Execution Copy
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Exhibit 4.6
SERIES W WARRANT AGREEMENT
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SERIES W WARRANT AGREEMENT, dated as of September 17, 1999, among U.S.I.
HOLDINGS CORPORATION (together with its successors and assigns, the "Company"),
a Delaware corporation, and each of the purchasers set forth on the signature
pages hereto (collectively, the "Purchasers").
RECITALS:
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A. The Board of Directors of the Company has authorized the issuance of up
to an aggregate of 6,282,501 warrants (the "Series W Warrants") of the Company,
each Series W Warrant representing the right to purchase, upon the terms and
subject to the conditions hereinafter set forth, and subject to adjustment as
set forth herein, one share of Series W Convertible Preferred Stock, $.01 par
value, of the Company (the "Series W Preferred Stock") at the Exercise Price and
on the terms and subject to the conditions hereinafter set forth. The Series W
Preferred Stock is convertible into shares of voting Common Stock, $.01 par
value, of the Company (the "Common Stock") in accordance with the terms of the
certificate of designations setting forth the rights and preferences of the
Series W Preferred Stock (the "Series W Certificate of Designations").
B. The Company and the Purchasers have entered into separate Subscription
Agreements (collectively, as amended from time to time, the "Subscription
Agreement"), pursuant to which, on the date hereof, the Company has agreed to
sell, and the Purchasers have agreed to purchase an aggregate of 20,833,340
shares of Series W Preferred Stock and an aggregate of 6,250,002 Series W
Warrants.
C. The Company and the Purchasers have entered into a Shareholders'
Agreement (as defined herein) setting forth certain agreements with respect to
the transfer, voting and registration of shares of Capital Stock (as defined
therein) of the Company (including the Series W Warrants and the shares of
Series W Preferred Stock issuable upon exercise thereof).
AGREEMENT:
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties to this Agreement hereby agree as follows:
ARTICLE I
Form, Execution and Transfer of Warrant Certificates:
SECTION 1.1 Form of Series W Warrant Certificates. The warrant
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certificates (individually, a "Series W Warrant Certificate" and, collectively,
the "Series W Warrant Certificates") evidencing the Series W Warrants, and the
forms of assignment and of election to purchase shares to be attached to such
certificates, shall be substantially in the forms set forth in Attachment A
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hereto and may have such letters, numbers or other marks of
identification or designation as may be required to comply with any law or with
any rule or regulation of any governmental authority, stock exchange or
self-regulatory organization made pursuant thereto. Each Series W Warrant
Certificate shall be dated the date of issuance thereof by the Company, either
upon initial issuance or upon transfer or exchange, and on its face shall
initially entitle the holder thereof to purchase a number of shares of Series W
Preferred Stock equal to the number of Series W Warrants represented by such
Series W Warrant Certificate at a price per share equal to the Exercise Price,
but the number of such shares and the Exercise Price shall be subject to
adjustment as provided herein.
SECTION 1.2 Execution of Series W Warrant Certificates; Registration
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Books. (a) Execution of Series W Warrant Certificates. The Series W Warrant
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Certificates shall be executed on behalf of the Company by an officer of the
Company authorized by the Board of Directors of the Company. In case the officer
of the Company who shall have signed any Series W Warrant Certificate shall
cease to be such an officer of the Company before issuance and delivery by the
Company of such Series W Warrant Certificate, such Series W Warrant Certificate
nevertheless may be issued and delivered with the same force and effect as
though the individual who signed such Series W Warrant Certificate had not
ceased to be such an officer of the Company, and any Series W Warrant
Certificate may be signed on behalf of the Company by any individual who, at the
actual date of the execution of such Series W Warrant Certificate, shall be a
proper officer of the Company to sign such Series W Warrant Certificate,
notwithstanding the fact that at the date of the execution of this Agreement any
such individual was not such an officer.
(b) Registration Books. The Company will keep or cause to be kept at
its office at the address set forth on the signature pages hereof or at such
other office of the Company in the United States of America of which the Company
shall have given notice to each holder of Series W Warrant Certificates, books
for registration and transfer of the Series W Warrant Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Series W Warrant Certificates, the registration number and the
number of Series W Warrants evidenced on its face by each of the Series W
Warrant Certificates and the date of each of the Series W Warrant Certificates.
SECTION 1.3 Transfer, Split Up, Combination and Exchange of Series W
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Warrant Certificates; Lost or Stolen Series W Warrant Certificates. (a)
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Transfer, Split Up, etc. Any Series W Warrant Certificate, with or without other
Series W Warrant Certificates, may be transferred, split up, combined or
exchanged for another Series W Warrant Certificate or Series W Warrant
Certificates, entitling the registered holder or transferee thereof to purchase
a like number of shares of Series W Preferred Stock as the Series W Warrant
Certificate or Series W Warrant Certificates surrendered then entitled such
registered holder to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Series W Warrant Certificate shall make such request
in writing delivered to the Company, and shall surrender the Series W Warrant
Certificate or Series W Warrant Certificates to be transferred, split up,
combined or exchanged at the office of the Company referred to in Section
1.2(b), whereupon the Company shall deliver promptly (and in any case within 5
business days after receipt of said Series W Warrant Certificate or Series W
Warrant Certificates) to the Person entitled thereto a Series W Warrant
Certificate or Series W Warrant Certificates, as the case
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may be, as so requested.
(b) Loss, Theft, etc. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Series W Warrant Certificate (which evidence
shall be, in the case of a Non-Management Investor, notice from such
Non-Management Investor of such ownership (or of ownership by such
Non-Management Investor's nominee) and such loss, theft, destruction or
mutilation), and (i) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company; provided, however, that if the holder of
such Series W Warrant Certificate is an Non-Management Investor or a nominee of
a Non-Management Investor, such holder's own unsecured agreement of indemnity
shall be deemed to be satisfactory; or (ii) in the case of mutilation, upon
surrender and cancellation thereof; the Company at its own expense will execute
and deliver, in lieu thereof, a new Series W Warrant Certificate, dated the date
of such lost, stolen, destroyed or mutilated Series W Warrant Certificate and of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Series W Warrant
Certificate.
(c) Transfers Generally. Notwithstanding any provision of this
Agreement, no holder of Series W Warrants shall Transfer, nor shall the Company
recognize or give any effect to any Transfer of, any Series W Warrants now or
hereafter owned by such holder unless such Transfer is made in accordance with
Article II of the Shareholders' Agreement. The Company agrees, promptly
following a written request therefor, to execute and deliver all documents,
agreements and instruments and to take all commercially reasonable actions
within its control to cooperate with and give effect to any transaction or
series of transactions involving a Transfer of Series W Warrants to which any
provision of Article II of the Shareholders' Agreement applies.
