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EXHIBIT 4.6
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION
WHICH, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO COVENTRY
CORPORATION, IS EXEMPT FROM SUCH REGISTRATION.
COVENTRY CORPORATION
COMMON STOCK PURCHASE WARRANT
COVENTRY CORPORATION, a Tennessee corporation (the "Company"), hereby
certifies that, for value received, Warburg, Xxxxxx Ventures, L.P., a Delaware
limited partnership, (the "Holder"), or its assigns, is entitled, subject to the
terms set forth below, to purchase from the Company, at any time and from time
to time during the period beginning on May 9, 1997 and ending on May 9, 2004 in
whole or in part, an aggregate of One Million Three Hundred and Forty-Three
Thousand Eight Hundred and Twenty-Two (1,343,822) fully paid and non-assessable
shares of the Common Stock of the Company at a purchase price, subject to the
provisions of Paragraph 3 hereof, of $10.625 per share (the "Purchase Price").
The Purchase Price and the number and character of such shares are subject to
adjustment as provided below, and the term "Common Stock" shall mean, unless the
context otherwise requires, the stock or other securities or property at the
time deliverable upon the exercise of this Warrant. This Warrant is herein
called the "Warrant."
Notwithstanding anything contained in this Warrant to the contrary,
this Warrant shall not be exercisable by Warburg, Xxxxxx Ventures, L.P., a
Delaware limited partnership ("Warburg"), if, after giving effect to the shares
of Common Stock of the Company issuable to Warburg upon such exercise (or
partial exercise), Warburg would beneficially own ten percent (10%) or more
of the outstanding Voting Securities of the Company (the "Control Threshold"),
unless Warburg shall have obtained any Required Approval. For purposes of the
this Warrant, (i) beneficial ownership shall be determined in accordance with
Rule 13d-3 of the Securities Exchange Act of 1934, as amended, (ii) Voting
Securities of the Company shall mean all shares of Common Stock and all
securities convertible into or exchangeable for shares of Common Stock other
than this Warrant or the Warrant issued to Warburg, dated May 9, 1997, and
(iii) "Required Approval" shall mean any approval required by any state
insurance regulatory or similar authority to which the Company or any of its
assets is subject, in connection with an acquisition of control of the Company
or any of its subsidiaries. The foregoing provisions are specifically intended
to prevent the acquisition of control (as defined or presumed to exist under
any such state insurance or similar regulatory authority) of the Company or any
of its subsidiaries by Warburg unless and until Warburg obtains the Required
Approval.
1. EXERCISE OF WARRANT.
1.1 Exercise. The purchase rights evidenced by this Warrant shall be
exercised by the holder surrendering this Warrant, with the form of subscription
at the end hereof duly executed by such holder, to the Company at its office in
Nashville, Tennessee, accompanied by payment, of an amount (the "Exercise
Payment") equal to the Purchase Price multiplied by the number of shares being
purchased pursuant to such exercise, payable as follows: (a) by payment to the
Company in cash, by certified or official bank check, or by wire transfer of the
Exercise Payment, (b) by surrender to the Company for cancellation of securities
of the Company having a Market Price (as hereinafter defined) on the date of
exercise equal to the
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Exercise Payment; (c) by surrender to the Company for cancellation of notes
of the Company having an aggregate principal amount plus accrued but unpaid
interest on the date of surrender equal to the Exercise Payment or (d) by a
combination of the methods described in clauses (a), (b) and (c) above. In lieu
of exercising the Warrant, the holder may elect to receive a payment equal to
the difference between (i) the average Market Price for the ten trading days
immediately preceding such payment multiplied by the number of shares as to
which the payment is then being elected and (ii) the Exercise Payment, payable
by the Company to the Holder only in shares of Common Stock valued at the
average Market Price for the ten trading days immediately preceding such payment
("Net Exercise"). For purposes hereof, the term "Market Price" shall mean (a) if
the Common Stock is traded on a national securities exchange, the last reported
sale price of a share of Common Stock, regular way on such date or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices thereof regular way on such date, in either case as officially reported
on the principal national securities exchange on which the Common Stock is then
listed or admitted for trading, or, (b) if the Common Stock is not then listed
or admitted for trading on any national securities exchange but is designated as
a national market system security by the NASD, the last reported trading price
of the Common Stock on such date, or (c) if not listed or admitted to trading on
any national securities exchange or designated as a national market system
security, the average of the reported bid and asked price of the Common Stock on
such date in the over-the-counter market as furnished by the National Quotation
Bureau, Inc., or, if such firm is not then engaged in the business of reporting
such prices, as furnished by any member of the National Association of
Securities Dealers, Inc. selected by the Company or, (d) if the shares of Common
Stock are not so publicly traded, the fair market value thereof, as determined
in good faith by the Board of Directors of the Company.
