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Exhibit 4.7
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WARRANT AGREEMENT
dated as of December -, 1999
between
OXFORD HEALTH PLANS, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., as Warrant Agent
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Series A Warrants and Series B Warrants
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TABLE OF CONTENTS
Page
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PARTIES.................................................................................................. 1
RECITALS................................................................................................. 1
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions................................................................................ 1
SECTION 1.2. Other Obligations.......................................................................... 3
ARTICLE II
TRANSFERABILITY
SECTION 2.1. Registration............................................................................... 4
SECTION 2.2. Form, Execution and Delivery of Warrant Certificates....................................... 4
SECTION 2.3. Transfer................................................................................... 5
SECTION 2.4. Legend on Warrant Certificates and Warrant Shares.......................................... 6
SECTION 2.5. Exchange of Warrant Certificate............................................................ 6
SECTION 2.6. Cancellation of Warrant Certificates....................................................... 6
SECTION 2.7. Treatment of Holders of Warrant Certificates............................................... 7
ARTICLE III
EXERCISE OF WARRANTS
SECTION 3.1 ........................................................................................... 7
ARTICLE IV
PAYMENT OF TAXES
SECTION 4.1. Payment of Taxes........................................................................... 8
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ARTICLE V
MUTILATED OR MISSING WARRANT
SECTION 5.1. Mutilated or Missing Warrant............................................................... 9
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.1. Warrant Agent.............................................................................. 10
SECTION 6.2. Limitations on Warrant Agent's Obligations................................................. 10
SECTION 6.3. Compliance with Applicable Laws............................................................ 12
SECTION 6.4. Appointment, Resignation and Appointment of Successor...................................... 12
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Amendments................................................................................. 14
SECTION 7.2. Notices and Demands to the Company and Warrant Agent....................................... 15
SECTION 7.3. Successors................................................................................. 15
SECTION 7.4. Governing Law; Choice of Forum; Etc........................................................ 15
SECTION 7.5. Delivery of Prospectus..................................................................... 15
SECTION 7.6. Obtaining of Governmental Approvals........................................................ 16
SECTION 7.7. Benefits of Warrant Agreement.............................................................. 16
SECTION 7.8. Headings................................................................................... 16
SECTION 7.9. Severability............................................................................... 16
SECTION 7.10. Counterparts............................................................................... 16
SECTION 7.11. Inspection of Agreement.................................................................... 16
SCHEDULE
SCHEDULE I. List of Existing Holders
EXHIBITS
EXHIBIT A. Form of Series A Warrant Certificate
EXHIBIT B. Form of Series B Warrant Certificate
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WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of December -, 1999 (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), between
Oxford Health Plans, Inc., a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company, as Warrant Agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the holders named on Schedule I hereto (together with their
Affiliates, the "Existing Holders") purchased the Series A Warrants (the "Series
A Warrants") to purchase Warrant Shares and the Series B Warrants (the "Series B
Warrants", and together with the Series A Warrants, the "Warrants") to purchase
Warrants Shares on May 13, 1998 pursuant to an Investment Agreement, dated as of
February 23, 1998 (as amended, supplemented or otherwise modified from time to
time, the "Investment Agreement"), by and between the Company and TPG Partners
II, L.P.;
WHEREAS, the Existing Holders may sell the Warrants evidenced by
warrant certificates issued pursuant to this Agreement (the "Warrant
Certificates");
WHEREAS, nothing in this Agreement is intended to alter or reduce the
existing rights of the Existing Holders; and
WHEREAS, the Warrant Agent has acted on behalf of the Company, and the
Company desires the Warrant Agent to continue to act on behalf of the Company,
and the Warrant Agent is willing so to act, in connection with the issuance,
transfer, exchange, exercise and cancellation of the Warrants;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Board of Directors" means the board of directors of the
Company.
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"Business Day" means any day, other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Common Stock" means the Company's common stock, par value
$.01 per share.
"Company" has the meaning set forth in the preamble hereto.
"Existing Holders" has the meaning set forth in the preamble
hereto.
"Expiration Date" means the earlier of (i) May 13, 2008, and
(ii) the date of an Optional Redemption.
"Expiration Time" means 5:00 P.M., New York City time, on the
Expiration Date.
"Investment Agreement" has the meaning set forth in the
preamble hereto.
"Optional Redemption" means, with respect to the Series A
Warrants, a redemption of the Series D Preferred Stock pursuant to
Article V, Section A of the Series D Certificate of Designations or a
redemption of the Series D Debentures pursuant to Section 6.1 of the
Series D Indenture, and, with respect to the Series B Warrants, a
redemption of the Series E Preferred Stock pursuant to Article V,
Section A of the Series E Certificate of Designations or a redemption
of Series E Debentures pursuant to Section 6.1 of the Series E
Indenture.
"Person" means any individual, firm, corporation, company,
limited liability company, association, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Series D Certificate of Designations" means the Certificate
of Designations for the Series D Preferred Stock filed by the Company
with the Secretary of State of the State of Delaware.
"Series D Debentures" means the Series D Junior Subordinated
Debentures due May 13, 2008 of the Company.
"Series D Indenture" means the indenture, between the Company
and the trustee specified therein, pursuant to which the Series E
Debentures are issued.
"Series D Preferred Stock" means the Series D Cumulative
Preferred Stock, par value $0.01 per share, of the Company.
"Series E Certificate of Designations" means the Certificate
of Designations for the Series E Preferred Stock filed by the Company
with the Secretary of State of the State of Delaware.
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"Series E Debentures" means the Series E Junior Subordinated
Debentures due May 13, 2008 of the Company.
"Series E Indenture" means the indenture, between the Company
and the trustee specified therein, pursuant to which the Series E
Debentures are issued.
"Series E Preferred Stock" means the Series E Cumulative
Preferred Stock, par value $0.01 per share, of the Company.
"Warrant" has the meaning set forth in the preamble hereto.
"Warrant Agent" has the meaning set forth in the preamble
hereto.
"Warrant Certificate" has the meaning in the preamble hereto.
"Warrantholder" has the meaning set forth in Section 2.1
hereof.
"Warrant Register" has the meaning set forth in Section 2.1
hereof.
"Warrant Shares" means the shares of Common Stock issued, or
issuable upon, exercise of the Warrants.
SECTION 1.2. Other Obligations. Nothing in this Agreement shall permit
the Company or the Warrant Agent to authorize or take any action that alters or
reduces the rights of the Existing Holders under the Investment Agreement or the
Warrants. In the event of any inconsistency between the provisions of this
Agreement, on the one hand, and the Warrant Certificate, on the other hand, the
provisions of the Warrant Certificate shall control. With respect to Existing
Holders, in the case of any inconsistency between the provisions of this
Agreement, on the one hand, or the Investment Agreement, on the other hand, the
provisions of the Investment Agreement shall control to the extent applicable,
except that Section 2.4 hereof supersedes Section 8.10 of the Investment
Agreement, and Section 6.4(a) hereof supersedes Section 10 of Exhibits B and D
to the Investment Agreement.
