1
Exhibit 10.4
Execution Copy
WARRANT AGREEMENT
between
AMN HOLDINGS, INC.,
as Issuer,
and
THE VARIOUS WARRANTHOLDERS
WHO ARE OR MAY BECOME PARTY HERETO
Dated as of November 19, 1999
2
TABLE OF CONTENTS
Page
SECTION 1. Definitions...................................................1
SECTION 2. The Warrants; Aggregate Number................................7
SECTION 3. Exercise. ....................................................7
SECTION 4. Payment of Taxes. ...........................................9
SECTION 6. Reservation of Common Stock and Other Covenants...............9
SECTION 7. Adjustments to Exercise Price and Aggregate Number...........10
SECTION 8. No Dilution or Impairment....................................20
SECTION 9. Transfers of the Warrant.....................................20
SECTION 10. Option to Put...............................................21
SECTION 11. Manner of Redemption........................................22
SECTION 12. Call Option.................................................25
SECTION 13. Limit on Grant of Other Put or Redemption Rights............26
SECTION 14. Survival of Provisions......................................26
SECTION 15. Delays, Omissions and Indulgences...........................27
SECTION 16. Rights of Transferees.......................................27
SECTION 17. Captions. .................................................27
SECTION 18. Notices.....................................................27
SECTION 19. Successors and Assigns......................................28
SECTION 20. Severability................................................28
SECTION 21. Governing Law...............................................28
SECTION 22. Entire Agreement; Amendment.................................28
SECTION 23. Rules of Construction.......................................29
3
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is dated as of November 19,
1999, among AMN HOLDINGS, INC., a Delaware corporation (the "Company"),
BANCAMERICA CAPITAL INVESTORS SBIC I, L.P., a Delaware limited partnership
("BACI") and each of the other warrantholders who are or may become party hereto
(collectively, the "Warrantholders").
Statement of Purpose
Pursuant to a Note and Warrant Purchase Agreement (the "Purchase
Agreement"), dated the date hereof, between the Company and BACI, the Company
issued to BACI certain subordinated notes and agreed to issue Common Stock
Purchase Warrants (the "Warrants") to purchase certain shares of the Common
Stock (as hereinafter defined) of the Company. The parties hereto desire to set
forth certain terms and conditions applicable to the Warrants and certain rights
and obligations among the Company and the Warrantholders, as more fully
described herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Definitions. As used herein, the following terms shall have
the following meanings. Capitalized terms not appearing below and not otherwise
defined herein shall have the meaning ascribed to them in the Purchase
Agreement.
"Affiliate" means, with respect to any Person, any other Person (a)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (b) directly or indirectly owning or holding
ten percent (10%) or more of the Capital Stock in such Person; provided, that,
in no event shall BACI (or any Affiliate of BACI) be deemed to be an Affiliate
of (a) the Company or (b) any Affiliate of the Company. For purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Aggregate Exercise Price" has the meaning assigned thereto in Section
3(b).
"Aggregate Number" has the meaning assigned thereto in Section 2.
"BACI" has the meaning assigned thereto in the Preamble.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx
and New York, New York are authorized or required by law or executive order to
close.
4
2
"Capital Stock" means (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cashless Exercise" has the meaning assigned thereto in Section 3(c).
"Change of Control" means any of the following events: (a) the sale,
lease, transfer or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Healthcare and its Subsidiaries taken as a
whole to any "person" or "group"(within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) other than any Sponsor Entity, (b) the Company
shall fail to own directly 100% of the outstanding Capital Stock of Healthcare,
(c) prior to a Qualified Public Offering, the Sponsor Entities shall fail to own
beneficially, directly or indirectly, at least 51% of the outstanding Voting
Stock of the Company, (d) after a Qualified Public Offering, the Sponsor
Entities shall fail to own beneficially, directly or indirectly, (i) at least
30% of the outstanding Voting Stock of the Company and (ii) a greater percentage
of the outstanding Voting Stock of the Company than the percentage of such
outstanding Voting Stock which any other "person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act) other than the Sponsor
Entities (A) shall have acquired beneficial ownership, directly or indirectly or
indirectly, of, or (B) shall have acquired by contract or otherwise (or shall
have entered into a contract or arrangement that, upon consummation, will result
in its or their acquisition of) control over, and (e) during any period of up to
twenty-four (24) consecutive months commencing after a Qualified Public
Offering, individuals who at the beginning of such twenty-four (24) month period
were directors of the Company (together with any new director whose election by
the board of directors of the Company or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the directors of the
Company then in office.
"Charter Documents" means the Certificate of Incorporation and the
Bylaws of the Company, as amended or supplemented from time to time.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act or the
Exchange Act.
"Common Stock" means (a) the common stock of the Company, par value
$0.01 per share, as described in the Charter Documents, and (b) any other
Capital Stock into which such Common Stock is reclassified or reconstituted.
"Convertible Securities" means evidences of indebtedness, shares of
stock or other securities which are directly or indirectly convertible or
exchangeable, with or without
5
3
payment of additional consideration in cash or property, for shares of Common
Stock, either immediately or upon the onset of a specified date or the happening
of a specified event.
"Distribution" has the meaning assigned thereto in Section 7(a)(ii).
"Election to Purchase" has the meaning assigned thereto in Section
3(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Exercise Amount" has the meaning assigned thereto in Section 3(a).
"Exercise Price" has the meaning assigned thereto in Section 2.
"Expiration Date" means the earlier of (a) tenth (10th) anniversary of
the date hereof or (b) the closing of a Qualified Public Offering in which the
issue price of Common Stock is at least 120% of the Exercise Price.
"Fair Market Value Per Share" means as of a particular date (a) the
fair market value of the Fully Diluted Common Stock based upon an arm's length
sale of the Company on such date (including its ownership interest in all
Persons) as an entirety, such sale being between a willing buyer and a willing
seller and determined without reference to any discount for minority interest,
restrictions on transfer, disparate voting rights among classes of Capital Stock
or lack of marketability with respect to capital stock divided by (b) the
aggregate number of shares of Fully Diluted Common Stock. The Fair Market Value
Per Share shall be determined initially by the Company within ten (10) days of
any event for which such determination is required and such determination
(including the basis therefor) shall be promptly provided to each Warrantholder.
Such determination shall be binding on each Warrantholder unless the Required
Warrantholders object thereto in writing within ten (10) days of receipt. In the
event the Company and the Required Warrantholders cannot agree on the Fair
Market Value Per Share within ten (10) Business Days of receipt by the Company
of the Required Warrantholders' objection, the Fair Market Value Per Share shall
be determined by an appraiser that is not an Affiliate of any interested party
(which may be a national or regional investment bank or national accounting
firm) mutually selected by the Company and the Required Warrantholders;
provided, that if the Company and the Required Warrantholders shall fail to
agree to such an appraiser, the Fair Market Value Per Share shall be determined
by a panel of three such appraisers. Within five (5) days after the date the
Company and the Required Warrantholders determine that they cannot agree as to
an appraiser, the Company on the one hand and the Required Warrantholders on the
other hand shall each designate one such appraiser that is willing and able to
conduct such determination. If either fails to make such determination within
such time period, then the other party that has made the designation shall have
the right to make the designation on such failing party's behalf. The two
appraisers so designated shall, within a period of five (5) days after the
designation of the second appraiser, designate a mutually acceptable third
appraiser. The Fair Market Value Per Share shall be the average of the
determination of the two appraisers that are closer to each other than to the
determination of the third appraiser,
6
4
which third determination shall be discarded; provided, however, that if the
determination of two appraisers are equally close to the determination of the
third appraiser, then the Fair Market Value Per Share shall be the average of
the determination of all three appraisers. The fees and expenses of the
appraisers shall be paid fifty percent (50%) by the Company and fifty percent
(50%) by the Warrantholders unless such determination results in a Fair Market
Value Per Share (a) more than one hundred ten percent (110%) of the Fair Market
Value Per Share initially determined by the Company in which case such fees and
expenses shall be borne by the Company or (b) less than ninety percent (90%) of
the Fair Market Value Per Share initially determined by the Company in which
case such fees and expenses shall be borne by the Warrantholders. Any
determination of Fair Market Value Per Share by the appraiser or appraisers
shall be made within thirty (30) days of the date of selection of the last
appraiser (if there shall be more than one).
"Fully Diluted" means, with respect to the Common Stock, as of any
date, the number of shares of Common Stock that would be outstanding assuming
all securities of the Company convertible into or exchangeable for Common Stock
were converted into Shares of Common Stock pursuant to their respective terms
and all options, warrants or other rights to acquire Common Stock were
exercised.
"Healthcare" means AMN Healthcare, Inc., a Nevada corporation and as of
the date hereof a wholly-owned Subsidiary of the Company.