1.2 Optional Exercise.
(a) Except as provided in Paragraph 1.2(b), this Warrant may not be
exercised at the option of the Company.
(b) The Warrant may not be exercised before June 30, 2000 at the
Company's option. Thereafter, this Warrant shall be subject to mandatory
exercise, in whole but not in part, at the option of the Company, if the Market
Price of the Common Stock on twenty (20) consecutive trading days during the
period ending within five days prior to the giving of written notice of exercise
by the Company is $17.00 per share (appropriately
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adjusted for any stock split, stock dividend or similar event) (the "Mandatory
Exercise"). In the event the Company delivers such notice to the Holder pursuant
to Paragraph 1.2(b) (the "Optional Exercise Notice"), the Holder shall have ten
days to elect the manner in which the Exercise Payment shall be made. If the
Holder fails to notify the Company in writing as to the manner in which the
Exercise Payment is to be made within such ten-day period, the Holder shall be
deemed to have elected a Net Exercise. For purposes of this Paragraph 1.2(b),
the amount of the Net Exercise shall be valued at the average Market Price for
the ten trading days immediately preceding the date on which the Company
delivers the Optional Exercise Notice.
Notwithstanding anything contained in this Warrant to the contrary,
if, after giving effect to the shares of Common Stock issuable upon exercise
(or partial exercise) of this Warrant pursuant to the Mandatory Exercise,
Warburg would exceed the Control Threshold, then the following provisions shall
apply:
(i) Warburg shall use its reasonable best efforts to obtain all
Required Approvals as soon as practicable following receipt of the Optional
Exercise Notice, unless Warburg notifies the Company that it intends to sell or
otherwise transfer shares of Common Stock so that, after giving effect to the
Mandatory Exercise, it will not exceed the Control Threshold. Without limiting
the generality of the foregoing, at the request of Warburg, the Company shall
register the shares to be issued to Warburg pursuant to the Mandatory Exercise
in the names of the partners of Warburg unless, in the opinion of counsel to
the Company, such shares are not at the time of such registration freely
transferable by such partners pursuant to Rule 144(k) or another similar
exemption from the registration requirements of the Securities Act of 1933, as
amended.
(ii) In no event shall any shares of Common Stock be issued to
Warburg pursuant to the Mandatory Exercise unless and until Warburg notifies
the Company in writing that all Required Approvals have been obtained or that
it has transferred or sold such number of shares of Common Stock such that,
after giving effect to the issuance of the shares of Common Stock pursuant to
the Mandatory Exercise, the Control Threshold would not be exceeded.
1.3 Partial Exercise. This Warrant may be exercised at the option of
the holder for less than the full number of shares of Common Stock, in which
case the number of shares receivable upon the exercise of this Warrant as a
whole, and the sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the Company at its
expense will forthwith issue to the holder hereof a new Warrant or Warrants of
like tenor calling for the number of shares of Common Stock as to which rights
have not been exercised, such Warrant or Warrants to be issued in the name of
the holder hereof or his nominee (upon payment by such holder of any applicable
transfer taxes).
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant and payment of the Purchase Price, and in
any event within ten (10) days thereafter, the Company, at its expense,
will cause to be issued in the name of and delivered to the holder hereof a
certificate or certificates for the number of fully paid and non-assessable
shares or other securities or property to which such holder shall be entitled
upon such exercise, plus, in lieu of any fractional share to which such holder
would otherwise be entitled, cash in an amount determined in accordance with
Paragraph 3.9 hereof. The Company agrees that the shares so purchased shall be
deemed to be issued to the holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid.
3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to
prevent dilution of the right granted hereunder, the Purchase Price shall be
subject to adjustment from time to time in accordance with this Paragraph 3. Up
on each adjustment of the Purchase Price pursuant to this Paragraph 3, the
registered Holder of this Warrant shall thereafter be entitled to acquire upon
exercise, at the Purchase Price resulting from such adjustment, the number of
shares of the Company's Common Stock obtainable by multiplying the Purchase
Price in effect immediately prior to such adjustment by the number of shares of
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the Company's Common Stock acquirable immediately prior to such adjustment and
dividing the product thereof by the Purchase Price resulting from such
adjustment.
