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THIS WARRANT AND THE UNDERLYING COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON FEBRUARY 28, 2001, OR IF NOT A BUSINESS
DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT FOLLOWING
BUSINESS DAY.
No. W-1 WARRANT TO PURCHASE
1,181,250 Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
WARNER INSURANCE SERVICES, INC.
TRANSFER RESTRICTED -- SEE SECTION 6.02
This certifies that, for good and valuable consideration, pursuant to
that certain Restructuring Agreement dated as of March 1, 1996 among WARNER
INSURANCE SERVICES, INC., a Delaware corporation (the "Company") and the
Releasees listed therein (the "Restructuring Agreement"), Atlantic Employers
Insurance Company, a New Jersey corporation, and its registered, permitted
assigns (collectively, the "Warrantholder" or "Holder"), is entitled to
purchase from the Company, subject to the terms and conditions hereof, at any
time before 5:00 P.M., New York time, on February 28, 2001 (or, if such day is
not a business day, at or before 5:00 P.M., New York time on the next following
business day), the number of fully paid and non-assessable shares of Common
Stock, par value $.01 per share, of the Company (the "Common Stock") stated
above at the exercise price of $2.00 per share (the "Exercise Price"). The
Exercise Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Article II hereof. Pursuant to Section 8.4(b) of the
Restructuring Agreement, for a period of six months after the issuance of this
Warrant, the Company has the right to acquire up to one half of the Warrants at
a cash price equal to $1.00 per Warrant. This Warrant is being issued to the
Holder in accordance with Section 1.1 of the Restructuring Agreement and is one
in a series of Warrants being similarly issued with the Restructuring
Agreement. Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Restructuring Agreement.
THIS WARRANT IS ONE OF A SERIES OF WARRANTS WITH LIKE PROVISIONS TO PURCHASE,
IN THE AGGREGATE, 1,553,125 SHARES OF COMMON STOCK.
THE COMPANY HAS THE RIGHT, PURSUANT TO SECTION 8.4(b) OF THE RESTRUCTURING
AGREEMENT TO ACQUIRE ONE HALF OF THE WARRANTS ON A PRO RATA BASIS AT A CASH
PRICE EQUAL TO $1.00 PER WARRANT FOR A PERIOD ENDING ON AUGUST 31, 1996.
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ARTICLE I
Duration and Exercise of Warrant
Section 1.01: Duration of Warrant. Subject to the terms contained
herein, this Warrant may be exercised at any time before 5:00 P.M., New York
time, on February 28, 2001 (the "Expiration Date"), (or, if such day is not a
business day, at or before 5:00 P.M., New York time, on the next following
business day). If this Warrant is not exercised at or before 5:00 P.M., New
York time, on the Expiration Date, it shall become void, and all rights
hereunder shall thereupon cease.
Section 1.02: Exercise of Warrant.
(a) The Warrantholder may exercise this Warrant, in whole or
in part, upon surrender of this Warrant with the Subscription Form hereon duly
executed, to the Company at its corporate office at 00-00 Xxxxxxx Xxxxx, Xxxx
Xxxx, Xxx Xxxxxx 00000, or to such office as duly designated by the Company to
the Warrantholder, together with the full Exercise Price for each Warrant
Share to be purchased by tendering in lawful money of the United States, or by
certified check or bank draft payable in United States Dollars to the order of
the Company.
