EXECUTION COPY
WARRANTHOLDERS RIGHTS AGREEMENT
WARRANTHOLDERS RIGHTS AGREEMENT (this "Agreement"), dated as of
December 31, 1997, between AMCOMP INCORPORATED, a Delaware corporation (together
with its successors, "AmComp"), and NATIONSBANK, N.A. ("NationsBank", and
together with such other warrantholders of AmComp as may, from time to time,
become parties to this Agreement in accordance with the provisions hereof, the
"Warrantholders").
WHEREAS, AmComp wishes to provide to the Warrantholders and the holders
of the Conversion Shares (as defined herein) the rights described herein;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Unless otherwise defined herein, the
following terms used in this Agreement shall have the meanings specified below.
"Affiliate" means, with respect to any Person, any of (i) a director or
executive officer of such Person, (ii) a spouse, parent, sibling or descendent
of such Person (or a spouse, parent, sibling or descendant of any director or
executive officer of such Person), (iii) any general or limited partner of such
Person, (iv) any holder of 10% or more of any class of equity securities of such
Person, and (v) any other Person that, directly or indirectly, controls, or is
controlled by or is under common control with such Person. For the purpose of
this definition, "control" (including the terms "controlling", "controlled by"
and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities or by contract or agency or otherwise.
"BHC Act" means the Bank Holding Company Act of 1956, as amended.
"Closing Date" means December 31, 1997.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $0.01 per share, of
AmComp, and stock of any other class or other consideration into which such
Common Stock may change.
"Conversion Shares" means (i) any shares of Common Stock or other
securities issued upon the exercise of any Warrants and (ii) any securities
issued with respect to any of such shares or other securities referred to in
clause (i) upon the conversion thereof into other securities or by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise;
provided that any of such securities shall cease to be Conversion Shares when
such securities shall have (x) been disposed of pursuant to a Public Sale or (y)
ceased to be outstanding.
"Credit Agreement" means the Amended and Restated Credit Agreement,
dated as of December 31, 1997, by and among AmComp, the subsidiaries of AmComp
parties thereto and NationsBank.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor Federal statute, and the rule and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such successor Federal statute.
"Indemnified Party" has the meaning set forth in Section 3.4(a) hereof.
"Initial Public Offering" means the first registration of an offering
of shares of Common Stock under the Securities Act which becomes effective
(other than by a registration on Form S-4 or S-8 or any successor or similar
forms).
"Majority Holders" means holders holding a majority in interest of the
outstanding Conversion Shares and Warrants (such majority determined, for
purposes of this definition, by calculating the number of Conversion Shares for
which such Warrants are then exercisable).
"NASD" means The National Association of Securities Dealers, Inc.
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"Other Securities" means securities other than Registrable Securities.
"Person" means a corporation, an association, a partnership, a trust, a
limited liability company, an organization, a business, an individual, a
government or a subdivision thereof or a governmental agency.
"Public Sale" means any sale of Common Stock to the public pursuant to
an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 (or any
successor provision then in effect) adopted under the Securities Act.
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"Registrable Securities" means any Conversion Shares until the earlier
of (i) the date (if any) on which such Conversion Shares shall have been
exchanged for new equity securities of AmComp not bearing a legend restricting
transfer, the subsequent disposition of which shall not require registration or
qualification under the Securities Act or any similar state law then in force
and (ii) the date on which such Conversion Shares may be sold pursuant to Rule
144(k) under the Securities Act.
"Registration Expenses" means all expenses incident to AmComp's
performance of or compliance with Sections 3.1 through 3.4 hereof, including (i)
all registration, filing and listing fees, (ii) all fees and expenses of
complying with securities or blue-sky laws, (iii) all word processing,
duplicating and printing expenses, (iv) all messenger and delivery expenses, (v)
the fees and disbursements of counsel for AmComp and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (vi)
premiums and other costs of policies of insurance (if any) against liabilities
arising out of the public offering of the Registrable Securities being
registered if AmComp desires such insurance, and (vii) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but not including underwriting discounts and commissions and
transfer taxes, if any; provided that, in any case where Registration Expenses
are not to be borne by AmComp, such expenses shall not include (i) salaries of
AmComp personnel or general overhead expenses of AmComp, (ii) auditing fees,
(iii) premiums or other expenses relating to liability insurance required by
underwriters of AmComp, or (iv) other expenses for the preparation of financial
statements or other data, to the extent that any of the foregoing either is
normally prepared by AmComp in the ordinary course of its business or would have
been incurred by AmComp had no public offering taken place.
"Regulation Y Holder" means any Warrant Securityholder that is a bank
holding company within the meaning of the BHC Act, or a subsidiary thereof
subject to Regulation Y under the BHC Act.
"Restricted Securities" means the Warrants, the Conversion Shares and
any securities obtained upon exchange for or upon conversion or transfer of or
as a distribution on Warrants, the Conversion Shares or any such securities;
provided that particular securities shall cease to be Restricted Securities when
such securities shall have (x) been disposed of pursuant to a Public Sale, (y)
been otherwise transferred or exchanged and new certificates for them not
bearing a legend restricting further transfer shall have been delivered by
AmComp and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state law then in
force, or (z) ceased to be outstanding. Whenever any particular securities cease
to be Restricted Securities, the holder thereof shall be entitled to receive
from the issuer thereof or its transfer agent, without expense (other than
transfer taxes, if any), new securities of like tenor not bearing a legend of
the character set forth in Section 2.2.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at
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that time. Reference to a particular section of the Securities Act shall include
a reference to the comparable section, if any, of any such successor statute.
"Warrant Securityholder" means at any time any Warrantholder or any
holder of Conversion Shares.
"Warrantholders" has the meaning set forth in the introductory
paragraph.
"Warrants" has the meaning set forth in Section 2.1.