ARTICLE II
TRANSFERABILITY
SECTION 2.1. Registration. The Warrants shall be issued only in
registered form. The Warrant Agent shall keep, at its corporate trust office,
books (the "Warrant Register") in which, subject to such reasonable regulations
as it may prescribe, it shall register Warrant Certificates in accordance with
Section 2.2 hereof including transfers, exchanges, exercises and cancellations
of outstanding Warrant Certificates. Whenever any Warrant Certificates are
surrendered for transfer or exchange in accordance with Section 2.3 or Section
2.5, an authorized officer of the Warrant Agent shall manually countersign and
deliver the Warrant Certificates which the holder thereof (the "Warrantholder")
making the transfer or exchange is entitled to receive.
SECTION 2.2. Form, Execution and Delivery of Warrant Certificates. (a)
One or more certificates evidencing Series A Warrants to purchase not more than
15,800,000 Warrant Shares (subject to adjustment in accordance with Section 9.2
of the Warrant Certificate) and one or more certificates evidencing Series B
Warrants to purchase not more than 6,730,000 Warrant Shares (subject to
adjustment in accordance with Section 9.2 of the Warrant Certificate) may be
executed by the Company and delivered
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to the Warrant Agent upon the execution of this Warrant Agreement or from time
to time thereafter. The Warrants shall be issued pursuant to this Agreement only
in exchange for Warrants held by Existing Holders or upon transfer of Warrants
by the Existing Holders or in exchange for or upon transfer of Warrants pursuant
to this Agreement.
(b) Each Warrant Certificate, whenever issued hereunder, shall be in
registered form substantially in the form set forth in Exhibit A hereto, in the
case of Series A Warrants, or in the form set forth in Exhibit B hereto, in the
case of Series B Warrants, which Exhibits are hereby incorporated herein by
reference, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement. Each Warrant
Certificate shall be printed, lithographed, typewritten, mimeographed or
engraved or otherwise reproduced in any other manner as may be approved by the
officers executing the same (such execution to be conclusive evidence of such
approval) and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (such
execution to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement or the Warrants (or, with
respect to Existing Holders, the Investment Agreement) or as may be required to
comply with any law or with any rule or regulation made pursuant thereto, or
with any regulation of any stock exchange on which the Warrants or the Warrant
Shares may be listed, or to conform to usage. Each Warrant Certificate shall be
signed on behalf of the Company by its chairman or vice-chairman of the board of
directors, or its president or vice-president, and by its treasurer or an
assistant treasurer, or its secretary or an assistant secretary. The signature
of any such officer on any Warrant Certificate may be manual or by facsimile.
Each Warrant Certificate, when so signed on behalf of the Company, shall be
delivered to the Warrant Agent together with an order for the countersignature
and delivery of such Warrants by the Warrant Agent.
(c) The Warrant Agent shall, upon receipt of any Warrant Certificate
duly executed on behalf of the Company, countersign such Warrant Certificate and
deliver such Warrant Certificate to or upon the order of the Company. Each
Warrant Certificate shall be dated the date of its countersignature.
(d) No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby may be exercised, unless such Warrant Certificate has been countersigned
by the manual signature of the Warrant Agent. Such signature by the Warrant
Agent upon any Warrant Certificate executed by the Company shall be conclusive
evidence that such Warrant Certificate has been duly issued under the terms of
this Agreement.
(e) If any officer of the Company who has signed any Warrant
Certificate either manually or by facsimile signature shall cease to be such
officer before such Warrant
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Certificate shall have been countersigned and delivered by the Warrant Agent,
such Warrant Certificate nevertheless may be countersigned and delivered as
though the person who signed such Warrant Certificate had not ceased to be such
officer of the Company; and any Warrant Certificate may be signed on behalf of
the Company by such persons as, at the actual date of the execution of such
Warrant Certificate, shall be the proper officers of the Company as specified in
this Section 2.2, regardless of whether at the date of the execution of this
Agreement any such person was such officer.
(f) The Warrantholders shall be entitled to receive Warrants in
physical, certificated registered form.
SECTION 2.3. Transfer. A Warrant Certificate may be sold or otherwise
transferred at any time (except as such sale or transfer may be restricted
pursuant to the Securities Act or any applicable state securities laws) and any
such sale or transfer shall be effected on the Warrant Register upon surrender
of such Warrant Certificate at the corporate trust office of the Warrant Agent,
duly endorsed by the Warrantholder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute, and the Warrant Agent shall countersign and deliver, as provided in
Section 2.2, a new Warrant Certificate or Warrant Certificates of like tenor in
appropriate denomination to the Person or Persons entitled thereto.
SECTION 2.4. Legend on Warrant Certificates and Warrant Shares. (a) By
acceptance of a Warrant Certificate, each Warrantholder is deemed to agree to
(i) the placement on such Warrant Certificate of a legend substantially as set
forth in Exhibit A hereto, in the case of Series A Warrants, or Exhibit B
hereto, in the case of Series B Warrants, and (ii) the placement on certificates
representing the Warrant Shares issuable upon exercise of Warrants held by such
Warrantholder of a legend substantially as set forth below:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS."
(b) The legend shall be removed from a Warrant Certificate, or from a
certificate representing Warrant Shares, if the Warrants evidenced by such
Warrant Certificate, or such Warrant Shares, as the case may be, are sold
pursuant to an effective registration statement under the Securities Act (other
than to a person directly or indirectly controlling or controlled by the Company
or a person under direct or indirect common control with the Company) or there
is delivered to the Company such satisfactory evidence, which may include an
opinion of independent counsel, as reasonably requested by the Company, to
confirm that neither such legend nor the restrictions on transfer set forth
therein are required to ensure that transfers of such Warrants or Warrant
Shares, as the case may be, will not violate the registration and prospectus
delivery requirements of the Securities Act. Any such legend on a Warrant
Certificate may be changed or removed only upon notice by the Company to the
Warrant Agent.
SECTION 2.5. Exchange of Warrant Certificate. Any Warrant Certificate
may be exchanged for another certificate or certificates of like tenor entitling
the Warrantholder to purchase a like aggregate number of Warrant Shares as the
certificate or certificates surrendered then entitles such Warrantholder to
purchase. Any Warrantholder desiring to exchange a Warrant Certificate shall
make such request in writing delivered to the Warrant Agent, and shall
surrender, properly endorsed, the certificate evidencing the Warrant to be so
exchanged. Thereupon, the Company shall execute, and the Warrant Agent shall
countersign and deliver, as provided in Section 2.2. hereof, to the Person
entitled thereto a new Warrant Certificate or Certificates as so requested.
