date of such exercise, the Company shall issue and
deliver to the Holder a certificate or certificates for the Warrant Shares
issuable upon such exercise, registered in the name of the Holder or its
designee. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable thereunder. Upon receipt by the Company of this
Warrant at its office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed to be the holder
of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be physically delivered to the Holder.
(b) RESERVATION OF SHARES. The Company shall at all times
reserve for issuance and/or delivery upon exercise of this Warrant such number
of shares of its Common Stock as shall be required for issuance and delivery
upon exercise of the Warrants.
(c) FRACTIONAL SHARES. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of a share, determined as
follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading privileges
on such exchange or listed for trading on the NASDAQ system,
the current market value shall be the last reported sale price
of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant or
if no such sale is made on such day, the average closing bid
and asked prices for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted
to unlisted trading privileges, the current market value shall
be the mean of the last reported bid and asked prices reported
by the National Quotations Bureau, Inc. on the last business
day prior to the date of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted
to unlisted trading privileges and bid and asked prices are
not so reported, the current market value shall
2
<PAGE>
be an amount, not less than book value thereof as at the end
of the most recent fiscal year of the Company ending prior to
the date of the exercise of the Warrant, determined in such
reasonable manner as may be prescribed by the Board of
Directors of the Company.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company at its principal office or at the office of its stock transfer agent, if
any, with the Assignment Form annexed hereto duly executed and funds sufficient
to pay any transfer tax, the Company shall, without charge, execute and deliver
a new Warrant in the name of the assignee named in such instrument of assignment
and this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other warrants which carry the same rights upon presentation
hereof at the principal office of the Company or at the office of its stock
transfer agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof. The term "Warrant" as used herein includes any Warrants into which this
Warrant may be divided or exchanged. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at
any time and the number and kind of securities purchasable upon the exercise of
the Warrants shall be subject to adjustment from time to time upon the happening
of certain events as follows:
(1) In case the Company shall (i) declare a dividend
or make a distribution on its outstanding shares of Common
Stock in shares of Common Stock, (ii) subdivide or reclassify
its outstanding shares of Common Stock into a greater number
of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for
such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted
so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator
3
<PAGE>
of which shall be the number of shares of Common Stock
outstanding after giving effect to such action, and the
numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such action. Such
adjustment shall be made successively whenever any event
listed above shall occur.
(2) In case the Company shall fix a record date for
the issuance of rights or warrants to all holders of its
Common Stock entitling them to subscribed for or purchase
shares of Common Stock (or securities) convertible into Common
Stock) at a price (the "Subscription Price") (or having a
conversion price per share) less than the current market price
of the Common Stock (as defined in Subsection (8) below) on
the record date mentioned below, or less than the Exercise
Price on such record date the Exercise Price shall be adjusted
so that the same shall equal the lower of (i) the price
determined by multiplying the Exercise Price in effect
immediately prior to the date of such issuance by a fraction,
the numerator of which shall be the sum of the number of
shares of Common Stock outstanding on the record date
mentioned below and the number of additional shares of Common
Stock which the aggregate offering price of the total number
of shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so offered)
would purchase at such current market price per share of the
Common Stock, and the denominator of which shall be the sum of
the number of shares of Common Stock outstanding on such
record date and the number of additional shares of Common
Stock offered for subscription or purchase (or into which the
convertible securities so offered are convertible) or (ii) in
the event the Subscription Price is equal to or higher than
the current market price but is less than the Exercise Price,
the price determined by multiplying the Exercise Price in
effect immediately prior to the date of issuance by a
fraction, the numerator of which shall be the sum of the
number of shares outstanding on the record date mentioned
below and the number of additional shares of Common Stock
which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion
price of the convertible securities so offered) would purchase
at the Exercise Price in effect immediately prior to the date
of such issuance, and the denominator of which shall be the
sum of the number of shares of Common Stock outstanding on the
record date mentioned below and the number of additional
shares of Common Stock offered for subscription or purchase
(or into which the convertible securities so offered are
convertible). Such adjustment shall be made successively
whenever such rights or warrants are issued and shall become
effective immediately after the record date for the
determination of shareholders entitled to receive such rights
or warrants; and to the extent that shares of Common Stock are
not delivered (or securities convertible into Common Stock are
not delivered) after the expiration of such rights or warrants
the Exercise Price shall be readjusted to the Exercise Price
which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of Common Stock
(or securities convertible into Common Stock) actually
delivered.