All references herein to "days" shall mean calendar days unless
otherwise specified.
ARTICLE II
PURCHASE OF WARRANTS;
TRANSFER AND CONVERSION OF SHARES;
PAYMENTS TO WARRANT SECURITYHOLDERS
SECTION 2.1. Purchase of Warrants. AmComp hereby agrees to sell to
NationsBank and, subject to the terms and conditions of this Agreement,
NationsBank hereby agrees to purchase from AmComp, on the Closing Date, for a
purchase price of $.01 and other good and valuable consideration, all of which
shall be deemed to have been received by AmComp upon the execution and delivery
of this Agreement, warrants entitling NationsBank to purchase, in the aggregate,
55,000 shares of Common Stock, for an initial exercise price of $4.00 per share
(together with any warrants issued in substitution or replacement therefore, the
"Warrants"). On the Closing Date, AmComp will deliver to NationsBank, upon
payment therefor, a Warrant substantially in the form of Exhibit A registered in
the name of NationsBank or the name of its nominee and dated the Closing Date.
The terms set forth in the Warrant constitute part of this Agreement as if fully
set forth herein. Subject to the terms hereof and the Warrant, NationsBank or
its assigns may exercise the Warrant, in whole or in part, at any time prior to
the fifth anniversary of the Closing Date, provided that NationsBank may not
exercise the Warrant, and agrees to promptly return the Warrant to AmComp for
cancellation, if (a) the "Consolidation" (as defined in the Credit Agreement)
shall not have been consummated on or prior to August 31, 1998 as a result of
the election of NationsBank not to grant the request of AmComp to effect the
Consolidation in accordance with the terms set forth in the Credit Agreement,
(b) the principal amount of the "Facility B Advance" (as defined in the Credit
Agreement) and all accrued interest and other amounts owing with respect thereto
shall have been paid on or prior to September 30, 1998, and (c) NationsBank
shall have received a loan fee paid by AmComp in the amount of $75,000 on or
prior to September 30, 1998. Notwithstanding anything herein to the contrary,
if, prior to March 31, 1998, NationsBank (x) provides notice to AmComp of its
election to receive a fee in lieu of continuing to hold the Warrant, and (y)
surrenders the Warrant to AmComp, then AmComp shall, within 10 days following
the surrendering of the Warrant, pay to NationsBank a loan fee in the amount of
$75,000.
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SECTION 2.2. Restrictions on Transfer and Conversion; Legend on
Certificates.
(a) Except as otherwise provided in this Agreement, Restricted
Securities shall not be transferable except (i) pursuant to an effective
registration statement under the Securities Act, (ii) pursuant to Rule 144 or
144A (or any successor provisions) under the Securities Act, or (iii) pursuant
to a transaction that is otherwise exempt from or not subject to the
registration requirements of the Securities Act.
(b) Unless otherwise expressly provided herein, each certificate for
Restricted Securities and each certificate issued in exchange for or upon
transfer of any thereof shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR
OFFERED FOR SALE UNLESS REGISTERED UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO AND HAVE THE BENEFIT OF A WARRANTHOLDERS RIGHTS AGREEMENT
DATED AS OF DECEMBER 31, 1997, BETWEEN AMCOMP INCORPORATED AND THE
WARRANTHOLDERS PARTIES THERETO, COPIES OF WHICH ARE ON FILE WITH AMCOMP
INCORPORATED."
(c) Any other provision of this Agreement to the contrary
notwithstanding, no transfer of any Restricted Securities other than pursuant to
a Public Sale may be made to any Person unless such Person shall have agreed in
writing that such Person, as a holder of Restricted Securities, and the
Restricted Securities it acquires shall be bound by and be entitled to the
benefits of all the provisions of this Agreement applicable to such Restricted
Securities (and upon such agreement such Person shall be entitled to such
benefits). Any purported transfer of Restricted Securities without compliance
with the applicable provisions of this Agreement shall be void and of no effect,
and the purported transferee shall have no rights as a Warrant Securityholder
under this Agreement. In the event of such noncomplying transfer, AmComp shall
not transfer any such Restricted Securities on its books or recognize the
purported transferee as a shareholder or warrantholder, as the case may be, for
any purpose, until all applicable provisions of this Agreement have been
complied with.
SECTION 2.3. Permitted Transfers. The restrictions on transfer provided
in Section 2.2 shall not be applicable to any transfer in compliance with
federal and all applicable state securities laws (i) to an Affiliate of the
holder of Restricted Securities, from an Affiliate of such holder to such holder
or between Affiliates of such holder (if any such Affiliate to whom shares of
Restricted Securities have been transferred by a holder thereof ceases to be an
Affiliate of such holder of Restricted Securities, such Restricted Securities
shall immediately be transferred back
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to the transferor thereof), (ii) upon the death of any holder of Restricted
Securities to such holder's executors, administrators or testamentary trustees,
or (iii) to a trust the beneficiaries of which include only the holder of such
Restricted Securities or such holder's spouse, parents, siblings or descendants
(any transferee referred to in (i), (ii) or (iii) above being referred to herein
as a "Permitted Transferee"); provided that no such transfer shall be made to
any Permitted Transferee unless such Permitted Transferee shall have agreed in
writing that such Permitted Transferee, as a Warrant Securityholder, and the
shares of Common Stock or Warrants it acquires shall be bound by and be entitled
to the benefits of all the provisions of this Agreement applicable to Common
Stock or Warrants (as the case may be), and upon such agreement such Permitted
Transferee shall be entitled to such benefits.