SECTION 1.4 Subsequent Issuance of Series W Warrant Certificates.
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Subsequent to the date hereof, no Series W Warrant Certificates shall be issued
except (i) Series W Warrant Certificates issued upon any transfer, split up,
combination or exchange of Series W Warrants pursuant to Section 1.3(a); (ii)
Series W Warrant Certificates issued in replacement of lost, stolen, destroyed
or mutilated Series W Warrant Certificates pursuant to Section 1.3(b); and (iii)
Series W Warrant Certificates issued pursuant to Section 2.4 upon the partial
exercise of any Series W Warrant Certificate to evidence the unexercised portion
of such Series W Warrant Certificate.
SECTION 1.5 Special Agreements of Series W Warrant Certificate
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Holders. Every holder of a Series W Warrant Certificate by accepting the same
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consents and agrees with the Company and with every other holder of a Series W
Warrant Certificate that: (i) the Series W Warrant Certificates are
transferable, subject to the provisions of the Shareholders' Agreement, only on
the registry books of the Company if surrendered at the office of the Company
referred to in Section 1.2(b), duly endorsed or accompanied by an instrument of
transfer (in the form attached hereto); and (ii) the Company may deem and treat
the Person in whose name each Series W Warrant Certificate is registered as the
absolute owner thereof and of the Series W Warrants evidenced thereby for all
purposes whatsoever, and the Company shall not be affected by any notice to the
contrary.
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ARTICLE II
Exercise of Warrants; Payment of Exercise Price
SECTION 2.1 Exercise of Series W Warrants. At any time and from time
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to time on or prior to the Expiration Date, the holder of any Series W Warrant
Certificate may exercise the Series W Warrants evidenced thereby, in whole or in
part, by surrender of such Series W Warrant Certificate, with an election to
purchase (a form of which is attached to each Series W Warrant Certificate)
attached thereto duly executed, to the Company at its office referred to in
Section 1.2(b), together with payment of the Exercise Price for each share of
Series W Preferred Stock with respect to which the Series W Warrants are then
being exercised. Such Exercise Price shall be payable in cash or by certified or
official bank check payable to the order of the Company or by wire transfer of
immediately available funds to the account of the Company.
SECTION 2.2 Cashless Exercise. If any holder of Series W Warrant
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Certificates delivers such Series W Warrant Certificates to the Company and
notifies the Company in writing that such holder intends to exercise all, or any
portion of, the Series W Warrants represented by such Series W Warrant
Certificates and to satisfy its obligation to pay the Exercise Price in respect
thereof under this Section 2.2, such holder shall become entitled to receive,
instead of the number of shares of Series W Preferred Stock such holder would
have received had the Exercise Price been paid pursuant to Section 2.1, a number
of shares of Series W Preferred Stock in respect of the exercise of such Series
W Warrants equal to the product of:
(a) the number of shares of Series W Preferred Stock issuable upon
such exercise of such Series W Warrant Certificate (or, if only a portion
of such Series W Warrant Certificate is being exercised, issuable upon the
exercise of such portion); multiplied by
(b) the quotient of:
(i) the difference of
(A) the Fair Market Value per share of Series W
Preferred Stock at the time of such exercise; minus
(B) the Exercise Price per share of Series W Preferred
Stock at the time of such exercise;
divided by
(ii) the Fair Market Value per share of Series W Preferred
Stock at the time of such exercise.
The Company shall not be required to issue fractional shares by virtue of this
Section 2.2, but
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shall pay the exercising holder cash in lieu of such fractional shares in
accordance with Section 4.2. The parties hereto agree that an exercise of any
Series W Warrants in accordance with this Section 2.2 shall be deemed to be a
conversion of such Series W Warrants, pursuant to the terms of this Agreement
and the Series W Warrants, into Series W Preferred Stock.
SECTION 2.3 Issuance of Series W Preferred Stock. Upon timely receipt
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of a Series W Warrant Certificate, with the form of election to purchase duly
executed, accompanied by payment of the Exercise Price for each of the shares to
be purchased in the manner provided in Section 2.1 or Section 2.2 and an amount
equal to any applicable transfer tax (if not payable by the Company pursuant to
Section 3.4), the Company shall thereupon promptly (and in any case within 5
business days after the receipt of such Series W Warrant Certificate) cause
certificates representing the number of whole shares of Series W Preferred Stock
then being purchased to be delivered to or upon the order of the registered
holder of such Series W Warrant Certificate, registered in such name or names as
may be designated by such holder, and, promptly (and in any case within 5
business days after the receipt of such Series W Warrant Certificate) deliver
the cash, if any, to be paid in lieu of fractional shares pursuant to Section
4.2 to or upon the order of the registered holder of such Series W Warrant
Certificate.
SECTION 2.4 Unexercised Series W Warrants. If the registered holder of
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any Series W Warrant Certificate shall exercise less than all the Series W
Warrants evidenced thereby, a new Series W Warrant Certificate evidencing Series
W Warrants equal in number to the number of Series W Warrants remaining
unexercised shall be issued by the Company to the registered holder of such
Series W Warrant Certificate or to its duly authorized assigns.
SECTION 2.5 Cancellation and Destruction of Series W Warrant
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Certificates. All Series W Warrant Certificates surrendered to the Company for
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the purpose of exercise, exchange, substitution or transfer shall be canceled by
it, and no Series W Warrant Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Agreement. The Company
shall cancel and retire any other Series W Warrant Certificates purchased or
acquired by the Company otherwise than upon the exercise thereof.
ARTICLE III
Covenants of the Company
SECTION 3.1 Series W Preferred Stock Record Date. Each Person in whose
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name any certificate for shares of Series W Preferred Stock is issued upon the
exercise of Series W Warrants shall be deemed to have become the holder of
record of the Series W Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Series W Warrant Certificate
evidencing such Series W Warrants was duly surrendered with an election to
purchase attached thereto duly executed and payment of the aggregate Exercise
Price was made.
SECTION 3.2 Right of Action. All rights of action in respect of the
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Series W
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Warrants are vested in the respective registered holders of the Series W Warrant
Certificates, and any registered holder of any Series W Warrant Certificate,
without the consent of the holder of any other Series W Warrant Certificate,
may, in its own behalf and for its own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, its right to exercise the Series W Warrants
evidenced by such Series W Warrant Certificate in the manner provided in such
Series W Warrant Certificate and in this Agreement.