4
<PAGE>
(3) In case the Company shall hereafter distribute to
the holders of its Common Stock evidences of its indebtedness
or assets (excluding cash dividends or distributions and
dividends or distributions referred to in Subsection (1)
above) or subscription rights or warrants (excluding those
referred to in Subsection (2) above), then in each such case
the Exercise Price in effect thereafter shall be determined by
multiplying the Exercise Price in effect immediately prior
thereto by a fraction, the numerator of which shall be the
total number of shares of Common Stock outstanding multiplied
by the current market price per share of Common Stock (as
defined in Subsection (8) below), less the fair market value
(as determined by the Company's Board of Directors) of said
assets or evidences of indebtedness so distributed or of such
rights or warrants, and the denominator of which shall be the
total number of shares of Common Stock outstanding multiplied
by such current market price per share of Common Stock. Such
adjustment shall be made successively whenever such a record
date is fixed. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately
after the record date for the determination of shareholders
entitled to receive such distribution.
(4) In case the Company shall issue shares of its
Common Stock excluding shares issued (i) in any of the
transactions described in Subsection (1) above, (ii) upon
exercise of options granted pursuant to the Company's Stock
Option Plan, (iii) upon exercise of warrants outstanding at
January 27, 1995 and this Warrant and (iv) to shareholders of
any corporation which merges into the Company in proportion to
their stock holdings of such corporation immediately prior to
such merger, upon such merger, or issued in a bona fide public
offering pursuant to a firm commitment underwriting, but only
if no adjustment is required pursuant to any other specific
subsection of this Section (f) (without regard to Subsection
(9) below) with respect to the transaction giving rise to such
rights for a consideration per share (the "Offering Price")
less than the current market price per share (as defined in
Subsection (8) below) on the date the Company fixes the
offering price of such additional shares or less than the
Exercise Price, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the lower of (i)
the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common Stock
which the aggregate consideration received (determined as
provided in Subsection (7) below) for the issuance of such
additional shares would purchase at such current market price
per share of Common Stock, and the denominator of which shall
be the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares or
(ii) in the event the Offering Price is equal to or higher
than the current market price per share but less than the
Exercise Price, the price determined by multiplying the
Exercise Price in effect immediately prior to the date of
issuance by a fraction, the numerator
5
<PAGE>
of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common Stock
which the aggregate consideration received (determined as
provided in Subsection (7) below) for the issuance of such
additional shares would purchase at the Exercise Price in
effect immediately prior to the date of such issuance, and the
denominator of which shall be the number of shares of Common
Stock outstanding immediately after the issuance of such
additional shares. Such adjustment shall be made successively
whenever such an issuance is made.
(5) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock
(excluding securities issued in transactions described in
Subsections (2) and (3) above) for a consideration per share
of Common Stock (the "Conversion Price") initially deliverable
upon conversion or exchange or such securities (determined as
provided in Subsection (7) below) less than the current market
price per share (as defined in Subsection (8) below) in effect
immediately prior to the issuance of such securities, or less
than the Exercise Price, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the lower of (i)
the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the issuance of such
securities and the number of shares of Common Stock which the
aggregate consideration received (determined as provided in
Subsection (7) below) for such securities would purchase at
such current market price per share of Common Stock, and the
denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to such issuance
and the maximum number of shares of Common Stock of the
Company deliverable upon conversion of or in exchange for such
securities at the initial conversion or exchange price or rate
or (ii) in the event the Conversion Price is equal to or
higher than the current market price per share but less than
the Exercise Price, the price determined by multiplying the
Exercise Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be the
sum of the number of shares outstanding immediately prior to
the issuance of such securities and the number of shares of
Common Stock which the aggregate consideration received
(determined as provided in Subsection (7) below) for such
securities would purchase at the Exercise Price in effect
immediately prior to the date of such issuance, and the
denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to the issuance
of such securities and the maximum number of shares of Common
Stock of the Company deliverable upon conversion of or in
exchange for such securities at the initial conversion or
exchange price or rate. Such adjustment shall be made
successively whenever such an issuance is made.
(6) Whenever the Exercise Price payable upon exercise
of each Warrant is adjusted pursuant to Subsections (1), (2),
(3), (4) and (5) above, the number of
6
<PAGE>
Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Shares
initially issuable upon exercise of this Warrant by the
Exercise Price in effect on the date hereof and dividing the
product so obtained by the Exercise Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and (5)
above, the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the
amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts
or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection
therewith;
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash
shall be deemed to be the fair market value thereof
as determined in good faith by the Board of Directors
of the Company (irrespective of the accounting
treatment thereof), whose determination shall be
conclusive; and
(C) in the case of the issuance of
securities convertible into or exchangeable for
shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the
consideration received by the Company for the
issuance of such securities plus the additional
minimum consideration, if any, to be received by the
Company upon the conversion or exchange thereof the
consideration in each case to be determined in the
same manner as provided in clauses (A) and (B) of
this Subsection (7).