(b) Upon receipt of this Warrant with the Subscription Form
duly executed and accompanied by payment of the aggregate Exercise Price for the
Warrant Shares for which this Warrant is then being exercised, the Company will
promptly cause to be issued certificates for the total number of whole shares
of Common Stock for which this Warrant is being exercised (adjusted to reflect
the effect of the provisions contained in Article II hereof, if any, and as
provided in Section 4.04 hereof) in such denominations as are required for
delivery to the Warrantholder, and the Company shall thereupon deliver such
certificates to the Warrantholder. If at the time this Warrant is exercised a
registration statement is not in effect to register under the Securities Act,
the Warrant Shares issuable upon exercise of this Warrant, the Company may
place such legends on certificates representing the Warrant Shares to indicate
that the Warrant Shares have not been registered and may not be transferred
except upon compliance with the registration requirements of the Securities Act
of 1933, as amended, and applicable state securities laws or an opinion of
counsel to the Company or of counsel reasonably satisfactory to the Company
that such registration is not required, or such other legends as may be
reasonably required in the opinion of counsel to the Company to permit the
Warrant Shares to be issued without such registration. From and after receipt
by the Company of the duly executed Subscription Form and the aggregate
exercise prices and notwithstanding that certificates in respect of the Warrant
Shares may not have been delivered, the Warrantholder shall be considered a
shareholder of the Company in respect of the Warrant Shares for all intents and
purpose.
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(c) In case the Warrantholder shall exercise this Warrant with
respect to less than all of the Warrant Shares that may be purchased under this
Warrant, the Company will execute a new warrant in the form of this Warrant for
the balance of such Warrant Shares and deliver such new warrant to the
Warrantholder.
(d) The Company covenants and agrees that it will pay when due and
payable any and all costs, expenses, charges and stock transfer and similar
taxes which may be payable in respect of the issue of this Warrant or in
respect of the issue of any Warrant Shares. The Company shall not, however, be
required to pay any tax imposed on income or gross receipts or any tax which
may be payable in respect of any transfer involved in the issuance or delivery
of this Warrant or at the time of surrender.
ARTICLE II
Adjustment of Warrant Shares
Purchasable and of Exercise Price
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article II.
Section 2.01: Mechanical Adjustments.
(a) Anti-Dilution Provisions; Adjustment of Exercise Price. The
Exercise Price shall be subject to adjustment from time to time as hereinafter
provided. Upon each adjustment of the Exercise Price, the Warrantholder shall
thereafter be entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of Warrant Shares obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
(b) Exercise Price Adjustment Formulas. If and whenever after the
date of this Warrant, the Company shall issue or sell any shares of Common
Stock (except as provided in subsection 2.01(h)) for a consideration per share
less than 95% of the Market Price on the date of such issuance or sale, then
forthwith the Exercise Price shall be reduced to the prices (calculated to the
nearest tenth of a cent) determined by multiplying the Exercise Price in effect
immediately prior to the time of such issuance or sale by a fraction, the
numerator of which shall be (i) the sum of (A) the number of shares of Common
Stock outstanding immediately prior to such issuance or sale (assuming the
conversion of all securities convertible into shares of Common Stock)
multiplied by the Market Price immediately prior to such issuance or sale, and
(B) the consideration, if any, received and deemed received by the Company upon
such issuance or sale, divided by (ii) the total number of shares of Common
Stock outstanding and deemed outstanding immediately after
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such issuance or sale, and the denominator of which shall be the Market Price
immediately prior to such issuance or sale.
No adjustment of the Exercise Price, however, shall be made in an amount less
than $.01 per share, but any such lesser adjustment shall be carried forward
and shall be made at the time and together with the next subsequent adjustment
which together with any adjustments so carried forward shall amount to $.01 per
share or more.
(c) Constructive Issuances of Stock; Convertible Securities; Rights
and Options; Stock Dividends. For the purposes of subsection 2.01(b) above,
the following provisions (i) to (viii), inclusive, shall also be applicable:
(i) In case at any time subsequent to the date hereof, the
Company shall in any manner grant any rights to subscribe for or to
purchase, or any options for the purchase of, shares of Common Stock or
any stock or securities convertible into or exchangeable for shares of
Common Stock (such convertible or exchangeable stock or securities
being hereinafter called "Convertible Securities"), whether or not such
rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the
consideration per share for which shares of Common Stock are issued or
sold upon the exercise of such Convertible Securities (determined by
dividing (A) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options,
plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or options,
plus, in the case of any such rights or options which relate to such
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issuance or sale of such
Convertible Securities (and, if such convertible securities constitute
obligations of the Company, the principal amount of such obligations so
converted) and upon the conversion or exchange thereof, by (B) the
total maximum number of shares of Common Stock issuable upon the
exercise of such rights or options or upon the conversion or exchange
of all such Convertible Securities issuable upon the exercise of such
rights or options) shall be less than 95% of the Market Price
determined as of the date of granting such price or options, as the
case may be, then the total maximum number of shares of Common Stock
issuable upon the exercise of such rights or options (or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such rights or options) shall
be deemed to be outstanding and to have been issued for such price per
share. Except as provided in subsection 2.01(c)(iii) below, no further
adjustments of the Exercise Price shall be made upon the actual
issuance of such shares of Common Stock or of such Convertible
Securities upon exercise of such rights or options or upon the
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actual issuance of such shares of Common Stock upon conversion
or exchange of such Convertible Securities.