SECTION 3.3 Survival. The agreements of the Company contained in this
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Article III shall survive the exercise of and the expiration of the Series W
Warrants.
SECTION 3.4 Transfer Taxes. The Company will pay all federal and state
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stamp and other transfer taxes and similar documentary or transfer charges and
assessments, if any, which may be payable in respect of (i) the initial sale and
issuance of the Series W Warrants, and (ii) the issuance of Series W Preferred
Stock or other Securities issuable upon exercise of the Series W Warrants, and
will save each holder of Series W Warrants harmless against any loss or
liability resulting from nonpayment or delay in payment of any such tax or
similar documentary or transfer charges and assessments. The Company will pay
all reasonable costs of delivery to any holder of Series W Warrants, or such
holder's nominee, of Series W Preferred Stock or other Securities acquired upon
exercise of the Series W Warrants.
SECTION 3.5 Information. The Company agrees to furnish each holder of
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Series W Warrants with copies of all notices and other information furnished to
holders of outstanding shares of Series W Preferred Stock under any provision of
the Series W Certificate of Designations, including without limitation Sections
2(e), 5(b), 7(g), 7(h), 7(j) and 8(ii)(b) thereof.
SECTION 3.6. Reservation of Shares. The Company covenants and agrees
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that it will at all times cause to be reserved and kept available out of its
authorized and unissued shares of capital stock such number of shares of Series
W Preferred Stock, Common Stock or other Securities as will be sufficient to
permit (i) the exercise in full of all Series W Warrants and (ii) the conversion
of all Series W Preferred Stock into Common Stock in accordance with the Series
W Certificate of Designations. The Company covenants and agrees that it will
take all actions necessary to ensure that all Series W Preferred Stock or other
Securities issuable upon the exercise of any Series W Warrant (including any
Securities issuable upon the exercise, exchange or conversion of Rights or
Convertible Securities) shall upon payment of the aggregate Exercise Price be
duly and validly authorized and issued and fully paid and nonassessable, free of
any preemptive rights and free of any lien created by, or arising out of actions
of, the Company or any of its Subsidiaries.
ARTICLE IV
Adjustments
SECTION 4.1 Adjustments. During the period when the Series W Warrants
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are exercisable, the number of shares of Series W Preferred Stock issuable upon
the exercise
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of each Series W Warrant, and the Exercise Price, shall be subject to
adjustment, without duplication, as follows:
(a) Mechanical Adjustments. If at any time or from time to time after
the date of original issuance of the Series W Warrants:
(i) a split or subdivision of the outstanding shares of Series W
Preferred Stock occurs;
(ii) the Company determines that holders of Series W Preferred
Stock are entitled to receive a dividend or other distribution (which
dividend or other distribution is not payable pro rata to each holder
of Series W Warrants, assuming exercise in full thereof payable in
(A) additional shares of Series W Preferred Stock, (B) other
Securities of the Company (including shares of Common Stock of the
Company in connection with a Forced Conversion, as defined in the
Series W Certificate of Designations) or (C) Rights or Convertible
Securities exercisable or exchangeable for or convertible into
additional shares of Series W Preferred Stock or other Securities of
the Company, in any transaction (including a reclassification of
shares of Series W Preferred Stock), in each case, without payment of
any consideration by such holder therefor (including upon conversion
or exercise of such Rights or Convertible Securities);
(iii) the number of outstanding shares of Series W Preferred
Stock is decreased by virtue of a combination or reverse stock split;
or
(iv) the Series W Preferred Stock is reclassified into Securities
of the Company or another Person in connection with a merger,
consolidation or reorganization of the Company with or into another
Person or the sale of all or substantially all of the assets of the
Company to a Person, in each case, not owned or Controlled by the
Company's stockholders;
then, as of (x) the record date of such transaction (or the date of such
transaction if no record date is fixed), or (y) in the case of Rights or
Convertible Securities that are not immediately exercisable or exchangeable for
or convertible into underlying Securities, the date on which such Rights or
Convertible become exercisable, exchangeable or convertible, the number of
shares of Series W Preferred Stock or other Securities issuable on exercise of
each Series W Warrant and the Exercise Price shall be adjusted appropriately so
that the holder of each Series W Warrant thereafter exercised shall be entitled
to receive the number of shares of Series W Preferred Stock or other Securities
such holder would have owned or been entitled to receive had such Series W
Warrant been exercised immediately prior to such transaction at the Exercise
Price then in effect.
(b) Distributions of Cash or Property. If the Company shall distribute
any Property or cash to holders of shares of Series W Preferred Stock at any
time after the date of original issuance of the Series W Warrants that is not
distributed pro rata to each holder of Series W Warrants (assuming exercise in
full thereof), then the number of shares of Series W
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Preferred Stock issuable on exercise of each Series W Warrant and the Exercise
Price shall be adjusted appropriately so that the holder of each Series W
Warrant thereafter exercised shall be entitled to receive additional shares of
Series W Preferred Stock with a Fair Market Value equal to the Fair Market Value
of the Property or cash such holder would have owned or been entitled to receive
had such Series W Warrant been exercised immediately prior to such transaction
at the Exercise Price then in effect. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on the date of such
distribution.
(c) Adjustments to Conversion Price of Series W Preferred Stock. The
number of shares of Series W Preferred Stock issuable on exercise of each Series
W Warrant and, if necessary, the Exercise Price shall be adjusted appropriately
upon each adjustment to the Conversion Price of the Series W Preferred Stock (as
defined in the Series W Certificate of Designations) so that the holder of each
Series W Warrant thereafter exercised shall be entitled to receive, upon
exercise of such Series W Warrant at the Exercise Price then in effect, a number
of shares of Series W Preferred Stock sufficient to entitle such holder to
receive that number of shares of Common Stock or other Securities into which the
Series W Preferred Stock could have been converted pursuant to the Series W
Certificate of Designations had such Series W Warrant been exercised immediately
prior to such transaction at the Exercise Price (and the Conversion Price) then
in effect.