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current market
price per share of Common Stock at any date shall be deemed to
be the lower of (i) the average of the daily closing prices
for 30 consecutive business days before such date or (ii) the
closing price on the business day immediately preceding such
date. The closing price for each day shall be the last sale
price regular way or, in case no such reported sale takes
place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the average of the highest reported
bid and lowest reported asked prices as reported by NASDAQ, or
other similar organization if NASDAQ is no longer reporting
such information, or if not so available, the fair market
price as determined by the Board of Directors.
7
<PAGE>
(9) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or
decrease of at least one cent ($0.01) in such price; provided,
however, that any adjustments which by reason of this
Subsection (9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
required to be made
hereunder. All calculations under this Section (f) shall be
made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Anything in this Section (f) to the
contrary notwithstanding, the Company shall be entitled, but
shall not be required, to make such changes in the Exercise
Price, in addition to those required by this Section (f), as
it shall determine, in its sole discretion, to be advisable in
order that any dividend or distribution in shares of Common
Stock, or any subdivision, reclassification or combination of
Common Stock, hereafter made by the Company shall not result
in any Federal Income tax liability to the holders of Common
Stock or securities convertible into Common Stock (including
Warrants).
(10) Whenever the Exercise Price is adjusted, as
herein provided, the Company shall promptly cause a notice
setting forth the adjusted Exercise Price and adjusted number
of Shares issuable upon exercise of each Warrant to be mailed
to the Holders, at their last addresses appearing in the
Warrant Register, and shall cause a certified copy thereof to
be mailed to its transfer agent, if any. The Company may
retain a firm of independent certified public accountants
selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation
required by this Section (f), and a certificate signed by such
firm shall be conclusive evidence of the correctness of such
adjustment.
(11) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the Holder
of this Warrant thereafter shall become entitled to receive
any shares of the Company, other than Common Stock, thereafter
the number of such other shares so receivable upon exercise of
this Warrant shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock contained
in Subsections (1) to (9), inclusive above.
(12) Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon
exercise of this Warrant, Warrants theretofore or thereafter
issued may continue to express the same price and number and
kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall
be adjusted as required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein
8
<PAGE>
provided, setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional shares of Common
Stock, if any, and such other facts as shall be necessary to show the reason for
and the manner of computing such adjustment. Each such officer's certificate
shall be made available at all reasonable times for inspection by the holder or
any holder of a Warrant executed and delivered pursuant to Section (a) and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall
be outstanding, (i) if the Company shall pay any dividend or make any
distribution upon the Common Stock or (ii) if the Company shall offer to the
holders of Common Stock for subscription or purchase by them any share of any
class or any other rights of (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen days prior the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other securities
shall receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section (i) shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with
9
<PAGE>
any such capital reorganization or reclassification, consolidation, merger, sale
or conveyance, additional shares of Common Stock shall be issued in exchange,
conversion, substitution or payment, in whole or in part, for a security of the
Company other than Common Stock, any such issue shall be treated as an issue of
Common Stock covered by the provisions of Subsection (1) of Section (f) hereof.
IN WITNESS whereof, the Company has duly executed this Warrant
as of the date below.
WHITMAN MEDICAL CORP.
By:______________________________________
Name: Randy Proto
Title: President
[SEAL]
Dated: ___________________, 1995
Attest:
___________________
Joseph Lichtenstein, Secretary
10
<PAGE>
PURCHASER FORM
Dated_____________, 19
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing ____________ shares of Common Stock
and hereby makes payment of__________ in payment of the actual exercise price
thereof.
___________
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name___________________________________________
(Please typewrite or print in block letters)
Address_______________________________________
Signature___________________
__________
ASSIGNMENT FORM
FOR VALUED RECEIVED,_____________
hereby sells, assigns and transfers unto
Name__________________________________
(Please typewrite or print in block letters)
Address______________________________
the right to purchase Common Stock represented by this Warrant to the extent of
________shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint________ Attorney, to transfer the same on the books of
the Company with full power of substitution in the premises.
Date____________, 19____
Signature_____________________
11
EXHIBIT 7
STOCK PURCHASE WARRANT
TO PURCHASE COMMON STOCK OF
WHITMAN MEDICAL CORP.
<PAGE>
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
(COLLECTIVELY THE "SECURITIES") HAVE BEEN ACQUIRED FOR INVESTMENT ONLY AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO WHITMAN
MEDICAL CORP. THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Void after 5:00 p.m. New York Time, on February 25, 2001.
Warrant to Purchase up to 650,000 shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
WHITMAN MEDICAL CORP.