SECTION 2.6. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered to the Warrant Agent for transfer, exchange or exercise
of the Warrants evidenced thereby shall be promptly canceled by the Warrant
Agent and shall not be reissued and, except as expressly permitted by this
Agreement, no Warrant Certificate shall be issued hereunder in lieu thereof. The
Warrant Agent shall deliver to the
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Company from time to time or otherwise dispose of canceled Warrant Certificates
in a manner satisfactory to the Company. Any Warrant Certificate surrendered to
the Company for transfer, exchange or exercise of the Warrants evidenced thereby
shall be promptly delivered to the Warrant Agent and such transfer, exchange or
exercise shall not be effective until such Warrant Certificate has been received
by the Warrant Agent.
SECTION 2.7. Treatment of Holders of Warrant Certificates. Every
Warrantholder consents and agrees with the Company, the Warrant Agent and with
every subsequent Warrantholder that until the Warrant Certificate is transferred
on the books of the Warrant Agent, the Company and the Warrant Agent may treat
the registered Warrantholder of such Warrant Certificate as the absolute owner
of the Warrants evidenced thereby for any purpose and as the person entitled to
exercise the rights attaching to the Warrants evidenced thereby, any notice to
the contrary notwithstanding.
ARTICLE III
EXERCISE OF WARRANTS
SECTION 3.1. (a) A Warrantholder may exercise the Warrants, in whole or
in part, by presentation and surrender to the Warrant Agent of the Warrant
Certificate together with the attached Election to Exercise, in accordance with
Section 4.2 of the Warrant Certificate. If the date specified as the exercise
date is not a Business Day, the Warrants will be deemed to be received and
exercised on the next succeeding day which is a Business Day. If the Warrants
are received or deemed to be received after the Expiration Date, the exercise
thereof will be null and void and any funds delivered to the Warrant Agent will
be returned to the Warrantholder as soon as practicable. In no event will
interest accrue on funds deposited with the Warrant Agent in respect of an
exercise or attempted exercise of Warrants. The validity of any exercise of
Warrants will be determined by the Warrant Agent in its sole discretion and such
determination will be final and binding upon the Warrantholder and the Company.
Neither the Company nor the Warrant Agent shall have any obligation to inform a
Warrantholder of the invalidity of any exercise of Warrants. The Warrant Agent
shall deposit all funds received by it in payment of the Exercise Price in the
account of the Company maintained with the Warrant Agent for such purpose and
shall advise the Company upon its request by telephone at the end of each day on
which funds for the exercise of the Warrants are received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm such
telephonic advice to the Company in writing.
(b) The Warrant Agent shall, by 11:00 A.M. on the second Business Day
following the exercise date of any Warrant, advise the Company and the transfer
agent and registrar in respect of the Warrant Shares issuable upon such exercise
as to the number of Warrants exercised in accordance with the terms and
conditions of this
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Agreement, the instructions of each Warrantholder with respect to delivery of
the Warrant Shares issuable upon such exercise, and the delivery of definitive
Warrant Certificates evidencing the balance, if any, of the Warrants remaining
after such exercise, and such other information as the Company or such transfer
agent and registrar shall reasonably require.
(c) On the terms and subject to the conditions set forth in this
Agreement and in the Warrant Certificate, upon presentation and surrender of the
Warrant Certificate and payment of the aggregate Exercise Price as set forth in
Section 4.2 of the Warrant Certificate, the Company shall promptly issue and
cause to be delivered to the Warrant Agent a certificate or certificates (in
such name or names as the Warrantholder may designate in writing) for the
specified number of duly authorized, fully paid and non-assessable Warrant
Shares issuable upon exercise, and shall deliver to the Warrantholder cash, as
provided in Section 11 of the Warrant Certificate, with respect to any
Fractional Warrant Shares otherwise issuable upon such surrender. Upon receipt
of such Warrant Shares, the Warrant Agent shall transmit such Warrant Shares to
the Warrantholder, or to such Persons as the Warrantholder may designate in
writing together with, or preceded by, the prospectus in accordance with Section
7.5 hereof. The Company agrees that it will provide such information and
documents to the Warrant Agent as may be necessary for the Warrant Agent to
fulfill its obligations under this Agreement. In the event that the Warrants are
exercised in part prior to the Expiration Time, the Company shall issue and
cause to be delivered to the Warrant Agent a certificate or certificates (in
such name or names as the Warrantholder may designate in writing) evidencing any
remaining unexercised Warrants. Upon receipt of such Warrant Certificate, the
Warrant Agent shall countersign and deliver such Warrant Certificate to the
Warrantholder, or to such persons as the Warrantholder may designate in writing.
ARTICLE IV
PAYMENT OF TAXES
SECTION 4.1. Payment of Taxes. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes and other governmental
charges that may be imposed under the laws of the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
any issue or delivery of Warrant Shares or of other securities or property
deliverable upon exercise of the Warrants evidenced by a Warrant Certificate
or certificates representing such shares or securities (other than income taxes
imposed on the Warrantholder); provided that the Company shall not be required
to pay any such tax or other charge that may be imposed in connection with any
transfer involved in the issue of any certificate for Warrant Shares or other
securities or property, or payment of cash, to any Person other than the holder
of the Warrant Certificate surrendered upon exercise, and in case of any such
tax or charge, the Warrant Agent and the Company shall not be required to issue
any security or
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property or pay any cash until such tax or charge has been paid or it has been
established to the Warrant Agent's and the Company's satisfaction that no such
tax or charge is payable.
ARTICLE V
MUTILATED OR MISSING WARRANT
SECTION 5.1. Mutilated or Missing Warrant. If any Warrant Certificate
is lost, stolen, mutilated or destroyed, the Company shall issue and the Warrant
Agent shall countersign, in exchange and substitution for and upon cancellation
of the mutilated Warrant Certificate, or in lieu of and substitution for the
Warrant Certificate lost, stolen or destroyed, upon receipt of a proper
affidavit or other evidence reasonably satisfactory to the Company and the
Warrant Agent (and surrender of any mutilated Warrant Certificate) and bond of
indemnity in form and amount and with corporate surety reasonably satisfactory
to the Company and the Warrant Agent in each instance protecting the Company and
the Warrant Agent, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants as the Warrant Certificate so lost, stolen,
mutilated or destroyed. Any such new Warrant Certificate shall constitute an
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant Certificate shall be at any time
enforceable by anyone. An applicant for such substitute Warrant Certificate
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe. All
Warrant Certificates shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement of lost,
stolen, mutilated or destroyed Warrant Certificates, and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement of negotiable
instruments or other securities without their surrender.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.1. Warrant Agent. The Company hereby appoints ChaseMellon
Shareholder Services, L.L.C. as Warrant Agent of the Company in respect of the
Warrants upon the terms and subject to the conditions herein set forth, and
ChaseMellon Shareholder Services, L.L.C. hereby accepts such appointment. The
Warrant Agent shall have the powers and authority granted to and conferred upon
it hereby and such further powers and authority to act on behalf of the Company
as the Company may hereafter grant to or confer upon it.
