<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
---------
PHP Healthcare Corporation
--------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
--------------------------------------------------------
(Title of Class of Securities)
693344103
--------------------------------------------------------
(CUSIP Number)
Arnold L. Wadler, Esq., Metromedia Company,
One Meadowlands Plaza, E. Rutherford, New Jersey 07073,
phone # (201) 531-8050
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 2, 1997
--------------------------------------------------------
(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 this 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 this 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 filled out for a reporting
person's initial filing 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 1 of Pages
---
<PAGE>
CUSIP No. Page of Pages
--------- --- ---
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
John W Kluge ###-##-####
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /X/
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
PF
- -------------------------------------------------------------------------------
(5) Check 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
Beneficially Owned Power 816,500
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 0
--------------------------------------------------
(9) Sole Dispositive
Power 816,500
--------------------------------------------------
(10) Shared Dispositive
Power 0
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
816,500
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
7.1%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Item 1. Security and Issuer
This statement relates to the common stock, par value $.01 per share
(the "Common Stock") of PHP Healthcare Corporation, a Delaware
corporation (the "Issuer"). The principal executive offices of the
Issuer are 11440 Commerce Park Drive, Reston, Virginia 20191.
Item 2. Identity and Background.
This statement is being filed by John W. Kluge, as beneficial owner of
the Common Stock of the Issuer held by Chase Manhattan Bank, John W.
Kluge & Stuart Subotnick, Trustees U/A DTD 5/30/84 As Amended made by
and for John W. Kluge (the "Trust"), a grantor trust of which John W.
Kluge is the beneficial owner. Mr. Kluge's business address is c/o
Metromedia Company, One Meadowlands Plaza, East Rutherford, New Jersey
07073. His principal occupation is Chairman, President and Chief
Executive Officer of Metromedia Company, a Delaware general
partnership. During the past five years, Mr. Kluge has not been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws. He is a citizen of
the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
The consideration used in acquiring the 816,500 shares of Common Stock
was cash.
Item 4. Purpose of Transaction(s).
Mr. Kluge, through the Trust, purchased 316,500 shares of Common
Stock on the open market on three separate dates as follows: 155,000
shares on April 23, 1997 at $12.43 per share, 109,500 shares on April
24, 1997 at $12.90 per share and 52,000 shares on April 25, 1997 at
$12.99 per share.
On May 2, 1997, the Trust and the Issuer consummated
the transactions contemplated by a stock purchase agreement (the
"PHP SPA"), dated as of April 28, 1997, between the
Trust and the Issuer pursuant to which the Trust purchased 200,000
shares of Common Stock at $13.00 per share.
On May 2, 1997, the Trust and Charles H. Robbins, the former
Chairman of the Board and Chief Executive Officer of the Issuer,
entered into a stock purchase agreement (the "Robbins
<PAGE>
SPA") pursuant to which the Trust purchased from Mr. Robbins 300,000
shares of Common Stock at $13.00 per share. The Robbins SPA and
the PHP SPA are hereinafter referred to as the "Stock Purchase
Agreements".
The shares acquired through purchase on the open market, together with
the shares acquired pursuant to the Stock Purchase Agreements are
hereinafter referred to as the "Shares".
Registration Rights.
In connection with the PHP SPA, the Issuer and the Trust
entered into a Registration Rights Agreement, dated as of
April 28, 1997 (the "Registration Rights Agreement"). Pursuant
to the Registration Rights Agreement, the Issuer has granted
the Trust certain demand and piggyback registration rights,
subject to and upon the terms and conditions set forth
therein. In addition, the Issuer agreed to pay certain
registration expenses in connection with the exercise of such
registration rights.
The foregoing descriptions of the Stock Purchase Agreements
and the Registration Rights Agreement are qualified in their
entirety by the text of the Stock Purchase Agreements and the
Registration Rights Agreement, which are attached hereto as
Exhibits 1, 2 and 3, respectively and are incorporated herein by
reference.
In the ordinary course of business, Mr. Kluge, through the
Trust, acquires or divests himself of significant or controlling
interests in various companies. The purpose of acquiring a
significant or controlling interest in such companies, including
the Issuer, is to enhance the value of the company as an investment.
From time to time Mr. Kluge reviews the performance of the
investments held by the Trust and considers possible strategies
for enhancing value. As part of his ongoing review of the investment
in the Common Stock, Mr. Kluge is currently exploring and may explore
from time to time in the future a variety of alternatives, including,
without limitation: (a) the acquisition of additional securities of
the Issuer or the disposition of securities of the Issuer; (b) an
extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of the assets of the
Issuer or any of its subsidiaries; (d) a change in the present Board
of Directors or management of the Issuer; (e) a material change in
the present capitalization or dividend policy of the Issuer;
(f) other material changes in the Issuer's business or
<PAGE>
corporate structure; (g) causing a class of securities of the Issuer
to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (h) causing a class of
equity securities of the Issuer to become eligible for termination
of registration pursuant to Section 12(g)(4)of the Securities
Exchange Act of 1934, as amended; and (i) other actions similar to
any of those enumerated above. There is no assurance that Mr. Kluge
will develop any plans or proposals with respect to any of the
foregoing matters. Any alternatives which Mr. Kluge may pursue will
depend upon a variety of factors, including, without limitation,
current and anticipated future trading prices for the Common Stock,
the financial condition, results of operations and prospects of the
Issuer and general economic, financial market and industry conditions.
Item 5. Interest in the Securities of the Issuer.
John W. Kluge is the beneficial owner of 816,500 shares of Common
Stock which are directly owned by the Trust of which he is beneficial
owner. This amount constitutes approximately 7.1% of the outstanding
shares of Common Stock as of May 2, 1997.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of Issuer.
See Item 4.
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Stock Purchase Agreement, dated as of April 28, 1997,
between PHP Healthcare Corporation and Chase Manhattan Bank, John W.
Kluge & Stuart Subotnick, Trustees U/A DTD 5/30/84 As Amended made
by and for John W. Kluge
Exhibit 2: Stock Purchase Agreement dated as of May 2, 1997
between Charles H. Robbins and Chase Manhattan Bank, John W. Kluge
& Stuart Subotnick, Trustees U/A DTD 5/30/84 As Amended made by and
for John W. Kluge
Exhibit 3: Registration Rights Agreement, dated as of
April 28, 1997, between PHP Healthcare Corporation and Chase
Manhattan Bank, John W. Kluge & Stuart Subotnick, Trustees
U/A DTD 5/30/84 As Amended made by and for John W. Kluge
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
hereby certify that the information set forth in this statement is true,
complete and correct.
Dated: May 8, 1997
/s/ John W. Kluge
John W. Kluge, Trustee
<PAGE>
EXHIBIT INDEX
Exhibit Description
1. Stock Purchase Agreement, dated as of April 28, 1997, between PHP
Healthcare Corporation and Chase Manhattan Bank, John W. Kluge &
Stuart Subotnick, Trustees U/A DTD 5/30/84 As Amended made by and
for John W. Kluge
2. Stock Purchase Agreement dated as of May 2, 1997 between Charles H.
Robbins and Chase Manhattan Bank, John W. Kluge & Stuart Subotnick,
Trustees U/A DTD 5/30/84 As Amended made by and for John W. Kluge
3. Registration Rights Agreement, dated as of April 28, 1997, between PHP
Healthcare Corporation and Chase Manhattan Bank, John W. Kluge &
Stuart Subotnick, Trustees U/A DTD 5/30/84 As Amended made by and
for John W. Kluge
<PAGE>
STOCK PURCHASE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made as of April 28,
1997, between Chase Manhattan Bank, John W. Kluge & Stuart Subotnick Trustees
U/A DTD 5/30/84 As Amended made by and for John W. Kluge (the "Buyer") and PHP
Healthcare Corporation, a Delaware corporation (the "Company" or the "Seller").
The Buyer and the Company are referred to collectively herein as the "Parties."