(d) Below Fair Market Value Issuances. If at any time or from time to
time after the date of original issuance of the Series W Warrants the Company
shall issue or sell Securities of the Company at a price per Security that is
less than the Fair Market Value (as defined in the Series W Certificate of
Designations for this purpose) of such Securities, then, as of (x) the record
date of such transaction (or the date of such transaction if no record date is
fixed), or (y) in the case of Rights or Convertible Securities that are not
immediately exercisable or exchangeable for or convertible into underlying
Securities, the date on which such Rights or Convertible become exercisable,
exchangeable or convertible, the number of shares of Series W Preferred Stock or
other Securities issuable on exercise of each Series W Warrant shall be adjusted
by multiplying the number issuable immediately prior to such date by the
quotient of (i) the sum of (A) the total number of shares of Common Stock of the
Company outstanding on a fully diluted, as-converted basis (assuming the
exercise, exchange and/or conversion in full of all outstanding Rights and
Convertible Securities of the Company) plus (B) the number of additional
Securities of the Company so issued or sold (or the maximum number of Securities
into or for which such additional Rights or Convertible Securities may be
exercised, exchanged or converted) divided by (ii) the sum of (A) the total
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number of shares of Common Stock of the Company outstanding on a fully diluted,
as-converted basis (assuming the exercise, exchange and/or conversion in full of
all outstanding Rights and Convertible Securities of the Company) plus (B) the
number of additional Securities of the Company so issued or sold (or the maximum
number of Securities into or for which such additional Rights or Convertible
Securities may be exercised, exchanged or converted) that the aggregate
consideration paid or payable for such additional Securities (including upon
exercise of any Rights or Convertible Securities) could have purchased at the
Fair Market Value per Security on the relevant date. No adjustment shall be made
pursuant to this Section 4.1(d) in respect of any transaction not requiring the
approval of holders of Series W Preferred Stock under clauses (a) and (b) of
Section 7(c)(iii) of the Series W Certificate of
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Designations.
(e) Rights and Convertible Securities. In the case of any adjustment
made pursuant to this Section 4.1 that entities the holder of a Series W Warrant
to receive Rights or Convertible Securities upon exercise of such Series W
Warrant, the Securities deliverable upon exercise, exchange or conversion of
such Rights or Convertible Securities shall be deemed to have been issued at the
time such Rights or Convertible Securities were exercised, exchanged or
converted. However, upon the expiration of such Rights or Convertible Securities
where none, or only a portion, of the aggregate maximum number of Securities
issuable thereunder were actually issued, the number of shares of Series W
Preferred Stock or other Securities issuable on exercise of each Series W
Warrant and the Exercise Price, to the extent in any way affected by the
issuance of such Rights or Convertible Securities, shall be recomputed to
reflect the issuance of only the number of shares of Series W Preferred Stock or
other Securities actually issued.
(f) Other Adjustments. In case the Company at any time or from time to
time shall take any action which could have a similar dilutive effect on the
number of shares of Series W Preferred Stock issuable upon exercise of the
Series W Warrants or the Common Stock issuable upon conversion of such Series W
Preferred Stock, other than an action described in any of Sections 4.1(a)
through (e), then, the number of shares of Series W Preferred Stock or other
Securities issuable upon exercise of the Series W Warrants and the Exercise
Price shall be adjusted in such manner and at such time as the Executive
Committee of the Board of Directors of the Company reasonably determines to be
equitable under the circumstances (such determination to be evidenced in a
resolution, a certified copy of which shall be submitted to the holders of the
Series W Warrants). If the Company determines that a state of facts occurs or is
proposed that would result in the adjustment provisions of this Section 4.1 not
being equitable or fairly protected in accordance with the essential intent and
principles of such provisions, the Company shall make an adjustment in the
application of such provisions, in accordance with the essential intent and
principles, so as to be equitable and protect such provisions.
(g) De Minimis Changes in Exercise Price. No adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Exercise Price;
provided that any adjustments that, at the time of the calculation thereof, are
less than one percent (1%) of the Exercise Price at such time and by reason of
this Section 4.1(g) are not required to be made at such time shall be carried
forward and added to any subsequent adjustment or adjustments for purposes of
determining whether such subsequent adjustment or adjustments, as so
supplemented, exceed the one percent (1%) amount set forth in this Section
4.1(g) and, if any such subsequent adjustment, as so supplemented or otherwise,
should exceed such one percent (1%) amount, all adjustments deferred prior
thereto and not previously made shall then be made. In any case, all such
adjustments being carried forward pursuant to this Section 4.1(g) shall be
given effect upon the exercise of any Series W Warrants by any holder thereof
for purposes of determining the Exercise Price thereof. All calculations shall
be made to the nearest ten-thousandth of a dollar ($0.0001).
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(h) Effect of Adjustments. All Series W Warrants originally issued by
the Company hereunder shall, subsequent to any adjustment made pursuant to this
Section 4.1, evidence the right to purchase, at the adjusted Exercise Price, the
number of shares of Series W Preferred Stock or other Securities determined to
be purchasable from time to time hereunder upon exercise of such Series W
Warrants, all subject to further adjustment as provided herein. Each such
adjustment shall be valid and binding upon the Company and the holders of Series
W Warrants irrespective of whether the Series W Warrant Certificates theretofore
and thereafter issued express the Exercise Price per share of Series W Preferred
Stock and the number of shares of Series W Preferred Stock that were expressed
upon the initial Series W Warrant Certificates issued hereunder.
(i) Miscellaneous. Adjustments shall be made pursuant to this Section
4.1 successively whenever any of the events referred to in Sections 4.1(a)
through 4.1(f), inclusive, shall occur. If any Series W Warrant shall be
exercised subsequent to the record date for any of the events referred to in
this Section 4.1, but prior to the effective date thereof, appropriate
adjustments shall be made immediately after such effective date so that the
holder of such Series W Warrant on such record date shall have received, in the
aggregate, the kind and number of shares of Series W Preferred Stock or other
Securities or Property or cash that it would have owned or been entitled to
receive on such effective date had such Series W Warrant been exercised prior to
such record date.
(j) Other Securities. In the event that at any time, as a result of an
adjustment made pursuant to this Section 4.1, each holder of Series W Warrants
shall become entitled to purchase any Securities other than shares of Series W
Preferred Stock, the number or amount of such other Securities so purchasable
and the purchase price of such Securities shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions contained in Section 4.1 (a) through Section 4.1(f), inclusive, and
all other relevant provisions of this Section 4.1 that are applicable to shares
of Series W Preferred Stock shall be applicable to such other Securities.