SECTION 2.4. Restrictions on Transfer by Regulation Y Holders. Nothing
in this Agreement shall require any Regulation Y Holder to make a transfer of
Warrants or Conversion Shares in a manner not permitted by the BHC Act or other
applicable law (as "Impermissible Transfer"). If this Agreement would otherwise
require any Regulation Y Holder to make an Impermissible Transfer as a condition
precedent to making a transfer of Warrants of Conversion Shares in a manner
permitted by the BHC Act and other applicable law (a "Permissible Transfer"),
then such Regulation Y Holder shall not be required to make such Impermissible
Transfer as a condition precedent to making such Permissible Transfer.
SECTION 2.5. No Inconsistent Agreements. AmComp has not entered into
and will not enter into any registration rights agreements or similar
arrangements the performance by AmComp of which would in any manner conflict
with, restrict or be inconsistent with the performance by AmComp of its
obligations under this Agreement.
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ARTICLE III
SECTION 3.1. Incidental Registration.
(a) If at any time subsequent to an Initial Public Offering AmComp
proposes to register any of its securities under the Securities Act (other than
by a registration on Form S-4 or S-8 or any successor or similar forms) whether
for its own account or for the account of the holder or holders of any Other
Securities, it will each such time give prompt written notice to all Warrant
Securityholders of its intention to do so. Upon the written request of any such
holder made within 30 days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
holder and the intended method of disposition thereof), AmComp will use its best
efforts to effect the registration under the Securities Act of all Registrable
Securities which AmComp has been so requested to register by the holders
thereof, to the extent required to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Securities so to
be registered, by inclusion of such Registrable Securities in the registration
statement which covers the securities which AmComp proposes to register;
provided that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, AmComp shall determine for
any reason either not to register or to delay registration of such securities,
AmComp may, at its election, give written notice of such determination to each
Warrant Securityholder and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith) and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities. AmComp will pay all Registration Expenses in connection with
each registration of Registrable Securities pursuant to this Section 3.1.
(b) If AmComp at any time proposes to register any of its securities
under the Securities Act as contemplated by Section 3.1(a) and such securities
are to be distributed by or through one or more underwriters, AmComp will, if
requested by any holder of Registrable Securities as provided in this Section
3.1, use its best efforts to arrange for such underwriters to include all the
Registrable Securities to be offered and sold by such holder among the
securities to be distributed by such underwriters; provided that if the managing
underwriter of such underwritten offering shall inform AmComp and holders of the
Registrable Securities requesting such registration and all other holders of any
Other Securities which shall have exercised, in respect of such underwritten
offering, registration rights comparable to the rights under this Section 3.1,
by letter of its belief that inclusion in such distribution of all or a
specified number of such securities proposed to be distributed by such
underwriters would interfere with the successful marketing of the securities
being distributed by such underwriters (such letter to state the basis of such
belief and the approximate number of such Registrable Securities and such Other
Securities proposed so to be registered which may be distributed without such
effect), then AmComp may, upon written notice to all holders of such Registrable
Securities and holders of
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such Other Securities, include in such registration, if and to the extent stated
by such managing underwriter to be necessary to eliminate such effect, (i)
first, securities requested to be included in such registration for the account
of AmComp ("AmComp Shares"), and (ii) second, requested to be included in such
registration by the holder or holders thereof pro rata among such holders
requesting such registration on the basis of the number of such securities or
shares requested to be included by such holders' provided that (x) AmComp shall
include only Registrable Securities and Other Securities requested to be
included in such registration by the holders thereof pro rata among such holders
on the basis of the number of such securities requested to be included by such
holders, such that the resultant aggregate number of such Registrable Securities
and Other Securities so included in such registration, together with the number
of securities to be included in such registration for the account of AmComp,
shall be equal to the number of shares stated in such managing underwriter's
letter, and (y) if the managing underwriter indicates that the inclusion of a
greater percentage of Registrable Securities (and a lesser percentage of Other
Securities) than the inclusion of such shares on a pro rata basis would permit a
greater number of shares of its securities to be registered in a manner that
would not interfere with the successful marketing of the securities being
distributed by such underwriters, then Registerable Securities and Other
Securities shall be included in such registration in the proportions so
determined by the managing underwriter to permit inclusion of such greater
number.
SECTION 3.2. Registration Procedures.
(a) If and whenever AmComp is required to effect the registration of
any Registerable Securities under the Securities Act as provided in Section 3.1,
AmComp shall, as expeditiously as possible:
(i) prepare and (within 60 days after the end of the period
within which requests for registration may be given to AmComp or in any
event as soon thereafter as possible file with the Commission the
requisite registration statement to effect such registration (including
such audited financial statements as may be required by the Securities
Act) and thereafter use its best efforts to cause such registration
statement to become and remain effective as provided in clause (ii)
below; provided however that AmComp may discontinue any registration of
its securities which are not Registrable Securities at any time prior
to the effective date of the registration statement relating thereto;
provided further that before filing such registration statement or any
amendments thereto, AmComp will furnish to the counsel selected by the
holders of Registrable Securities which are to be included in such
registration copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
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registration statement until the expiration of 90 days after such
registration statement becomes effective;
(iii) furnish to each seller of Registrable Securities covered
by such registration statement and each underwriter, if any, of the
securities being sold by such seller such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents,
as such seller and underwriter, if any, may reasonably request in order
to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under blue-sky or similar laws of such
jurisdictions as any seller thereof and any underwriter of the
securities being sold by such seller shall reasonably request, to keep
such registrations or qualifications in effect for so long as such
registration statement remains in effect, and take any other action
which may be reasonably necessary or advisable to enable such seller
and underwriter to consummate the disposition in such jurisdictions of
the securities owned by such seller, except that AmComp shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for
the requirements of this subdivision (iv) be obligated to be so
qualified, to subject itself to taxation in any such jurisdiction or to
consent to general service of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller and the underwriters, if any, of
(x) an opinion of counsel for AmComp, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, an
opinion dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to
such seller, and
(y) a "comfort" letter, dated the effective date of
such registration statement (and, if such registration
includes an underwritten public offering, a letter dated the
date of the closing under the underwriting agreement), signed
by
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the independent public accountants who have certified AmComp's