WHEREAS, the Buyer intends to purchase from the Company, and the Company
intends to sell to the Buyer, 200,000 shares (the "Shares") of the Company's
common stock, $.01 par value (the "Common Stock") on the terms and subject to
the conditions herein provided;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein made, and upon the terms and
subject to the conditions herein contained, the Parties agree as follows:
SECTION 1
Purchase and Sale of Shares
1.1 Transaction. On and subject to the terms and conditions of this
Agreement, the Buyer agrees to purchase from the Company, and the Company agrees
to sell to the Buyer, 200,000 Shares for the consideration specified below in
this Section 1.2.
1.2 Purchase Price. The Buyer agrees to pay to the Company, by wire
transfer of same day funds, at the Closing (as defined in Section 2) $13.00 per
share, for a total payment of $2,600,000.00 (the "Purchase Price").
1.3 Taxes. The Buyer shall bear the cost of any documentary, stamp,
sales, excise, transfer or other taxes payable (other than income taxes
payable by the Company) in respect of the sale of Shares.
SECTION 2
Closing Dates; Delivery
2.1 Closing Dates. The closing of the transactions contemplated by this
Agreement shall be held at the offices of Fried, Frank, Harris, Shriver &
Jacobson, 1001 Pennsylvania Avenue, N.W., Washington, D. C., or such other place
as the Parties may agree, at no later than 5:00 p.m., local time, on May 1, 1997
(the "Closing") or at such other time and place upon which the Company and the
Buyer shall agree (the date of the Closing is hereinafter referred to as
<PAGE>
the "Closing Date").
2.2 Delivery. At the Closing, (i) the Company will deliver to Buyer a
certificate for the Shares, registered in the Buyer's name and (ii) the Buyer
will deliver via wire transfer to the Company the Purchase Price specified in
Section 1.2 above in immediately available funds.
SECTION 3
Representations, Warranties and Agreements of the Company
The Company represents and warrants to the Buyer that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date:
3.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, the jurisdiction of its incorporation and has all required corporate
power and authority to own its property, to carry on its business as presently
conducted and to carry out the transactions contemplated hereby. The Company is
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where such qualification is required, except where failure to
so qualify would not have a material adverse effect on its business or assets.
3.2 Authorization of Transaction. The execution, delivery and performance
of this Agreement have been duly authorized by all necessary corporate or other
action of the Company. This Agreement is a valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors. The
issuance of the Shares pursuant to the terms of this Agreement shall be, at the
Closing, duly and validly authorized, and no further approval or authority of
the shareholders or the directors of the Company or of any governmental
authority or agency will be required for the issuance and sale of the Shares as
contemplated by this Agreement. When issued and sold to the Buyer, the Shares
will be duly and validly issued, fully paid and non-assessable and shall in all
respects rank pari passu with all other Shares of common stock of the Company.
3.3 No Liens. The Shares will be issued free and clear of any lien,
pledge, security interest, claim, option, right of first refusal, transfer
restriction under any shareholder or similar agreement, encumbrance or other
restriction or limitation.
3.4 Approvals; Compliance With Certificate of Incorporation and By-
<PAGE>
Laws. The Company is not in violation of its Certificate of Incorporation (the
"Certificate") or By-Laws as of the date hereof. The execution, delivery and
performance of this Agreement and the transactions contemplated hereby will not
conflict with or constitute a breach or violation of the Certificate or By-Laws
or of any agreement or other instrument to which the Company is a party.
3.5 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency or
court to which the Company is subject or (ii) violate or result in a breach or
constitute a default under the terms of any contract or agreement to which the
Seller is a party.
3.6 Securities and Exchange Commission Filings. All information contained
in the Seller's filings with the Securities and Exchange Commission ("SEC") is
accurate in all material respects and such filings do not contain any material
misstatement of fact or omit to state any material. Seller has duly filed with
the SEC all reports and documents required to be filed by it under the
Securities Exchange Act of 1934, as amended. All information contained in such
reports and documents is accurate in all material respects and no such report or
document contains any material misstatement of fact or omits to state any
material fact necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading.
3.7 Charles H. Robbins Transaction. Upon the effectiveness of the
Amendment No. 1 to the Employment Agreement between the Seller and Charles H.
Robbins ("Mr. Robbins"), dated as of April 30, 1997, Seller is not a party to
any document, nor is Seller aware of any agreement, that prohibits the sale of
300,000 shares of Common Stock, free and clear, by Mr. Robbins to the Buyer
pursuant to the Stock Purchase Agreement between Mr. Robbins and the Buyer,
dated as of April 30, 1997, in the form attached hereto as Exhibit 3.7.
3.8 No Material Adverse Change. Since the filing of the Seller's Form
10-QA\5 for the quarter ended January 31, 1997, on April 29, 1997, there has
been no event, circumstance or change which would have a material adverse effect
on the properties, business, prospects, results of operations or financial
condition of the Seller and the Seller knows of no such event, circumstance or
change which is threatened.
3.9 Brokers or Finders; Other Offers. The Company has not incurred, and
will not incur, directly or indirectly, as a result of any action taken by the
Company, any liability for brokerage or finders' fees or agents' commissions or
any similar charges in connection with this Agreement.
<PAGE>
3.10 Disclaimer of other Representations and Warranties. Except as
expressly set forth in this Section 3, the Company makes no representation or
warranty, express or implied, at law or in equity, in respect of the Shares, the
Company, its assets, liabilities or operations.
SECTION 4
Representations and Warranties of the Buyer
The Buyer hereby represents and warrants to the Company with respect to the
purchase of the Shares as follows:
4.1 Accredited Investor. The Buyer is an "accredited investor" within the
meaning of Rule 501(a)(3) of Regulation D, under the Securities Act of 1933, as
amended (the "Securities Act").
4.2 Purchase for Investment. The Buyer is purchasing the Shares for
investment for its own account, not as a nominee or agent, and not with a view
to any public resale or other distribution thereof except in compliance with
applicable securities laws. The Buyer understands that the Shares are not
registered under the Securities Act or under any state or foreign securities
laws.
4.3 Access to Information. The Buyer acknowledges that it has reviewed
all public information which it considers necessary or advisable to enable it to
make a decision concerning its purchase of Shares.
4.4 Legal Power and Authority. The Buyer has full legal power and
authority to execute and deliver this Agreement and to perform his obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the Buyer, enforceable in accordance with its terms and conditions. Except
for filings with the SEC, the Buyer need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.
4.5 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency or
court to which the Buyer is subject.
4.6 Brokers or Finders. The Buyer has not, and will not, incur, directly
or indirectly, as a result of any action taken by such Buyer, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement.
<PAGE>
SECTION 5
Buyer's Conditions to Closing
The Buyer's obligations to purchase the Shares at the Closing are subject
to the fulfillment of the following conditions, the waiver of which shall not
be effective unless the Buyer consents in writing thereto:
5.1 Representations and Warranties Correct. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date in all material
respects and the Buyer shall have received on the Closing Date a certificate
from the Seller in the form of Exhibit 5.1 hereto, stating that all such
representations and warranties are true and correct on the Closing Date in all
material respects.
5.2 Compliance with State Securities Laws. The Company shall have
obtained all permits and qualifications required by any state for the offer and
sale of the Shares, or shall have the availability of exemptions therefrom.
5.3 No Prohibition. No statute, rule or regulation or order of any court
or administrative agency shall be in effect which prohibits Buyer from
consummating the transactions contemplated hereby.
5.4 Opinion of Counsel to Seller. Buyer shall have received an opinion of
Fried, Frank, Harris, Shriver & Jacobson, counsel to the Seller, dated the
Closing Date, in the form of Exhibit 5.4 hereto.
5.5 No Claims. Except as disclosed in the SEC filings, there is no
outstanding order of any governmental body against or involving the Seller and
there are no claims pending or threatened against or involving the Company or
any of its properties which individually or in the aggregate could have a
material adverse effect concerning the transactions contemplated hereby.