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SECTION 6.2. Limitations on Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees:
(a) Compensation and Indemnification. The Company agrees to
pay the Warrant Agent compensation to be agreed upon with the Company
for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for all reasonable out-of-pocket expenses (including
reasonable counsel fees) incurred by the Warrant Agent in connection
with the services rendered by it hereunder. The Company also agrees to
indemnify the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense incurred without gross negligence, bad faith
or willful misconduct on the part of the Warrant Agent, arising out of
or in connection with its acting as Warrant Agent hereunder. Anything
to the contrary notwithstanding, in no event shall the Warrant Agent be
liable for special, punitive, indirect, consequential or incidental
loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Warrant Agent has been advised of the
likelihood of such loss or damage.
(b) Agent for the Company. In acting in the capacity of
Warrant Agent under this Agreement, the Warrant Agent is acting solely
as agent of the Company and does not assume any obligation or
relationship of agency or trust with any of the owners or holders of
the Warrants.
(c) Counsel. The Warrant Agent may consult with counsel
satisfactory to it (which may be counsel to the Company), and the
written advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the
written advice or opinion of such counsel.
(d) Documents. The Warrant Agent shall be authorized and
protected and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in reliance upon any notice,
direction, consent, certificate, affidavit, statement or other paper or
document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any
interest in, any Warrant, with the same rights that it or they would
have were it not the Warrant Agent hereunder, and, to the extent
permitted by applicable law, it or they may engage or be interested in
any financial or other transaction with the Company and may act on, or
as a depositary, trustee or agent for, any committee or body of holders
of Warrants or Warrant Shares, or other securities or obligations of
the Company as freely as if it were not the Warrant Agent hereunder.
Nothing in this Agreement
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shall be deemed to prevent the Warrant Agent from acting as trustee
under the Series A Indenture or the Series E Indenture.
(f) No Liability for Interest. The Warrant Agent shall not be
under any liability for interest on any monies at any time received by
it pursuant to any of the provisions of this Agreement.
(g) No Liability for Invalidity. The Warrant Agent shall not
be under any responsibility with respect to the validity or sufficiency
of this Agreement or the execution and delivery hereof (except the due
execution and delivery hereof by the Warrant Agent) or with respect to
the validity or execution of the Warrant Certificates (except its
countersignature thereon).
(h) No Responsibility for Recitals. The recitals contained in
this Agreement and in the Warrant Certificates (except as to the
Warrant Agent's countersignature thereon) shall be taken as the
statements of the Company and the Warrant Agent assumes no
responsibility hereby for the correctness of the same.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform such duties as are specifically set forth herein
and no implied duties or obligations shall be read into this Agreement
against the Warrant Agent. The Warrant Agent shall not be under any
obligation to take any action hereunder which may tend to involve it in
any expense or liability, the payment of which within a reasonable time
is not, in its opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the
Company of any Warrant Certificate authenticated by the Warrant Agent
and delivered by it to the Company pursuant to this Agreement or for
the application by the Company of the proceeds of the issue and sale,
or exercise, of the Warrants. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance
of its covenants or agreements contained in this Agreement or in any
Warrant Certificate or in the case of the receipt of any written demand
from a Warrantholder with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or,
except as provided in Section 7.2 hereof, to make any demand upon the
Company.
(j) Instructions from Company. The Warrant Agent is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer or the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be liable for
any action taken, suffered or omitted to be taken by it in good faith
in accordance with instructions of any such officers.
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(k) Delegation. The Warrant Agent may execute and exercise any
of the rights or powers hereby vested in it to perform any duty hereunder either
itself or by or through its attorneys or agents.
SECTION 6.3. Compliance with Applicable Laws. The Warrant Agent agrees
to comply with all applicable federal and state laws imposing obligations on it
in respect of the services rendered by it under this Agreement and in connection
with the Warrants, including (but not limited to) the provisions of United
States federal income tax laws regarding information reporting and backup
withholding. The Warrant Agent shall be responsible for its failure to comply
with any such laws imposing obligations on it, including (but not limited to)
any liability for its failure to comply with any applicable provisions of United
States federal income tax laws regarding information reporting and backup
withholding.
SECTION 6.4. Appointment, Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the Warrantholders from time to time,
that there shall at all times be a Warrant Agent hereunder until all the
Warrants issued hereunder have been exercised or have expired in accordance with
their terms, which Warrant Agent shall be appointed in the Borough of Manhattan,
The City of New York, and shall have a capital and surplus of at least
$50,000,000.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which it desires such resignation to become effective; provided that such
date shall not be less than three months after the date on which such notice is
given, unless the Company agrees to accept such notice less than three months
prior to such date of effectiveness. The Company may remove the Warrant Agent at
any time by giving written notice to the Warrant Agent of such removal,
specifying the date on which it desires such removal to become effective. Such
resignation or removal shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (qualified as set forth in
subsection (a)) and the acceptance of such appointment by such successor Warrant
Agent. The obligation of the Company under Section 6.2(a) hereof shall continue
to the extent set forth therein notwithstanding the resignation or removal of
the Warrant Agent.
(c) If at any time the Warrant Agent shall resign, or shall cease to be
qualified as set forth in subsection (a), or shall be removed, or shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall file
a petition seeking relief under any applicable Federal or State bankruptcy or
insolvency law or similar law, or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver, conservator or custodian
of all or any substantial part of its property, or shall admit in writing its
inability to pay or to meet its debts as they mature, or if a receiver or
custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of any applicable Federal
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or State bankruptcy or similar law, or if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as set forth in subsection (a), shall be appointed by the
Company by an instrument in writing, filed with the successor Warrant Agent.
Upon the appointment as herein provided of a successor Warrant Agent and
acceptance by the latter of such appointment, the Warrant Agent so superseded
shall cease to be Warrant Agent under this Agreement.
(d) Any successor Warrant Agent appointed under this Agreement shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent under
this Agreement, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Warrant Agent shall be entitled to receive, all
monies, securities and other property on deposit with or held by such
predecessor, as Warrant Agent under this Agreement.