(ii) In case at any time the Company shall in any manner
issue or sell any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the
price per share for which shares of Common Stock are issuable upon such
conversion or exchange (determined by dividing (A) the total amount
received or receivable by the Company as consideration for the issuance
or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon
the conversion or exchange thereof, by (B) the total maximum number of
shares which would be issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than 95% of the Market Price
determined as of the date of such issuance or sale, then the total
maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall (as of the date of
the issuance or sale of such Convertible Securities) be deemed to be
outstanding and to have been issued for such price per share; except as
otherwise specified in subsection 2.01(c)(iii) below, no further
adjustments of the Exercise Price shall be made upon the actual
issuance of such shares of Common Stock upon conversion or exchange of
such Convertible Securities.
(iii) If the purchase price provided for in any right or option
referred to in subsection 2.01(c)(i), or the additional consideration,
if any, payable upon the conversion or exchange of any Convertible
Securities referred to in subsection 2.01(c)(ii), or the rate at which
any Convertible Securities referred to in subsections 2.01(c)(i) or
(ii) are convertible into or exchangeable for shares of Common Stock,
shall change or a different purchase price or rate shall become
effective at any time or from time to time (other than under or by
reason of provisions designed to protect against dilution) then, upon
such change becoming effective, the Exercise Price then in effect at
the time of such event shall forthwith be increased or decreased to
such Exercise Price as would have been obtained had the rights, options
or Convertible Securities still outstanding provided for such changed
purchase price, additional compensation or rate of commission or
exchange, as the case may be, at the time initially granted, issued or
sold. On the expiration of any such option or right or the termination
of any such right to convert or exchange such Convertible Securities,
the Exercise Price then in effect hereunder shall forthwith be
increased to such Exercise Price as would have been obtained at the
time of such expiration or termination had such option, right or
convertible securities never been issued. If the purchase price
provided for in any right or option referred to in subsection
2.01(c)(i), or the additional consideration payable upon the exchange
or conversion of any Convertible Securities referred to in subsections
2.01(c)(i) or (ii), or the rate
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at which any Convertible Securities referred to in subsections
2.01(c)(i) or (ii) are convertible into or exchangeable for shares of
Common Stock, shall decrease at any time under or by reason of
provisions with respect thereto designed to protect against dilution,
then, in the case of the delivery of shares of Common Stock upon the
exercise of any such right or option or upon conversion or exchange of
any such right or option or upon conversion or exchange of any such
Convertible Securities, the Exercise Price then in effect hereunder
shall forthwith be decreased to such Exercise Price as would have been
obtained had the adjustments made upon issuance of such right or option
or Convertible Securities been made upon the basis of the issuance of
(and the total consideration computed in accordance with subsections
2.01(c)(i) or (ii), as the case may be, received for) the shares of
Common Stock delivered as aforesaid.
(iv) In case of the issuance of shares of Common Stock or
Convertible Securities of the Company as a dividend or distribution
upon any shares of Common Stock of the Company, such shares of Common
Stock or Convertible Securities, as the case may be, issuable in
payment of such dividend or distribution shall be deemed to have been
issued or sold without consideration.