financial statements including in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letter delivered to
the underwriters in underwritten public offerings of securities;
(vii) notify the holders of Registrable Securities and the
managing underwriter or underwriters, if any, promptly and confirm such
advice in writing promptly thereafter:
(A) when the registration statement, the prospectus
or any prospectus supplement related thereto or post-
effective amendment to the registration statement has been
filed, and, with respect to the registration statement or any
post-effective amendment thereto, when the same has become
effective;
(B) of any request by the Commission for amendments
or supplements to the registration statement or the prospectus
or for additional information;
(C) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration or the
initiation of any proceedings by any Person for that purpose;
and
(D) of the receipt by AmComp of any notification with
respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or
blue-sky laws of any jurisdiction or the initiation or threat
of any proceeding for such purpose;
(viii) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon
AmComp's discovery that, or upon the happening of any event as a result
of which, the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances then existing, and at the request of any such seller
promptly prepare and furnish to such seller and each underwriter, if
any, a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
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(ix) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the registration statement at
the earliest possible moment;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first full calendar quarter
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act;
(xi) make available for inspection by a representative of the
sellers of Registrable Securities participating in the offering, any
underwriter participating in any disposition pursuant to the
registration and any attorney or accountant retained by such sellers or
underwriter (each, an "Inspector"), all financial and other records,
pertinent corporate documents and properties of AmComp (the "Records"),
and cause AmComp's officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection
with such registration; provided that AmComp shall not be required to
comply with this subdivision (xi) if there is a reasonable likelihood,
in the judgment of AmComp, that such delivery could result in the loss
of any attorney-client privilege related thereto; and provided further
that Records which AmComp determines, in good faith, to be confidential
and which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (x) such Records have become
generally available to the public or (y) the disclosure of such Records
may be necessary or appropriate (A) to comply with any law, rule,
regulation or order applicable to any such Inspectors or seller of
Registrable Securities, (B) in response to any subpoena or other legal
process or (C) in connection with any litigation to which such
Inspectors or any seller of Registrable Securities is a party (provided
that AmComp is provided with reasonable notice of such proposed
disclosure and a reasonable opportunity to seek a protective order or
other appropriate remedy with respect to such Records);
(xii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of
such Registration Statement;
(xiii) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange or
automated quotation system on which any of the Common Stock is then
listed or traded; and
(xiv) use its best efforts to provide a CUSIP number for the
Registrable Securities, not later than the effective date of the
registration.
AmComp may require each seller of Registrable Securities as to which any
registration is being effected to furnish AmComp such information regarding such
seller and the distribution of such
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securities as AmComp may from time to time
reasonably request in writing for purposes of preparing the relevant
registration statement and amendments and supplements thereto.
(b) Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from AmComp of the
occurrence of any event of the kind described in subdivision (viii) of Section
3.2(a), such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of Section
3.2(a). In the event AmComp shall give any such notice, the periods specified in
subdivision (ii) of Section 3.2(a) shall be extended by the length of the period
from and including the date when each seller of any Registrable Securities
covered by such registration statement shall have received such notice to the
date on which each such seller has received the copies of the supplemented or
amended prospectus contemplated by subdivision (viii) of Section 3.2(a).
(c) If any such registration or comparable statement refers to any
holder of Registrable Securities by name or otherwise as the holder of any
securities of AmComp, then such holder shall have the right to require, in the
event that such reference to such holder by name or otherwise is not required by
the Securities Act or any similar federal statute then in force, the deletion of
the reference to such holder.
SECTION 3.3. Underwritten Offerings.
(a) If requested by the underwriters for any underwritten offering by
holders of Registrable Securities pursuant to a registration requested under
Section 3.1, AmComp will enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to AmComp, each such holder and the underwriters, and to
contain such representations and warranties by AmComp and such holders and such
other terms as are generally prevailing in agreements of such type, including,
without limitation, indemnities to the effect and to the extent provided in
Section 3.4. The holders of the Registrable Securities will cooperate with
AmComp in the negotiation of the underwriting agreement.
(b) Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of any equity securities of AmComp, during the ten days prior
to and the 180 days after the effective date of any underwritten registration
pursuant to Section 3.1 (or such shorter period as the underwriter or
underwriters may permit), except as part of such underwritten registration,
whether or not such holder of Registrable Securities participates in such
registration, and except as otherwise permitted by the managing underwriter of
such underwriting (if any). Each of the holders of Registrable Securities agrees
that AmComp may instruct its transfer agent to place stop transfer notations in
its records to enforce this Section 3.3(b).
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(c) No Person may participate in any underwritten offering hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved, subject to the terms and
conditions hereof, by the Person or a majority of the Persons entitled to
approve such arrangements and (ii) completes and executes all agreements,
questionnaires, indemnities and other documents (other than powers of attorney,
except a power of attorney with respect to the price at which such Person's
shares of Common Stock shall be sold to the underwriters of such offering and
the transfer of such shares to such underwriters; provided that such power of
attorney may include, at the sole discretion of such person, a minimum price
below which such Person shall not be obligated to sell such shares) required
under the terms of such underwriting arrangements.
SECTION 3.4. Indemnification.
(a) AmComp agrees to indemnify and hold harmless each holder of
Registrable Securities whose Registrable Securities are covered by any
registration statement, its directors and officers and each other Person, if
any, who controls such holder within the meaning of the Securities Act or
Exchange Act (each an "Indemnified Party"), against any losses, claims, damages
or liabilities, joint or several, to which such Indemnified Party may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
AmComp will reimburse each such Indemnified Party for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided that
AmComp shall not be liable in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to AmComp by or on behalf of such holder specifically for use in the preparation
thereof. In addition, AmComp shall indemnify any underwriter of such offering
and each other Person, if any, who controls any such underwriter within the
meaning of the Securities Act or the Exchange Act in substantially the same
manner and to substantially the same extent as the indemnity herein provided to
each Indemnified Party. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or any such
director, officer, underwriter or controlling person and shall survive the
transfer of such securities by such holder.