(k) Notice of Adjustment. Whenever the number of shares of Series W
Preferred Stock issuable upon the exercise of Series W Warrants is adjusted or
the Exercise Price in respect thereof is adjusted, as herein provided, the
Company shall promptly (and in any case within 10 business days after the
effective date of any such adjustment) give to each holder of Series W Warrants
notice of such adjustment or adjustments and shall promptly (and in any case
within 10 business days after the effective date of such adjustment or
adjustments) deliver to each holder of Series W Warrants a certificate of the
Company's chief financial officer setting forth: (i) the number of shares of
Series W Preferred Stock or other Securities issuable upon the exercise of each
Series W Warrant and the Exercise Price for such shares after such adjustment;
(ii) a brief statement of the facts requiring such adjustment; and (iii) the
computation by which such adjustment was made. So long as any Series W Warrant
is outstanding, the Company shall deliver to each holder of Series W Warrants
promptly following the end of each fiscal year of the Company, if requested by
the Required Series W Warrantholders, a certificate of the independent certified
public accountants of the Company setting forth: (A) the number of shares of
Series W Preferred Stock or other Securities issuable upon the exercise of each
Series W Warrant and the Exercise Price for such shares as
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of the end of such fiscal year; (B) a brief statement of the facts requiring
each adjustment required to be made in such fiscal year; and (C) the computation
by which each such adjustment was made.
(l) Accretion. Notwithstanding any contrary provision of this Section
4.1, no adjustment to the Exercise Price or the number of shares of Series W
Preferred Stock or other Securities issuable upon exercise of any Series W
Warrant shall be made, and no right shall be conferred, in respect of any
increase in the Series W Liquidation Preference made pursuant to Section 4(a) of
the Series W Certificate of Designations.
SECTION 4.2 Fractional Shares. The Company shall not be required to
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issue fractional shares of Series W Preferred Stock or other Securities upon the
exercise of any Series W Warrant. Upon the exercise of any Series W Warrant,
there shall be paid to the holder thereof, in lieu of any fractional share of
Series W Preferred Stock or other Security resulting therefrom, an amount of
cash (computed to the nearest whole cent) equal to the product of (i) the
fractional amount of such share multiplied by (ii) the Fair Market Value, as
determined on the Stock Trading Day immediately prior to the date of exercise of
such Series W Warrant.
SECTION 4.3 Additional Agreements of the Company. The Company shall
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not, by amendment to its certificate of incorporation (including without
limitation the Series W Certificate of Designations), as in effect on the date
hereof, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, liquidation, issuance or sale of Securities, Rights or
Convertible Securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but shall at all times in good faith assist in the
carrying out of all the provisions of this Article IV and in the taking of all
such actions as may be reasonably necessary or appropriate in order to protect
the rights of the holders of the Series W Warrant Certificates against dilution
or other impairment described in this Article IV. Before taking any action that
would result in an adjustment to the then current Exercise Price to a price that
would be below the then current par value of Series W Preferred Stock or other
Securities issuable upon exercise of any Series W Warrant, the Company will take
or cause to be taken any and all necessary corporate or other action that may be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Series W Preferred Stock or other Securities upon
payment of such Exercise Price as so adjusted.
ARTICLE V
Interpretation of Agreement
SECTION 5.1 Certain Defined Terms. For the purpose of this Agreement,
---------------------
the following terms shall have the meanings specified with respect thereto
below:
"Affiliate" means, as to any Person, any other Person directly or
indirectly Controlling, Controlled by or under direct or indirect common Control
with such Person. For purposes of this Agreement, Zurich and CapZ shall not be
deemed to be Affiliates of each
11
other.
"CapZ" means Capital Z Financial Services Fund II, L.P. and Capital Z
Financial Services Private Fund II, L.P. and their respective Affiliates.
"Change of Control" means, as to any Person, a change, shift or
transfer of Control with respect to such Person (including any change in the
Control of any entity Controlling such Person). The decision of the Executive
Committee of the Board of Directors of the Company, giving due consideration to
whether, among other things, a change of actual control or management of a
specified Person has occurred, shall be conclusive in determining whether a
Change of Control of an entity Controlling the specified Person has occurred for
purposes of this definition.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of securities, partnership interests or by
contract, assignment or otherwise. The terms "Controlling" and "Controlled"
shall have meanings correlative to the foregoing.
"Convertible Securities" means notes, debentures or other equity or
debt securities convertible into shares of capital stock or other equity
securities of a specified Person.
"Exercise Price" means, prior to any adjustment pursuant to Section
4.1 of this Agreement, the Initial Exercise Price and thereafter, the Initial
Exercise Price as adjusted and readjusted from time to time (in each case,
rounded to the nearest whole cent).
"Expiration Date" means, with respect to any Series W Warrant,
September 17, 2004 (unless extended pursuant to Section 7.9).
"Fair Market Value" (i) of a share of any equity security on any date
means the average for a period of 10 consecutive Stock Trading Days immediately
prior to such date of the high and low sale prices (or if no sales are reported,
the average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices), as reported in the composite
transactions for the New York Stock Exchange, or if the security is not listed
or admitted to trading on such exchange, as reported in the composite
transactions for the principal national or regional United States securities
exchange on which the security is listed or admitted to trading or, if the
security is not listed or admitted to trading on a United States national or
regional securities exchange, as reported by NASDAQ or by the National Quotation
Bureau Incorporated or, (ii) (A) in the case of any security not listed or
traded on any national securities exchange and prices for the security are not
reported by NASDAQ or the National Quotation Bureau Incorporated, or (B) with
respect to any Property not constituting an equity security, means the value of
such security or Property established by two-thirds of the Executive Committee
of the Board of Directors of the Company, in the good faith exercise of its
reasonable business judgment, as the fair market value of such security or
Property; provided, that if two-thirds of the Executive Committee of the Board
--------
of Directors shall not establish the Fair Market Value, then the Fair Market
Value shall be determined by an independent accounting firm or an investment
bank which is not an affiliate of the Company, in either case of nationally
recognized standing.
12
"Forced Conversion" shall have the meaning given in the Series W
Certificate of Designations.
"Initial Exercise Price" means $6.00 per share of Series W Preferred
Stock.
"Joinder Agreement" shall have the meaning set forth in the
Shareholders' Agreement.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"Operative Documents" shall have the meaning given to such term in the
Subscription Agreement.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Property" means any property; any assets; any evidences of
indebtedness of the Company or other Person; any capital stock of the Company or
any other Person; any Rights; or any Convertible Securities.
"Public Offering" shall have the meaning given in the Series R
Certificate of Designations, as in existence on the date hereof.
"Required Series W Warrantholders" means, at any time, the holders of
at least 50% of all Series W Warrants outstanding (excluding any Series W
Warrants directly or indirectly held by the Company or any Subsidiary of the
Company) at such time.
"Rights" means warrants, options or other rights to acquire capital
stock or other equity securities of a specified Person.
"Securities Act" means the Securities Act of 1933, as amended.
"Security" shall have the meaning specified in section 2(1) of the
Securities Act.