This is to Certify That, FOR VALUE RECEIVED, Phillip Frost ("Frost"),
or assigns (collectively, "Holder"), is entitled to purchase, subject to the
provisions of this Warrant, from Whitman Medical Corp., a New Jersey corporation
("Company"), up to 650,000 fully paid, validly issued and nonassessable shares
of Common Stock, no par value per share, of the Company ("Common Stock") at a
price of $8.50 per share at any time or from time to time during the period from
February 26, 1996 to February 25, 2001, but not later than 5:00 p.m. New York
City Time, on February 25, 2001. The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be paid for each
share of Common Stock may be adjusted from time to time as hereinafter set
forth. The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter sometimes referred to as "Warrant
Shares" and the exercise price of a share of Common Stock in effect at any time
and as adjusted from time to time is hereinafter sometimes referred to as the
"Exercise Price".
(a) EXERCISE OF WARRANT. This Warrant may be exercised in
whole or in part at any time or from time to time on or after February 26, 1996
and until February 25, 2001, provided, however, that (i) if either such day is a
day on which banking institutions in the State of New Jersey are authorized by
law to close, then on the next succeeding day which shall not be such a day, and
(ii) in the event of any merger, consolidation or sale of substantially all the
assets of the Company as an entirety, resulting in any distribution to the
Company's stockholders, prior to February 25, 2001, the Holder shall have the
right to exercise this Warrant commencing at such time through February 25, 2001
into the kind and amount of shares of stock and other securities and
<PAGE>
property (including cash) receivable by a holder of the number of shares of
Common Stock into which this Warrant might have been exercisable immediately
prior thereto. This Warrant may only be exercised subject to the limitations
imposed by the New Jersey Shareholders Protection Act (N.J.S.A. 14A:10A-1 et
seq.), including, without limitation, the prohibitions against entering into
a"business combination" with an "interested shareholder", provided however, that
if at the time of exercise the Company is not subject to such act, no such
limitations shall apply. This Warrant may be exercised by presentation and
surrender hereof to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
Warrant Shares specified in such form. As soon as practicable after each such
exercise of the warrants, but not later than seven (7) days from the date of
such exercise, the Company shall issue and deliver to the Holder a certificate
or certificates for the Warrant Shares issuable upon such exercise, registered
in the name of the Holder or its designee. If this Warrant should be exercised
in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
thereunder. Upon receipt by the Company of this Warrant at its office, or by the
stock transfer agent of the Company at its office, in proper form for exercise,
the Holder shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be physically delivered to the Holder.
(b) RESERVATION OF SHARES. The Company shall at all times
reserve for issuance and/or delivery upon exercise of this Warrant such number
of shares of its Common Stock as shall be required for issuance and delivery
upon exercise of the Warrants.
(c) FRACTIONAL SHARES. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of a share, determined as
follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading privileges
on such exchange or listed for trading on the NASDAQ system,
the current market value shall be the last reported sale price
of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant or
if no such sale is made on such day, the average closing bid
and asked prices for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted
to unlisted trading privileges, the current market value shall
be the mean of the last reported bid and asked prices reported
by the National Quotations Bureau, Inc. on the last business
day prior to the date of the exercise of this Warrant; or
2
<PAGE>
(3) If the Common Stock is not so listed or admitted
to unlisted trading privileges and bid and asked prices are
not so reported, the current market value shall be an amount,
not less than book value thereof as at the end of the most
recent fiscal year of the Company ending prior to the date of
the exercise of the Warrant, determined in such reasonable
manner as may be prescribed by the Board of Directors of the
Company.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company at its principal office or at the office of its stock transfer agent, if
any, with the Assignment Form annexed hereto duly executed and funds sufficient
to pay any transfer tax, the Company shall, without charge, execute and deliver
a new Warrant in the name of the assignee named in such instrument of assignment
and this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other warrants which carry the same rights upon presentation
hereof at the principal office of the Company or at the office of its stock
transfer agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof. The term "Warrant" as used herein includes any Warrants into which this
Warrant may be divided or exchanged. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at
any time and the number and kind of securities purchasable upon the exercise of
the Warrants shall be subject to adjustment from time to time upon the happening
of certain events as follows:
(1) In case the Company shall (i) declare a dividend
or make a distribution on its outstanding shares of Common
Stock in shares of Common Stock, (ii) subdivide or reclassify
its outstanding shares of Common Stock into a greater number
of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for
such dividend or distribution or of the effective date of such
3
<PAGE>
subdivision, combination or reclassification shall be adjusted
so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall
be the number of shares of Common Stock outstanding after
giving effect to such action, and the numerator of which shall
be the number of shares of Common Stock outstanding
immediately prior to such action. Such adjustment shall be
made successively whenever any event listed above shall occur.