5.6 Board Approval. Authority to enter this Agreement and the
transactions contemplated hereby has been duly granted by Seller's Board of
Directors.
5.7 Registration Rights Agreement. The Buyer and the Seller shall enter
into a Registration Rights Agreement, substantially in the form of Exhibit
5.7.
5.8 Amendments to Employment and Registration Rights Agreements. Copies
of the following executed documents shall be delivered to Buyer (i) Amendment
No. 1 to the Employment Agreement, dated as of April 30, 1997,
<PAGE>
between Robbins and Seller; substantially in the form or Exhibit 5.8(i) and
(ii) Amendment No. 1 to Registration Rights Agreement, dated April 30, 1997,
by and among the Seller, Charles H. Robbins, Ellen E. Robbins, Charles H.
Robbins, Grantor, Ellen E. Robbins, Trustee under Trust Indenture dated
October 1, 1985, FBO Lee S. Robbins, Charles H. Robbins, Grantor, and Charles
B. Robbins, substantially in the form of Exhibit 5.8(ii).
SECTION 6
Company's Conditions to Closing
The Company's obligation to sell and issue the Shares at the Closing Date
is subject to the fulfillment as of the Closing Date of the following
conditions, the waiver of which shall not be effective unless the Company
consents in writing thereto:
6.1 Representations. The representations made by the Buyer in Section 4
hereof shall be true and correct when made, and shall be true and correct on the
Closing Date in all material respects, and the Company shall have received on
the Closing Date a certificate from the Buyer stating that all such
representations and warranties are true and correct on the Closing Date in all
material respects.
6.2 Compliance with State Securities Laws. The Company shall have
obtained all permits and qualifications required by any state for the offer and
sale of the Shares or shall have the availability of exemptions therefrom.
6.3 No Prohibition. No statute, rule or regulation or order of any court
or administrative agency shall be in effect which prohibits Company from
consummating the transactions contemplated hereby.
SECTION 7
Restrictions on Transferability of Securities; Compliance with Securities Laws
7.1 General Restrictions on Transferability. The Buyer shall not sell,
assign, transfer or pledge the Shares, except upon satisfaction of the
conditions specified in this Section 7, which conditions are intended to ensure
compliance with the provisions of the Securities Act. The Buyer will cause any
proposed purchaser, assignee, transferee, or pledgee of the Shares held by the
Buyer to agree to take and hold such securities subject to the provisions and
conditions of this Section 7.
7.2 Restrictive Legend. Each certificate representing the Shares shall
<PAGE>
be stamped or otherwise imprinted with a legend in the following form (in
addition to any legend required under applicable state securities laws):
THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, THE
COMMON STOCK MAY NOT BE TRANSFERRED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER SUCH ACT AND SUCH LAWS OR PURSUANT TO AN
EXEMPTION THEREFROM.
The Buyer and any subsequent holder consent to the Company making a notation on
its records and giving instructions to any transfer agent of the Shares in order
to implement the restrictions on transfer established in this Section 7.
SECTION 8
Miscellaneous
8.1 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to its rules of
conflict of laws.
8.2 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the Parties.
8.3 Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant hereto at the Closing constitute the full and entire
understanding and agreement between the Parties with regard to the subjects
related to herein, and neither the Buyer nor the Company shall be liable or
bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
8.4 Notices. Any notice or other communication in connection with this
Agreement shall be made in writing and served by personal delivery (including,
without limitation, courier, Federal Express or other overnight messenger
<PAGE>
service), or mailed by United States certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Company:
Jack M. Mazur
President and Chief Executive Officer
PHP Healthcare Corporation.
11440 Commerce Park Drive, Suite 300
Reston, Virginia 20191
Copies to:
Richard A. Steinwurtzel, Esq.
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue, N.W.
Suite 800
Washington, DC 20004-2505
If to the Buyer:
John W. Kluge
215 East 67th Street
New York, NY
Copies to:
Metromedia Company
One Meadowlands Plaza
E. Rutherford, NJ 07073
Attn: General Counsel
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
8.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the Parties actually
executing such counterparts, and all of which together shall constitute one
<PAGE>
instrument.
8.6 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision hereof.
8.7 Headings. The titles and subtitles used in this Agreement are used
for convenience only and should not be considered in construing or interpreting
this Agreement.
8.8 Expenses. The Buyer and the Company shall each bear their own
expenses with respect to this Agreement and the transactions contemplated
hereby.
8.9 Listing. The Company agrees to use reasonable efforts to cause the
Shares to be listed on the New York Stock Exchange.
8.10 Further Assurances. The Parties agree to use their reasonable efforts
to effectuate this Agreement and the transactions contemplated hereby.
<PAGE>
IN WITNESS WHEREOF, each of the Parties hereto caused this Agreement to be
executed on its behalf as of the date first above written.
PHP HEALTHCARE CORPORATION
By: /s/ Anthony M. Picini
Name: Anthony M. Picini
Title: Senior Vice President and Chief Financial
Officer
CHASE MANHATTAN BANK, JOHN W.
KLUGE & STUART SUBOTNICK TRUSTEES
U/A DTD 5/30/84 AS AMENDED MADE BY
AND FOR JOHN W. KLUGE
By: /s/ John W. Kluge
Name: John W. Kluge, Trustee
<PAGE>
STOCK PURCHASE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made as of May 2,
1997, by and between Chase Manhattan Bank, John W. Kluge & Stuart Subotnick
Trustees U/A DTD 5/30/84 As Amended made by and for John W. Kluge (the "Buyer")
and Charles H. Robbins, an individual residing in Virginia (the "Seller"). The
Buyer and the Seller are referred to collectively herein as the "Parties."
WHEREAS, the Buyer intends to purchase from the Seller, and the Seller
intends to sell to the Buyer, 300,000 shares (the "Shares") of PHP Healthcare
Corporation's (the "Company") Common Stock, $.01 par value, on the terms and
subject to the conditions herein provided;
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements herein made, and upon the terms and subject to the
conditions herein contained, the Parties agree as follows:
SECTION 1
Purchase and Sale of Shares
1.1 Transaction. On and subject to the terms and conditions of this
Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees
to sell to the Buyer, the Shares for the consideration specified below in this
Section 1.2.
1.2 Purchase Price. The Buyer agrees to pay to the Seller, by wire
transfer of same day funds, at the Closing (as defined in Section 2) $13.00 per
share, for a total payment of $3,900,000.00 (the "Purchase Price"), to the
account, or accounts, designated by the Seller in writing prior to the Closing
(as defined herein).
1.3 Taxes. The Buyer shall bear the cost of any documentary, stamp,
sales, excise, transfer or other taxes payable (other than income taxes payable
by the Seller) in respect of the sale of Shares.
SECTION 2
Closing Dates; Delivery
2.1 Closing Dates. The closing of the transactions contemplated by this
Agreement shall be held at the offices of Tucker, Flyer & Lewis, 1615 L Street,
N.W., Washington, D. C., or such other place as the Parties may agree, at no
later than 2:00 p.m., local time, on the day which is one business day after the
day on which the last of the conditions set forth in Section 5 and 6 shall have
been
<PAGE>
satisfied or waived (the "Closing") or at such other time and place upon
which the Seller and the Buyer shall agree (the date of the Closing is
hereinafter referred to as the "Closing Date").
2.2 Delivery. At the Closing, (i) the Seller will deliver to Buyer a
certificate or certificate(s) for the Shares, and (ii) the Buyer will deliver
via wire transfer to the Seller the Purchase Price specified in Section 1.2
above in immediately available funds. Each of the certificates shall be duly
endorsed for transfer or accompanied by appropriate stock powers duly executed,
in either case in favor of the Buyer.
SECTION 3
Representations, Warranties and Agreements of the Seller
The Seller represents and warrants to the Buyer that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date:
3.1 Ownership of Shares. The Seller owns the Shares free and clear of all
liens, claims or encumbrances (except for the restrictions set forth in the
Employment Agreement (the "Employment Agreement") dated February 24, 1997 by and
between the Company and the Seller).