"Series W Certificate of Designations" means the Certificate of
Designations relating to the Series W Preferred Stock.
"Series W Liquidation Preference" shall have the meaning set forth in
the Series W Certificate of Designations.
"Shareholders' Agreement" means the Shareholders' and Warrantholders'
Agreement, dated as of the date hereof, among the Company and the
securityholders of the Company party thereto, as the same may be amended from
time to time.
13
"Stock Trading Day" means each day on which the securities exchange or
quotation system which is used to determine the Fair Market Value is open for
trading or quotation.
"Subsidiary" means any corporation with respect to which a specified
Person (or Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Transfer" means any direct or indirect transfer, sale, conveyance,
pledge, hypothecation or other disposition, including without limitation any of
the foregoing which occurs by virtue of any Change of Control.
"Zurich" means Zurich American Holding Company of America and its
Affiliates.
SECTION 5.2 Captions. The captions of this Agreement are included for
--------
convenience of reference only, do not constitute a part hereof and shall be
disregarded in the construction hereof.
SECTION 5.3 GOVERNING LAW; CONSENT TO JURISDICTION, VENUE AND SERVICE
---------------------------------------------------------
OF PROCESS: WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND
--------------------------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH
PROCEEDING BY NOTICE IN THE MANNER SET FORTH IN SECTION 7.6.
ARTICLE VI
Preemptive Rights
SECTION 6.1 Rights to Subscribe. Until such time as a Public Offering
-------------------
has been consummated, except with respect to Exempt Issuances (as defined
below), if the
14
Company proposes to issue any shares of capital stock ("New Shares"), Rights to
acquire capital stock of the Company or Convertible Securities convertible into
shares of capital stock of the Company, the Company will deliver to the holders
of Series W Warrants a written notice (the "New Issuance Notice") not more than
45 days, and not less than 30 days, prior to the date of completion of such
issuance (the "New Issuance") or, if earlier, the date of execution of
definitive documentation with respect thereto, stating the price and other terms
and conditions thereof. Each holder of Series W Warrants shall have the right,
exercisable within 21 days of the receipt by such holders of the New Issuance
Notice, to purchase (or be issued without consideration if the New Shares,
Rights or Convertible Securities to be issued in the New Issuance (the "New
Issuance Securities") are to be issued without consideration) all or any part of
its Pro Rata Share of the New Issuance Securities at the price and on the terms
on which the Company proposes to make the New Issuance, such price to be paid in
full in cash or by check against the issuance and delivery of the New Issuance
Securities; provided, however, that if the Company proposes to issue any notes,
-------- -------
debentures or other debt securities of the Company to which are attached any
Rights exercisable for a nominal exercise price, each holder of Series W
Warrants may purchase all, or any part of its Pro Rata Share of such Rights by
purchasing the note, debenture or other debt security to which such Right is
attached, in the time period and at the price and terms (including payment
therefor) specified above for New Issuance Securities. "Pro Rata Share" means
the ratio, expressed as a percentage, of (i) the total number of shares of
capital stock of the Company owned by a holder of Series W Warrants on
a fully-diluted, as-converted basis (assuming the exercise of all unexercised
Series W Warrants and Existing Warrants, as defined in the Shareholders'
Agreement) to (ii) the total number of issued and outstanding shares of capital
stock of the Company, on a fully-diluted, as-converted basis (assuming the
exercise of all unexercised Series W Warrants and Existing Warrants, as defined
in the Shareholders' Agreement, but excluding shares of capital stock issued,
and shares of capital stock reserved for issuance pursuant to Rights and
Convertible Securities issued, in an Exempt Issuance).
SECTION 6.2 Exempt Issuances. Notwithstanding Section 6.1, the holders
----------------
of Series W Warrants shall have no rights to subscribe for New Issuance
Securities issued by the Company (i) to directors, officers, employees, advisors
or consultants of the Company or one of its subsidiaries pursuant to an
incentive compensation, bonus or stock purchase or other similar plan approved
in good faith by the Board of Directors of the Company, (ii) as consideration in
connection with an acquisition by the Company or one of its subsidiaries on an
arm's length basis, (iii) that are issued in connection with a financing in
which a substantial preponderance of the proceeds are derived from the issuance
of debt securities of the Company, so long as at the time of issuance such New
Issuance Securities and all other New Issuance Securities so issued in the
immediately preceding twelve-month period represent, in the aggregate, less than
2.5% of the Common Stock of the Company outstanding, (iv) pursuant to a sale of
its Common Stock in a firm commitment underwriting registered under the
Securities Act of 1933, as amended, (v) pursuant to the exercise of Rights or
the conversion or exchange of Convertible Securities in existence on the first
date any Series W Warrant is issued and outstanding, (vi) pursuant to a stock
split, stock dividend or other distribution made on a pro rata basis to all
holders of capital stock of the Company, or (vii) issued in a transaction
permitted by clauses (i) through (vi) of this Section 6.2 (each, an "Exempt
Issuance").
15
ARTICLE VII
Miscellaneous
SECTION 7.1 Amendments and Waivers. No modification, amendment or
----------------------
waiver of any provision of this Agreement, nor any consent to any departure from
the terms of this Agreement, shall be effective unless it is in writing and
signed by (i) the Required Series W Warrantholders and (ii) the Company, if such
modification, amendment, waiver or consent imposes material additional
obligations on the Company or could reasonably be expected to materially
adversely affect any of the rights of the Company hereunder; provided that any
--------
such modification, waiver, amendment or consent of this Section 7.1 or that
affects the Exercise Price or the number or type of Securities issuable upon
exercise of the Series W Warrants (provided that an adjustment pursuant to
Section 4.1 shall not be deemed to be a modification, waiver, amendment or
consent covered by this Section 7.1) or hastens the Expiration Date shall not be
effective as to any holder of any Series W Warrants unless consented to by such
holder. Any such waiver or consent shall be effective only in the specific
instance and for the purpose given. No failure or delay by any party to this
Agreement in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
SECTION 7.2 Series W Warrants Subject to Shareholders' Agreement. The
----------------------------------------------------
holders of the Series W Warrants and the Company are subject in all respects to
the terms of the Shareholders' Agreement. By its acceptance of a Series W
Warrant, each holder of Series W Warrants agrees to be bound by all of the terms
and provisions of the Shareholders' Agreement to the extent applicable. Each
holder of Series W Warrants who signs the Shareholders' Agreement or a Joinder
Agreement after the date hereof shall be deemed to be an Investor (as defined in
the Shareholders' Agreement) and shall be entitled to all rights and privileges
of an Investor as if such holder had been an original signatory to the
Shareholders' Agreement.