"Legally Available Funds" means, with respect to any redemption of the
Warrant Securities pursuant to Section 11 hereof, the amount of funds of the
Company available for such redemption (a) as required under Sections 151 and 160
of the General Corporation Law of the State of Delaware, as amended, or any
comparable provision of any succeeding law, (b) until such time as all Senior
Indebtedness then due and payable shall have been paid in full and all letters
of credit and commitments arising under the Senior Loan Agreement have expired
or terminated, as permitted by the terms, conditions or provisions of the Senior
Loan Agreement and (c) as permitted by the Purchase Agreement.
"Majority Exercising Warrantholders" has the meaning assigned thereto
in Section 11(d).
"Notes" means the Senior Subordinated Promissory Notes, in the
aggregate principal amount of $20,000,000 issued pursuant to the Purchase
Agreement.
"Partially Available Funds" has the meaning assigned thereto in Section
11(e)(iii).
"Percentage Interest" means, with respect to any Warrantholder, the
quotient, expressed as a percentage, equal to (a) the number of Warrant Shares
for which such Warrantholder's Warrant may be exercised divided by (b) the
Aggregate Number.
"Per Share Proceeds" has the meaning assigned thereto in Section 12(b).
"Person" means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization
7
5
or government or any agency or political subdivision thereof, or other entity of
any kind and includes any successor (by merger or otherwise) of such entity.
"Principal Office" means the Company's principal office as set forth in
Section 18 hereof or such other principal office of the Company in the United
States of America the address of which first shall have been set forth in a
notice to the Warrantholders.
"Public Offering" means any underwritten primary public offering of
securities of the Company pursuant to a registration statement declared
effective under the Securities Act (other than a public offering pursuant to a
registration statement on Form S-8).
"Purchase Agreement" has the meaning assigned thereto in the Statement
of Purpose.
"Put Notice" has the meaning assigned thereto in Section 11(a).
"Qualified Public Offering" means a Public Offering underwritten on a
firm commitment basis by an investment bank of national standing and resulting
in not less than $30,000,000 in net cash proceeds to the Company.
"Redemption Date" has the meaning assigned thereto in Section 11(a).
"Redemption Price" has the meaning assigned thereto in Section 11(b).
"Regulatory Requirement" has the meaning assigned thereto in Section
6(c).
"Related Parties" means, with respect to a Sponsor, a collective
reference to (a) each Person which is a controlling stockholder or partner of
such Sponsor, (b) each Person at least 80% of whose Voting Stock is owned by
such Sponsor, directly or indirectly, (c) each trust, corporation, partnership
or other entity, the controlling beneficiaries, stockholders, partners or owners
of which, directly or indirectly, consist of such Sponsor and/or such other
Persons referred to in the preceding clauses (a) or (b) and/or in the succeeding
clause (e), (d) each partner or stockholder of such Sponsor as of the date
hereof who acquires any assets or Voting Stock of the Company pursuant to a
general distribution by such Sponsor to each of its partners or stockholders and
(e) each officer or director of such Sponsor.
"Required Warrantholders" means the holders of at least fifty-one
percent (51%) of the Warrant Securities then outstanding determined on a Fully
Diluted basis.
"Rights Agreement" means the Rights Agreement dated as of the date
hereof among the Company, AMN Acquisition Corp., HWH Capital Partners, L.P., HWH
Nightingale Partners, L.P. and BACI, as amended, restated, supplemented or
otherwise modified from time to time.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
8
6
"Senior Indebtedness" means all obligations of Healthcare, as borrower,
and the Company, as guarantor, whether now or hereafter incurred pursuant to and
in accordance with the Senior Loan Documents and any promissory notes evidencing
such obligations (including without limitation principal, interest, fees, costs,
expenses, and other amounts).
"Senior Loan Agreement" means the Credit Agreement dated as of the date
hereof among Healthcare, as borrower, Holdings and certain subsidiaries of
Healthcare from time to time party thereto, as guarantors, Bank of America,
N.A., as agent, and the lenders from time to time party thereto, as amended,
restated, supplemented or otherwise modified from time to time, including any
refinancing thereof.
"Senior Loan Documents" means the Senior Loan Agreement and all other
collateral agreements executed in connection with the Senior Loan Agreement, in
each case as amended, restated, supplemented or otherwise modified from time to
time.
"Stockholders Agreement" means the Stockholders Agreement dated as of
the date hereof among the Company, AMN Acquisition Corp. and BACI, as amended,
restated, supplemented or otherwise modified from time to time.
"Sponsors" means a collective reference to HWH Capital Partners, L.P.,
HWH Nightingale Partners, L.P. and Xxxx Wheat & Partners, L.P., together with
their successors and permitted assigns, and "Sponsor" means any of them.
"Sponsor Entity" means any Person that is (a) a Sponsor or (b) a
Related Party of a Sponsor, and "Sponsor Entities" means a collective reference
to each Sponsor Entity.
"Stock Combination" has the meaning assigned thereto in Section
7(a)(i).
"Stock Dividend" has the meaning assigned thereto in Section 7(a)(i).
"Stock Subdivision" has the meaning assigned thereto in Section
7(a)(i).
"Subsidiary" means, with respect to any Person, any entity of which
more than fifty percent (50%) of the outstanding capital stock or other
ownership interests having ordinary voting power to elect the board of directors
or other managers of such entity is at the time, directly or indirectly, owned
by or the management is otherwise controlled by such Person. Unless otherwise
qualified, references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Company.
"Transaction" has the meaning assigned thereto in Section 7(b).
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Warrant" has the meaning assigned thereto in the Statement of Purpose.
9
7
"Warrant Securities" is defined in Section 10(a).
"Warrant Shares" means (a) the shares of Common Stock issued or
issuable upon exercise of any Warrant in accordance with its terms and (b) all
other shares of the Company's capital stock issued with respect to such shares
by way of stock dividend, stock split or other reclassification or in connection
with any merger, consolidation, recapitalization or other reorganization
affecting the Company's Capital Stock.
SECTION 2. The Warrants; Aggregate Number.
Pursuant to the Purchase Agreement and subject to the terms
and conditions of this Agreement, the Company hereby issues and delivers to the
Warrantholders Warrants (each in the form of Exhibit A hereto) to purchase, at a
price per share equal to $32,794.8673 (the "Exercise Price"), 292.07729 shares
of fully paid and nonassessable Common Stock. The 292.07729 shares of Common
Stock subject to the Warrants are referred to herein as the "Aggregate Number,"
which represents the number of shares that as of the date hereof would
constitute eleven percent (11.0%) of all issued and outstanding shares of Common
Stock of the Company on a Fully Diluted basis, and is subject to adjustment as
set forth herein.
SECTION 3. Exercise.
(a) Method of Exercise. On or before the Expiration Date, each
Warrantholder, in accordance with the terms hereof, may exercise its Warrant in
whole or in part with respect to its Percentage Interest in the Aggregate
Number. Each Warrantholder shall effect such exercise by delivering such Warrant
to the Company during normal business hours on any Business Day at the Company's
Principal Office, together with the Election to Purchase, in the form attached
hereto as Exhibit B (the "Election to Purchase"), duly executed, and payment of
the Exercise Price per share for the number of shares to be purchased (the
"Exercise Amount"), as specified in the Election to Purchase. If the Expiration
Date is not a Business Day, then such Warrant may be exercised on the next
succeeding Business Day.
(b) Payment of Aggregate Exercise Price. Payment of the Aggregate
Exercise Price shall be made to the Company in cash or other immediately
available funds or as provided in Section 3(c), or a combination thereof. In the
case of payment of all or a portion of the Aggregate Exercise Price pursuant to
Section 3(c), the direction by the exercising Warrantholder to make a Cashless
Exercise shall serve as accompanying payment for that portion of the Aggregate
Exercise Price. The amount to be paid (the "Aggregate Exercise Price") shall
equal the product of (a) the Exercise Amount multiplied by (b) the Exercise
Price.
(c) Cashless Exercise. Each exercising Warrantholder shall have the
right to pay all or a portion of the Aggregate Exercise Price by making a
cashless exercise pursuant to this Section 3(c) (a "Cashless Exercise"), in
which case the portion of the Aggregate Exercise Price to be so paid shall be
paid by reducing the number of shares of Common Stock otherwise issuable
pursuant to the Election to Purchase by an amount equal to the product
10
8
of (A)(i) the Exercise Price to be so paid divided by (ii) the Fair Market Value
Per Share and (B) the number of shares of Common Stock otherwise issuable
pursuant to the Election to Purchase. The number of shares of Common Stock to be
issued to the exercising Warrantholder as a result of a Cashless Exercise will
therefore be as follows:
(Fair Market Value Per Share-Exercise Price) x Cashless Exercise Amount*
Fair Market Value Per Share
* The Cashless Exercise Amount in the above formula is that
portion of the Exercise Amount (expressed as a number of
shares of Common Stock) with respect to which the Exercise
Price is being paid by Cashless Exercise pursuant to this
Section 3(c).