(v) In case at any time any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such
shares of Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to
be the amount payable to the Company therefor, without deduction
therefrom of any expenses incurred or any underwriting or selling
commissions or concessions paid by the Company in connection therewith
or any underwriting or selling discounts allowed by the Company in
connection therewith. In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such
shares of Common Stock or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount of the
consideration other than cash payable to the Company shall be deemed to
be the fair value of such consideration as determined by the Board of
Directors of the Company, without deduction therefrom of any expenses
incurred or any underwriting or selling commissions or concessions paid
by the Company in connection therewith or any underwriting or selling
discounts allowed by the Company in connection therewith. In case any
shares of Common Stock or Convertible Securities shall be issued in
connection with any merger of another corporation into the Company, the
amount of consideration therefor shall be deemed to be the fair value,
as determined by the Board of Directors of the Company, of such portion
of the assets of such merged corporation as such Board shall determine
to be attributable to such shares of Common Stock, Convertible
Securities, rights or options, as the case may be.
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(vi) In case at any time the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them
(A) to receive a dividend or other distribution payable in shares of
Common Stock or in Convertible Securities, or (B) to subscribe for or
purchase shares of Common Stock or Convertible Securities, then such
record date shall be deemed to be the date of the issuance or sale of
the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution
or the date of the granting of such right or subscription or purchase,
as the case may be.
(vii) "Market Price" shall mean, as of any day, the
closing sale price of the shares of Common Stock on such day on the New
York Stock Exchange or the American Stock Exchange (or if the Common
Stock shall not then be listed on either such exchange, the closing
sale price on the principal (determined by the highest volume averaged
for a period of twenty consecutive business days prior to the day as to
which "Market Price" is being determined) national securities exchange
(as defined in the Securities Exchange Act of 1934, as amended) on
which the Common Stock may then be listed) or, if there shall have been
no sales on such exchange or exchanges on such day, the averages of the
high and low sales prices of the Common Stock on such day on the NASDAQ
National Market System or, if the Common Stock is not included in the
NASDAQ National Market System, the average of the bid and asked prices
at the end of such day or, if the Common Stock shall not be so listed,
the average of the bid and asked prices at the end of the day in the
over-the-counter market as reported by NASDAQ or, if the Common Stock
is not included on NASDAQ, as reported by the National Quotation
Bureau, Inc. or any successor organization, in each such case, averaged
for a period of twenty consecutive business days prior to the day as to
which "Market Price" is being determined.
(viii) The number of shares of Common Stock outstanding at
any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be
considered an issuance or sale of shares of Common Stock for the
purposes of subsection 2.01(b).
(d) Effect of Certain Dividends. In case at any time the
Company shall declare a dividend upon the shares of Common Stock payable
otherwise than out of earnings or earned surplus (other than in a partial or
total liquidation or dissolution of the Company) and otherwise than in shares
of Common Stock or Convertible Securities, the Exercise Price in effect
immediately prior to the declaration of such dividend shall be reduced by an
amount equal, in the case of a dividend in cash, to the amount thereof payable
per share of Common Stock or, in the case of any other dividend, to the fair
value thereof per share of Common Stock as determined by the Board of Directors
of the
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Company. For the purposes of the foregoing, a dividend other than in cash
shall be considered payable out of earnings or earned surplus only to the
extent that such earnings or earned surplus are charged an amount equal to the
fair value of such dividend as determined by the Board of Directors of the
Company. Such reductions shall take effect as of the date on which a record is
taken for the purpose of such dividend, or if a record is not taken, the date
as of which the holders of record of shares of Common Stock entitled to such
dividends are to be determined. As used in this subsection 2.01(d), the term
"dividend" shall mean any distribution to the holders of shares of Common
Stock. Except as provided in this subsection 2.01(d), no adjustment in the
Exercise Price and no change in the number of Warrant Shares so purchasable
shall be made pursuant to this Section 2.01 as a result of or by reason of any
such dividend.