SECTION 7.3 No Liabilities as Stockholder. Nothing contained in this
-----------------------------
Agreement or the Shareholders' Agreement shall be construed as imposing any
obligation on a holder of Series W Warrants to purchase any securities or as
imposing any liabilities on such holder as a stockholder of the Company, whether
such obligation or liabilities are asserted by the Company or by creditors of
the Company.
SECTION 7.4 Entire Agreement. This Agreement and the other Operative
----------------
Documents constitute the full and entire understanding and agreement between the
parties hereto and thereto with respect to the subject matter hereof and thereof
and supersede all prior negotiations, understandings and agreements between such
parties in respect of such subject matter.
SECTION 7.5 Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective
16
successors and assigns; provided, however, that no assignment of rights under
-------- -------
this Agreement will be valid unless made in connection with a contemporaneous
Transfer of Series W Warrants which complies with the provisions of the Warrant
Certificate representing such Series W Warrants and is not prohibited by the
Shareholders' Agreement; and provided future, that upon any such assignment,
-------- ------
the assignee shall execute and deliver a Joinder Agreement unless the
Shareholders' Agreement expressly does not require the assignee to do so. The
Company may not assign or otherwise transfer any of its rights or obligations
under this Agreement.
SECTION 7.6 Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given to such party at its address or facsimile number set forth on
the signature pages hereof or the signature page of any Joinder Agreement or
such other address or facsimile number as such party may hereafter specify for
the purpose by notice to the party sending the communication. Each such notice,
request or other communication shall be effected by facsimile transmission,
overnight courier or personal delivery, and shall not be deemed given until
confirmation of completed facsimile transmission or receipt from an overnight
courier is received by the notifying party or until delivered, in the case of
personal delivery.
SECTION 7.7 Severability. Any term or provision of this Agreement
------------
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement, or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction.
SECTION 7.8 Counterparts. This Agreement may be signed in any number
------------
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 7.9 Expiration. All Series W Warrants that have not been
----------
exercised in accordance with the provisions of this Agreement shall expire and
all rights of holders of such Series W Warrants shall terminate and cease at
5:30 p.m., California time, on the Expiration Date; provided, that if the
--------
Company fails to notify the holders of Series W Warrants in accordance with this
Section 7.9 less than 90 days prior to the Expiration Date, the Expiration Date
shall be automatically extended to the 90th day after the date such notice is
actually effected. The Company agrees to notify each holder of Series W
Warrants, not less than 90 days but not more than 150 days, prior to the
Expiration Date, in writing, of the impending occurrence of the Expiration Date
and that, at 5:30 p.m., California time, on the Expiration Date, all unexercised
Series W Warrants shall expire and all rights of holders of such Series W
Warrants shall terminate and cease.
SECTION 7.10 Injunctive Relief. It is hereby agreed and acknowledged
-----------------
that the remedies at law in respect of the failure by the Company to comply with
any of the obligations herein imposed on it would be inadequate and that, in the
event of any such failure, any aggrieved holder of Series W Warrants will be
irreparably damaged. Any such holder of Series W Warrants shall, upon any
finding by a court of competent jurisdiction that
17
the Company has breached any such obligation, be entitled to injunctive relief,
including specific performance, to enforce such obligation, without the posting
of any bond, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, neither the Company nor any holder of Series W
Warrants shall raise the defense that there is an adequate remedy at law.
(Signature pages follow.)
18
[WARRANT AGREEMENT SIGNATURE PAGE]
Norwest Equity Capital, LLC
By Itasca NEC, LLC its Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Member
Address: 0000 Xxxxx Xxxxx
Xxxxxxxxxxx, XX. 00000
[WARRANT AGREEMENT SIGNATURE PAGE]
WLD Equity Partners 1999, Limited Partnership
By: /s/ Illegible
-----------------------------------------
Name: Illegible
Title: President WLD Equity Partners
1999, GP Inc.
Address: 000 X. Xxx Xxxx Xxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
[WARRANT AGREEMENT SIGNATURE PAGE]
Xxxxxxx X. Xxxxxxx, Revocable Trust
By: /s/ Illegible
-----------------------------------------
Name:
Title:
Address:
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
[WARRANT AGREEMENT SIGNATURE PAGE]
Provident Life and Accident Insurance Company
By: Provident Investment Management, LLC
Its: Agent
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Address: 0 Xxxxxxxx Xxxxxx, 0-X
Xxxxxxxxxxx, Xxxxxxxxx 00000
[WARRANT AGREEMENT SIGNATURE PAGE]
Conning Insurance Capital
International Partners III, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Title: Partner, Private Equity
Address: Conning & Company
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
[WARRANT AGREEMENT SIGNATURE PAGE]
The Travelers Insurance Company
By: /s/ Xxxxxxxxx X. Xxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxxxx X. Xxxxxx Xxxxxxxx
Title: Senior Vice President
Address: Xxx Xxxxx Xxxxxx, 0-XX
Xxxxxxxx, XX 00000
[WARRANT AGREEMENT SIGNATURE PAGE]
Conning Insurance Capital Limited
Partnership III, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Title: Partner, Private Equity
Address: Conning & Company
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
U.S.I. HOLDINGS CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Financial Officer
U.S.I. Holdings Corporation
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attn: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
[WARRANT AGREEMENT SIGNATURE PAGE]
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.
By: CAPITAL Z PARTNERS, L.P.,
its general partner
By: CAPITAL Z PARTNERS, LTD.,
its general partner
By: /s/ Illegible
------------------------------------------
Name:
Title:
Address: Capital Z Partners Ltd
00 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel 000.000.0000
Fax 000.000.0000
Attention: Xxx Spass
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P.
By: CAPITAL Z PARTNERS, L.P.,
its general partner
By: CAPITAL Z PARTNERS, LTD.,
its general partner
By: /s/ Illegible
------------------------------------------
Name:
Title:
Address: Capital Z Partners Ltd
00 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel 000.000.0000
Fax 000.000.0000
Attention: Xxx Spass
ATTACHMENT A
------------
[FORM OF WARRANT CERTIFICATE]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY THE HOLDER
SOLELY FOR ITS OWN ACCOUNT AND FOR THE PURPOSE OF INVESTMENT AND NOT WITH A VIEW
TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION OF ANY SUCH SECURITIES.