(2) In case the Company shall fix a record date for
the issuance of rights or warrants to all holders of its
Common Stock entitling them to subscribed for or purchase
shares of Common Stock (or securities convertible into Common
Stock) at a price (the "Subscription Price") (or having a
conversion price per share) less than the current market price
of the Common Stock (as defined in Subsection (8) below) on
the record date mentioned below, or less than the Exercise
Price on such record date the Exercise Price shall be adjusted
so that the same shall equal the lower of (i) the price
determined by multiplying the Exercise Price in effect
immediately prior to the date of such issuance by a fraction,
the numerator of which shall be the sum of the number of
shares of Common Stock outstanding on the record date
mentioned below and the number of additional shares of Common
Stock which the aggregate offering price of the total number
of shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so offered)
would purchase at such current market price per share of the
Common Stock, and the denominator of which shall be the sum of
the number of shares of Common Stock outstanding on such
record date and the number of additional shares of Common
Stock offered for subscription or purchase (or into which the
convertible securities so offered are convertible) or (ii) in
the event the Subscription Price is equal to or higher than
the current market price but is less than the Exercise Price,
the price determined by multiplying the Exercise Price in
effect immediately prior to the date of issuance by a
fraction, the numerator of which shall be the sum of the
number of shares outstanding on the record date mentioned
below and the number of additional shares of Common Stock
which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion
price of the convertible securities so offered) would purchase
at the Exercise Price in effect immediately prior to the date
of such issuance, and the denominator of which shall be the
sum of the number of shares of Common Stock outstanding on the
record date mentioned below and the number of additional
shares of Common Stock offered for subscription or purchase
(or into which the convertible securities so offered are
convertible). Such adjustment shall be made successively
whenever such rights or warrants are issued and shall become
effective immediately after the record date for the
determination of shareholders entitled to receive such rights
or warrants; and to the extent that shares of Common Stock are
not delivered (or securities convertible into Common Stock are
not delivered) after the expiration of such rights or warrants
the Exercise Price shall be readjusted to the Exercise Price
which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made
4
<PAGE>
upon the basis of delivery of only the number of shares of
Common Stock (or securities convertible into Common Stock)
actually delivered.
(3) In case the Company shall hereafter distribute to
the holders of its Common Stock evidences of its indebtedness
or assets (excluding cash dividends or distributions and
dividends or distributions referred to in Subsection (1)
above) or subscription rights or warrants (excluding those
referred to in Subsection (2) above), then in each such case
the Exercise Price in effect thereafter shall be determined by
multiplying the Exercise Price in effect immediately prior
thereto by a fraction, the numerator of which shall be the
total number of shares of Common Stock outstanding multiplied
by the current market price per share of Common Stock (as
defined in Subsection (8) below), less the fair market value
(as determined by the Company's Board of Directors) of said
assets or evidences of indebtedness so distributed or of such
rights or warrants, and the denominator of which shall be the
total number of shares of Common Stock outstanding multiplied
by such current market price per share of Common Stock. Such
adjustment shall be made successively whenever such a record
date is fixed. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately
after the record date for the determination of shareholders
entitled to receive such distribution.
(4) In case the Company shall issue shares of its
Common Stock excluding shares issued (i) in any of the
transactions described in Subsection (1) above, (ii) upon
exercise of options granted pursuant to the Company's Stock
Option Plan, (iii) upon exercise of warrants outstanding at
February 26, 1996 and this Warrant and (iv) to shareholders of
any corporation which merges into the Company in proportion to
their stock holdings of such corporation immediately prior to
such merger, upon such merger, or issued in a bona fide public
offering pursuant to a firm commitment underwriting, but only
if no adjustment is required pursuant to any other specific
subsection of this Section (f) (without regard to Subsection
(9) below) with respect to the transaction giving rise to such
rights for a consideration per share (the "Offering Price")
less than the current market price per share (as defined in
Subsection (8) below) on the date the Company fixes the
offering price of such additional shares or less than the
Exercise Price, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the lower of (i)
the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common Stock
which the aggregate consideration received (determined as
provided in Subsection (7) below) for the issuance of such
additional shares would purchase at such current market price
per share of Common Stock, and the denominator of which shall
be the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares or
(ii) in the
5
<PAGE>
event the Offering Price is equal to or higher than the
current market price per share but less than the Exercise
Price, the price determined by multiplying the Exercise Price
in effect immediately prior to the date of issuance by a
fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to the issuance
of such additional shares and the number of shares of Common
Stock which the aggregate consideration received (determined
as provided in Subsection (7) below) for the issuance of such
additional shares would purchase at the Exercise Price in
effect immediately prior to the date of such issuance, and the
denominator of which shall be the number of shares of Common
Stock outstanding immediately after the issuance of such
additional shares. Such adjustment shall be made successively
whenever such an issuance is made.