3.1 Adjustment for Issue or Sale of Common Stock at Less than the
Market Price. Except as provided in Paragraph 3.2 or 3.5 below, if and whenever
on or after the date of issuance hereof the Company shall issue or sell, or
shall in accordance with subparagraphs 3.1(1) to (9), inclusive, be deemed to
have issued or sold, any shares of its Common Stock for a consideration per
share less than the average Market Price for the ten trading days immediately
preceding such issuance or sale, then forthwith upon such issue or sale (the
"Triggering Transaction"), the Purchase Price shall, subject to subparagraphs
(1) to (9) of this Paragraph 3.1, be reduced to the Purchase Price (calculated
to the nearest tenth of a cent) determined by multiplying the Purchase Price in
effect immediately prior to the time of such Triggering Transaction by a
fraction, the numerator of which shall be the sum of (x) the Number of Shares
Deemed Outstanding immediately prior to such Triggering Transaction and (y) the
number of shares of Common Stock which the aggregate consideration received by
the Company upon such Triggering Transaction would purchase at the average
Market Price for the ten-day trading period immediately preceding such
Triggering Transaction, and the denominator of which shall be the Number of
Shares Deemed Outstanding immediately after such Triggering Transaction.
For purposes of this Paragraph 3, the term "Number of Common Shares
Deemed Outstanding" at any given time shall mean the sum of (i) the number of
shares of the Company's Common Stock outstanding at such time, and (ii) the
number of shares of the Company's Common Stock deemed to be outstanding under
subparagraphs 3.1(1) to (9), inclusive, at such time.
For purposes of determining the adjusted Purchase Price under this
Paragraph 3.1, the following subsections (1) to (9), inclusive, shall be
applicable:
(1) In case the Company at any time shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock
(such rights or options being herein called "Options" and such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the right to convert or
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exchange any such Convertible Securities are immediately exercisable and
the price per share for which the Common Stock is issuable upon exercise,
conversion or exchange (determined by dividing (x) the total amount, if
any, received or receivable by the Company as consideration for the
granting of such Options, plus the aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities,
the aggregate amount of additional consideration, if any, payable upon the
issue or sale of such Convertible Securities and upon the conversion or
exchange thereof, by (y) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or the conversion or exchange of
such Convertible Securities) shall be less than the average Market Price in
effect for the ten-day trading period immediately prior to the time of the
granting of such Option, then the total maximum amount of Common Stock
issuable upon the exercise of such Options, or, in the case of Options for
Convertible Securities, upon the conversion or exchange of such Convertible
Securities, shall (as of the date of granting of such Options) be deemed to
be outstanding and to have been issued and sold by the Company for such
price per share. No adjustment of the Purchase Price shall be made upon the
actual issue of such shares of Common Stock or such Convertible Securities
upon the exercise of such Options, except as otherwise provided in
subparagraph (3) below.
(2) In case the Company at any time shall in any manner issue
(whether directly or by assumption in a merger or otherwise) 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
Common Stock is issuable upon such conversion or exchange (determined by
dividing (x) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus
the aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (y) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange
of all such Convertible Securities) shall be less than the average Market
Price in effect for the ten-day trading period immediately prior to the
time of such issue 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 issue or sale of such Convertible
Securities) be
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be deemed to be outstanding and to have been issued and sold by the Company
for such price per share. No adjustment of the Purchase Price shall be made
upon the actual issue of such Common Stock upon exercise of the rights to
exchange or convert under such Convertible Securities, except as otherwise
provided in subparagraph (3) below.
(3) If the purchase price provided for in any Options referred to in
subparagraph (1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subparagraphs (1) or (2), or the rate at which any Convertible Securities
referred to in subparagraph (1) or (2) are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution of the type set forth in
Paragraph 3.1 or 3.3), the Purchase Price in effect at the time of such
change shall forthwith be readjusted to the Purchase Price which would have
been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. If the purchase price provided for in any Option
referred to in subparagraph (1) or the rate at which any Convertible
Securities referred to in subparagraphs (1) or (2) are convertible into or
exchangeable for Common Stock, shall be reduced at any time under or by
reason of provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Stock upon the exercise of
any such Option or upon conversion or exchange of any such Convertible
Security, the Purchase Price then in effect hereunder shall forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Security never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Purchase Price then in effect hereunder is hereby reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Purchase Price then in
effect hereunder shall forthwith be increased to the Purchase Price which
would have been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
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(5) In case any Options shall be issued in connection with the issue
or sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed to have
been issued without consideration.