THE SECURITIES MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF (EACH SUCH ACTION, A "TRANSFER") UNLESS (A) SUCH TRANSFER
COMPLIES WITH THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT DATED AS OF SEPTEMBER
17, 1999 AND THE SHAREHOLDERS' AND WARRANTHOLDERS' AGREEMENT, DATED AS OF
SEPTEMBER 17, 1999, AS SUCH MAY BE AMENDED, COPIES OF WHICH ARE ON FILE WITH THE
SECRETARY OF U.S.I. HOLDINGS CORPORATION (TOGETHER WITH ITS SUCCESSORS, THE
"COMPANY") AND WHICH WILL BE MAILED TO A SECURITYHOLDER WITHOUT CHARGE WITHIN
FIVE (5) DAYS AFTER RECEIPT BY THE COMPANY OF A WRITTEN REQUEST THEREFOR FROM
SUCH SECURITYHOLDER, (B) EITHER (1) THE TRANSFER IS PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR (2) THE COMPANY SHALL HAVE BEEN FURNISHED WITH AN OPINION OF COUNSEL, WHICH
OPINION OF COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE
EFFECT THAT NO REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND THE RULES AND REGULATIONS IN
EFFECT THEREUNDER, AND (C) SUCH TRANSFER SHALL BE IN COMPLIANCE WITH ANY
APPLICABLE STATE OR FOREIGN SECURITIES OR "BLUE SKY" LAWS.
U.S.I. HOLDINGS CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH SECURITYHOLDER
WHO SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES
THEREOF OR OTHER SECURITIES OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
WARRANT CERTIFICATE
U.S.I. HOLDINGS CORPORATION
No. WR- [_______]Series W Warrants
---
Attachment A-1
Date:
------
This Series W Warrant Certificate certifies that , or registered
-------
assigns, is the registered holder of (______)Series W Warrants. Each Series
-----
W Warrant entitles the owner thereof to purchase at any time on or prior to 5:30
p.m., California time, on September 17, 2004 (as the same may be extended
pursuant to Section 7.9 of the Series W Warrant Agreement (as defined below),
the "Expiration Date"), (i) prior to a Forced Conversion (as defined in the
Series W Certificate of Designations), one (1) fully paid and nonassessable
share of Series W Convertible Preferred Stock and (ii) from and after a Forced
Conversion, one (1) fully paid and nonassessable share of Common Stock, of
U.S.I. HOLDINGS CORPORATION (together with its successors and assigns, the
"Company"), a Delaware corporation, at an Exercise Price of Six and 0/100
Dollars ($6.00) upon presentation and surrender of this Series W Warrant
Certificate with a form of election to purchase duly executed and delivery to
the Company of the payment of the Exercise Price in the manner set forth in the
Series W Warrant Agreement. The number of shares that may be purchased upon
exercise of each Series W Warrant (and payment of the Exercise Price therefor)
and the Exercise Price therefor are the number and amount as of the date hereof,
and are subject to adjustment as referred to below.
The Series W Warrants are issued pursuant to the Series W Warrant Agreement
(as it may from time to time be amended or supplemented, the "Series W Warrant
Agreement"), dated as of September 17, 1999, among the Company and the
Purchasers (as defined therein) and are subject to all of the terms, provisions
and conditions thereof, which Series W Warrant Agreement is hereby incorporated
herein by reference and made a part hereof and to which Series W Warrant
Agreement reference is hereby made for a full description of the rights,
obligations, duties and immunities of the Company and the holders of the Series
W Warrant Certificates. Capitalized terms used, but not defined, herein have the
respective meanings ascribed to them in the Series W Warrant Agreement.
As provided in the Series W Warrant Agreement, the Exercise Price and the
number of shares that may be purchased upon the exercise of the Series W
Warrants evidenced by this Series W Warrant Certificate are, upon the happening
of certain events, subject to modification and adjustment.
This Series W Warrant Certificate shall be exercisable, at the election of
the holder, either as an entirety or in part from time to time. If this Series W
Warrant Certificate shall be exercised in part, the holder shall be entitled to
receive, upon surrender hereof, another Series W Warrant Certificate or Series W
Warrant Certificates for the number of Series W Warrants not exercised. This
Series W Warrant Certificate, with or without other Series W Warrant
Certificates, upon surrender in the manner set forth in the Series W Warrant
Agreement, may be exchanged for another Series W Warrant Certificate or Series W
Warrant Certificates of like tenor evidencing Series W Warrants entitling the
holder to purchase a like aggregate
Attachment A-2
number of shares as the Series W Warrants evidenced by the Series W Warrant
Certificate or Series W Warrant Certificates surrendered shall have entitled
such holder to purchase.
THIS SERIES W WARRANT CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
WITNESS the signature of a proper officer of the Company as of the date
first above written.
U.S.I. HOLDINGS CORPORATION
By:
-----------------------------------------
Name:
Title:
Attachment A-3
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if
such holder desires to transfer the Series W Warrant Certificate)
FOR VALUE RECEIVED, hereby
-----------------------------------------------
sells, assigns and transfers unto
-------------------------------------------------------------------------------
(Please print name and address of transferee.)
the accompanying Series W Warrant Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint:
-------------------------------------------------------------------------------
attorney, to transfer the accompanying Series W Warrant Certificate on the books
of the Company, with full power of substitution.
Dated: , .
---------------- --------
[HOLDER]
By
-----------------------------------------
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the accompanying Series W Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.
Attachment A-4
[FORM OF ELECTION TO PURCHASE]
(To be executed by the registered holder if
such holder desires to exercise the Series W Warrant Certificate)
To U.S.I. HOLDINGS CORPORATION:
The undersigned hereby irrevocably elects to exercise
---------------------
Series W Warrants represented by the accompanying Series W Warrant Certificate
to purchase the shares of Series W Preferred Stock issuable upon the exercise of
such Series W Warrants and requests that certificates for such shares be issued
in the name of:
--------------------------------------------------------------------------------
(Please print name and address.)
---------------------------------------------------------------------------
(Please insert social security or other taxpayer identification number.)
If such number of Series W Warrants shall not be all the Series W Warrants
evidenced by the accompanying Series W Warrant Certificate, a new Series W
Warrant Certificate for the balance remaining of such Series W Warrants shall be
registered in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address.)
---------------------------------------------------------------------------
(Please insert social security or other identifying number.)
Dated: , .
---------------- --------
[HOLDER]
By
-----------------------------------------
NOTICE
The signature to the foregoing Election to Purchase must correspond to the
name as written upon the face of the accompanying Series W Warrant Certificate
or any prior assignment thereof in every particular, without alteration or
enlargement or any change whatsoever.
Attachment A-5