(5) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock
(excluding securities issued in transactions described in
Subsections (2) and (3) above) for a consideration per share
of Common Stock (the "Conversion Price") initially deliverable
upon conversion or exchange or such securities (determined as
provided in Subsection (7) below) less than the current market
price per share (as defined in Subsection (8) below) in effect
immediately prior to the issuance of such securities, or less
than the Exercise Price, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the lower of (i)
the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the issuance of such
securities and the number of shares of Common Stock which the
aggregate consideration received (determined as provided in
Subsection (7) below) for such securities would purchase at
such current market price per share of Common Stock, and the
denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to such issuance
and the maximum number of shares of Common Stock of the
Company deliverable upon conversion of or in exchange for such
securities at the initial conversion or exchange price or rate
or (ii) in the event the Conversion Price is equal to or
higher than the current market price per share but less than
the Exercise Price, the price determined by multiplying the
Exercise Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be the
sum of the number of shares outstanding immediately prior to
the issuance of such securities and the number of shares of
Common Stock which the aggregate consideration received
(determined as provided in Subsection (7) below) for such
securities would purchase at the Exercise Price in effect
immediately prior to the date of such issuance, and the
denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to the issuance
of such securities and the maximum number of shares of Common
Stock of the Company deliverable upon conversion of or in
exchange for such securities at the initial conversion or
exchange price or rate. Such adjustment shall be made
successively whenever such an issuance is made.
6
<PAGE>
(6) Whenever the Exercise Price payable upon exercise
of each Warrant is adjusted pursuant to Subsections (1), (2),
(3), (4) and (5) above, the number of Shares purchasable upon
exercise of this Warrant shall simultaneously be adjusted by
multiplying the number of Shares initially issuable upon
exercise of this Warrant by the Exercise Price in effect on
the date hereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and (5)
above, the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the
amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts
or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection
therewith;
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash
shall be deemed to be the fair market value thereof
as determined in good faith by the Board of Directors
of the Company (irrespective of the accounting
treatment thereof), whose determination shall be
conclusive; and
(C) in the case of the issuance of
securities convertible into or exchangeable for
shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the
consideration received by the Company for the
issuance of such securities plus the additional
minimum consideration, if any, to be received by the
Company upon the conversion or exchange thereof the
consideration in each case to be determined in the
same manner as provided in clauses (A) and (B) of
this Subsection (7).
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current market
price per share of Common Stock at any date shall be deemed to
be the lower of (i) the average of the daily closing prices
for 30 consecutive business days before such date or (ii) the
closing price on the business day immediately preceding such
date. The closing price for each day shall be the last sale
price regular way or, in case no such reported sale takes
place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the average of the highest reported
bid and lowest reported asked prices as reported by NASDAQ, or
other similar organization if NASDAQ is no longer reporting
such information, or if not so available, the fair market
price as determined by the Board of Directors.
7
<PAGE>
(9) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or
decrease of at least one cent ($0.01) in such price; provided,
however, that any adjustments which by reason of this
Subsection (9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
required to be made hereunder. All calculations under this
Section (f) shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be. Anything
in this Section (f) to the contrary notwithstanding, the
Company shall be entitled, but shall not be required, to make
such changes in the Exercise Price, in addition to those
required by this Section (f), as it shall determine, in its
sole discretion, to be advisable in order that any dividend or
distribution in shares of Common Stock, or any subdivision,
reclassification or combination of Common Stock, hereafter
made by the Company shall not result in any Federal Income tax
liability to the holders of Common Stock or securities
convertible into Common Stock (including Warrants).
(10) Whenever the Exercise Price is adjusted, as
herein provided, the Company shall promptly cause a notice
setting forth the adjusted Exercise Price and adjusted number
of Shares issuable upon exercise of each Warrant to be mailed
to the Holders, at their last addresses appearing in the
Warrant Register, and shall cause a certified copy thereof to
be mailed to its transfer agent, if any. The Company may
retain a firm of independent certified public accountants
selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation
required by this Section (f), and a certificate signed by such
firm shall be conclusive evidence of the correctness of such
adjustment.
(11) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the Holder
of this Warrant thereafter shall become entitled to receive
any shares of the Company, other than Common Stock, thereafter
the number of such other shares so receivable upon exercise of
this Warrant shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock contained
in Subsections (1) to (9), inclusive above.