(d) Issuance of Shares of Common Stock. Upon receipt by the Company of
the exercising Warrantholder's Warrant at its Principal Office in proper form
for exercise, and accompanied by payment of the Aggregate Exercise Price as
aforesaid, the exercising Warrantholder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that certificates representing such shares of Common Stock may
not then be actually delivered. Upon such surrender of such Warrant and payment
of the Aggregate Exercise Price as aforesaid, the Company shall issue and cause
to be delivered with all reasonable dispatch to, or upon the written order of,
such Warrantholder (and in such name or names as such Warrantholder may
designate) a certificate or certificates for the Exercise Amount, subject to any
reduction as provided in Section 3(c) for a Cashless Exercise.
(e) Fractional Shares. The Company shall not be required to deliver
fractions of shares of Common Stock upon exercise of any Warrant. If any
fraction of a share of Common Stock would be deliverable upon exercise of a
Warrant, the Company may, in lieu of delivering such fraction of a share of
Common Stock, make a cash payment to the affected Warrantholder in an amount
equal to the same fraction of the Fair Market Value Per Share determined as of
the Business Day immediately preceding the date of exercise of such Warrant.
(f) Partial Exercise. In the event of a partial exercise of any
Warrant, the Company shall issue to the affected Warrantholder a Warrant in like
form for the unexercised portion thereof.
SECTION 4. Payment of Taxes.
The Company shall pay all stamp taxes attributable to the initial
issuance of shares or other securities issuable upon the exercise of each
Warrant or issuable pursuant to Section 7 hereof, excluding any tax or taxes
which may be payable because of the transfer involved in the issuance or
delivery of any certificates for shares or other securities in a name other than
that of the exercising Warrantholder in respect of which such shares or
securities are issued.
SECTION 5. Replacement Warrant.
11
9
If any Warrant is mutilated, lost, stolen or destroyed, the Company
shall issue and deliver in exchange and substitution for and upon cancellation
of the mutilated Warrant, or in lieu of and in substitution for the Warrant
lost, stolen or destroyed, a new Warrant of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of such Warrant
and upon receipt of indemnity reasonably satisfactory to the Company; provided,
that if the Warrantholder is a financial institution or other institutional
investor its own agreement shall be satisfactory.
SECTION 6. Reservation of Common Stock and Other Covenants.
(a) Reservation of Authorized Common Stock. The Company shall at all
times reserve and keep available out of the aggregate of its authorized but
unissued shares, free of preemptive rights, such number of its duly authorized
shares of Common Stock, or other stock or securities deliverable pursuant to
Section 7 hereof, as shall be sufficient to enable the Company at any time to
fulfill all of its obligations under this Agreement and the Warrants.
(b) Affirmative Actions to Permit Exercise and Realization of Benefits.
If any shares of Common Stock reserved or to be reserved for the purpose of
exercise of the Warrants, or any shares or other securities reserved or to be
reserved for the purpose of issuance pursuant to Section 7 hereof, require
registration with or approval (other than as a result of a Regulatory
Requirement contemplated by Section 6(c)) of any governmental authority under
any federal or state law (including but not limited to approvals or expirations
of waiting periods required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act, but excluding the Securities Act and any state securities or "blue skies"
laws) before such shares or other securities may be validly delivered upon
exercise of any Warrant, then each of the Company and the Warrantholders shall
cooperate with each other so that each may prepare and file notification and
report forms in compliance with such law and shall otherwise fully comply with
the requirements of such law, to the extent required in connection with the
exercise of the Warrants. The Company shall bear all expenses in connection with
the filing of such forms.
(c) Regulatory Requirements and Restrictions. In the event of any
reasonable determination by any Warrantholder that, by reason of any existing or
future federal or state law, statute, rule, regulation, guideline, order, court
or administrative ruling, request or directive (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful) (a
"Regulatory Requirement"), such Warrantholder is effectively restricted or
prohibited from holding its Warrant or the related Warrant Shares (including any
shares of capital stock or other securities distributable to such Warrantholder
in any merger, reorganization, readjustment or other reclassification), or
otherwise realize upon or receive the benefits intended under its Warrant, the
Company shall, and shall use its commercially reasonable efforts to have its
shareholders, take such action as such Warrantholder may deem reasonably
necessary to permit such Warrantholder to comply with such Regulatory
Requirement. The costs of taking such action shall be shared equally by the
Company, on the one hand, and the Warrantholders, on the other hand. Such action
to be
12
10
taken may include without limitation the Company's authorization of one or more
new classes of capital stock for which such Warrant may be exercised or to make
such modifications and amendments to the Charter Documents, this Agreement, the
related Warrant or any other documents and instruments related to or executed in
connection herewith or with the Warrants as may be deemed reasonably necessary
by such Warrantholder. Such Warrantholder shall give written notice to the
Company of any such determination and the action or actions necessary to comply
with such Regulatory Requirement, which notice and determination shall be
conclusive absent manifest error, and the Company shall take all commercially
reasonable steps necessary to comply with such determination as expeditiously as
possible.
(d) Validly Issued Shares. The Company covenants that all shares of
Common Stock that may be delivered upon exercise of each Warrant (including
those issued pursuant to Section 7 hereof) shall upon delivery by the Company be
duly authorized and validly issued, fully paid and nonassessable, free from all
taxes, liens and charges with respect to the issue or delivery thereof and
otherwise free of all other security interests, encumbrances and claims of any
nature whatsoever.
SECTION 7. Adjustments to Exercise Price and Aggregate Number.
Under certain conditions, the Aggregate Number is subject to adjustment
as set forth in this Section 7. Upon each such adjustment of the Aggregate
Number hereunder, the Exercise Price shall be adjusted by multiplying the
Exercise Price then in effect by the Aggregate Number immediately prior to
giving effect to such adjustment and dividing the product thereof by the
Aggregate Number resulting from such adjustment. No adjustments shall be made
under this Section 7 as a result of (i) the issuance of the Warrant Shares upon
exercise of any Warrant, (ii) the issuance of restricted stock or options to
purchase shares of Common Stock up to an aggregate amount of 15% of the Fully
Diluted Common Stock pursuant to a stock option plan or plans approved by the
Board of Directors of the Company, or the subsequent exercise of such options,
or (iii) the issuance of $1,000,000 worth of Common Stock to Xxxxxxx Xxxxxx.
(a) Adjustments to Aggregate Number. The Aggregate Number, after taking
into consideration any prior adjustments pursuant to this Section 7, shall be
subject to adjustment from time to time as follows and, thereafter, as adjusted,
shall be deemed to be the Aggregate Number hereunder.
(i) Stock Dividends, Subdivisions and Combinations. In case at any time
or from time to time the Company shall:
(A) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Common Stock (a "Stock Dividend"),
(B) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, including without limitation by means
of a stock split (a "Stock Subdivision"), or
13
11
(C) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock (a "Stock Combination"),
then the Aggregate Number in effect immediately prior thereto shall be (1)
proportionately increased in the case of a Stock Dividend or a Stock Subdivision
and (2) proportionately decreased in the case of a Stock Combination. In the
event the Company shall declare or pay, without consideration, any dividend on
the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a Stock Dividend in
an amount of shares equal to the maximum number of shares issuable upon exercise
of such rights to acquire Common Stock.
(ii) Other Distributions. In case at any time or from time to time the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive any dividend or other distribution (collectively, a
"Distribution") of:
(A) cash,
(B) any (x) evidences of its Indebtedness (other than
Convertible Securities), (y) shares of its Capital Stock (other than additional
shares of Common Stock or Convertible Securities) or (z) other securities or
property of any nature whatsoever (other than cash), or
(C) any options, warrants or other rights to subscribe for or
purchase any of the following: any (x) evidences of Indebtedness (other than
Convertible Securities), (y) shares of its Capital Stock (other than additional
shares of Common Stock or Convertible Securities) or (z) other securities or
property of any nature whatsoever,
then each Warrantholder shall be entitled to elect by written notice to the
Company to receive (1) immediately and without further payment the cash,
evidences of Indebtedness, stock, securities, other property, options, warrants
and/or other rights (or any portion thereof) to which such Warrantholder would
have been entitled by way of such Distribution as if such Warrantholder had
exercised its Warrant(s) immediately prior to such Distribution or (2) upon the
exercise of its Warrant(s) at any time on or after the taking of such record,
the number of Warrant Shares to be received upon exercise of such Warrant(s)
determined as stated herein and, in addition and without further payment, the
cash, evidences of Indebtedness, stock, securities, other property, options,
warrants and/or other rights (or any portion thereof) to which such
Warrantholder would have been entitled by way of such Distribution and
subsequent dividends and distributions through the date of exercise as if such
Warrantholder (I) had exercised its Warrant(s) immediately prior to such
Distribution and (II) had retained the Distribution in respect of the Common
Stock and all subsequent dividends and distributions of any nature whatsoever in
respect of any stock or securities paid as dividends and distributions and
originating directly or indirectly from such Common Stock; provided, however,
that in the case of a Distribution of the items listed in clauses (A), (B)(x),
(B)(z), (C)(x) or (C)(z), the Company, at its option, may adjust the Aggregate
Number as follows: the Aggregate Number shall be increased by being multiplied
by a fraction (i) the numerator of which shall be the Fair Market Value Per
Share immediately prior to the record date for such Distribution and (ii) the
denominator of which shall be the
14
12
Fair Market Value Per Share immediately prior to such record date less the fair
market value per share of such Distribution.