(e) Stock Splits and Reverse Splits. In case at any time the
Company shall subdivide its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares
purchasable pursuant to this Warrant immediately prior to such subdivision
shall be proportionately increased, and conversely, in case at any time the
Company shall combine its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Common Stock purchasable upon the exercise of this Warrant immediately prior to
such combination shall be proportionately reduced. Except as provided in this
subsection 2.01(e), no adjustment in the Exercise Price and no exchange in the
number of Warrant Shares so purchasable shall be made pursuant to this Section
2.01 as a result of or by reason of any such subdivision or combination.
(f) Effect of Reorganization and Assets Sales. If any capital
reorganization or reclassification of the capital stock of the Company, or
consolidation of the Company with or merger of the Company into another
corporation, or the sale of all or substantially all of its assets to another
corporation, shall be effected in such a way that holders of shares of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for shares of Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby each holder of Warrants shall
thereafter have the right to receive upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock of the
Company immediately theretofore receivable upon the exercise of such Warrants,
such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding stock of Common Stock
equal to the number of shares of such stock immediately theretofore so
receivable upon exercise had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of such holder
to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Exercise Price and of the number of shares
issuable upon exercise) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise of such Warrants. The Company shall not
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effect any such consolidation, merger or sale unless prior to or simultaneously
with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or of the corporation
purchasing such assets shall assume by written instrument executed and mailed
or delivered to each Warrantholder, the obligation to deliver to such
Warrantholder such shares of stock, securities or assets as, in accordance with
the foregoing provisions such Warrantholder may be entitled to receive, and
containing the express assumption of such successor corporation of the
performance and observance of the provisions of this Warrant to be performed
and observed by the Company and of all liabilities and obligation of the
Company hereunder.
(g) Accountants' Certificate. Upon each adjustment of the
Exercise Price and upon each change in the number of Warrant Shares, then and
in each such case, the Company will promptly obtain a certificate of a firm of
independent certified public accountants of recognized standing selected by the
Company's Board of Directors, who may be the regular auditors of the Company,
stating the adjusted Exercise Price and the new number of Warrant Shares so
issuable, or specifying the other shares of stock, securities or assets and the
amount thereof receivable as a result of such change in rights, and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. The Company will promptly mail a copy of such
accountant's certificate to the Warrantholders, which certificate shall be
conclusive evidence of the correctness of the computation with respect to any
such adjustment of the Exercise Price and any such change in the number of such
Warrant Shares so issuable.
(h) No Adjustments Required. Notwithstanding anything herein to
the contrary, there shall be no adjustment in the Exercise Price in connection
with (i) the grant of any option, or the exercise of any option granted under
any employee benefit plan or stock option plan or (ii) upon the exercise of any
Convertible Security outstanding on the date of this Warrant including this
Warrant.
Section 2.02: Notice of Adjustment. Whenever the number of Warrant
Shares or the Exercise Price is adjusted as herein provided, the Company shall
prepare and deliver to the Warrantholder a certificate signed by its Chairman
of the Board, President, any Vice President, Treasurer or Secretary, setting
forth the adjusted number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price of such Shares after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which adjustment was made.
Section 2.03: No Adjustment for Dividends. Except as provided in
Section 2.01 of this Agreement, no adjustment in respect of any cash dividends
payable out of earnings or earned surplus shall be made during the term of this
Warrant or upon the exercise of this Warrant.
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Section 2.04: Form of Warrant After Adjustments. The form of this
Warrant need not be changed because of any adjustments in the Exercise Price or
the number or kind of the Warrant Shares, and any Warrant theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in this Warrant, as initially issued.
ARTICLE III
Compliance with the Securities Act
The Holder acknowledges that the Warrant Shares, in its hands, will be
restricted securities which may not be sold or offered for sale in the absence
of an effective registration statement under the Securities Act or an opinion
of counsel satisfactory to the Company that such registration is not required.