(e) Any Person into which the Warrant Agent may be merged or converted
or any Person with which the Warrant Agent may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Warrant
Agent shall be a party, or any Person to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business of the
Warrant Agent, in each case provided that it shall be qualified as set forth in
subsection (a), shall be the successor Warrant Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement, including, without limitation, any
successor to the Warrant Agent first named above.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Amendments. (a) This Agreement and any Warrant Certificate
may be amended by the parties hereto by executing a supplemental warrant
agreement, without the consent of the Warrantholder of any Warrant, for the
purpose of (i) curing any ambiguity, or curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement that is not
inconsistent with the provisions of this Agreement or the Warrant Certificates
(or with respect to Existing Holders, the Investment Agreement), (ii) evidencing
the succession of another Person to the Company and the assumption by any such
successor of the covenants of the Company contained in this Agreement and the
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Warrants, (iii) evidencing and providing for the acceptance of appointment by a
successor Warrant Agent with respect to the Warrants, (iv) adding to the
covenants of the Company for the benefit of the Warrantholders or surrendering
any right or power conferred upon the Company under this Agreement, (v)
appointing a successor Warrant Agent, or (vi) amending this Agreement and the
Warrants in any manner that the Company may deem to be necessary or desirable
and that will not adversely affect the interests of the Warrantholders.
(b) Without the consent of each Warrantholder of Warrants affected
thereby, no amendment may be made that (i) changes the Warrants so as to reduce
the number of Warrant Shares purchasable upon exercise of the Warrants or so as
to increase the exercise price, (ii) shortens the period of time during which
the Warrants may be exercised, (iii) otherwise adversely affects the exercise
rights of the Warrantholders in any material respect, or (iv) reduces the number
of unexercised Warrants the consent of the Warrantholders of which is required
for amendment of this Agreement or the Warrants.
(c) Notwithstanding anything contained herein to the contrary, the
Warrant Agent may, but shall not be required to, enter any supplement or
amendment that affects the Warrant Agent's own rights, duties, obligations or
immunities under this Agreement.
SECTION 7.2. Notices and Demands to the Company and Warrant Agent. If
the Warrant Agent shall receive any notice or demand addressed to the Company by
the Warrantholder, the Warrant Agent shall promptly forward such notice or
demand to the Company.
SECTION 7.3. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrantholder shall bind
and inure to the benefit of their respective successors and permitted assigns
hereunder.
SECTION 7.4. Governing Law; Choice of Forum; Etc. The validity,
construction and performance of this Agreement shall be governed by, and
interpreted in accordance with, the laws of New York without reference to its
conflict of laws rules. The Company, the Warrant Agent and the Warrantholder
(the "parties hereto") agree that the appropriate and exclusive forum for any
disputes arising out of this Agreement solely between or among any or all of the
Company, the Warrant Agent and the Existing Holders and/or any Person who has
become a Warrantholder shall be the United States District Court for the
Southern District of New York, and, if such court will not hear any such suit,
the courts of the state of the Company's incorporation, and the parties hereto
irrevocably consent to the exclusive jurisdiction of such courts, and agree to
comply with all requirements necessary to give such courts jurisdiction. The
parties hereto further agree that the parties will not bring suit with respect
to any disputes, except as expressly set forth below, arising out of this
Agreement for the execution or enforcement of judgment, in any jurisdiction
other
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than the above specified courts. Each of the parties hereto irrevocably consents
to the service of process in any action or proceeding hereunder by the mailing
of copies thereof by registered or certified airmail, postage prepaid, if to (i)
the Warrant Agent, at 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxx Xxxxxxxx, XX 00000,
Attention: Xxxx Xxxxx; (ii) the Company, at 00 Xxxxxx Xxxxxxxx, Xxxxxxxx, XX
00000, Attention: General Counsel, or at such other address specified by the
Company in writing to the Warrant Agent and (iii) any Warrantholder, at the
address of such Warrantholder specified in the Warrant Register. The foregoing
shall not limit the rights of any party hereto to serve process in any other
manner permitted by the law or to obtain execution of judgment in any other
jurisdiction. The parties hereto further agree, to the extent permitted by law,
that final and unappealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. The parties hereto agree to waive any and
all rights that they may have to a jury trial with respect to disputes arising
out of this Agreement.
SECTION 7.5. Delivery of Prospectus. The Company shall furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant Shares
deliverable upon exercise of Warrants and complying in all material respects
with the Securities Act (the "Prospectus"), and the Warrant
Agent agrees that upon the exercise of any Warrant, the Warrant Agent shall
deliver a Prospectus to the Warrantholder of such Warrant, prior to or
concurrently with the delivery of the Warrant Shares issued upon such exercise
except in each case to the extent that the Company shall have notified the
Warrant Agent in writing that such delivery of a Prospectus is not required
under the Securities Act.
SECTION 7.6. Obtaining of Governmental Approvals. The Company shall
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under United States Federal and
state laws, which the Company may deem necessary or appropriate in connection
with the issuance, sale, transfer and delivery of the Warrants, the exercise of
the Warrants, the issuance, sale, transfer and delivery of the Warrant Shares to
be issued upon exercise of Warrants or upon the expiration of the period during
which the Warrants are exercisable.
SECTION 7.7. Benefits of Warrant Agreement. Nothing in this Agreement
or any Warrant Certificate shall be construed to give to any Person other than
the Company, the Warrant Agent and the Warrantholders any legal or equitable
right, remedy or claim under this Agreement or any Warrant Certificate, and this
Agreement or any Warrant Certificate shall be for the sole and exclusive benefit
of the Company, the Warrant Agent and the Warrantholders.
SECTION 7.8. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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SECTION 7.9. Severability. If any provision in this Agreement or in any
Warrant Certificate shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions, or of such provisions in any other jurisdiction, shall not in any
way be affected or impaired thereby.
SECTION 7.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 7.11. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the corporate trust office of the
Warrant Agent and at the office of the Company at 00 Xxxxxx Xxxxxxxx, Xxxxxxxx,
XX 00000, for inspection by any Warrantholder. The Warrant Agent may require any
such Warrantholder to submit satisfactory proof of ownership for inspection by
it.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
OXFORD HEALTH PLANS, INC.
By: __________________________
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: __________________________
Name:
Title:
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SCHEDULE I
Name of Warrant Holder
TPG Partners II, L.P.
TPG Parallel II, L.P.
TPG Investors II, X.X.
Xxxxx Equity Associates, L.P.
Oxford Acquisition Corp.
DLJ Merchant Banking Partners II, L.P.
DLJ Merchant Banking Partners II-A, L.P.
DLJ Offshore Partners II, C.V.