3.2 Legal Capacity. The Seller has full legal capacity to execute and
deliver this Agreement and to perform his obligations hereunder (except for the
restrictions set forth in the Employment Agreement). This Agreement constitutes
the valid and legally binding obligation of the Seller, enforceable in
accordance with its terms and conditions. Except as may be required by the
Federal or state securities laws, the Seller need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
3.3 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency or
court to which the Seller is subject or (ii) except for the Employment
Agreement, violate or result in a breach or constitute a default under the terms
of any contract or agreement to which the Seller is a party.
3.4 Brokers or Finders. The Seller has not incurred, and will not incur,
directly or indirectly, as a result of any action taken by the Seller, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement.
<PAGE>
3.5 Other Agreements. Except for the Employment Agreement, the Seller is
not a party to any agreements, contracts, arrangements or understandings with
respect to the transferability or voting of the Shares.
SECTION 4
Representations and Warranties of the Buyer
The Buyer hereby represents and warrants to the Seller that the Statements
contained in this Section 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date.
4.1 Accredited Investor. The Buyer is an "accredited investor" within the
meaning of Rule 501(a)(3) of Regulation D, under the Securities Act of 1933, as
amended (the "Securities Act").
4.2 Purchase for Investment. The Buyer is purchasing the Shares for
investment for its own account, not as a nominee or agent, and not with a view
to any public resale or other distribution thereof except in compliance with
applicable securities laws. The Buyer understands that the Shares are not
registered under the Securities Act or under any state or foreign securities
laws.
4.3 Access to Information. The Buyer acknowledges that it has reviewed
all public information which it considers necessary or advisable to enable it to
make a decision concerning its purchase of Shares.
4.4 Legal Capacity. The Buyer has full legal capacity to execute and
deliver this Agreement and to perform his obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions. Except as may be required by the
Federal or state securities laws, the Buyer need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
4.5 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency or
court to which the Buyer is subject or (ii) except for the Employment Agreement,
violate or result in a breach or constitute a default under the terms of any
contract or agreement to which the Seller is a party.
4.6 Brokers or Finders. The Buyer has not, and will not, incur, directly
or indirectly, as a result of any action taken by such Buyer, any liability for
brokerage
<PAGE>
or finders' fees or agents' commissions or any similar charges in connection
with this Agreement.
<PAGE>
SECTION 5
Buyer's Conditions to Closing
The Buyer's obligations to purchase the Shares at the Closing are subject
to the fulfillment of the following conditions, the waiver of which shall not
be effective unless the Buyer consents in writing thereto:
5.1 Representations and Warranties Correct. The representations and
warranties made by the Seller in Section 3 hereof shall be true and correct when
made, and shall be true and correct on the Closing Date in all material
respects.
5.2 Compliance with State Securities Laws. The Seller shall have obtained
all permits and qualifications required by any state for the offer and sale of
the Shares, or shall have the availability of exemptions therefrom.
5.3 No Prohibition. No statute, rule or regulation or order of any court
or administrative agency shall be in effect which prohibits Buyer from
consummating the transactions contemplated hereby.
5.4 Opinion of Counsel for the Seller. The Seller shall have received an
opinion from Tucker, Flyer & Lewis, counsel to the Seller, dated the Closing
Date, in form and substance reasonably satisfactory to the Buyer.
5.5 Agreement with the Company. The Seller shall have entered into a
valid and binding agreement with the Company, substantially in the form
attached hereto as Exhibit 5.4, modifying the Employment Agreement, which (i)
provides for the termination of the Put Right (as defined in the Employment
Agreement) which was exercised by the Seller on April 30, 1997 and (ii) permits
the sale of the Shares to the Buyer.
5.6 No Claims. There are no claims pending or, to the knowledge of the
Seller, threatened against or involving the Seller which individually or in the
aggregate would have an material adverse effect on the transactions contemplated
hereby.
5.7 Registration Rights Agreement. The Buyer and the Company shall have
entered into a Registration Rights Agreement, in the substantially the form
attached hereto as Exhibit 5.6.
SECTION 6
Seller's Conditions to Closing
The Seller's obligation to sell and issue the Shares at the Closing Date is
subject to the fulfillment as of the Closing Date of the following conditions,
the waiver of which shall not be effective unless the Seller consents in writing
thereto:
<PAGE>
6.1 Representations. The representations made by the Buyer in Section 4
hereof shall be true and correct when made, and shall be true and correct on the
Closing Date in all material respects, and the Seller shall have received on the
Closing Date a certificate from the Buyer stating that all such representations
and warranties are true and correct on the Closing Date in all material
respects.
6.2 Compliance with State Securities Laws. The Seller shall have obtained
all permits and qualifications required by any state for the offer and sale of
the Shares or shall have the availability of exemptions therefrom.
6.3 No Prohibition. No statute, rule or regulation or order of any court
or administrative agency shall be in effect which prohibits Seller from
consummating the transactions contemplated hereby.
6.4 Agreement with the Company. The Seller shall have entered into a
valid and binding agreement with the Company, in the form attached hereto as
Exhibit I, modifying the Employment Agreement. The amendment to the Employment
Agreement shall (i) provide for the termination of the Put Right (as defined in
the Employment Agreement) which was exercised by the Seller on April 30, 1997
and (ii) permit for the sale of the Shares to the Buyer.
SECTION 7
Restrictions on Transferability of Securities; Compliance with Securities Laws
7.1 General Restrictions on Transferability. The Buyer shall not sell,
assign, transfer or pledge the Shares, except upon satisfaction of the
conditions specified in this Section 7, which conditions are intended to ensure
compliance with the provisions of the Securities Act. The Buyer will cause any
proposed purchaser, assignee, transferee, or pledgee of the Shares held by the
Buyer to agree to take and hold such securities subject to the provisions and
conditions of this Section 7.
7.2 Restrictive Legend. Each certificate representing the Shares shall be
stamped or otherwise imprinted with a legend in the following form (in addition
to any legend required under applicable state securities laws):
THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, THE
COMMON STOCK MAY NOT BE TRANSFERRED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER
<PAGE>
SUCH ACT AND SUCH LAWS OR PURSUANT TO AN EXEMPTION THEREFROM.
The Buyer and any subsequent holder consent to the Company making a notation on
its records and giving instructions to any transfer agent of the Shares in order
to implement the restrictions on transfer established in this Section 7.
SECTION 8
Termination
8.1 Termination. This Agreement may be terminated (as to the party
electing to so terminate it) at any time prior to the Closing:
a. by the Buyer if any of the conditions specified in Section 5 of
this Agreement have not been met or waived by the Investor pursuant to the terms
of this Agreement by May 7, 1997 or at such earlier date that it becomes
apparent that any such condition can no longer be satisfied; or
b. by the Seller if any of the conditions specified in Section 6 of
this Agreement have not been met or waived by it pursuant to the terms of this
Agreement by May 7, 1997 or at such earlier date that it becomes apparent that
any such condition can no longer be satisfied.
SECTION 9
Miscellaneous
9.1 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to its rules of
conflict of laws.
9.2 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the Parties.
9.3 Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant hereto at the Closing constitute the full and entire
understanding and agreement between the Parties with regard to the subjects
related to herein, and neither the Buyer nor the Seller shall be liable or bound
to any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
9.4 Notices. Any notice or other communication in connection with this
<PAGE>
Agreement shall be made in writing and served by personal delivery (including,
without limitation, courier, Federal Express or other overnight messenger
service), or mailed by United States certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Seller:
Charles H. Robbins
7720 Carlton Place
Vienna, Virginia 22102
Copies to:
Stefan F. Tucker, Esq.
Lawrence T. Yanowitch, Esq.