(b) Each prospective seller of Registrable Securities hereunder shall
indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section
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3.4) AmComp, each director of AmComp and each other person, if any, who controls
AmComp within the meaning of the Securities Act or Exchange Act, with respect to
any statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereof, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to AmComp by
or on behalf of such seller specifically for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of AmComp
or any such director, officer or controlling person and shall survive the
transfer of such securities by such seller. The amount payable by any
prospective seller of a Registrable Security with respect to the indemnification
set forth in this subsection (b) in connection with any offering of securities
will not exceed the amount of net proceeds received by such prospective seller
pursuant to such offering.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in the
preceding subdivisions of this Section 3.4, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action; provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 3.4, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that the
indemnifying party may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include, as an unconditional term thereof, the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. No indemnified party shall
consent to entry of any judgment or enter into any settlement of any such action
the defense of which has been assumed by an indemnifying party without the
consent of such indemnifying party.
(d) If the indemnification provided for in the preceding subdivisions
of this Section 3.4 is unavailable to an indemnified party in respect of any
expense, loss, claim, damage or liability referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such expense, loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative
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benefits received by, and the relative fault of, AmComp on the one hand and of
the holder or underwriter, as the case may be, on the other in connection with
the statements or omissions which resulted in such expense, loss, damage or
liability, as well as any other relevant equitable considerations. The relative
benefits received by AmComp on the one hand and the holder or underwriter, as
the case may be, on the other in connection with the distribution of the
Registrable Securities shall be deemed to be in the same proportion as the total
net proceeds received by AmComp from the initial sale of the Registrable
Securities by AmComp to the purchaser bear to the gain realized by the selling
holder or the underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of AmComp on the one hand
and of the holder or underwriter, as the case may be, on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission to state a material fact relates
to information supplied by AmComp, by the holder or by the underwriter and
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission; provided that the foregoing
contribution agreement shall not inure to the benefit of any indemnified party
if indemnification would be unavailable to such indemnified party by reason of
the proviso contained in the first sentence of subdivision (a) of this Section
3.4, and in no event shall the obligation of any indemnifying party to
contribute under this subdivision (d) exceed the amount that such indemnifying
party would have been obligated to pay by way of indemnification if the
indemnification provided for under subdivisions (a) or (b) of this Section 3.4
had been available under the circumstances.
AmComp and the holders of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this subdivision (d) were
determined by pro rata allocation (even if the holders and any underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph and subdivision (c) of this Section 3.4. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subdivision (d), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
SECTION 3.5. Rule 144; Rule 144A.
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(a) If AmComp shall have filed a registration statement pursuant to
Section 12 of the Exchange Act or a registration statement pursuant to the
Securities Act, and for so long as AmComp remains subject to the reporting
requirements of the Exchange Act, AmComp will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and the
regulations adopted by the Commission thereunder and will take such further
action as any holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities, AmComp will deliver to such holder a written statement
as to whether it has complied with such requirements.
(b) AmComp represents and warrants that the Common Stock is not, and is
not part of a class of securities that is, listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in an
automated inter-dealer quotation system. For so long as any shares of
Registrable Securities are restricted securities within the meaning of Rule
144(a)(3) under the Securities Act, AmComp covenants and agrees that it shall,
during any period in which it is not subject to Section 13 or 15(d) of the
Exchange Act, make available to any holder of Registrable Securities in
connection with the sale of such holder Registrable Securities and any
prospective purchaser of Registrable Securities from such, in each case upon
request, the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Securities Act.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Notices. All notices and other communications provided for
hereunder shall be dated and in writing and shall be deemed to have been given
(i) if given by telecopy, when such telecopy is transmitted and confirmation of
receipt thereof is obtained or (ii) if given by mail, prepaid overnight courier
or any other means, when received or when delivery at such address is refused.
Such notices shall be addressed to the appropriate party to the attention of the
person who executed this Agreement at the address or telecopy number set forth
under such party's signature below (or to the attention of such other person or
to such other address or telecopy number as such party shall have furnished to
each other party in accordance with this Section 4.1).
SECTION 4.2. Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto or their successors in interest, except as expressly otherwise provided
herein.
-16-
SECTION 4.3. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 4.4. Specific Performance. Without limiting the rights of each
party hereto to pursue all other legal and equitable rights available to such
party for the other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
SECTION 4.5. GOVERNING LAW; ARBITRATION.
(a) THIS AGREEMENT AND THE WARRANTS SHALL BE GOVERNED BY THOSE
PROVISIONS OF THE CORPORATE CODE OF THE JURISDICTION IN WHICH AMCOMP IS
INCORPORATED AND ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE OF THE JURISDICTION IN
WHICH AMCOMP IS INCORPORATED WHICH ARE NECESSARILY APPLICABLE TO SECURITIES
ISSUED BY A CORPORATION INCORPORATED IN SUCH JURISDICTION AND OTHERWISE SHALL BE
DEEMED TO BE CONTRACTS MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE.
AMCOMP AND THE WARRANTHOLDERS AGREE THAT THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT BEAR A REASONABLE RELATION TO THE STATE OF NEW YORK.