DLJ Diversified Partners, L.P.
DLJ Diversified Partners-A, L.P.
DLJ MB Funding II, Inc.
DLJ Millennium Partners, L.P.
DLJ Millennium Partners-A, L.P.
DLJ EAB Partners, L.P.
UK Investment Plan 1997 Partners
DLJ ESC II L.P.
DLJ First ESC, L.P.
DLJ Capital Corporation
Sprout Growth II, L.P.
The Sprout CEO Fund, L.P.
Sprout Capital VIII, L.P.
Sprout Venture Capital, L.P.
21
Exhibit A
Form of Series A Warrant Certificate
THE SECURITIES EVIDENCED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND WERE NOT REGISTERED UNDER ANY
STATE SECURITIES LAW, AND THE SECURITIES EVIDENCED HEREBY AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THE SECURITIES EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.
IF THE WARRANTHOLDER SPECIFIED IN THIS CERTIFICATE IS AN EXISTING HOLDER (AS
DEFINED IN THE WARRANT AGREEMENT), THEN THIS CERTIFICATE ALSO EVIDENCES AND
ENTITLES SUCH EXISTING HOLDER, AS A HOLDER HEREOF, TO CERTAIN RIGHTS AS SET
FORTH IN THE REGISTRATION RIGHTS AGREEMENT DATED AS OF FEBRUARY 23, 1998, BY AND
BETWEEN TPG OXFORD LLC AND OXFORD HEALTH PLANS, INC. (THE "COMPANY"), THE TERMS
OF WHICH ARE INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY AND AT THE PRINCIPAL OFFICE OF THE
WARRANT AGENT.
22
No. [Number of Warrants]
SERIES A WARRANTS
Exercisable commencing May 13, 1998;
Void after Expiration Time (as defined herein)
OXFORD HEALTH PLANS, INC., a Delaware corporation (the
"Company"), hereby certifies that, for value received, ____________________, or
registered assigns (the "Warrantholder"), is the owner of ______________Warrants
(as defined below), each of which entitles the Warrantholder to purchase from
the Company one fully paid, duly authorized and nonassessable share of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock"), at any
time from and after May 13, 1998 (the "Issue Date") and continuing up to the
Expiration Time (as defined herein) at a per share exercise price determined
according to the terms and subject to the conditions set forth in this
certificate (the "Warrant Certificate"). The number of shares of Common Stock
issuable upon exercise of each such Warrant and the exercise price per share of
Common Stock are subject to adjustment from time to time pursuant to the
provisions of Section 9 of this Warrant Certificate. The Warrants evidenced by
this Warrant Certificate are part of a series of warrants to purchase up to
15,800,000 shares of Common Stock (collectively, the "Warrants"), issued
pursuant to an Investment Agreement, dated as of February 23, 1998 (as it may be
amended, supplemented or otherwise modified from time to time, the "Investment
Agreement"), by and between TPG Oxford LLC, a Delaware limited liability company
(the "Investor"), and the Company, or pursuant to the Warrant Agreement, dated
as of December _____ , 1999 (as it may be amended, supplemented or otherwise
modified from time to time, the "Warrant Agreement"), between the Company and
ChaseMellon Shareholder Services, L.L.C., as Warrant Agent.
Section 1. Definitions. As used in this Warrant Certificate, the
following terms shall have the meanings set forth below:
"Board of Directors" means the board of directors of the
Company.
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"Business Day" means any day, other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Certificate of Designations" means, with respect to the
Series D Preferred Stock or the Series E Preferred Stock, as the case
may be, the Certificate of Designations therefor filed by the Company
with the Secretary of State of the State of Delaware.
"Certificate of Incorporation" means the Second Amended and
Restated Certificate of Incorporation of the Company, as amended from
time to time.
"Closing Price" with respect to a share of Common Stock on any
day means, subject to Section 9.1(f) hereof, the last reported sale
price on that day or, in case no such reported sale takes place on such
day, the average of the last reported bid and asked prices, regular
way, on that day, in either case, as reported in the consolidated
transaction reporting system with respect to securities quoted on
Nasdaq or, if the shares of Common Stock are not quoted on Nasdaq, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading or, if the shares of Common Stock are not quoted on Nasdaq and
not listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid
and low asked prices on such other nationally recognized quotation
system then in use, or, if on any such day the shares of Common Stock
are not quoted on any such quotation system, the average of the closing
bid and asked prices as furnished by a professional market maker
selected by the Board of Directors making a market in the shares of
Common Stock. If the shares of Common Stock are not publicly held or so
listed, quoted or publicly traded, the "Closing Price" means the fair
market value of a share of Common Stock, as determined in good faith by
the Board of Directors.
"Common Stock" has the meaning set forth in the preamble
hereto.
"Company" has the meaning set forth in the preamble hereto.
"Debentures" means the Series D Debentures and the Series E Debentures.
"Debentures" means the Series D Debentures and the Series E
Debentures.
"Equity Securities" of any Person means any and all common
stock, preferred stock, any other class of capital stock and
partnership or limited liability company interests of such Person or
any other similar interests of any Person that is not a corporation,
partnership or limited liability company.
"Exercise Price" has the meaning set forth in Section 8
hereof.
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"Expiration Date" means the earlier of (i) May 13, 2008, and
(ii) the date of an Optional Redemption.
"Expiration Time" means 5:00 P.M., New York City time, on the
Expiration Date.
"Fractional Warrant Share" means any fraction of a whole share
of Common Stock issued, or issuable upon, exercise of the Warrants.
"Investment Agreement" has the meaning set forth in the
preamble hereto.
"Investor" has the meaning set forth in the preamble hereto.
"Issue Date" has the meaning set forth in the preamble hereto.
"Nasdaq" means The Nasdaq Stock Market's National Market.
"Offer Time" has the meaning set forth in Section 9.1(e)
hereof.
"Optional Redemption" means a redemption of the Series D
Preferred Stock pursuant to Article V, Section A of the Certificate of
Designations therefor or a redemption of the Series D Debentures
pursuant to Section 6.1 of the Series D Indenture.
"Organic Change" means, with respect to any Person, any
transaction (including without limitation any recapitalization, capital
reorganization or reclassification of any class or series of Equity
Securities, any consolidation of such Person with, or merger of such
Person into, any other Person, any merger of another Person into such
Person (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding
shares of capital stock of such Person), and any sale or transfer or
lease of all or substantially all of the assets of such Person, but not
including any stock split, combination or subdivision which is the
subject of Section 9.1(b)hereof) pursuant to which any class or series
of Equity Securities of such Person is converted into the right to
receive other securities, cash or other property.