Tucker, Flyer & Lewis
1615 L Street, N.W.
Suite 400
Washington, D.C. 20036-5610
If to the Buyer:
John W. Kluge
215 East 57th Street
New York, NY
Copies to:
Metromedia Company
One Meadowlands Plaza
East Rutherford, NJ 07073
Attn: General Counsel
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
9.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the Parties actually
<PAGE>
executing such counterparts, and all of which together shall constitute one
instrument.
9.6 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision hereof.
9.7 Headings. The titles and subtitles used in this Agreement are used
for convenience only and should not be considered in construing or interpreting
this Agreement.
9.8 Expenses. The Buyer and the Seller shall each bear their own expenses
with respect to this Agreement and the transactions contemplated hereby.
9.9 Further Assurances. The Parties agree to use their best efforts to
effectuate this Agreement and the transactions contemplated hereby.
<PAGE>
IN WITNESS WHEREOF, each of the Parties hereto caused this Agreement to be
executed on its behalf as of the date first above written.
CHARLES H. ROBBINS
/s/Charles H. Robbins
Charles H. Robbins
CHASE MANHATTAN BANK,
JOHN W. KLUGE AND STUART
SUBOTNICK, TRUSTEES U/A
DTD 5/30/84 AS AMENDED
MADE BY AND FOR JOHN W.
KLUGE
By: /s/ John W. Kluge
John W. Kluge, Trustee
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of
April 28, 1997, between PHP Healthcare Corporation, a Delaware corporation (the
"Company"), and Chase Manhattan Bank, John W. Kluge and Stuart Subotnick
Trustees U/A DTD 5/30/84 As Amended made by and for John W. Kluge (the
"Stockholder").
WHEREAS, the Company and the Stockholder have entered into a stock purchase
agreement, dated as of the date hereof (the "Stock Purchase Agreement"); and
WHEREAS, in connection with the Stock Purchase Agreement, the Company has
agreed to grant certain rights with respect to registering under the Securities
Act of 1933, as amended, the 200,000 shares of Common Stock acquired by the
Stockholder, pursuant to the Stock Purchase Agreement and 300,000 shares of
Common Stock acquired by the Stockholder from Charles H. Robbins, the Company's
former Chairman and Chief Executive Officer, on the date even with the date
hereof (the "Robbins Transaction").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company, options or warrants to acquire shares of such Common Stock or
securities convertible into such shares of Common Stock, and any equity
securities issued or issuable with respect to the Common Stock in connection
with a reclassification, recapitalization, merger, consolidation or other
reorganization.
"Eligible Shares" means the 500,000 shares of Common Stock acquired by the
Stockholder pursuant to (i) the Stock Purchase Agreement (200,000 shares) and
(ii) the Robbins' Transaction (300,000 shares). Such shares of Common Stock
shall cease to be Eligible Shares when (i) a registration statement with respect
to the sale of such shares shall have become effective under the Securities Act
and such shares shall have been disposed of in accordance with such registration
statement or (ii) such shares shall have been otherwise transferred pursuant to
an applicable exemption under the Securities
<PAGE>
Act, new certificates for such shares not bearing a legend restricting
further transfer shall have been delivered by the Company and such shares
shall be freely transferable to the public without registration under the
Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect from time to time.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.
"Rule 144" means Rule 144 promulgated under the Securities Act or any
successor rule thereto or any complementary rule thereto.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
2. Registration Rights.
2.1. Demand Registration.
(a) (i) Subject to Sections 2.1(b) and 2.3 below, at any time after
the date hereof, the Stockholder shall have the right to require the Company to
file one shelf registration statement pursuant to Rule 415 of the Securities Act
covering all, and not less than all, of the Eligible Shares by delivering a
written request therefor to the Company specifying the number of Eligible Shares
to be included in such shelf registration statement and the intended method of
distribution thereof (other than an underwritten public offering). All such
requests by the Stockholder pursuant to Sections 2.1(a)(i) are referred to
herein as "Demand Registration Requests," and the registrations so requested are
referred to herein as "Demand Registrations."
(ii) The Company shall, as expeditiously as possible following,
but in no case more than 30 days after, a Demand Registration Request, use its
best efforts to (x) effect such registration under the Securities Act of
Eligible Shares which the Company has been so requested to register, for
distribution in accordance with such intended method of distribution (other than
an underwritten offering), and (y) if requested by the Stockholder, obtain
acceleration of the effective date of the registration statement relating to
such registration.
(b) If the Board of Directors of the Company, in its good faith
<PAGE>
judgment, determines that any registration of Eligible Shares should not be made
or continued because it would materially interfere with any material financing,
acquisition, corporate reorganization or merger or other material transaction
involving the Company or any of its subsidiaries (a "Valid Business Reason"),
(x) the Company may postpone filing a registration statement relating to a
Demand Registration Request until such Valid Business Reason no longer exists,
but in no event for more than three months, and (y) in case a registration
statement has been filed relating to a Demand Registration Request, the Company
may cause such registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such registration statement
until such Valid Business Reason no longer exists, but in no event for more than
three months (such period of postponement or withdrawal under sub clause (x) or
(y) of this clause (b), the "Postponement Period"); and the Company shall give
written notice of its determination to postpone or withdraw a registration
statement and of the fact that the Valid Business Reason for such postponement
or withdrawal no longer exists, in each case, promptly after the occurrence
thereof; provided, however, the Company shall not be permitted to postpone or
withdraw a registration statement within 12 months after the expiration of any
Postponement Period.
If the Company shall give any notice of postponement or withdrawal of any
registration statement, the Company shall not, during the period of postponement
or withdrawal, register any Common Stock, other than pursuant to a registration
statement on Form S-4 or S-8 (or an equivalent registration form then in
effect). The Stockholder agrees that, upon receipt of any notice from the
Company that the Company has determined to withdraw any registration statement
pursuant to clause (b) above, the Stockholder will discontinue any disposition
of Eligible Shares pursuant to such registration statement and, if so directed
by the Company, will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Stockholder's possession
of the prospectus covering such Eligible Shares that was in effect at the time
of receipt of such notice. If the Company shall have withdrawn or prematurely
terminated a registration statement filed under Section 2.1(a)(i) (whether
pursuant to clause (b) above or as a result of any stop order, injunction or
other order or requirement of the Commission or any other governmental agency or
court), the Company shall not be considered to have effected an effective
registration for the purposes of this Agreement until the Company shall have
filed a new registration statement covering Eligible Shares covered by the
withdrawn registration statement and such registration statement shall have been
declared effective and shall not have been withdrawn. If the Company shall give
any notice of withdrawal or postponement of a registration statement, the
Company shall, at such time as the Valid Business Reason that caused such
withdrawal or postponement no longer exists (but in no event later than three
months after the date of the postponement or withdrawal), use its best efforts
to effect the registration under the Securities Act of Eligible Shares covered
by the
<PAGE>
withdrawn or postponed registration statement in accordance with this Section
2.1 (unless the Stockholder shall have withdrawn such request, in which case
the Company shall not be considered to have effected an effective
registration for the purposes of this Agreement), and such registration shall
not be withdrawn or postponed pursuant to clause (b) above.
(c) The Company, subject to Sections 2.3 and 2.6, may elect to
include in any registration statement and offering made pursuant to
Section 2.1(a)(i), authorized but unissued shares of Common Stock or shares of
Common Stock held by the Company as treasury shares.
2.2. Piggyback Registrations.
(a) If, at any time, the Company proposes or is required to register
any of its equity securities under the Securities Act (other than pursuant to
(i) registrations on such form or similar form(s) solely for registration of
securities in connection with an employee benefit plan or dividend reinvestment
plan or a merger or consolidation or (ii) a Demand Registration under Section
2.1) on a registration statement on Form S-1, Form S-2 or Form S-3 (or an
equivalent general registration form then in effect), whether or not for its own
account, the Company shall give prompt written notice of its intention to do so
to the Stockholder. Upon the written request of the Stockholder, made within
15 days following the receipt of any such written notice (which request shall
specify the maximum number of Eligible Shares intended to be disposed of by the
Stockholder and the intended method of distribution thereof), the Company shall,
subject to Sections 2.2(b), 2.3 and 2.6 hereof, use its best efforts to cause
all such Eligible Shares that the Stockholder requested the registration
thereof, to be registered under the Securities Act (with the securities which
the Company at the time proposes to register) to permit the sale or other
disposition by the Stockholder (in accordance with the intended method of
distribution thereof) of Eligible Shares to be so registered. The Company is
obligated to effect no more than two piggyback registrations pursuant to this
Section 2.2, each of such registrations being for a minimum of 250,000 of the
Eligible Shares. No registration effected under this Section 2.2(a) shall
relieve the Company of its obligation to effect a Demand Registration.