(12) Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon
exercise of this Warrant, Warrants theretofore or thereafter
issued may continue to express the same price and number and
kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall
be adjusted as required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein
8
<PAGE>
provided, setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional shares of Common
Stock, if any, and such other facts as shall be necessary to show the reason for
and the manner of computing such adjustment. Each such officer's certificate
shall be made available at all reasonable times for inspection by the holder or
any holder of a Warrant executed and delivered pursuant to Section (a) and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall
be outstanding, (i) if the Company shall pay any dividend or make any
distribution upon the Common Stock or (ii) if the Company shall offer to the
holders of Common Stock for subscription or purchase by them any share of any
class or any other rights of (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen days prior the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other securities
shall receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section (i) shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with
9
<PAGE>
any such capital reorganization or reclassification, consolidation, merger, sale
or conveyance, additional shares of Common Stock shall be issued in exchange,
conversion, substitution or payment, in whole or in part, for a security of the
Company other than Common Stock, any such issue shall be treated as an issue of
Common Stock covered by the provisions of Subsection (1) of Section (f) hereof.
IN WITNESS whereof, the Company has duly executed this Warrant
as of the date below.
WHITMAN MEDICAL CORP.
By: /S/ RANDY S. PROTO
______________________________
Name: Randy S. Proto
Title: President
[SEAL]
Dated: February 26, 1996
Attest:
/S/ FERNANDO FERNANDEZ
______________________
Fernando Fernandez, Secretary
10
<PAGE>
PURCHASER FORM
Dated_________,_______
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing____ shares of Common Stock and hereby
makes payment of _______ in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name___________________________________________
(Please typewrite or print in block letters)
Address________________________________________
Signature____________________
____________
ASSIGNMENT FORM
FOR VALUED RECEIVED,____________
hereby sells, assigns and transfers unto
Name__________________________________________
(Please typewrite or print in block letters)
Address________________________________________
the right to purchase Common Stock represented by this Warrant to the
extent of ________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint ________ Attorney, to transfer the same on
the books of the Company with full power of substitution in the premises.
Date_________,_____
Signature__________
11
EXHIBIT 8
DIRECTORS AND CONSULTANTS STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of November 20, 1992 between
Whitman Medical Corp. ("Company") and Phillip Frost, M.D.
("Optionee"). Terms used herein have the same meaning as in the
Company's 1986 Directors and Consultants Stock Option Plan
("Plan").
1. The Company hereby grants to Optionee an option (the "Option") to
purchase 25,000 of the Company's common shares, no par value per share
("Shares"), pursuant and subject to the terms of the Plan, a copy of which has
been delivered to Optionee and which is incorporated herein by reference.
2. The Option price per Share shall be $7.50.
3. The Option shall expire on November 19, 2002 unless
earlier terminated.
4. The Option shall not be transferable otherwise than by will or by
the laws of descent and distribution and during the lifetime of Optionee shall
be exercisable only by Optionee.
5. The Option is not limited in the period of time in which it is
exercisable by reason of the Optionee ceasing to be a director or a consultant
to the Company, provided that the Option shall not be exercisable beyond the
expiration date set forth in Section 3.
6. Nothing herein or in the Plan shall confer upon any
director of or consultant to the Company any right to continue
in the service of the Company.
7. The Option and the Plan are subject to adjustments,
modifications and amendments as provided in the Plan.
8. Subject to the Plan, this Agreement shall bind and inure to the
benefit of the Company, Optionee and their respective successors, assigns and
personal representatives.
9. This Agreement will be governed by and construed under
the laws of New Jersey.
10. Any disputes, claims or interpretive issues arising hereunder
shall be determined by the Board of Directors or a committee thereof in its sole
and absolute discretion, and such determination shall be final and
uncontestable.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective from the date first above written.
WHITMAN MEDICAL CORP.
By:
-------------------------
-------------------------
PHILLIP FROST, M.D.
EXHIBIT 9
DIRECTORS AND CONSULTANTS STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of October 1, 1993 between
Whitman Medical Corp. ("Company") and Phillip Frost, M.D.
("Optionee"). Terms used herein have the same meaning as in the
Company's 1986 Directors and Consultants Stock Option Plan
("Plan").
1. The Company hereby grants to Optionee an option (the "Option") to
purchase 25,000 of the Company's common shares, no par value per share
("Shares"), pursuant and subject to the terms of the Plan, a copy of which has
been delivered to Optionee and which is incorporated herein by reference.
2. The Option price per Share shall be $11.75.
3. The Option shall expire on September 30, 2003 unless
earlier terminated.
4. The Option shall not be transferable otherwise than by will or by
the laws of descent and distribution and during the lifetime of Optionee shall
be exercisable only by Optionee.