With respect to any offer, sale or other disposition of any Warrant Shares, the
Holder will give written notice to the Company prior thereto, describing
briefly the manner thereof, together with a written opinion of such Holder's
counsel, to the effect that such offer, sale or other distribution may be
effected without registration or qualification (under federal law and
applicable state law then in effect). Promptly upon receiving such written
notice and reasonably satisfactory opinion, if so requested, the Company, as
promptly as practicable, shall notify such Holder that such Holder may sell or
otherwise dispose of the Warrant Shares, all in accordance with the terms of
the notice delivered to the Company. If a determination has been made pursuant
to this Article III that the opinion of counsel for the Holder is not
reasonably satisfactory to the Company, the Company shall so notify the Holder
promptly after such determination has been made. Each certificate representing
the Warrant Shares thus transferred shall bear a legend as to the applicable
restrictions on transferability in order to ensure compliance with the
Securities Act, unless in the opinion of counsel for the Company such legend is
not required, in order to ensure compliance with the Securities Act. The
Company may issue stop transfer instructions to its transfer agent and
registrar in connection with such restrictions. The Warrant Shares are
entitled to certain rights of registration as provided in Section 7.2 of the
Restructuring Agreement.
ARTICLE IV
Other Provisions Relating
to Rights of Warrantholder
Section 4.01: No Rights as Shareholder; Notice to Warrantholder.
Nothing contained in this Warrant shall be construed as conferring upon the
Warrantholder or his transferees the right to vote or to receive dividends or
to consent or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or of any other
matter or any rights whatsoever as shareholders of the Company, except to the
extent specifically provided for herein; provided, however that the
Warrantholder shall be delivered all notices and other communications sent by
the Company
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to its shareholders. Without limiting the foregoing, in case at any time: (1)
the Company shall declare any dividend payable in Common Stock or any
distribution (other than cash dividends) to the holders of the Common Stock;
(2) the Company shall make an offer for subscription pro rata to the holders of
its Common Stock of any additional shares of stock of any class or other
rights; (3) there shall be any capital reorganization, or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another
corporation; or (4) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; then, in any one or more of such
cases, the Company shall give notice to the Warrantholder of the date on which
(a) the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights, or (b) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up shall take place, as the case may be. Such notice shall also
specify the date as of which the holders of Common Stock of records shall
participate in such dividend, distribution or subscription rights, or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding up as the case may be. Such written
notice shall be given not less than 10 days and not more than 90 days prior to
the record date on which the Company's transfer books are closed in respect
thereto and such notice may state that the record date is subject to the
effectiveness of a registration statement under the Securities Act, or to a
favorable vote of stockholders, if either is required.
Section 4.02: Lost, Stolen, Mutilated or Destroyed Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its reasonable discretion impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as, and in
substitution for, this Warrant.
Section 4.03: Reservation of Shares.
(a) The Company covenants and agrees that at all times it shall
reserve and keep available for the exercise of this Warrant such number of
authorized shares of Common Stock or other securities as are sufficient to
permit the exercise in full of this Warrant.
(b) The Company shall use its best efforts to maintain or secure the
listing of the Warrant Shares upon the securities exchange or automated
quotation system, if any, upon which shares of its Common Stock are then
listed.
(c) The Company covenants that all shares of Common Stock issued on
exercise of this Warrant will be validly issued, fully paid, non-assessable and
free of preemptive rights.
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Section 4.04: No Fractional Shares. Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this Warrant. In any
case where the Warrantholder would, except for the provisions of this Section
4.04, be entitled under the terms of this Warrant to receive a fraction of a
share upon exercise of this Warrant and receipt of the Exercise Price, the
Company shall not be required to issue any fraction of a share, but rather,
will adjust the aggregate Exercise Price for such fraction of a share to which
the Warrantholder would otherwise be entitled.
ARTICLE V
Treatment of Warrantholder
Prior to due presentment for registration or transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
the purpose of any exercise hereof and for all other purposes of the Company
shall not be affected by any notice to the contrary.
ARTICLE VI
Split-Up, Combination,
Exchange and Transfer of Warrant
Section 6.01: Split-Up, Combination, Exchange and Transfer of
Warrant. Subject to and limited by the provisions of Section 6.02 hereof, this
Warrant may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant
Shares. If the Warrantholder desires to split up, combine or exchange this
Warrant, he shall make such request in writing delivered to the Company and
shall surrender to the Company this Warrant and any other Warrants to be so
split up, combined or exchanged. Upon any such surrender for a split-up,
combination or exchange, the Company shall execute and deliver to the person
entitled thereto a Warrant or Warrants, as the case may be, as so requested.