(b) ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ ENDISPUTE AND
ANY SUCCESSOR THEREOF (J.A.M.S.), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
-17-
(c) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF
AMCOMP'S DOMICILE AT TIME OF THE EXECUTION OF THIS INSTRUMENT, AGREEMENT OR
DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL
BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
(d) RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT SHALL BE DEEMED TO (i) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN T HIS
AGREEMENT; OR (ii) BE A WAIVER BY NATIONSBANK OF THE PROTECTION AFFORDED TO IT
BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (iii) LIMIT
THE RIGHT OF NATIONSBANK HERETO (a) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT
NOT LIMITED TO) SETOFF, OR (b) TO FORECLOSE AGAINST ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (c) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. NATIONSBANK MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF
SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR
FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
SECTION 4.6. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
SECTION 4.7. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, 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 contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
18
SECTION 4.8. Entire Agreement. This Agreement is intended by the
parties hereto as a final and complete expression of their agreement and
understanding in respect to the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings, written or oral, between the
parties with respect to such subject matter.
SECTION 4.9. Amendment and Waiver. Any provision of this Agreement may
be amended if, but only if, such amendment is in writing and is signed by AmComp
and the Majority Holders; provided that no such amendment may adversely affect
the rights or obligations hereunder of any Warrant Securityholder unless signed
by such Warrant Securityholder. Any provision may be waived if, but only if,
such waiver is in writing and is signed by the party or parties waiving such
provision and for whose benefit such provision is intended.
SECTION 4.10. No Third-Party Beneficiaries. Nothing in this Agreement
shall convey any rights upon any person or entity which is not a party or an
assignee of a party to this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
AMCOMP INCORPORATED
By:/s/ Xxx Xxxxxxx
------------------------------
Name: Xxx Xxxxxxx
Title: Vice President
Address: X.X. Xxx 00000
Xxxxx Xxxx Xxxxx
Xxxxxxx, 00000
Telefax: (000) 000-0000
NATIONSBANK, N.A.
By:/s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Address: 1555 Palm Beach Xxxxx Xxxx.
Xxx. 00X
Xxxx Xxxx Xxxxx
Xxxxxxx 00000-000
Telefax: (000) 000-0000
X-0
XXXXX XX XXX XXXX )
) to wit:
COUNTY OF NEW YORK )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County listed above to take acknowledgments,
personally appeared Xxxx X. Xxxxxx who is personally known to me to be the
person who signed the foregoing Warrantholders Rights Agreement on behalf of
NationsBank, N.A. and who executed the foregoing instrument on December 31,
1997, and who acknowledged before me in the State and County listed above that
he executed same.
This acknowledgment is given for the sole purpose of verifying the
identity of the parties who signed the foregoing instrument and the place of its
signing, and without any liability on the part of the Notary with regard to the
obligations of the foregoing instrument.
WITNESS my hand and official seal this 31 day of December, 1997.
/s/ Xxxxxx Xxxxxx
------------------------------------
Print Name:______________________________________
Notary Public - State of_________________________
Commission Number:_______________________________
Commission Expires:______________________________
(NOTARIAL SEAL)
XXXXXX XXXXXX
Notary Public, State of New York
No. O1G150044850
Qualified in Kings county
Certificate Filed in New York County
Commission Expires 6/5/99
STATE OF NEW YORK )
) to wit:
COUNTY OF NEW YORK )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County listed above to take acknowledgments,
personally appeared Xxx Xxxxxxx who is personally known to me to be the person
who signed the foregoing Warrantholders Rights Agreement on behalf of AmComp
Incorporated and who executed the foregoing instrument on December 31, 1997, and
who acknowledged before me in the State and County listed above that he executed
same.
This acknowledgment is given for the sole purpose of verifying the
identity of the parties who signed the foregoing instrument and the place of its
signing, and without any liability on the part of the Notary with regard to the
obligations of the foregoing instrument.
WITNESS my hand and official seal this 31 day of December, 1997.
/s/ Xxxxxx Xxxxxx
-------------------------------
Print Name:_________________________________
Notary Public - State of____________________
Commission Number:__________________________
Commission Expires:_________________________
(NOTARIAL SEAL)
XXXXXX XXXXXX
Notary Public, State of New York
No. O1G150044850
Qualified in Kings county
Certificate Filed in New York County
Commission Expires 6/5/99
-2-
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS
REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO AND HAVE THE BENEFIT OF A WARRANTHOLDERS
RIGHTS AGREEMENT DATED AS OF DECEMBER 31, 1997, BETWEEN AMCOMP INCORPORATED AND
THE Warrantholders PARTIES THERETO, COPIES OF WHICH ARE ON FILE WITH AMCOMP
INCORPORATED.
Warrant No. 1 For the Purchase of 55,000 Shares
AMCOMP INCORPORATED
Common Stock Purchase Warrant
THIS CERTIFIES THAT, for value received, NationsBank, N.A. or its
successors in interest, assigns or transferees (collectively, the
"Warrantholder"), is entitled to purchase from AmComp Incorporated, a Delaware
corporation (the "Company"), 55,000 shares of the Company's Common Stock (as
defined in Section 9(a) hereof) (the "Conversion Shares") at the exercise price
of FOUR DOLLARS ($4.00) per share ("Exercise Price"). The number of Conversion
Shares and the Exercise Price shall be adjusted and readjusted or changed from
time to time in accordance with Section 4 hereof.
This Warrant may be exercised at any time and from time to time on or
prior to the fifth anniversary of the date of issuance set forth on the
signature page of this Warrant, provided that Warrantholder may not exercise
this Warrant, and agrees to promptly return this Warrant to the Company for
cancellation, if (a) the "Consolidation" (as defined in the Amended and Restated
Credit Agreement, dated as of December 31, 1997 (the "Credit agreement"), by and
among the Company, the subsidiaries of the Company parties thereto and the
Warrantholder) shall not have been consummated on or prior to August 31, 1998 as
a result of the election of the Warrantholder not to grant the request of the
Company to effect the Consolidation in accordance with the terms set forth in
the Credit Agreement, (b) the principal amount of the "Facility B Advance" (as
defined in the Credit Agreement) and all accrued interest and other amounts
owing with respect thereto shall have been paid on or prior to September 30,
1998, and (c) the Warrantholder shall have received a loan fee paid by the
Company in the amount of $75,000 on or prior to September 30, 1998.