5. The Option is not limited in the period of time in which it is
exercisable by reason of the Optionee ceasing to be a director or a consultant
to the Company, provided that the Option shall not be exercisable beyond the
expiration date set forth in Section 3.
6. Nothing herein or in the Plan shall confer upon any
director of or consultant to the Company any right to continue
in the service of the Company.
7. The Option and the Plan are subject to adjustments,
modifications and amendments as provided in the Plan.
8. Subject to the Plan, this Agreement shall bind and inure to the
benefit of the Company, Optionee and their respective successors, assigns and
personal representatives.
9. This Agreement will be governed by and construed under
the laws of New Jersey.
10. Any disputes, claims or interpretive issues arising hereunder
shall be determined by the Board of Directors or a committee thereof in its sole
and absolute discretion, and such determination shall be final and
uncontestable.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective from the date first above written.
WHITMAN MEDICAL CORP.
By:___________________________
---------------------------
PHILLIP FROST, M.D.
EXHIBIT 10
DIRECTORS AND CONSULTANTS STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of October 21, 1994 between
Whitman Medical Corp. ("Company") and Phillip Frost, M.D.
("Optionee"). Terms used herein have the same meaning as in the
Company's 1986 Directors and Consultants Stock Option Plan
("Plan").
1. The Company hereby grants to Optionee an option (the "Option")
to purchase 25,000 of the Company's common shares, no par value per share
("Shares"), pursuant and subject to the terms of the Plan, a copy of which has
been delivered to Optionee and which is incorporated herein by reference.
2. The Option price per Share shall be $4.88.
3. The Option shall expire on October 20, 2004 unless
earlier terminated.
4. The Option shall not be transferable otherwise than by will
or by the laws of descent and distribution and during the lifetime of Optionee
shall be exercisable only by Optionee.
5. The Option is not limited in the period of time in which it
is exercisable by reason of the Optionee ceasing to be a director or a
consultant to the Company, provided that the Option shall not be exercisable
beyond the expiration date set forth in Section 3.
6. Nothing herein or in the Plan shall confer upon any
director of or consultant to the Company any right to continue
in the service of the Company.
7. The Option and the Plan are subject to adjustments,
modifications and amendments as provided in the Plan.
8. Subject to the Plan, this Agreement shall bind and inure to
the benefit of the Company, Optionee and their respective successors, assigns
and personal representatives.
9. This Agreement will be governed by and construed under
the laws of New Jersey.
10. Any disputes, claims or interpretive issues arising hereunder
shall be determined by the Board of Directors or a committee thereof in its sole
and absolute discretion, and such determination shall be final and
uncontestable.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective from the date first above written.
WHITMAN MEDICAL CORP.
By:
--------------------------
--------------------------
PHILLIP FROST, M.D.
EXHIBIT 11
DIRECTORS AND CONSULTANTS STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of November 9, 1995 between
Whitman Medical Corp. ("Company") and Phillip Frost, M.D.
("Optionee"). Terms used herein have the same meaning as in the
Company's 1986 Directors and Consultants Stock Option Plan
("Plan").
1. The Company hereby grants to Optionee an option (the "Option")
to purchase 25,000 of the Company's common shares, no par value per share
("Shares"), pursuant and subject to the terms of the Plan, a copy of which has
been delivered to Optionee and which is incorporated herein by reference.
2. The Option price per Share shall be $6.375.
3. The Option shall expire on November 9, 2005 unless
earlier terminated.
4. The Option shall not be transferable otherwise than by will
or by the laws of descent and distribution and during the lifetime of Optionee
shall be exercisable only by Optionee.
5. The Option is not limited in the period of time in which it
is exercisable by reason of the Optionee ceasing to be a director or a
consultant to the Company, provided that the Option shall not be exercisable
beyond the expiration date set forth in Section 3.
6. Nothing herein or in the Plan shall confer upon any
director of or consultant to the Company any right to continue
in the service of the Company.
7. The Option and the Plan are subject to adjustments,
modifications and amendments as provided in the Plan.
8. Subject to the Plan, this Agreement shall bind and inure to
the benefit of the Company, Optionee and their respective successors, assigns
and personal representatives.
9. This Agreement will be governed by and construed under
the laws of New Jersey.
10. The exercise of the Option is subject to the New
Jersey Shareholders Protection Act.
11. Any disputes, claims or interpretive issues arising hereunder
shall be determined by the Board of Directors or a committee thereof in its sole
and absolute discretion, and such determination shall be final and
uncontestable.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective from the date first above written.
WHITMAN MEDICAL CORP.
By:___________________________
---------------------------
PHILLIP FROST, M.D.