"Person" means any individual, firm, corporation, company,
limited liability company, association, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Senior Preferred Stock" means the Series D Preferred Stock
and Series E Preferred Stock.
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"Series D Debentures" means the Series D Junior Subordinated
Debentures due May 13, 2008 of the Company.
"Series D Indenture" means the indenture, between the Company
and the trustee specified therein, pursuant to which the Series D
Debentures are issued.
"Series D Preferred Stock" means the Series D Cumulative
Preferred Stock, par value $0.01 per share, of the Company.
"Series E Debentures" means the Series E Junior Subordinated
Debentures due May 13, 2008 of the Company.
"Series E Indenture" means the indenture, between the Company
and the trustee specified therein, pursuant to which the Series E
Debentures are issued.
"Series E Preferred Stock" means the Series E Cumulative
Preferred Stock, par value $0.01 per share, of the Company.
"Stated Value" means the stated value of the Series D
Preferred Stock or the Series E Preferred Stock, as the case may be, in
each case as set forth in the Certificate of Designations therefor.
"Subsidiary" means, as to any Person, any other Person of
which more than 50% of the shares of the voting stock or other voting
interests are owned or controlled, or the ability to select or elect
50% or more of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries or
by such first Person and one or more of its Subsidiaries.
"Trading Day" means any day on which Nasdaq is open for
trading, or if the shares of Common Stock are not quoted on Nasdaq, any
day on which the principal national securities exchange or national
quotation system on which the shares of Common Stock are listed,
admitted to trading or quoted is open for trading, or if the shares of
Common Stock are not so listed, admitted to trading or quoted, any
Business Day.
"Warrant" has the meaning set forth in the preamble hereto.
"Warrant Agent" means the Person named or otherwise appointed
as such as set forth in Section 10 hereof.
"Warrant Agreement" has the meaning set forth in the preamble
hereto.
"Warrant Certificate" has the meaning in the preamble hereto.
"Warrant Market Price" means the average of the Closing Prices
of a share of Common Stock for the ten consecutive Trading Days ending
on the Trading Day immediately prior to the day on which the Election
to Exercise is delivered.
"Warrant Register" has the meaning set forth in Section 2.2
hereof.
"Warrant Shares" means the shares of Common Stock issued, or
issuable upon, exercise of the Warrants.
"Warrantholder" has the meaning set forth in the preamble
hereto.
Section 2. Transferability.
2.1. Registration. The Warrants shall be issued only in
registered form.
2.2. Transfer. The Warrants evidenced by this Warrant
Certificate may be sold or otherwise transferred at any time (except as such
sale or transfer may be
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26
restricted pursuant to the Securities Act or any applicable state securities
laws) and any such sale or transfer shall be effected on the books of the
Company (the "Warrant Register") maintained at the corporate trust office of the
Warrant Agent upon surrender of this Warrant Certificate at the corporate trust
office of the Warrant Agent for registration of transfer duly endorsed by the
Warrantholder or by its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. Upon any registration of transfer, the Company shall execute, and the
Warrant Agent shall countersign and deliver a new Warrant Certificate or
Certificates in appropriate denominations to the Person or Persons entitled
thereto.
2.3. Legend on Warrant Certificates and Warrant Shares. If and
for so long as required by the Warrant Agreement, this Warrant Certificate and
certificates representing the Warrant Shares shall contain a legend as specified
in Section 2.4 of the Warrant Agreement.
Section 3. Exchange of Warrant Certificate. Any Warrant
Certificate may be exchanged for another certificate or certificates of like
tenor entitling the Warrantholder to purchase a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitles such
Warrantholder to purchase. Any Warrantholder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Warrant Agent,
and shall surrender, properly endorsed, the certificate evidencing the Warrant
to be so exchanged. Thereupon, the Company shall execute, and the Warrant Agent
shall countersign and deliver to the Person entitled thereto, a new Warrant
Certificate or Certificates as so requested.
Section 4. Term of Warrants; Exercise of Warrants.
4.1. Duration of Warrant. On the terms and subject to the
conditions set forth in this Warrant Certificate, the Warrantholder may exercise
the Warrants evidenced hereby, in whole or in part, at any time and from time to
time after the Issue Date and before the Expiration Time. If the Warrants
evidenced hereby are not exercised by the Expiration Time, they shall become
void, and all rights hereunder shall thereupon cease.
4.2. Exercise of Warrant.
(a) On the terms and subject to the conditions set forth in
this Warrant Certificate, the Warrantholder may exercise the Warrants evidenced
hereby, in whole or in part, by presentation and surrender to the Warrant Agent
of this Warrant Certificate together with the attached Election to Exercise duly
filled in and signed, and accompanied by payment to the Company of the Exercise
Price for the number of Warrant Shares specified in such Election to Exercise.
Payment of the aggregate Exercise Price shall be made (i) in cash in an amount
equal to the aggregate Exercise Price; (ii) by certified or official bank check
in an amount equal to the aggregate Exercise Price; (iii) by
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27
an exchange (which shall be treated as a recapitalization to the extent
allowable under the Internal Revenue Code of 1986, as amended, and applicable
regulations thereunder) with the Company of a number of shares of Senior
Preferred Stock having an aggregate Stated Value plus accumulated and unpaid
dividends thereon equal to the aggregate Exercise Price or by an exchange (which
shall be treated as recapitalization to the extent allowable under the Internal
Revenue Code of 1986, as amended, and applicable regulations thereunder) with
the Company of a principal amount of Debentures having an aggregate principal
amount plus accrued and unpaid interest thereon equal to the aggregate Exercise
Price; (iv) by an exchange (which shall be treated as a recapitalization to the
extent allowable under the Internal Revenue Code of 1986, as amended, and
applicable regulations thereunder) with the Company of outstanding Warrants
(other than the Warrants being exercised) to purchase Warrant Shares having an
aggregate Warrant Market Price which, after subtracting the aggregate exercise
prices thereof, equals the aggregate Exercise Price of the Warrants being
exercised; or (v) by any combination of the foregoing; provided, however, that
(except to the extent expressly permitted by the proviso in Section 5(b) of the
Share Exchange Agreement, dated as of February 13, 1999, by and among the
Company and the investors named therein) the Warrantholders may not use shares
of Series D Preferred Stock pursuant to clause (iii) or (v) in connection with
any exercise prior to May 13, 2000.