A reclassification of the Common Stock into shares of Common Stock and
shares of any other class of stock shall be deemed a Distribution by the Company
to the holders of its Common Stock of such shares of such other class of stock
and, if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such event shall be deemed a Stock Subdivision or Stock Combination, as the case
may be, of the outstanding shares of Common Stock within the meaning of Section
7(a)(i) hereof.
(iii) Issuance of Common Stock. If at any time or from time to time the
Company shall (except as hereinafter provided in this Section 7(a)(iii)) issue
or sell any additional shares of Common Stock for a consideration per share less
than the Fair Market Value Per Share then, effective on the date specified
below, the Aggregate Number shall be adjusted by multiplying (A) the Aggregate
Number immediately prior thereto by (B) a fraction, the numerator of which shall
be the sum of the number of shares of Common Stock outstanding immediately prior
to the issuance of such additional shares of Common Stock, the number of shares
of Common Stock issuable upon the conversion or exercise of options, warrants,
rights or convertible securities (whether or not then exercisable), and the
number of such additional shares of Common Stock so issued and the denominator
of which shall be the sum of the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares of Common Stock, the
number of shares of Common Stock issuable upon the conversion or exercise of
options, warrants, rights or convertible securities (whether or not then
exercisable), and the number of shares of Common Stock which the aggregate
consideration for the total number of such additional shares of Common Stock so
issued would purchase at the Fair Market Value Per Share. The date as of which
the Fair Market Value Per Share shall be computed shall be the date of actual
issuance of such additional shares of Common Stock.
The provisions of this Section 7(a)(iii) shall not apply to any
issuance of additional shares of Common Stock for which an adjustment is
otherwise provided under Section 7(a)(i) hereof. No adjustment of the Aggregate
Number shall be made under this Section 7(a)(iii) upon the issuance of any
additional shares of Common Stock which are issued pursuant to (1) the exercise
of any Warrant in whole or in part, (2) the exercise of other subscription or
purchase rights or (3) the exercise of any conversion or exchange rights in any
Convertible Securities, provided that for purposes of clauses (2) or (3) an
adjustment shall previously have been made upon the issuance of such other
rights or upon the issuance of such Convertible Securities (or upon the issuance
of any warrants or other rights therefor) pursuant to Section 7(a)(iv) or (v)
hereof.
(iv) Warrants and Options. If at any time or from time to time the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a distribution of, or shall in any manner (whether
directly, by assumption in a merger in which the Company is the surviving
corporation and in which the shareholders of the Company immediately prior to
the merger continue to own more than fifty percent (50%) of the Fully Diluted
Common Stock immediately after the merger and for a period of at least one
hundred eighty (180) days thereafter, or otherwise) issue or sell any warrants,
options Fair Market Value Per Share immediately prior to the record date for
such Distribution and (ii) the denominator of which shall be the
15
13
or other rights to subscribe for or purchase (A) any shares of Common Stock or
(B) any Convertible Securities, whether or not the rights to subscribe,
purchase, exchange or convert thereunder are immediately exercisable, and the
consideration per share for which additional shares of Common Stock may at any
time thereafter be issuable pursuant to such warrants, options or other rights
or pursuant to the terms of such Convertible Securities shall be less than the
Fair Market Value Per Share (determined on the date specified below), then the
Aggregate Number shall be adjusted as provided in Section 7(a)(iii) hereof on
the basis that (1) the maximum number of additional shares of Common Stock
issuable pursuant to all such warrants, options or other rights or necessary to
effect the conversion or exchange of all such Convertible Securities shall be
deemed to have been issued as of the date of the determination of the Fair
Market Value Per Share as hereinafter provided and (2) the aggregate
consideration for such maximum number of additional shares of Common Stock shall
be deemed to be the minimum consideration received and receivable by the Company
for the issuance of such additional shares of Common Stock pursuant to the terms
of such warrants, options or other rights or such Convertible Securities. For
purposes of this Section 7(a)(iv), the effective date of such adjustment and the
date as of which the Fair Market Value Per Share shall be computed shall be the
earliest of (A) the date on which the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive any such
warrants, options or other rights or (B) the date of actual issuance of such
warrants, options or other rights.
(v) Convertible Securities. If at any time or from time to time the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a distribution of or shall in any manner (whether
directly, by assumption in a merger in which the Company is the surviving
corporation and in which the shareholders of the Company immediately prior to
the merger continue to own more than fifty percent (50%) of the Fully Diluted
Common Stock immediately after the merger and for a period of at least one
hundred eighty (180) days thereafter, or otherwise) issue or sell Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the consideration per share for the additional
shares of Common Stock which may at any time thereafter be issuable pursuant to
the terms of such Convertible Securities shall be less than the Fair Market
Value Per Share (determined on the date specified below), then the Aggregate
Number shall be adjusted as provided in Section 7(a)(iii) hereof on the basis
that (1) the maximum number of additional shares of Common Stock necessary to
effect the conversion or exchange of all such Convertible Securities shall be
deemed to have been issued as of the date of the determination of the Fair
Market Value Per Share as herein provided and (2) the aggregate consideration
for such maximum number of additional shares of Common Stock shall be deemed to
be the minimum consideration received and receivable by the Company for the
issuance of such additional shares of Common Stock pursuant to the terms of such
Convertible Securities. For purposes of this Section 7(a)(v), the effective date
of such adjustment and the date as of which the Fair Market Value Per Share
shall be computed shall be the earliest of (A) the date on which the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive any such Convertible Securities, or (B) the date of
actual issuance of such Convertible Securities.
16
14
No adjustment of the Aggregate Number shall be made under this
Section 7(a)(v) upon the issuance of any Convertible Securities which are issued
pursuant to the exercise of any warrants, options or other subscription or
purchase rights if an adjustment shall previously have been made or if no such
adjustment shall have been required upon the issuance of such warrants, options
or other rights pursuant to Section 7(a)(iv) hereof.
(vi) Subsequent Adjustments. If at any time after any
adjustment of the Aggregate Number shall have been made pursuant to Section
7(a)(iv) or (v) hereof on the basis of the issuance of warrants, options or
other rights or the issuance of Convertible Securities, or after any new
adjustments of the Aggregate Number shall have been made pursuant to this
Section 7(a)(vi),
(A) such warrants, options or rights or the right of
conversion or exchange in such Convertible Securities shall
expire, and a portion of such warrants, options or rights, or
the right of conversion or exchange in respect of a portion of
such Convertible Securities, as the case may be, shall not
have been exercised prior to such expiration, and/or
(B) in the case of adjustments made pursuant to
Section 7(a)(iv) or (v), the consideration per share for which
shares of Common Stock are issuable pursuant to such warrants,
options or rights or the terms of such Convertible Securities
shall be irrevocably increased solely by virtue of provisions
therein contained for an automatic increase in such
consideration per share upon the arrival of a specified date
or the happening of a specified event,
such previous adjustment shall be rescinded and annulled and the additional
shares of Common Stock which were deemed to have been issued by virtue of the
computation made in connection with such adjustment shall no longer be deemed to
have been issued by virtue of such computation. Simultaneously therewith, a
recomputation shall be made of the effect of such warrants, options or rights or
Convertible Securities on the determination of the Aggregate Number, which shall
be made on the basis of:
(1) treating the number of additional shares of
Common Stock, if any, theretofore actually issued or issuable pursuant
to the previous exercise of such warrants, options or rights or such
right of conversion or exchange as having been issued on the date or
dates of such exercise and, in the case of a recomputation of a
calculation originally made pursuant to Section 7(a)(iv) or (v), for
the consideration actually received and receivable therefor, and
(2) in the case of a recomputation of a calculation
originally made pursuant to Section 7(a)(iv) or (v), treating any such
warrants, options or rights or any such Convertible Securities which
then remain outstanding as having been granted or issued immediately
after the time of such irrevocable increase of the consideration per
share for which shares of Common Stock are issuable under such
warrants, options or rights or Convertible Securities;
17
15
and, if and to the extent called for by the foregoing provisions of
Section 7(a)(vi) on the basis aforesaid, a new adjustment of the
Aggregate Number shall be made, such new adjustment shall supersede the
previous adjustment so rescinded and annulled.