Notwithstanding anything herein to the contrary, if, prior to March 31, 1998,
the Warrantholder (x) provides notice to the Company of its election to receive
a fee in lieu of
Page 1 of 9
continuing to hold the Warrant, and (y) surrenders the Warrant to the Company,
then the Company shall, within 10 days following the surrendering of the
Warrant, pay to the Warrantholder a loan fee in the amount of $75,000.
1. Exercise of Warrant.
(a) The rights represented by this Warrant may be exercised by the
Warrantholder, in whole or in part, by (a) delivering to the Company a duly
executed notice of exercise in the form of Annex A hereto and (b) at the
Warrantholder's option, either (i) delivering a check payable to (or wire
transfer to the account of) the Company in an amount equal to the product of (x)
the Exercise Price times (y) the number of Conversion Shares as to which this
Warrant is being exercised (such product, the "Total Exercise Price") or (ii)
delivering to the company a letter (the "Conversion Letter") requesting
conversion or exchange of a portion of any indebtedness owed by the Company to
the Warrantholder in an amount equal to the Total Exercise Price or (iii) if the
Company shall have consummated an Initial Public Offering (as defined in the
Warrant Agreement referred to below), surrendering to the Company a portion of
this Warrant with a Value (as defined below) equal to the Total Exercise Price.
For the purpose of clause (b)(iii) above, "Value" shall mean the product of (I)
the amount by which the Fair Market Value per Share (as defined below) exceeds
the Exercise Price and (II) the number of Conversion Shares as to which this
Warrant is surrendered for the purpose of effecting payment for Conversion
Shares. "Fair Market Value per Share" means the average closing price of a share
of Common Stock of the Company for the three trading days immediately preceding
the date on which the Warrant (or portion thereof) is surrendered, determined by
reference to any recognized national publication containing such information.
(b) This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of delivery of a duly executed notice
of exercise, together with the amount (in cash or by delivering the Conversion
Letter or by surrender of a portion of this Warrant), if any, payable upon
exercise of this Warrant and, as of such moment, (i) the rights of the
Warrantholder, as such, with respect to the number of Conversion Shares as to
which this Warrant is being exercised (and, if applicable, surrendered as
payment of the Total Exercise Price) shall cease, and (ii) such Warrantholder
shall be deemed to be the record holder of the shares of Common Stock issuable
upon such exercise. As soon as practicable after the exercise, in whole or in
part, of this Warrant, and in any event within 5 business days thereafter, the
Company at its expense (including the payment by it of any applicable issuance
or stamp taxes) will cause to be issued in the name of and delivered to the
Warrantholder, or as the Warrantholder (upon payment by the Warrantholder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock to which the
Warrantholder shall be entitled upon such exercise. In the event of partial
exercise of this Warrant and, if applicable, partial surrender of this Warrant
pursuant to clause (b)(iii) of this Section, the Warrant need not be delivered
to the Company provided that the Warrantholder agrees to make a notation of such
partial exercise and, if applicable, partial surrender of the Warrant. If this
Warrant is delivered to the Company, the Company shall issue and deliver to the
Page 2 of 9
Warrantholder a new Warrant evidencing the rights to purchase the remaining
Conversion Shares, which new Warrant shall all other respects be identical to
this Warrant.
2. Investment Representation.
The Warrantholder by accepting this Warrant represents that the
Warrantholder is acquiring this Warrant for its own account or the account of an
affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrantholder will not sell or otherwise dispose of
this Warrant or the underlying Conversion Shares in violation of applicable
securities laws. The Warrantholder acknowledges that the certificates
representing any Conversion Shares will bear a legend indicating that they have
not been registered under the Securities Act of 1933, and may not be sold by the
Warrantholder except pursuant to an effective registration or pursuant to an
exemption from registration. The Warrantholder shall be entitled to include the
Conversion Shares in any demand or piggyback registration in accordance with
(and subject to) the terms and conditions of the Warrantholders Rights
Agreement, dated as of December 31, 1997 (the "Warrant Agreements"), between the
Company and the Warrantholder.
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been duly
authorized and validly issued and covenants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as follows:
(a) If the Company shall (i) pay a stock dividend or make a
distribution to holders of Common Stock in shares of its Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, (A) the Exercise Price shall be increased or decreased, as the case
may be, to an amount which shall bear the same relation to the Exercise Price in
effect immediately prior to such action as the total number of shares
outstanding immediately prior to such action shall bear to the total number of
shares outstanding immediately after such action and (B) this Warrant
automatically shall be adjusted so that it shall thereafter evidence the right
to purchase the kind and number of Conversion Shares or other securities which
the Warrantholder would have owned
Page 3 of 9
and would have been entitled to receive after such action if this Warrant had
been exercised immediately prior to such action or any record date with respect
thereto. An adjustment made pursuant to this subsection (a) shall become
effective retroactively immediately after the record date in the case of a
dividend or distribution of Common Stock and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification.
(b) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other debt
or equity securities of the Company, or of any corporation other than the
Company (except for the Common Stock of the Company) or (iii) subscription
rights, options or warrants to purchase any of the foregoing assets or
securities, whether or not such rights options or warrants are immediately
exercisable (hereinafter collectively called "Distributions on Common Stock"),
the Company Shall make provisions for the Warrantholder to receive upon exercise
of this Warrant, a proportional amount (depending upon the extent to which this
Warrant is exercised) of such assets, evidences of indebtedness, securities or
such other rights, as if such Warrantholder had exercised this Warrant on or
before such record date.