(b) If, at any time after giving written notice of its intention to
register any equity securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
equity securities, the Company may, at its election, give written notice of such
determination to the Stockholder and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Eligible Shares in
connection with such abandoned registration, without prejudice, however, to the
rights of Stockholder under Section 2.1, and (ii) in the case of a determination
to
<PAGE>
delay such registration of its equity securities, shall be permitted to
delay the registration of such Eligible Shares requested by the Stockholder
to be included therein for the same period as the delay in registering such
other equity securities.
(c) The Stockholder shall have the right to withdraw its request for
inclusion of its Eligible Shares in any registration statement pursuant to this
Section 2.2 by giving written notice to the Company of its request to withdraw;
provided, however, that (i) such request must be made in writing prior to the
earlier of the execution of the underwriting agreement or the execution of the
custody agreement with respect to such registration and (ii) such withdrawal
shall be irrevocable and, after making such withdrawal, the Stockholder shall no
longer have any right to include Eligible Shares in the registration as to which
such withdrawal was made.
2.3. Allocation of Securities Included in Registration Statement.
If any registration pursuant to Section 2.2 involves an underwritten
offering and the underwriter shall advise the Company that, in its view, the
number of securities requested to be included in such registration exceeds the
number (the "Section 2.2 Sale Number") that can be sold in an orderly manner in
such registration within a price range acceptable to the Company, the Company
shall include in such registration:
(i) first, all Common Stock that the Company proposes (the "Company
Securities");
(ii) second, to the extent that the number of Company Securities is
less than the Section 2.2 Sale Number, the remaining shares to be included in
such registration shall be allocated on a pro rata basis among (x) all other
persons exercising right to include Common Stock in such registration and (y)
the Eligible Shares requested to be registered by the Stockholder, provided,
however, that the Stockholder shall be subject to any agreements between the
Company and any such other person as of a date prior to the date hereof in
respect of the allocation set forth in this Section 2.3(ii).
2.4. Registration Procedures.
If and whenever the Company is required by the provisions of this
Agreement to use its best efforts to effect or cause the registration of any
Eligible Shares under the Securities Act as provided in this Agreement, the
Company shall, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement on an
appropriate registration form of the Commission for the
<PAGE>
disposition of such Eligible Shares in accordance with the intended method of
disposition thereof, which form (i) shall be selected by the Company and (ii)
shall be available for the sale of Eligible Shares by the Stockholder and
shall comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the
Commission to be filed therewith, and the Company shall use its best efforts
to cause such registration statement to become and remain effective for the
time periods set forth in subsection (b) of this Section 2.4 (provided,
however, that before filing a registration statement or prospectus or any
amendments or supplements thereto, or comparable statements under securities
or blue sky laws of any jurisdiction, the Company will furnish to one counsel
for the Stockholder, copies of all such documents proposed to be filed
(including all exhibits thereto), which documents will be subject to the
reasonable review and reasonable comment of such counsel, and the Company
shall not file any registration statement or amendment thereto or any
prospectus or supplement thereto to which the Stockholder shall reasonably
object in writing);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period not to exceed two years as the Stockholder shall request and to comply
with the provisions of the Securities Act with respect to the sale or other
disposition of all Eligible Shares covered by such registration statement in
accordance with the intended methods of disposition by the Stockholder set forth
in such registration statement;
(c) furnish, without charge, to the Stockholder such number of copies
of such registration statement, each amendment and supplement thereto (in each
case including all exhibits), and the prospectus included in such registration
statement (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and other documents, as the Stockholder may
reasonably request in order to facilitate the public sale or other disposition
of Eligible Shares owned by the Stockholder (the Company hereby consenting to
the use in accordance with applicable law of each such registration statement
(or amendment or post-effective amendment thereto) and each such prospectus (or
preliminary prospectus or supplement thereto), the Stockholder in connection
with the offering and sale of Eligible Shares covered by such registration
statement or prospectus);
(d) use its best efforts to register or qualify Eligible Shares
covered by such registration statement under such other securities or "blue sky"
laws of such jurisdictions as the Stockholder shall reasonably request, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable the Stockholder to consummate the disposition of Eligible Shares in
such jurisdictions, except that in no event shall the Company be
<PAGE>
required to qualify to do business as a foreign corporation in any
jurisdiction where it would not, but for the requirements of this paragraph
(d), be required to be so qualified, to subject itself to taxation in any
such jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) promptly notify the Stockholder (i) when the registration
statement, any pre-effective amendment, the prospectus or any prospectus
supplement related thereto or post-effective amendment to the registration
statement has been filed and, with respect to the registration statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or state securities authority for amendments or
supplements to the registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any Eligible Shares for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose; (v) of the
existence of any fact of which the Company becomes aware which results in the
registration statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading; and (vi) if at any time
the representations and warranties contemplated by Section 3 below cease to be
true and correct in all material respects; and, if the notification relates to
an event described in clause (v), the Company shall promptly prepare and furnish
to the Stockholder a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to the purchasers of such Eligible
Shares, such prospectus shall not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading;
(f) comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders, as soon as
reasonably practicable after the effective date of the registration statement,
an earnings statement (which need not be audited) covering the period of at
least twelve consecutive months beginning with the first day of the Company's
first calendar quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(g) (i) cause all such Eligible Shares covered by such registration
statement to be listed on the principal securities exchange on which similar
securities issued by the Company are then listed (if any), if the listing of
such Eligible Shares is then permitted under the rules of such exchange, or
(ii) if
<PAGE>
no similar securities are then so listed, to either cause all such Eligible
Shares to be listed on a national securities exchange or to secure
designation of all such Eligible Shares as a National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") "national
market system security" within the meaning of Rule 11Aa2-1 of the Commission
or, failing that, secure NASDAQ authorization for such shares and, without
limiting the generality of the foregoing, take all actions that may be
required by the Company as the issuer of such Eligible Shares in order to
facilitate the managing underwriter's arranging for the registration of at
least two market makers as such with respect to such shares with the National
Association of Securities Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent and registrar
for all such Eligible Shares covered by such registration statement not later
than the effective date of such registration statement;
(i) enter into such customary agreements and take such other actions
as the Stockholder shall reasonably request in order to expedite or facilitate
the disposition of such Eligible Shares. If any of the Eligible Shares are to
be distributed by underwriters, the Stockholder shall be party to such
underwriting agreement and may, at the Stockholder's option, require that the
Company make to and for the benefit of the Stockholder the representations,
warranties and covenants of the Company which are being made to and for the
benefit of such underwriters and which are of the type customarily provided to
institutional investors in secondary offerings;
(j) obtain an opinion from the Company's counsel and a "cold comfort"
letter from the Company's independent public accountants in customary form and
covering such matters as are customarily covered by such opinions and "cold
comfort" letters, which opinion and letter shall be reasonably satisfactory to
the Stockholder;
(k) deliver promptly to the Stockholder copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement, other than those portions of any such memoranda
which contain information subject to attorney-client privilege with respect to
the Company, and, upon receipt of such confidentiality agreements as the Company
may reasonably request, make reasonably available for inspection by any
attorney, accountant or other agent retained by the Stockholder, all pertinent
financial and other records, pertinent corporate documents and properties of the
Company, and cause all of the Company's officers, directors and employees to
supply all information reasonably requested by the Stockholder or such attorney,
accountant or agent in connection with such registration statement;
<PAGE>
(l) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Eligible Shares, not later than
the effective date of the registration statement;
(n) within a reasonable time prior to the filing of any registration
statement, any related prospectus, any amendment to such a registration
statement or amendment or supplement to such a prospectus, provide copies of
such document to the Stockholder and the Stockholder's counsel invite the
Stockholder and the Stockholder's counsel to attend drafting sessions with
respect to such documents; make such reasonable changes in any such document
prior to or after the filing thereof as the counsel to the Stockholder may
reasonably request, provided that such changes shall not (x) unreasonably delay
the filing of such document or (y) unreasonably interfere with the good faith
judgment of the Company and its counsel with respect to disclosures made in such
documents about the Company; and make available for discussion of such document
such of the representatives of the Company as shall be reasonably requested by
the Stockholder;
(o) upon request, at least one day prior to the filing of any
document which is to be incorporated by reference into the registration
statement or the prospectus (after the initial filing of such registration
statement) provide copies of such document to the Stockholder, and make the
Company's representatives reasonably available for discussion of such document;
(p) furnish to the Stockholder, without charge, at least one copy of
the registration statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(q) cooperate with the Stockholder to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing Eligible Shares to be sold, and cause such Eligible Shares to be
issued in such denominations and registered in such names in accordance with the
underwriting agreement or, if not an underwritten offering, in accordance with
the instructions of the Stockholder at least three business days prior to any
sale of Eligible Shares; and
(r) take all such other commercially reasonable actions the Company
deems necessary or advisable in order to expedite or facilitate the disposition
of such Eligible Shares.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.4 that the Stockholder furnish the Company such
<PAGE>
information regarding the Stockholder and the distribution of such securities
as the Company may from time to time reasonably request provided that such
information shall be used only in connection with such registration.