(vii) Miscellaneous. The following provisions shall be applicable to
the making of adjustments of the Aggregate Number provided above in this Section
7(a):
(A) To the extent that no adjustment shall have been
previously made pursuant to this Section 7, the sale or other
disposition of any issued shares of Common Stock owned or held
by or for the account of the Company or any of its
Subsidiaries shall be deemed an issuance thereof for the
purposes of this Section 7(a).
(B) (1) To the extent that any additional shares of
Common Stock or any Convertible Securities or any warrants,
options or other rights to subscribe for or purchase any
additional shares of Common Stock or any Convertible
Securities (a) are issued solely for cash consideration, the
consideration received by the Company therefor shall be deemed
to be the amount of the cash received by the Company therefor,
(b) are offered by the Company for subscription, the
consideration received by the Company shall be deemed to be
the subscription price, or (c) are sold to underwriters or
dealers for public offering, the consideration received by the
Company shall be deemed to be the public offering price. To
the extent that such issuance shall be for a consideration
other than cash, or partially for cash and partially for other
consideration, then, except as otherwise expressly provided
herein, the amount of such consideration shall be deemed to be
the fair market value of such consideration (plus, if
applicable, the amount of such cash), at the time of such
issuance, determined in the manner set forth in Section
7(d)(ii).
(2) In case any additional shares of Common Stock or
any Convertible Securities or any warrants, options or other
rights to subscribe for or purchase such additional shares of
Common Stock or Convertible Securities shall be issued in
connection with any merger in which the Company is the
survivor and issues any securities, the amount of
consideration therefor shall be deemed to be the fair market
value of such additional shares of Common Stock, Convertible
Securities, warrants, options or other rights, as the case may
be, determined in the manner set forth in Section 7(d)(i). In
the event of any consolidation or merger of the Company in
which the Company is not the surviving corporation, any
acquisition of the capital stock of the Company by means of a
share exchange, or any sale of all or substantially all the
assets of the Company for stock or other securities of any
corporation, the Company shall be deemed to have issued a
number of additional shares of common stock or securities of
the other corporation computed on the basis of the actual
exchange ratio on which the transaction was predicated and the
consideration received for such issuance shall be equal to the
fair market value on the date of such transaction of such
stock or securities of the other corporation determined in the
manner set forth in Section 7(d)(i).
18
16
(3) The consideration for an shares of Common Stock
issuable pursuant to the terms of any Convertible Securities
shall be equal to (a) the consideration received by the
Company for issuing any warrants, options or other rights to
subscribe for or purchase such Convertible Securities, plus
(b) the consideration paid or payable to the Company in
respect of the subscription for or purchase of such
Convertible Securities, plus (c) the consideration, if any,
payable to the Company upon the exercise of the right of
conversion or exchange of such Convertible Securities.
(4) In case of the issuance at any time of any
additional shares of Common Stock or Convertible Securities in
payment or satisfaction of any dividends upon any class of
stock other than Common Stock, the Company shall be deemed to
have received for such additional shares of Common Stock or
Convertible Securities a consideration equal to the amount of
such dividend so paid or satisfied.
(C) The adjustments required by the preceding
paragraphs of this Section 7(a) shall be made whenever and as
often as any specified event requiring an adjustment shall
occur, except that no adjustment of the Aggregate Number that
would otherwise be required shall be made (except in the case
of a Stock Subdivision or Stock Combination, as provided for
in Section 7(a)(i) hereof) unless and until such adjustment
either by itself or with other adjustments not previously made
adds or subtracts at least one-tenth of a percent (0.1%) to or
from the Aggregate Number immediately prior to the making of
such adjustment. Any adjustment representing a change of less
than such minimum amount (except as aforesaid) shall be
carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 7(a) and not
previously made, would result in a minimum adjustment. For the
purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its
occurrence.
(D) In computing adjustments under this Section 7(a),
fractional interests in Common Stock shall be taken into
account to the nearest one-hundredth (0.01) of a share.
(E) If the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to
shareholders thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or purchase
rights, then no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made
in respect thereof shall be rescinded and annulled.
Furthermore, if any Warrantholder shall have exercised any
Warrants between such record date and the date on which the
Company shall have abandoned such plan, any shares of Common
Stock received by such Warrantholder as a result of an
adjustment with respect to such plan shall be deemed cancelled
and shall be promptly returned to the Company.
(b) Changes in Common Stock. In case at any time the Company shall
initiate any transaction or be a party to any transaction (including, without
limitation, a merger, consolidation, share exchange, sale, lease or other
disposition of all or
19
17
substantially all of the Company's assets, liquidation, recapitalization or
reclassification of the Common Stock) in connection with which the previous
Fully Diluted Common Stock shall be changed into or exchanged for different
securities of the Company or capital stock or other securities of another
corporation or interests in a non-corporate entity or other property (including
cash) or any combination of the foregoing (each such transaction, a
"Transaction"), then, as a condition of the consummation of the Transaction,
lawful, enforceable and adequate provision shall be made so that each
Warrantholder shall be entitled to elect by written notice to the Company to
receive (i) a new warrant in form and substance similar to, and in exchange for,
its Warrant(s) or (ii) upon exercise of its Warrant(s) at any time on or after
the consummation of the Transaction, in lieu of the Warrant Shares issuable upon
such exercise prior to such consummation, the securities or other property
(including cash) to which such Warrantholder would have been entitled upon
consummation of the Transaction if such Warrantholder had exercised its
Warrant(s) immediately prior thereto (subject to adjustments from and after the
consummation date as nearly equivalent as possible to the adjustments provided
for in this Section 7). The Company will not effect any Transaction unless
concurrently with the consummation thereof each corporation or other entity
(other than the Company) which may be required to deliver any new warrant,
securities or other property as provided herein shall assume, by written
instrument delivered to such Warrantholder, the obligation to deliver to such
Warrantholder such new warrant, securities or other property as in accordance
with the foregoing provisions such Warrantholder may be entitled to receive and
such corporation or entity shall have similarly delivered to such Warrantholder,
if reasonably requested by such Warrantholder, an opinion of counsel for such
corporation or entity, reasonably satisfactory to such Warrantholder, which
opinion shall state that all of the terms of the new warrant or the original
Warrant shall be enforceable against the Company and such corporation or entity
in accordance with the terms hereof and thereof, together with such other
matters as such Warrantholder may reasonably request. The foregoing provisions
of this Section 7(b) shall similarly apply to successive Transactions.
(c) Other Action Affecting Common Stock. In case at any time or from
time to time the Company shall take any action of the type contemplated in
Section 7(a) or (b) hereof but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then, unless in the
opinion of the Board of Directors such action will not have a material adverse
effect upon the rights of any Warrantholder (taking into consideration, if
necessary, any prior actions which the Board of Directors deemed not to
materially adversely affect the rights of any Warrantholder), the Aggregate
Number shall be adjusted in such manner and at such time as the Board of
Directors of the Company may in good faith determine to be equitable in the
circumstances.
(d) Notices.
20
18
(i) Notice of Proposed Actions. In case the Company shall
propose (A) to pay any dividend payable in stock of any class to the
holders of its Common Stock or to make any other distribution to the
holders of its Common Stock, (B) to offer to the holders of its Common
Stock rights to subscribe for or to purchase any Convertible Securities
or additional shares of Common Stock or shares of stock of any class or
any other securities, warrants, rights or options, (C) to effect any
reclassification of its Common Stock, (D) to effect any
recapitalization, stock subdivision, stock combination or other capital
reorganization, (E) to effect any consolidation or merger, share
exchange, or sale, lease or other disposition of all or substantially
all of its property, assets or business or (F) to effect the
liquidation, dissolution or winding up of the Company, then in each
such case the Company shall give to each Warrantholder written notice
of such proposed action, which shall specify the date on which a record
is to be taken for the purposes of such stock dividend, distribution or
rights, or the date on which such reclassification, reorganization,
consolidation, merger, share exchange, sale, transfer, disposition,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock, if any such date
is to be fixed, or the date on which the transfer of Common Stock is to
occur, and shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action on
the Common Stock and on the Aggregate Number after giving effect to any
adjustment which will be required as a result of such action. Such
notice shall be so given in the case of any action covered by clause
(A) or (B) above at least fifteen (15) days prior to the record date
for determining holders of the Common Stock for purposes of such action
and, in the case of any other such action, at least fifteen (15) days
prior to the earlier of the date of the taking of such proposed action
or the date of participation therein by the holders of Common Stock.