(c) In the case of any consolidation or merger of the Company with or
into another corporation or the sale of all or substantially all the assets of
the Company to another person or entity, this Warrant thereafter shall be
exercisable for the kind and amount of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock of the
Company deliverable upon exercise of this Warrant would have been entitled upon
such consolidation, merger or sale; and, in such case, appropriate adjustment
shall be made in the application of the provisions in this Section 4 to the end
that the provisions set forth in this Section 4 (including provisions with
respect to changes in and adjustments of the exercise price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other securities or property thereafter deliverable upon the exercise of this
Warrant.
(d) Upon the occurrence of each adjustment or readjustment of the
exercise price or any change in the number of Conversion Shares or in the shares
of stock or other securities or property deliverable upon exercise of this
Warrant pursuant to this Section 4, the Company at its expense shall promptly
compute such adjustment or readjustment and change in accordance with the terms
hereof and furnish to each holder hereof a certificate signed by the chief
financial officer of the Company, setting forth such adjustment or readjustment
and change and showing in detail the facts upon which such adjustment or
readjustment and change is based. The Company shall, upon the written request at
any time of the Warrantholder, furnish or cause to be furnished to such Holder,
a similar certificate setting forth (i) such adjustment or readjustment and
change, (ii) the Exercise Price then in effect, and (iii) the number of
Conversion Shares and the amount, if any, of other shares of stock and other
securities and property which would be received upon the exercise of the
Warrant.
Page 4 of 9
(e) The Company shall not be required upon the exercise of this Warrant
to issue any fraction of shares, but shall make any adjustment therefor by
rounding the number of shares obtainable upon exercise to the next highest whole
number of shares.
5. Transfer of Rights.
Subject to and in accordance with the terms of the Warrant Agreement,
this Warrant is transferable in whole or in part, at the option of the
Warrantholder upon delivery of the Warrant Assignment Form annexed as Annex B
hereto, duly executed. Upon presentation of such Warrant Assignment Form to the
Company, the Company shall execute and deliver a new Warrant or Warrants in the
form of this Warrant with appropriate changes to reflect the issuance of
subsequent Warrants, in the name of the assignee or assignees named in such
instrument of assignment and, if the Warrantholder's entire interest is not
being transferred or assigned, in the name of the Warrantholder, and this
Warrant shall promptly be canceled. Any transfer or exchange of this Warrant
shall be without charge to the Warrantholder and any new Warrant or Warrants
issued shall be dated the date hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or for which it may
be exchanged. The Warrantholder (and not the Company) will be responsible for
any stamp, transfer or other taxes payable on any such transfer.
6. Lost. Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like denomination and date.
7. Rights of Warrantholder.
The Warrantholder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Warrantholder are limited to those expressed in this
Warrant.
8. Successors
All the provisions of this Warrant by or for the benefit of the Company
or the Warrantholder shall bind and inure to the benefit of their respective
successors and assigns.
9. Miscellaneous
(a) As used herein, the term "Common Stock" shall mean and include the
Company's currently authorized common stock, $0.01 par value per share, and
stock of any other class or other consideration into which such currently
authorized Common Stock may hereafter have been changed.
Page 5 of 9
(b) The caption headings used in this Warrant are for convenience of
reference only and shall not be construed in any way to affect the
interpretation of any provisions of this Warrant.
10. Notices.
Any notice pursuant to this Warrant shall be effective if sent by first
class mail, postage prepaid, or delivered by facsimile transmission, to the
address and in the manner specified in the Warrant Agreement.
Page 6 of 9
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its duly authorized officer, and
attested by its Secretary or Assistant Secretary as of the date set forth below.
AMCOMP INCORPORATED
By:____________________________________
Name:
Title:
Attest:
-----------------------------
Name:
Title:
Issuance Date: December 31, 1997
Page 7 of 9
ANNEX A
COMMON STOCK PURCHASE WARRANT
Notice of Exercise
[Date]
To: AMCOMP INCORPORATED
The undersigned, pursuant to the provisions set forth in Warrant No. , hereby
irrevocably elects and agrees to purchase _______ shares of the Company's Common
Stock covered by such Warrant, and makes payment herewith in full therefor of
the Total Exercise Price of $_______.
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate and will not sell or
otherwise dispose of the underlying Conversion Shares in violation of applicable
securities laws. If said number of shares is less than all of the shares
purchasable hereunder the undersigned requests that a new Warrant evidencing the
rights to purchase the remaining Conversion Shares (which new Warrant shall in
all other respects be identical to the Warrant exercised hereby) be registered
in the name of__________________ whose address is__________________:
Signature:___________________________
Printed Name:________________________
Address:_____________________________
_____________________________________
_____________________________________
_____________________________________
Page 8 of 9
ANNEX B
ASSIGNMENT
FOR VALUE RECEIVED ________________ hereby sells, assigns and transfers
all of its rights as set forth in Warrant No. with respect to the shares of the
Company's Common Stock covered thereby as set forth below unto:
Name of Assignee(s) Address(es) No. of Shares
___________________ _________________ _____________________________
___________________ _________________ _____________________________
___________________ _________________ _____________________________
All notices to be given by the Company to the Warrantholder pursuant to
Section 10 of Warrant No. shall be sent to the Assignee(s) at the above stated
address(es), and, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No. , then also to the undersigned.
The undersigned requests that the Company execute and deliver, if
necessary to comply with the provisions of Section 5 of Warrant No. , a new
Warrant or, if the number of shares being hereby assigned is less than all of
the shares covered by Warrant No. _________________ new Warrants in the name of
the undersigned, the assignee and/or the assignees, as is appropriate.
Dated:_____________________
Signature:___________________________
Printed Name:________________________
Address:_____________________________
_____________________________________
_____________________________________
Page 9 of 9