The Stockholder agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in clause (v) of paragraph (e)
of this Section 2.4, the Stockholder will discontinue its disposition of
Eligible Shares pursuant to the registration statement covering such Eligible
Shares until the Stockholder's receipt of the copies of the supplemented or
amended prospectus contemplated by paragraph (e) of this Section 2.4 and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in the Stockholder's
possession of the prospectus covering such Eligible Shares that was in effect at
the time of receipt of such notice. In the event the Company shall give any
such notice, the applicable period mentioned in paragraph (b) of this
Section 2.4 shall be extended by the number of days during such period from and
including the date of the giving of such notice to and including the date when
each seller of any Eligible Shares covered by such registration statement shall
have received the copies of the supplemented or amended prospectus contemplated
by paragraph (e) of this Section 2.4.
2.5. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with this Article 2, including, without limitation, all registration and
filing fees (including all expenses incident to filing with the New York
Stock Exchange, the NASDAQ or any other exchange), fees and expenses of
complying with securities and blue sky laws, printing and copying expenses,
fees and expenses of the Company's counsel and accountants, the fees and
disbursements of all independent public accountants (including the expenses
of any audit and/or "cold comfort" letter), and any other fees and
disbursements of underwriters, if any, customarily paid by issuers or sellers
of securities shall be paid by the Company; provided, however, that all
underwriting discounts and selling commissions applicable to Eligible Shares
and fees and disbursements of counsel for the Stockholder with respect to the
Eligible Shares shall be borne by the Stockholder.
2.6. Certain Limitations on Registration Rights.
In the case of a registration under Section 2.2, if the Company has
determined to enter into an underwriting agreement in connection therewith,
all securities to be included in such registration shall be subject to an
underwriting agreement and no Person may participate in such registration
unless such Person agrees to sell such Person's securities on the basis
provided therein and completes and executes all reasonable questionnaires and
other documents
<PAGE>
(including custody agreements and powers of attorney) which must be executed
in connection therewith, and provides such other information to the Company
or the underwriter as may be necessary to register such Person's securities.
2.7. No Required Sale.
Nothing in this Agreement shall be deemed to create an independent
obligation on the part of the Stockholder to sell any Eligible Shares
pursuant to any effective registration statement.
2.8. Indemnification.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company
will, and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, the Stockholder, and each other Person, if any, who
controls the Stockholder within the meaning of the Securities Act, against
any and all losses, claims, damages or liabilities, joint or several, actions
or proceedings (whether commenced or threatened) in respect thereof
("Claims") and expenses to which each such indemnified party may become
subject under the Securities Act or otherwise, insofar as such Claims or
expenses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement,
together with the documents incorporated by reference therein, under which
such securities were registered under the Securities Act or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any preliminary, final or summary prospectus or any amendment or supplement
thereto, together with the documents incorporated by reference therein, or
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
(iii) any violation by the Company of any federal, state or common law, rule
or regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration; provided,
however, that the Company shall not be liable to any such indemnified party
in any such case to the extent such Claim or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission of a material fact made in such
registration statement or amendment thereof or supplement thereto or in any
such prospectus or any preliminary, final or summary prospectus in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of such indemnified party specifically for use therein.
(b) The Stockholder (and, if the Company requires as a
<PAGE>
condition to including any Eligible Shares in any registration statement
filed in accordance with Section 2.2, any underwriter) shall, severally and
not jointly, indemnify and hold harmless (in the same manner and to the same
extent as set forth in paragraph (a) of this Section 2.8) to the extent
permitted by law the Company, its officers and directors, each Person
controlling the Company within the meaning of the Securities Act and all
other prospective sellers and their directors and officers, and respective
controlling Persons with respect to any untrue statement or alleged untrue
statement of any material fact in, or omission or alleged omission of any
material fact from, such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company or its representatives by or on behalf of the Stockholder (or
underwriter with respect to information provided by such underwriter),
specifically for use therein and reimburse such indemnified party for any
legal or other expenses reasonably incurred in connection with investigating
or defending any such Claim as such expenses are incurred; provided, however,
that the aggregate amount which the Stockholder shall be required to pay
pursuant to this Section 2.8(b) and Sections 2.8(c) and (e) shall in no case
be greater than the amount of the net proceeds received by the Stockholder
upon the sale of Eligible Shares pursuant to the registration statement
giving rise to such claim. Such indemnity and reimbursement of expenses
shall remain in full force and effect regardless of any investigation made by
or on behalf of such indemnified party and shall survive the transfer of such
securities by the Stockholder.
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.8 (with appropriate modifications)
shall be given by the Company and the Stockholder with respect to any required
registration or other qualification of securities under any state securities and
"blue sky" laws.
(d) Any person entitled to indemnification under this Agreement shall
notify promptly the indemnifying party in writing of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 2.8, but the failure of any indemnified party to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 2.8, except to the extent the
indemnifying party is materially prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Article 2. In case any action or proceeding is
brought against an indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to
the indemnified party a conflict of interest between such indemnified and
<PAGE>
indemnifying parties may exist in respect of such claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
that it so chooses, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that (i) if the indemnifying party
fails to take reasonable steps necessary to defend diligently the action or
proceeding within 20 days after receiving notice from such indemnified party
that the indemnified party believes it has failed to do so; or (ii) if such
indemnified party who is a defendant in any action or proceeding which is also
brought against the indemnifying party reasonably shall have concluded that
there may be one or more legal defenses available to such indemnified party
which are not available to the indemnifying party; or (iii) if representation of
both parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct, then, in any such case, the indemnified party
shall have the right to assume or continue its own defense as set forth above
(but with no more than one firm of counsel for all indemnified parties in each
jurisdiction, except to the extent any indemnified party or parties reasonably
shall have concluded that there may be legal defenses available to such party or
parties which are not available to the other indemnified parties or to the
extent representation of all indemnified parties by the same counsel is
otherwise inappropriate under applicable standards of professional conduct) and
the indemnifying party shall be liable for any expenses therefor. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 2.8(a), (b) or
(c), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of any Claim in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and the indemnified party, on the other hand, with respect to such
offering of securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or
<PAGE>
prevent such untrue statement or omission. If, however, the allocation
provided in the second preceding sentence is not permitted by applicable law,
then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 2.8(e) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
preceding sentences of this Section 2.8(e). The amount paid or payable in
respect of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding anything in this Section
2.8(e) to the contrary, no indemnifying party (other than the Company) shall
be required pursuant to this Section 2.8(e) to contribute any amount in
excess of the net proceeds received by such indemnifying party from the sale
of Eligible Shares in the offering to which the losses, claims, damages or
liabilities of the indemnified parties relate, less the amount of any
indemnification payment made by such indemnifying party pursuant to Sections
2.8(b) and (c).