(ii) Adjustment Notice. Whenever the Aggregate Number is to be
adjusted pursuant to this Section 7, unless otherwise agreed by the
Required Warrantholders, the Company shall forthwith obtain a
certificate signed by the chief financial officer of the Company,
setting forth, in reasonable detail, the event requiring the adjustment
and the method by which such adjustment is to be calculated. The
certificate shall set forth, if applicable, a description of the basis
on which the Board of Directors determined, as applicable, the Fair
Market Value Per Share, the fair market value of any evidences of
Indebtedness, shares of stock, other securities, warrants, other
subscription or purchase rights, or other property or any adjustment
under Section 7(b) or (c) hereof, the new Aggregate Number and, if
applicable, any new securities or property to which each respective
Warrantholder is entitled. The Company shall promptly cause a copy of
such certificate to be delivered to each Warrantholder. In the case of
any determination of Fair Market Value Per Share, such certificate
shall be delivered to the Warrantholders within the time period set
forth in the definition of Fair Market Value Per Share and the Required
Warrantholders may object thereto as provided therein, and any disputes
shall be resolved in accordance with the procedure set forth in such
definition (including, without limitation, with respect to the
allocation of fees and expenses). In the case of any other
determination of fair market value, Warrantholders may object to the
determination in such certificate by giving written notice within
fifteen (15) Business Days of the receipt of such certificate and,
thereafter, any disputes shall
21
19
be resolved in accordance with the procedure set forth in the
definition of Fair Market Value (including, without limitation, with
respect to the allocation of fees and expenses). The Company shall keep
at its Principal Office copies of all such certificates and cause the
same to be available for inspection at said office during normal
business hours by any Warrantholder or any prospective purchaser of a
Warrant (in whole or in part) if so designated by a Warrantholder.
SECTION 8. No Dilution or Impairment.
The Company will not, by amendment of its Charter Documents or through
any reorganization, recapitalization, transfer of assets, consolidation, merger,
share exchange, dissolution or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of any Warrant,
including without limitation the adjustments required under Section 7 hereof,
and will at all times in good faith assist in the carrying out of all such terms
and in taking of all such action as may be necessary or appropriate to protect
the rights of the Warrantholder against dilution or other impairment. Without
limiting the generality of the foregoing and notwithstanding any other provision
of any Warrant to the contrary (including by way of implication), the Company
(a) will not increase the par value of any shares of Common Stock receivable on
the exercise of any Warrant above the amount payable therefor on such exercise
and (b) will take all such corporate action as may be necessary or appropriate
so that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock on the exercise of any Warrant.
SECTION 9. Transfers of the Warrant.
(a) Transfer and Exchanges. The Company shall initially record each
Warrant on a register to be maintained by the Company with its other stock books
and, subject to Section 9(b) hereof and the provisions of the Stockholders
Agreement, from time to time thereafter shall record a transfer of each Warrant
on such register when such Warrant is: (i) surrendered for transfer in
accordance with the terms hereof, (ii) properly endorsed and accompanied by
appropriate instructions, and (iii) accompanied by payment in cash or by check,
bank draft or money order payable to the order of the Company, in United States
currency, of an amount equal to any stamp or other tax or governmental charge or
fee required to be paid in connection with the transfer thereof. Upon any such
transfer, a new Warrant or Warrants shall be issued to the transferee and the
affected Warrantholder (in the event that such Warrant is only partially
transferred) and the surrendered Warrant shall be canceled. Each such transferee
shall succeed to all of the rights of the transferring Warrantholder under this
Agreement or in the event that such Warrant is only partially transferred, the
transferring Warrantholder and such transferee shall, simultaneously, hold
rights hereunder in proportion to their respective Percentage Interests. Each
Warrant may be exchanged at the option of a Warrantholder, when surrendered at
the Principal Office of the Company, for another Warrant or other Warrants of
like tenor and representing in the aggregate the right to purchase a like number
of shares of Common Stock, subject to adjustment as more fully set forth herein.
22
20
(b) Transfers Subject to Securities Laws; Stockholders Agreement.
Subject to the restrictions set forth in this Section 9 and the Stockholders
Agreement, each Warrantholder may at any time and from time to time freely
transfer its Warrant and the Warrant Shares in whole or in part. No Warrant has
been, and the Warrant Shares at the time of their issuance may not be,
registered under the Securities Act, and, except as provided in the Stockholders
Agreement or the Rights Agreement, nothing herein contained shall be deemed to
require the Company to so register any Warrant or Warrant Shares. The Warrants
and the Warrant Shares are issued or issuable subject to the provisions and
conditions contained herein and in the Purchase Agreement, and every
Warrantholder by accepting any Warrant agrees with the Company to such
provisions and conditions, and represents to the Company that such Warrant has
been acquired and the Warrant Shares will be acquired for the account of such
Warrantholder for investment and not with a view to or for sale in connection
with any distribution thereof.
(c) Restrictive Securities Legend. Each certificate representing the
shares of Common Stock issued upon the exercise of any Warrant shall bear the
restrictive legend set forth below:
"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. NO TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CERTIFICATE MAY BE MADE UNLESS A REGISTRATION STATEMENT WITH
RESPECT TO THIS CERTIFICATE HAS BECOME EFFECTIVE UNDER SUCH ACT AND
SUCH REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE
SECURITIES LAWS OF ANY STATE HAS BECOME EFFECTIVE, OR THE COMPANY HAS
BEEN FURNISHED WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED. NEITHER THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR STATE
REGULATORY AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF THESE
SECURITIES."
SECTION 10. Option to Put.
(a) Put Rights. Notwithstanding any other provision of this Agreement
or any Warrant, the Required Warrantholders may elect by giving the Company
written notice thereof pursuant to Section 11(a) hereof, at any one time after
the occurrence of a Put Event (as defined in Section 10(b) hereof) and prior to
the Expiration Date, to sell to the Company, and the other Warrantholders may
then also sell to the Company (at a price established pursuant to Section 11(b)
hereof), all or any part of their respective Warrants and Warrant Shares
(collectively, the "Warrant Securities") and the Company shall be required to
purchase such Warrant Securities in accordance with, and subject to, the terms
hereof and Section 11 hereof; provided, however, that if any Warrantholder
exercises its put right hereunder for less than all of its Warrants or Warrant
Shares, it shall have no further put rights hereunder with respect to the
remaining Warrants or Warrant Shares.
23
21
(b) Put Events. The right of each Warrantholder to require the Company
to purchase the Warrant Securities under Section 10(a) hereof shall be
exercisable upon or at any time after the occurrence of any of the following
events or circumstances (each a "Put Event"):
(i) November 19, 2005;
(ii) the occurrence of a Change of Control; or
(iii) the dissolution, winding-up o liquidation of the Company
or Healthcare, or the sale of all or substantially all of the assets of
the Company or Healthcare.
SECTION 11. Manner of Redemption.
(a) Put Notice. Each Warrantholder that desires to participate in the
put option under Section 10 to put all or any part of its Warrant Securities to
the Company shall give notice to the Company at its Principal Office of such
exercise (the "Put Notice") not less than thirty (30) nor more than sixty (60)
days prior to the date set forth in the notice as the date fixed for redemption
(the "Redemption Date"). All Put Notices shall set forth the Redemption Date and
the Warrant Securities to be redeemed.
(b) Redemption Price. The purchase price (the "Redemption Price") of
the Warrant Securities to be redeemed by the Company hereunder shall be
calculated as of the date of the Put Notice and shall be equal to:
(i) in the case of each Warrant, the product of (A) the
difference of (1) the Put Price Per Share (defined below) minus (2) the
Exercise Price then in effect multiplied by (B) that number of Warrant
Shares being put; and
(ii) in the case of any Warrant Shares issued upon exercise of
a Warrant, the product of (A) the Put Price Per Share multiplied by (B)
that number of Warrant Shares to be redeemed.
(c) Put Price Per Share. The "Put Price Per Share" shall mean an amount
equal to the highest of:
(i) the Fair Market Value Per Share; and
(ii) the book value of stockholders equity of the Company
determined as of the end of the month immediately preceding the
Redemption Date in accordance with generally accepted accounting
principles divided by the Fully Diluted Common Stock.
(d) Closing. On the Redemption Date, the holders o the Warrant
Securities to be redeemed shall surrender such Warrant Securities to the Company
at its Principal Office or
24
22
such other place as may be set forth in the Put Notice on tender by the Company
of the Redemption Price in cash or other immediately available funds. Payment of
the Redemption Price shall only be out of Legally Available Funds. At the
request of the Warrantholders holding a majority of the Warrant Securities to be
redeemed (the "Majority Exercising Warrantholders"), the Company will deliver to
the holders of the Warrant Securities to be redeemed, at the Company's expense,
a certificate of the Company's chief financial officer in form and substance
reasonably acceptable to such holders to the effect that such payment is being
made out of Legally Available Funds. In the event any appraisal to be conducted
in connection with the determination of Fair Market Value Per Share has not been
completed five (5) Business Days prior to the Redemption Date, the Redemption
Date shall be postponed until five (5) Business Days after the completion of
such appraisal.