(6) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor (before deduction for expenses or
underwriters' discounts or commissions related to such issue or sale). In
case any shares of Common Stock, Options or Convertible Securities shall be
issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be the fair
value of such consideration as determined in good faith by the Board of
Directors of the Company. In case any shares of Common Stock, Options or
Convertible Securities shall be issued in connection with any merger in
which the Company is the surviving corporation, the amount of consideration
therefor shall be deemed to be the fair value of such portion of the net
assets and business of the non-surviving corporation as shall be attributed
by the Board of Directors of the Company in good faith to such Common
Stock, Options or Convertible Securities, as the case may be as determined
in good faith by the Board of Directors of the Company.
(7) 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 shares so owned or held shall be
considered an issue or sale of Common Stock for the purpose of this
Paragraph 3.1.
(8) In case the Company shall declare a dividend or make any other
distribution upon the stock of the Company payable in Options or
Convertible Securities, then in such case any Options 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.
(9) For purposes of this Paragraph 3.1, in case the Company shall take
a record of the holders of its Common Stock for the purpose of entitling
them (x) to receive a dividend or other distribution payable in Common
Stock,
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Options or in Convertible Securities, or (y) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue 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.
3.2 Dividends Not Paid Out of Earnings or Earned Surplus. In the event
the Company shall declare a dividend upon the Common Stock (other than a
dividend payable in Common Stock) payable otherwise than out of earnings or
earned surplus, determined in accordance with generally accepted accounting
principles, including the making of appropriate deductions for minority
interests, if any, in subsidiaries (herein referred to as "Liquidating
Dividends"), then, as soon as possible after the exercise of this Warrant, the
Company shall pay to the person exercising such Warrant an amount equal to the
aggregate value at the time of such exercise of all Liquidating Dividends
(including but not limited to the Common Stock which would have been issued at
the time of such earlier exercise and all other securities which would have been
issued with respect to such Common Stock by reason of stock splits, stock
dividends, mergers or reorganizations, or for any other reason). For the
purposes of this Paragraph 3.2, 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 in good faith by the Board of Directors of the
Company.
3.3 Subdivisions and Combinations. In case the Corporation shall at
any time (i) subdivide the outstanding Common Stock or (ii) issue a stock
dividend on its outstanding Common Stock, the Purchase Price in effect
immediately prior to such subdivision or dividend shall be proportionately
reduced by the same ratio as the subdivision or dividend. In case the
Corporation shall at any time combine its outstanding Common Stock, Purchase
Price in effect immediately prior to such combination shall be proportionately
increased by the same ratio as the combination.
3.4 Reorganization, Reclassification, Consolidation, Merger or Sale of
Assets. If any capital reorganization or reclassification of the capital stock
of the Company, or consolidation or merger of the Company with 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
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Common Stock shall be entitled to receive stock, securities, cash or other
property with respect to or in exchange for Common Stock, then, as a condition
of such reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provision shall be made whereby the holder of this Warrant shall
have the right to acquire and receive upon exercise of this Warrant such shares
of stock, securities, cash or other property issuable or payable (as part of the
reorganization, reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of the Company's Common
Stock as would have been received upon exercise of this Warrant at the Purchase
Price then in effect. The Company will not effect any such consolidation, merger
or sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument mailed or
delivered to the holder of this Warrant at the last address of such holder
appearing on the books of the Company, the obligation to deliver to such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase. If a purchase, tender or
exchange offer is made to and accepted by the holders of more than 50% of the
outstanding shares of Common Stock of the Company, the Company shall not effect
any consolidation, merger or sale with the person having made such offer or with
any Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holder of this Warrant shall have been given a
reasonable opportunity to then elect to receive upon the exercise of this
Warrant either the stock, securities or assets then issuable with respect to the
Common Stock of the Company or the stock, securities or assets, or the
equivalent, issued to previous holders of the Common Stock in accordance with
such offer. For purposes hereof the term "Affiliate" with respect to any given
person shall mean any person controlling, controlled by or under common control
with the given person.