The Company shall not be required to effect any split-up, combination or
exchange which will result in the issuance of a Warrant entitling the
Warrantholder to purchase upon exercise a fraction of a share of Common Stock
or a fractional Warrant. The Company may require such Warrantholder to pay a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any split-up, combination or exchange of Warrants.
Section 6.02: Restrictions on Transfer. This Warrant may be
exercised and this Warrant and the Warrant Shares may not be sold,
hypothecated, assigned or transferred (a "Transfer"), except only in accordance
with and subject to the provisions of the Securities Act and the rules and
regulations promulgated thereunder. The Warrantholder shall have
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the benefit of the certain registration rights for the Warrant Shares as
provided in the Restructuring Agreement.
ARTICLE VII
Other Matters
Section 7.01: Successors and Assigns. All the covenants and
provisions of this Warrant shall be binding upon and inure to the benefit of
the Company and the Holder and their respective successors and assigns.
Section 7.02: Amendments and Waivers. The provisions of this
Warrant, including the provisions of this sentence, may not be amended,
modified or supplemented, and waiver or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of the Holder. The Warrantholder shall be bound by any consent
authorized by this Section whether or not certificates representing his Warrant
have been marked to indicate such consent.
Section 7.03: Counterparts. This Warrant may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 7.04: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware.
Section 7.05: 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, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
Section 7.06: Integration/Entire Agreement. This Warrant is intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein other than as
to registration rights set forth in the Restructuring Agreement as to which the
Warrant Shares shall be entitled. This Warrant supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
Section 7.07: Notices. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or mailed by registered or certified
mail or overnight courier, postage prepaid, at the respective addresses of the
parties as set forth herein. Any party hereto may
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by notice so given change its address for future notice hereunder. Notice
shall conclusively be deemed to have been given when delivered in the manner
set forth above and shall be deemed to have been received when delivered.
Copies of all notices to the Company shall be given to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
and all notices to the Warrantholder shall be given to:
Atlantic Employers Insurance Company
0000 Xxxxxxxx Xxxxxx
TLP 00
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Notice or demand pursuant to this Warrant to be given or made by the
Warrantholder to or on the Company shall be sufficiently given or made if sent
by first class mail or overnight courier, postage prepaid, to the Warrantholder
at his last known address as it shall appear on the books of the Company.
Section 7.08: Headings. The Article and Section headings herein are
for convenience only and are not part of this Warrant and shall not affect the
interpretation thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the 1st day of March, 1996_.
WARNER INSURANCE SERVICES, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
(Corporate Seal)
ATTEST:
--------------------------------
Secretary
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ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, ____________________________ hereby sells, assigns
and transfers unto ________________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _____ ____________________ attorney, to
transfer said Warrant Certificate on the books of the within-named Company with
respect to the number of Warrants set forth below, with full power of
substitution in the premises:
Name(s) of
Assignee(s) Address No. of Warrants
----------- ------- ---------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
Dated: ________________, _____.
-----------------------------------------------------
Note: The above signature should correspond exactly
with the name on the face of this Warrant
Certificate.
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SUBSCRIPTION FORM
(To be executed upon exercise of Warrant)
WARNER INSURANCE SERVICES, INC.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, shares of Common Stock, as provided for therein, and
tenders herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $ .
Please issue a certificate or certificates for such Common Stock in
the name of, and pay any cash for any fractional share to:
Name
--------------------------------
(Please Print Name, Address and Social
Security No.)
Signature
---------------------------
Note: The above signature should
correspond exactly with the name on the
first page of this Warrant Certificate
or with the name of the assignee
appearing in the assignment form below.
And if said number of shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate is to be issued
in the name of said undersigned for the balance remaining of the shares
purchasable thereunder less any fraction of a share paid in cash.