(f) The indemnity agreements contained herein shall be in addition to
any other rights to indemnification or contribution which any indemnified party
may have pursuant to law or contract and shall remain operative and in full
force and effect regardless of any investigation made or omitted by or on behalf
of any indemnified party and shall survive the transfer of Eligible Shares by
any the Stockholder.
(g) The indemnification and contribution required by this Section 2.8
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
(h) In connection with underwritten offerings, the Company will use
its best efforts to negotiate terms of indemnification that are reasonably
favorable to the Stockholder, as appropriate under the circumstances.
3. Piggyback Underwritten Offerings.
In the case of a registration pursuant to Section 2.2 hereof, if the
Company shall have determined to enter into an underwriting agreement in
connection therewith, all of the Stockholder's Eligible Shares to be included in
such registration shall be subject to such underwriting agreement. The
<PAGE>
Stockholder may, at its option, require that any or all of the representations
and warranties by, and the other agreements on the part of, the Company to and
for the benefit of such underwriters shall also be made to and for the benefit
of the Stockholder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of the Stockholder. Such underwriting agreement
shall also contain such representations and warranties by the Stockholder as are
customary in agreements of that type.
4. General.
4.1. Recapitalizations, Exchanges, etc., Affecting Eligible Shares.
The provisions of this Agreement shall, to the extent reasonably
practicable, apply, to the full extent set forth herein with respect to
Eligible Shares, to any and all securities or capital stock (of the Company
or any successor to the Company and/or any other issuer thereof) which may be
issued in respect of, in exchange for, or in substitution of such Eligible
Shares, by reason of, and shall be appropriately adjusted to reflect, any
stock dividend, stock split, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or otherwise. The
adjustments contemplated by this paragraph shall be made cumulative with
respect to all such transactions contemplated by this Section that occur from
time to time. Any issuer of any such securities other than the Company shall
be required to assume in writing, to the extent relevant, the Company's
obligations with respect to the registration rights granted hereunder or
enter into a registration rights agreement substantially similar to this
Agreement and giving effect to the allocations and adjustments contemplated
by this Section, in connection with any such transaction pursuant to which
the Stockholder shall receive securities of such issuer, as contemplated by
this Section.
4.2. Rule 144.
The Company covenants that (i) so long as it remains subject to the
reporting provisions of the Exchange Act, it will timely file the reports
required to be filed by it under the Securities Act or the Exchange Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities
Act), and (ii) will take such further action as the Stockholder may reasonably
request, all to the extent required from time to time to enable the Stockholder
to sell Eligible Shares without registration under the Securities Act within the
limitation of the exemptions provided by (A) Rules 144 and 145 under the
Securities Act, as such Rules may be amended from time to time, or (B) any
similar rule or regulation hereafter adopted by the Commission. Upon the
request of the Stockholder, the Company will deliver to the Stockholder a
written statement as to whether it has
<PAGE>
complied with such requirements.
4.3. Nominees for Beneficial Owners.
If Eligible Shares are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its option, be treated as the
holder of such Eligible Shares for purposes of any request or other action by
the Stockholder pursuant to this Agreement (or any determination of any number
or percentage of shares constituting Eligible Shares held by the Stockholder
contemplated by this Agreement), provided that the Company shall have received
assurances reasonably satisfactory to it of such beneficial ownership.
4.4. Amendments and Waivers.
This Agreement may be amended, modified, supplemented or waived only
upon the written agreement of the Company and the Stockholder.
4.5. Notices.
Any notice required to be given hereunder shall be sufficient if in
writing, and sent by facsimile transmission and by courier service (with
proof of service), hand delivery or certified or registered mail (return
receipt requested and first-class postage prepaid), addressed as follows:
(i) if to the Company
11440 Commerce Park Drive
Reston, Virginia 22091
Attention: Jack M. Mazur
Facsimile: (703) 758-7259
with a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue, N.W.
Suite 800
Washington, D.C. 20004
Attention: Richard A. Steinwurtzel
Facsimile: (202) 639-7003
(ii) if to any of the Stockholder
John W. Kluge
215 East 67th Street
New York, NY
<PAGE>
with a copy (which shall not constitute notice) to:
Metromedia Company
One Meadowlands Plaza
E. Rutherford, NJ 07073
Attn: General Counsel
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
4.6. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and the respective successors, personal representatives and
assigns; provided, however, that the Stockholder may not assign any registration
rights under this Agreement to a third party. No Person other than the
Stockholder or its affiliates shall be entitled to any benefits under this
Agreement, except as otherwise expressly provided herein.
(b) This Agreement and any documents delivered by the parties in
connection herewith constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto. No addition to or
modification of any provision of this Agreement shall be binding upon any party
hereto unless made in writing and signed by all parties hereto.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to its rules of conflict
of laws. Each of the parties hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the courts of the State of Delaware and
of the United States of America located in the State of Delaware (the "Delaware
Courts") for any litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts), waives any objection to the laying of
venue of any such litigation in the Delaware Courts and agrees not to plead or
claim in any Delaware Court that such litigation brought therein has been
brought in an inconvenient forum.
(d) The headings of this Agreement are for the convenience of the
parties only, and shall be given no substantive or
<PAGE>
interpretative effect whatsoever.
(e) This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties
hereto.
(f) Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
(g) The parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or was otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any Delaware Court, this being in addition to any other
remedy to which they are entitled at law or in equity.
(h) Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(i) In this Agreement, unless the context otherwise requires, words
describing the singular number shall include the plural and vice versa, and
words denoting any gender shall include all genders and words denoting natural
persons shall include corporations and partnerships and vice versa.
(j) Except as provided in this Agreement, no action taken pursuant to
this Agreement, including, without limitation, any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with
<PAGE>
any representations, warranties, covenants or agreements contained in this
Agreement. The waiver by any party hereto of a breach of any provision
hereunder shall not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder.
4.7. No Inconsistent Agreements.
Neither the Company nor the Stockholder will, on or after the date of
this Agreement, enter into any agreement with respect to its securities which is
inconsistent with the rights granted in this Agreement or otherwise conflicts
with the provisions hereof, other than any lock-up agreement with the
underwriters in connection with any registered offering effected hereunder,
pursuant to which the Company shall agree not to register for sale, and the
Company shall agree not to sell or otherwise dispose of, Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, for
a specified period following the registered offering. Notwithstanding the
foregoing, the Company may grant registration rights to future stockholders in
future registration rights agreements.
4.8. Termination.
This Agreement shall terminate on May 1, 1999; provided, however, that
if the Company, in violation of this Agreement, fails to effectuate a Demand
Registration for which a Demand Registration Notice was timely delivered to the
Company, the Company shall continue to be required to effectuate such Demand
Registration and maintain its effectiveness until the earlier of (x) the
Eligible Shares thereunder are sold in accordance with the method of
distribution or (y) one year from the date of such effectiveness.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set forth above.
PHP HEALTHCARE CORPORATION
By: /s/ Anthony M. Picini
Name: Anthony M. Picini
Title: Senior Vice President
and Chief Financial Officer
CHASE MANHATTAN BANK, JOHN W.
KLUGE & STUART SUBOTNICK,
TRUSTEES U/A DTD 5/30/84 AS
AMENDED MADE BY AND FOR
JOHN W. KLUGE
By: /s/ John W. Kluge
Name: John W. Kluge, Trustee