3.5 No Adjustment for Exercise of Certain Options, Warrants, Etc. The
provisions of this Section 3 shall not apply to any Common Stock issued,
issuable or deemed outstanding under subparagraphs 3.1(1) to (9) inclusive: (i)
to any person pursuant to any stock option, stock purchase or similar plan or
arrangement for the benefit of employees, consultants or directors of the
Company or its subsidiaries in effect on the date of issuance hereof or
thereafter adopted by the Board of Directors of the Company (or physicians or
providers contracting with the Company or any of its Subsidiaries), (ii)
pursuant to options, warrants and conversion rights in existence on the date
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of issuance hereof, (iii) upon exercise of the Warrants issued to Franklin
Capital Associates, III L.P. ("Franklin") and Warburg, Xxxxxx Ventures, L.P.
("Warburg") pursuant to the Amended and Restated Securities Purchase Agreement,
dated as of April 2, 1997, by and among the Company, Franklin and Warburg, (iv)
on conversion of the Series A Preferred Stock or the sale of any additional
shares of Series A Preferred Stock or the issuance of additional shares of
Series A Preferred Stock as dividends pursuant to Section 2(a) of the
Certificate of Designation, Number, Voting Powers, Preferences and Rights of
Series A Convertible Preferred Stock of the Company, or (v) in connection with
underwritten public offerings for cash pursuant to a registration statement
filed under the Securities Act of Common Stock, Options or Convertible
Securities.
3.6 Notices of Record Date, Etc. In the event that:
(1) the Company shall declare any cash dividend upon its Common Stock,
or
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock, or
(3) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class or other
rights, or
(4) there shall be any capital reorganization or reclassification of
the capital stock of the Company, including any subdivision or combination
of its outstanding shares of Common Stock, or consolidation or merger of
the Company with, or sale of all or substantially all of its assets to,
another corporation, or
(5) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in connection with such event, the Company shall give to the holder of
this Warrant:
(i) at least twenty (20) days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up; and
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(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days' prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (i)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto and the date on which the holders of Common Stock 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.
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holder of this Warrant at the address of such
holder as shown on the books of the Company.
3.7 Grant, Issue or Sale of Options, Convertible Securities, or
Rights. If at any time or from time to time on or after the date of issuance
hereof, the Company shall grant, issue or sell any Options, Convertible
Securities or rights to purchase property (the "Purchase Rights") pro rata to
the record holders of any class of Common Stock of the Company and such grants,
issuances or sales do not result in an adjustment of the Purchase Price under
Paragraph 3.1 hereof, then the holder of this Warrant shall be entitled to
acquire (within thirty (30) days after the later to occur of the initial
exercise date of such Purchase Rights or receipt by such holder of the notice
concerning Purchase Rights to which such holder shall be entitled under
Paragraph 3.6) and upon the terms applicable to such Purchase Rights either:
(i) the aggregate Purchase Rights which such holder could have
acquired if it had held the number of shares of Common Stock acquirable
upon exercise of this Warrant immediately before the grant, issuance or
sale of such Purchase Rights; provided that if any Purchase Rights were
distributed to holders of Common Stock without the payment of additional
consideration by such holders, corresponding Purchase Rights shall be
distributed to the exercising holder of this Warrant as soon as possible
after such exercise and it shall not be necessary for the exercising holder
of this Warrant specifically to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall have expired or
shall expire prior to the end of said thirty (30) day period, the number of
shares of Common Stock or the
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amount of property which such holder could have acquired upon such exercise
at the time or times at which the Company granted, issued or sold such
expired Purchase Rights.
3.8 Adjustment by Board of Directors. If any event occurs as to
which, in the opinion of the Board of Directors of the Company, the provisions
of this Section 3 are not strictly applicable or if strictly applicable would
not fairly protect the rights of the holder of this Warrant in accordance with
the essential intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to protect such
rights as aforesaid, but in no event shall any adjustment have the effect of
increasing the Purchase Price as otherwise determined pursuant to any of the
provisions of this Section 3 except in the case of a combination of shares of a
type contemplated in Paragraph 3.3 and then in no event to an amount larger than
the Purchase Price as adjusted pursuant to Paragraph 3.3.