(e) No Restrictive Agreements; Legally Available Funds.
(i) Covenant Not to Impair Put Rights. Until such time as the
Company has paid in full all principal of and interest and premium on
the Notes, and all other amounts due under the Purchase Agreement and
the Notes, the Company covenants and agrees that it shall not, without
the prior written consent of the Required Warrantholders, enter into or
agree to become subject to any term, condition, provision or agreement
(including an amendment to an existing agreement) that would restrict
in any way the performance of the Company's obligations under this
Section 11 or the availability of Legally Available Funds with which to
perform such obligations, except for any such terms, conditions,
provisions or agreements permitted under the Purchase Agreement and the
Senior Loan Agreement. The Company represents to each Warrantholder
that the Company is not subject to or bound by any such term,
condition, provision or agreement as of the date hereof, except as set
forth in the Senior Loan Agreement and the Purchase Agreement.
(ii) Remedial Action. Upon receipt of a Put Notice, if the
Company believes that at the time of the Redemption Date the Company
would not have sufficient Legally Available Funds to perform its
obligations under this Section 11, then the Company shall promptly use
all commercially reasonable efforts to cause such Legally Available
Funds to become available, including, without limitation, by increasing
any such funds, in any manner permitted or contemplated by the General
Corporation Law of the State of Delaware, as amended, or any comparable
provision of any succeeding law or obtaining relief from any
contractual restriction in order to make the required payments. If,
notwithstanding the Company's commercially reasonable efforts pursuant
hereto, the Company is unable to fulfill its obligations under this
Section 11 because of insufficient Legally Available Funds, the Company
shall give prompt written notice thereof to each holder of Warrant
Securities specifying in reasonable detail the nature thereof and the
extent, if any, to which the Company would be able to fulfill its
obligations under this Section 11, and, in the case of a restriction
caused by any term, condition or provision of the Senior Loan
Agreement, the nature of the term, condition or provision which would
be breached and, if such term, condition or provision is a financial
covenant, a computation of the amounts or ratios setting forth the
deficiencies with respect to such covenant, such computation to be
certified by the chief financial officer of the Company.
(iii) Warrantholder Options. Upon receipt o notice from the
Company as provided in Section 11(e)(ii), the Required Warrantholders
may elect pursuant to written
25
23
notice given thereby to the Company: (A) that each Warrantholder's put
rights pursuant to the Put Notice shall remain exercised and the
Redemption Date shall be deferred until the first five (5) Business
Days after there are sufficient Legally Available Funds to effect such
redemption; provided, that, as and to the extent that there are
sufficient Legally Available Funds to effect such redemption, the
Company shall promptly make partial payments of the Redemption Price to
the holders of Warrant Securities to be redeemed, in which case there
shall be a series of redemptions, each of which shall take place not
more than five (5) Business Days after there are sufficient Legally
Available Funds to effect such redemption to an extent that would
permit such partial payments of the Redemption Price in increments of
not less than Twenty-Five Thousand Dollars ($25,000) ("Partially
Available Funds"); provided, further, that the Required Warrantholders,
in their sole and absolute discretion, may require the Company to issue
a promissory note, in form and substance reasonably satisfactory to the
Required Warrantholders, to the order of the holders of Warrant
Securities to be redeemed, bearing interest at a per annum rate equal
to the prime rate of leading money center banks as quoted in The Wall
Street Journal plus three hundred basis points (3.00%) compounded
semi-annually, to the extent that payment in such form rather than in
cash would not result in insufficient Legally Available Funds;
provided, further, that (I) the issuance of any such promissory notes
shall not be required if such issuance would violate, conflict with or
result in the breach of any of the terms and conditions of, otherwise
cause the termination of or give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, the Senior Loan Agreement, the Purchase
Agreement or any other contract, agreement, indenture, note, bond,
loan, instrument, lease or other written arrangement in respect of
Indebtedness to which the Company or any of its Subsidiaries is a party
or by or to which the Company or any of its Subsidiaries or any of
their properties is or may be bound or subject, (II) such promissory
notes shall not provide for the payment of cash interest prior to six
months following the maturity date of the Senior Loan Agreement
(determined at the time such promissory notes are issued), (III) if
such promissory notes are issued and the payment of interest due in
cash would violate, conflict with or result in the breach of any of the
terms and conditions of, otherwise cause the termination of or give any
other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, the Senior
Loan Agreement, the Purchase Agreement or any other contract,
agreement, indenture, note, bond, loan, instrument, lease or other
written arrangement in respect of Indebtedness to which the Company or
any of its Subsidiaries is a party or by or to which the Company or any
of its Subsidiaries or any of their properties is or may be bound or
subject, then such interest when due shall be payable by the issuance
of additional promissory notes substantially identical to the
promissory notes in respect of which such interest is due, and (IV) the
maturity date of such promissory notes will be no earlier than six (6)
months following the maturity date of the Senior Loan Agreement
(determined at the time such promissory notes are issued) or (B) the
exercise of the put rights pursuant to Section 10(a) shall be rescinded
in whole or in part at the option of the Majority Exercising
Warrantholders (with the result that the Majority Exercising
Warrantholders may require the Company to redeem the Warrant Securities
at any time thereafter until the later of (1) the Expiration Date or
(2) eighteen (18) months after the date the Majority Exercising
Warrantholders give notice to rescind the exercise of such put rights).
Notwithstanding the limitation set forth in clause (IV) of the prior
sentence, such promissory notes may contain provisions providing for
the immediate payment of all obligations thereunder after the later
26
24
to occur of (x) payment in full of all Senior Indebtedness then due and
payable and the expiration or termination of all letters of credit and
commitments under the Senior Loan Agreement and (y) payment in full of
all Indebtedness arising under the Purchase Agreement; provided, that
at such time sufficient funds of the Company are available for such
payment as required under Sections 151 and 160 of the General
Corporation Law of the State of Delaware, as amended, or any comparable
provision of any succeeding law; and provided, further, that the
Company shall use all commercially reasonable efforts to cause any such
funds to become available including without limitation by increasing
any such funds in any manner permitted or contemplated by the General
Corporation Law of the State of Delaware, as amended, or any comparable
provision of any succeeding law.
SECTION 12. Call Option.
(a) Option to Purchase. Subject to the provisions of the Purchase
Agreement and the Senior Loan Agreement, on and after November 19, 2006, the
Company shall be entitled to purchase from the holders of Warrant Securities, as
a whole but not in part, all Warrant Securities then outstanding at a purchase
price equal to the then applicable Redemption Price as calculated pursuant to
Section 11(c). Each holder of Warrant Securities shall be required under this
Section 12 to sell its Warrant Securities, in whole but not in part, upon the
delivery to such holder by the Company of written notice evidencing the
Company's desire to purchase such Warrant Securities. Each holder of Warrant
Securities shall deliver its Warrant Securities to the Company, properly
assigned or endorsed, at the closing therefor held within ten (10) Business Days
after the Company's notice against payment therefor made in cash or other
immediately available funds.
(b) Look-back Period. If at any time within one (1 year after the
repurchase of the Warrant Securities under this Section 12, the Company or its
shareholders consummate one or more transactions of the type described in
Section 10(b)(ii) or (iii), then the Company shall make or cause to be made,
simultaneously with the consummation of any such transaction or at such later
time as any payment in cash, securities or other property is received by the
Company or its shareholders or any Subsidiary of the Company, an additional
payment to the holders of Warrant Securities in an amount per share, for each
share purchased pursuant to this Section 12, equal to the amount, if any, by
which the value per share of the cash, securities or other property received by
the Company or its shareholders (the "Per Share Proceeds") in such transaction
exceeds the payment per share received by the holders of Warrant Securities
pursuant to Section 12(a) (net, in both cases, of direct costs, including,
without limitation, legal, accounting, consulting, investment banking fees and
sales commissions, and taxes paid or payable as a result thereof). Each
additional payment to the holders of Warrant Securities shall be made either in
cash or in the form of the securities or other property received by the Company
or its shareholders in connection with the transaction described above.
