1
Exhibit 10.18
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, OR OTHERWISE
TRANSFERRED, IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH APPLICABLE STATE LAWS.
STOCK PURCHASE WARRANT
This Warrant is issued this 1st day of October, 1996, by Children's
Comprehensive Services, Inc., a Tennessee corporation (the "Company"), to
Kenneth W. Miller ("Mr. Miller").
WITNESSETH:
1. ISSUANCE OF WARRANT; TERM. For and in consideration of the partial
surrender and cancellation of a Stock Purchase Warrant issued to School
Improvement Services, Inc. on October 1, 1994, and subsequently amended on
October 4, 1995, by the Company and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company hereby
grants to Mr. Miller, subject to the surrender of Amendment No. 1 to the
Original Warrant and the provisions hereinafter set forth, the right to purchase
5,758 shares of Common Stock, $.01 par value, of the Company (the "Common
Stock"). The shares of Common Stock issuable upon exercise of this Warrant are
hereinafter referred to as the "Shares." This Warrant shall be exercisable at
any time and from time to time from the date hereof through the period ending
September 30, 2004.
2. EXERCISE PRICE. The exercise price per share at which all or any of
the Shares may be purchased pursuant to the terms of this Warrant shall
be $5.20.
3. EXERCISE. This Warrant may be exercised by the holder hereof as to
all or any increment or increments of 1,000 Shares (or the balance of the Shares
if less than such number), upon delivery of written notice of intent to exercise
to the Company at 805 South Church Street, Murfreesboro, Tennessee 37130, or
such other address as the Company shall designate in a written notice to the
holder hereof, together with this Warrant and a certified or cashiers check
payable to the Company for the aggregate purchase price of the Shares so
purchased. Upon exercise of this Warrant as aforesaid, and upon compliance with
the covenants and conditions of Section 4 hereof, the Company shall, as promptly
as practicable, and in any event within 15 days thereafter, execute and deliver
to the holder of this Warrant a certificate or certificates for the total number
of whole Shares for which this Warrant is being exercised in such names and
denominations as are requested by such holder. If this Warrant shall be
exercised with respect to less than all of the Shares, the holder shall be
entitled to receive a new Warrant covering the
2
number of Shares in respect of which this Warrant shall not have been exercised,
which new Warrant shall in all other respects be identical to this Warrant.
4. COVENANTS AND CONDITIONS. The issuance of shares pursuant hereto
are subject to the following:
(a) Neither this Warrant nor the Shares have been registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws ("Blue Sky Laws"). This Warrant has been acquired for
investment purposes only and not with a view to distribution or resale
and may not be made subject to a security interest, pledged,
hypothecated, sold, exercised in favor of third parties or otherwise
transferred without an effective registration statement for such
Warrant under the Act and applicable Blue Sky Laws or an opinion of
counsel reasonably satisfactory to the Company that registration is
not required under the Act or under any applicable Blue Sky Laws.
(b) Transfer of the Shares issued upon the exercise of this
Warrant shall be restricted in the same manner and to the same extent
as the Warrant and the certificates representing such Shares shall
bear the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE
BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER HEREOF AND
MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL (i) A REGISTRATION
STATEMENT UNDER THE ACT AND SUCH STATE SECURITIES LAWS AS ARE
APPLICABLE SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR
(ii) IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS AS ARE
APPLICABLE IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
OFFER, SALE OR TRANSFER.
(c) The holder hereof and the Company agree to execute such other
documents and instruments as counsel for the Company reasonably deems
necessary to effect the compliance of the issuance of this Warrant and
any shares of Common Stock issued upon exercise hereof with applicable
federal and state securities laws.
(d) The Company covenants and agrees that all Shares which may be
issued upon exercise of this Warrant will, upon issuance and payment
therefor, be legally and validly issued and outstanding, fully paid
and nonassessable, free from all taxes, liens and
2
3
charges with respect thereto or to the issuance thereof. The Company
shall at all times reserve and keep available for issuance upon the
exercise of this Warrant or Warrants such number of the authorized but
unissued shares of the Common Stock as from time to time may be
required to exercise this Warrant (or any replacement thereof) in
full.
5. TRANSFER OF WARRANTS. Subject to the provisions of Paragraph 4, this
Warrant may be transferred, in whole or in part, by presentation of the Warrant
to the Company with written instructions for such transfer. Upon presentation
for transfer, the Company shall promptly execute and deliver a new Warrant or
Warrants in the form hereof in the name of the assignee or assignees and in the
denominations specified in such instructions. All expenses, taxes and other
charges payable in connection with the preparation, issuance and delivery of
Warrants under this Paragraph shall be paid by the party requesting transfer of
the Warrant.
6. WARRANT HOLDER NOT SHAREHOLDER. This Warrant does not confer upon
the holder hereof, as such, any right whatsoever as a shareholder of the
Company.
7. ADJUSTMENT UPON CHANGES IN STOCK. The number of Shares subject to
this Warrant and the price per share of such Shares shall be adjusted by the
Company in an equitable manner to reflect changes in the capitalization of the
Company, occurring after the date hereof, including, but not limited to, such
changes as result from merger, consolidation, reorganization, recapitalization,
reclassification, stock dividend, dividend in property other than cash, stock
split, combination of shares, exchange of shares and change in corporate
structure. If any adjustment under this Paragraph 7 would create a fractional
share of Common Stock or a right to acquire a fractional share of Common Stock,
the aggregate number of shares represented by this Warrant shall be adjusted and
any resulting fractional share shall be rounded to the nearest whole share.
Whenever the number of Shares issuable upon exercise of this Warrant or the
price per share of such Shares shall be adjusted pursuant to this Paragraph 7,
the Company shall forthwith notify the holder or holders of this Warrant of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date first above written.
CHILDREN'S COMPREHENSIVE SERVICES, INC.
By:
-----------------------------------
Title:
--------------------------------
KENNETH W. MILLER
--------------------------------------
3