3.9 Fractional Shares. The Company shall not issue fractions of
shares of Common Stock upon exercise of this Warrant or scrip in lieu thereof.
If any fraction of a share of Common Stock would, except for the provisions of
this Paragraph 3.9, be issuable upon exercise of this Warrant, the Company shall
in lieu thereof pay to the person entitled thereto an amount in cash equal to
the Market Price, calculated to the nearest one-hundredth (1/100) of a share.
3.10 Officer's Statement as to Adjustments. Whenever the Purchase
Price shall be adjusted as provided in Section 3 hereof, the Company shall
forthwith file at each office designated for the exercise of this Warrant, a
statement, signed by the Chairman of the Board, the President, any Vice
President or Treasurer of the Company, showing in reasonable detail the facts
requiring such adjustment and the Purchase Price that will be effective after
such adjustment. The Company shall also cause a notice setting forth any such
adjustments to be sent by mail, first class, postage prepaid, to the record
holder of this Warrant at his or its address appearing on the stock register. If
such notice relates to an adjustment resulting from an event referred to in
Paragraph 3.6, such notice shall be included as part of the notice required to
be mailed and published under the provisions of Paragraph 3.6 hereof.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other
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voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
5. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company shall at all times reserve and keep available out of its authorized but
unissued stock, solely for the issuance and delivery upon the exercise of this
Warrant and other similar Warrants, such number of its duly authorized shares of
Common Stock as from time to time shall be issuable upon the exercise of this
Warrant and all other similar Warrants at the time outstanding.
6. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of
like tenor.
7. REMEDIES. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that the same may be specifically enforced.
8. NEGOTIABILITY, ETC. This Warrant is issued upon the following terms,
to all of which each taker or owner hereof consents and agrees:
(a) Subject to the legend appearing on the first page hereof, title
to this Warrant may be transferred by endorsement (by the holder
hereof executing the form of assignment at the end hereof
including guaranty of
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signature) and delivery in the same manner as in the case of a
negotiable instrument transferable by endorsement and delivery.
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is
granted power to transfer absolute title hereto by endorsement
and delivery hereof to a bona fide purchaser hereof for value;
each prior taker or owner waives and renounces all of his
equities or rights in this Warrant in favor of every such bona
fide purchaser, and every such bona fide purchaser shall acquire
title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder of this Warrant as
the absolute owner hereof for all purposes without being affected
by any notice to the contrary.
(d) Prior to the exercise of this Warrant, the holder hereof shall
not be entitled to any rights of a shareholder of the Company
with respect to shares for which this Warrant shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
(e) The Company shall not be required to pay any Federal or state
transfer tax or charge that may be payable in respect of any
transfer involved in the transfer or delivery of this Warrant or
the issuance or conversion or delivery of certificates for Common
Stock in a name other than that of the registered holder of this
Warrant or to issue or deliver any certificates for Common Stock
upon the exercise of this Warrant until any and all such taxes
and charges shall have been paid by the holder of this Warrant or
until it has been established to the Company's satisfaction that
no such tax or charge is due.
9. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants
issued pursuant to the provisions of this paragraph) is exchangeable, upon the
surrender hereof by the holder hereof, at the principal office of the Company
for any number of new
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warrants of like tenor and date representing in the aggregate the right to
subscribe for and purchase the number of shares of Common Stock of the Company
which may be subscribed for and purchased hereunder.
10. MAILING OF NOTICES, ETC. All notices and other communications
from the Company to the holder of this Warrant shall be mailed by first-class
certified mail, postage prepaid, to the address furnished to the Company in
writing by the last holder of this Warrant who shall have furnished an address
to the Company in writing.
11. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
12. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
13. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE.
COVENTRY CORPORATION
By:
Name:
Title:
Dated: ____________, 1997
Attest:
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[To be signed only upon exercise of Warrant]
To Coventry Corporation:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _____________ shares of Common Stock of Coventry
Corporation and herewith makes payment of $________________ therefor, and
requests that the certificates for such shares be issued in the name of, and
be delivered to ______________________________, whose address is _____________
__________________________________.
Dated:
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
Address
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[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto________________________ the right represented by the within Warrant to
purchase the _________shares of the Common Stock of Coventry Corporation to
which the within Warrant relates, and appoints ____________________________
attorney to transfer said right on the books of Coventry Corporation with full
power of substitution in the premises.
Dated:
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
Address
In the presence of
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