(c) Per Share Proceeds. The Per Share Proceeds received in connection
with such transaction shall be determined without deduction for any expenses of
the transaction except for reasonable attorneys and accountants' fees and, in
the case of an underwritten public offering, the underwriting discounts and
commissions and shall be equal to:
27
25
(i) in the case of a Public Offering, the highest price per
share received by the Company or any holders of its capital stock;
(ii) in the case of a sale of assets of the Company, the
amount that would be distributed by the Company per share of Fully
Diluted Common Stock, on the assumption that all of the assets of the
Company remaining after the payment of or provision for the liabilities
of the Company would be distributed by the Company to the holders of
its capital stock in full redemption thereof;
(iii) in the case of a liquidation, merger, consolidation or
share exchange or a sale of stock in which the shareholders of the
Company receive cash, the cash per share of Fully Diluted Common Stock
to be received; or
(iv) in the case of a liquidation, merger, consolidation or
share exchange or a sale of stock for a consideration other than cash,
on the basis of the fair market value of such other consideration
determined by the Board of Directors of the Company in good faith.
SECTION 13. Limit on Grant of Other Put or Redemption Rights.
The Company covenants and agrees that from the date hereof, so long as
any Warrantholder holds a Warrant or any Warrant Shares in respect of which any
put rights provided for in Sections 10 and 11 have not terminated, the Company
shall not grant, directly or indirectly, to any Person or agree to otherwise
become obligated in respect of (a) any rights to require the Company to purchase
or redeem securities of the Company at any time before May 19, 2006 upon the
demand of any Person or (b) rights in the nature or substantially in the nature
of those set forth in Sections 10 and 11 hereof, if such rights are, or could
under any circumstances become, exercisable before May 19, 2006; in each case,
without the prior written consent of the Required Warrantholders. The Company
represents and warrants to each Warrantholder that, as of the date hereof, there
are no agreements granting any such rights to any Person.
SECTION 14. Survival of Provisions.
Notwithstanding the full exercise by any Warrantholder o its rights to
purchase Common Stock, the provisions of this Agreement and each Warrant shall
survive such exercise and the Expiration Date until such time as the rights of
the Required Warrantholders to have the Company redeem all Warrant Securities
held by each Warrantholder have expired or been fully exercised.
SECTION 15. Delays, Omissions and Indulgences.
No delay or omission to exercise any right, power or remedy accruing to
any Warrantholder upon any breach or default of the Company hereunder or under
any Warrant shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach or default, or any acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver
28
26
of any other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on any Warrantholder's part
of any breach or default hereunder or under any Warrant, or any waiver on any
Warrantholder's part of any provisions or conditions hereof or of any Warrant
must be in writing and that all remedies, either hereunder, under any Warrant or
by law or otherwise afforded to the Warrantholders, shall be cumulative and not
alternative.
SECTION 16. Rights of Transferees.
The rights granted to the Warrantholders hereunder and under each
Warrant shall pass to and inure to the benefit of all subsequent transferees of
all or any portion of a Warrant (provided that each Warrantholder and any
transferee shall hold such rights in proportion to their respective ownership of
the Warrants and Warrant Shares) until extinguished pursuant to the terms
hereof.
SECTION 17. Captions.
The titles and captions of the Sections and other provisions hereof are
for convenience of reference only and are not to be considered in construing
this Agreement.
SECTION 18. Notices.
All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified
first-class mail, return receipt requested, telecopy, overnight courier service
or personal delivery:
(a) if to the Company:
AMN Holdings, Inc.
00000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxx Wheat & Partners, L.P.
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
(b) if to any Warrantholder, to the respective address
set forth on the corporate records of the Company.
29
27
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five (5) Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
SECTION 19. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, provided that the
Company shall have no right to assign its rights, or to delegate its
obligations, hereunder without the prior written consent of each Warrantholder.
SECTION 20. Severability.
If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
SECTION 21. Governing Law.
THIS AGREEMENT AND EACH WARRANT IS TO BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
SECTION 22. Entire Agreement; Amendment.
This Agreement, the Warrant and the Purchase Agreement are intended by
the parties as a final expression of their agreement and are intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
Except as otherwise expressly provided in this Agreement, any provision of this
Agreement or of any Warrant may be amended or modified only by an instrument in
writing signed by the Company and the Required Warrantholders.
SECTION 23. Rules of Construction.
Unless the context otherwise requires "or" is not exclusive, and
references to sections or subsections refer to sections or subsections of this
Agreement. All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
* * *
30
28
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed as of the date first above written.
AMN HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------
Title: Chief Executive Officer, President,
Secretary and Treasurer
-----------------------------------
BANCAMERICA CAPITAL INVESTORS SBIC I, L.P.
By: BANCAMERICA CAPITAL
MANAGEMENT SBIC I, LLC, its general partner
By: BANCAMERICA CAPITAL
MANAGEMENT I L.P., its sole member
By: BACM I GP, LLC, its general partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
Managing Director
31
EXHIBIT A
FORM OF WARRANT
THIS COMMON STOCK PURCHASE WARRANT AND THE SHARES THAT MAY BE PURCHASED
HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER THE SECURITIES LAWS OF ANY STATE. THIS COMMON STOCK PURCHASE
WARRANT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO DISTRIBUTION, AND THIS COMMON STOCK PURCHASE WARRANT AND THE SHARES
THAT MAY BE PURCHASED HEREUNDER MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL THAT THE PROPOSED TRANSACTION
DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AND APPLICABLE STATE
SECURITIES LAWS.
THIS WARRANT IS SUBJECT TO THE TERMS OF A NOTE AND WARRANT PURCHASE
AGREEMENT, DATED AS OF NOVEMBER 19, 1999, BY AND BETWEEN AMN HOLDINGS,
INC. AND BANCAMERICA CAPITAL INVESTORS SBIC I, L.P. (AS AMENDED OR
OTHERWISE MODIFIED, THE "NOTE PURCHASE AGREEMENT").
AMN HOLDINGS, INC.
COMMON STOCK PURCHASE WARRANT
Number _____
THIS IS TO CERTIFY that [____________________], and its transferees,
successors and assigns (the "Warrantholder"), for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, is
entitled to purchase from AMN HOLDINGS, INC., a Delaware corporation (the
"Company"), at a price per share equal to the Exercise Price, [__] shares of the
fully paid and nonassessable Common Stock of the Company, subject to the terms
and conditions of the Warrant Agreement, dated as of November 19, 1999 (as
amended or otherwise modified, the "Warrant Agreement"), between the Company and
the other parties thereto. The number of shares of Common Stock subject to this
Warrant is subject to adjustment or reduction as set forth in Section 7 of the
Warrant Agreement. Capitalized terms used herein shall have the meanings
ascribed to such terms in Section 1 of the Warrant Agreement.
Payment of the Exercise Price may be made as set forth in Section 3 of
the Warrant Agreement.
32
If this Warrant is not exercised on or before 5:00 p.m., San Diego,
California time on the Expiration Date, this Warrant shall become void and all
rights hereunder shall cease as of such time, except as provided in the Warrant
Agreement.
This Warrant is one of the Warrants issued pursuant to the Warrant
Agreement and is subject to, and entitled to the benefits of, all of the terms,
provisions and conditions of the Warrant Agreement, which Warrant Agreement is
hereby incorporated by reference herein and made a part hereof. The Warrant
Agreement sets forth a full description of the rights, limitations of rights,
obligations, duties and immunities of the Company and the Warrantholder with
respect to this Warrant. Copies of the Warrant Agreement are on file at the
Principal Office of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its duly authorized officer, as of the ___ day of [______________].
AMN HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
33
EXHIBIT B
FORM OF NOTICE OF EXERCISE
_________________, ____
To: AMN Holdings, Inc.
00000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
1. The undersigned, pursuant to the provisions of the attached Warrant,
hereby elects to exercise such Warrant with respect to ________ shares of Common
Stock (the "Exercise Amount"). Capitalized terms used but not otherwise defined
herein have the meanings ascribed thereto in the attached Warrant.
2. The undersigned herewith tenders payment for such shares in the
following manner (please check type, or types, of payment and indicate the
portion of the Exercise Price to be paid by each type of payment):
____ Exercise for Cash
____ Cashless Exercise
3. Please issue a certificate or certificates representing the shares
issuable in respect hereof under the terms of the attached Warrant, as follows:
____________________________________________
(Name of Record Warrantholder/Transferee)
and deliver such certificate or certificates to the following address:
___________________________________________
___________________________________________
___________________________________________
(Address of Record Warrantholder/Transferee)
4. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
34
5. If the Exercise Amount is less than all of the shares of Common
Stock purchasable hereunder, please issue a new warrant representing the
remaining balance of such shares, as follows:
____________________________________________
(Name of Record Warrantholder/Transferee)
and deliver such warrant to the following address:
____________________________________________
____________________________________________
____________________________________________
(Address of Record Warrantholder/Transferee)
In witness whereof, the undersigned Warrantholder has caused this
Notice of Exercise to be executed as of this _____ day of __________, ______.
____________________________________________
(Name of Warrantholder)
By:_________________________________________