(b) On the terms and subject to the conditions set forth in
this Warrant Certificate, upon such presentation and surrender of this Warrant
Certificate and payment of such aggregate Exercise Price as set forth in
subsection (a) above, the Company shall promptly issue and cause to be delivered
to the Warrant Agent a certificate or certificates (in such name or names as the
Warrantholder may designate in writing) for the specified number of duly
authorized, fully paid and non-assessable Warrant Shares issuable upon exercise,
and shall deliver to the Warrantholder cash, as provided in Section 11 hereof,
with respect to any Fractional Warrant Shares otherwise issuable upon such
surrender. Upon receipt of such Warrant Shares, the Warrant Agent shall transmit
such Warrant Shares to the Warrantholder, or to such Persons as the
Warrantholder may designate in writing. In the event that the Warrants evidenced
by this Warrant Certificate are exercised in part prior to the Expiration Time,
the Company shall issue and cause to be delivered to the Warrant Agent a
certificate or certificates (in such name or names as the Warrantholder may
designate in writing) evidencing any remaining unexercised Warrants. Upon
receipt of such Warrant Certificate, the Warrant Agent shall countersign and
deliver such Warrant Certificate to the Warrantholder, or to such persons as the
Warrantholder may designate in writing.
(c) Each Person in whose name any certificate for Warrant
Shares is issued shall for all purposes be deemed to have become the holder of
record of the Warrant Shares represented thereby on the first date on which both
the Warrant Certificate evidencing the respective Warrants was surrendered and
payment of the Exercise Price and any applicable taxes was made, irrespective of
date of issue or delivery of such certificate.
Section 5. Payment of Taxes. The Company shall pay any and all
documentary, stamp or similar issue or transfer taxes and other governmental
charges that may be imposed under the laws of the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
any issue or delivery of Warrant Shares or of other securities or property
deliverable upon exercise of the
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Warrants evidenced by this Warrant Certificate or certificates representing such
shares or securities (other than income taxes imposed on the Warrantholder);
provided that the Company shall not be required to pay any such tax or other
charge that may be imposed in connection with any transfer involved in the issue
of any certificate for Warrant Shares or other securities or property, or
payment of cash, to any Person other than the holder of the Warrant Certificate
surrendered upon exercise, and in case of any such tax or charge, the Warrant
Agent and the Company shall not be required to issue any security or property or
pay any cash until such tax or charge has been paid or it has been established
to the Warrant Agent's and the Company's satisfaction that no such tax or charge
is payable.
Section 6. Mutilated or Missing Warrant. If any Warrant
Certificate is lost, stolen, mutilated or destroyed, the Company shall issue and
the Warrant Agent shall countersign, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, upon receipt
of a proper affidavit or other evidence reasonably satisfactory to the Company
and the Warrant Agent (and surrender of any mutilated Warrant Certificate) and
bond of indemnity in form and amount and with corporate surety reasonably
satisfactory to the Company and the Warrant Agent in each instance protecting
the Company and the Warrant Agent, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants as the Warrant Certificate so
lost, stolen, mutilated or destroyed. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by anyone. An applicant for such substitute Warrant
Certificate shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company or the Warrant Agent may prescribe.
All Warrant Certificates shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement of lost,
stolen, mutilated or destroyed Warrant Certificates, and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement of negotiable
instruments or other securities without their surrender.
Section 7. Reservation of Shares. The Company hereby agrees
that there shall be reserved for issuance and delivery upon exercise of Warrants
evidenced by this Warrant Certificate, free from preemptive rights, the number
of shares of authorized but unissued shares of Common Stock as shall be required
for issuance or delivery upon exercise of the Warrants evidenced by this Warrant
Certificate. The Company further agrees that it will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company. Without
limiting the generality of the foregoing, the Company agrees that before taking
any action which would cause an
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adjustment reducing the Exercise Price below the then-par value of Warrant
Shares issuable upon exercise of the Warrants evidenced hereby, the Company
shall from time to time take all such action that may be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock at the Exercise Price as so adjusted.
Section 8. Exercise Price. The price per share (the "Exercise
Price") at which Warrant Shares shall be purchasable upon the exercise of the
Warrants evidenced by this Warrant Certificate shall be $17.75, subject to
adjustment pursuant to Section 9 hereof.
Section 9. Adjustment of Exercise Price and Number of Shares.
The number and kind of securities purchasable upon the exercise of the Warrants
evidenced by this Warrant Certificate and the Exercise Price thereof shall be
subject to adjustment from time to time after the date hereof upon the happening
of certain events, as follows:
9.1. Adjustments to Exercise Price. The Exercise Price shall
be subject to adjustment as follows:
(a) Stock Dividends. In case the Company after the date hereof
shall pay a dividend or make a distribution to all holders of shares of
Common Stock in shares of Common Stock, then in any such case the
Exercise Price in effect at the opening of business on the day
following the record date for the determination of stockholders
entitled to receive such dividend or distribution shall be reduced to a
price obtained by multiplying such Exercise Price by a fraction of
which (x) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such record date and (y) the
denominator shall be the sum of such number of shares of Common Stock
outstanding and the total number of shares of Common Stock constituting
such dividend or distribution, such reduction to become effective
immediately after the opening of business on the day following such
record date. For purposes of this subsection (a), the number of shares
of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company.
(b) Stock Splits and Reverse Splits. In case after the date
hereof outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Exercise Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case after the date hereof outstanding shares of Common
Stock shall be combined into a smaller number of shares of Common
Stock, the Exercise Price in effect at the opening of business
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on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(c) Issuances Below Market. In case the Company after the date
hereof shall issue rights or warrants to holders of shares of Common
Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Closing Price per share on the
record date for the determination of stockholders entitled to receive
such rights or warrants, the Exercise Price in effect at the opening of
business on the day following such record date shall be adjusted to a
price obtained by multiplying such Exercise Price by a fraction of
which (x) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such record date plus the
number of shares of Common Stock that the aggregate offering price of
the total number of shares so to be offered would purchase at such
Closing Price and (y) the denominator shall be the number of shares of
Common Stock outstanding at the close of business on such record date
plus the number of additional shares of Common Stock so to be offered
for subscription or purchase, such adjustment to become effective
immediately after the opening of business on the day following such
record date; provided, however, that no adjustment shall be made if the
Company issues or distributes to each Warrantholder the rights or
warrants that each Warrantholder would have been entitled to receive
had the Warrants held by such Warrantholder been exercised prior to
such record date; and provided, further, that in no event shall the
fact that the Series B Warrants of the Company became exercisable for
shares of Common Stock upon occurrence of the Shareholder Approval (as
defined in the Investment Agreement) constitute an issuance of rights
or warrants for purposes of this subsection (c). For purposes of this
subsection (c), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any rights or warrants in respect of shares of
Common Stock held in the treasury of the Company. Rights or warrants
issued by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase Equity Securities, which
rights or warrants (i) are deemed to be transferred with such shares of
Common Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of Common Stock, including shares of Common
Stock issued upon exercise of the Warrants evidenced by this Warrant
Certificate, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events (a "Trigger Event"), shall
for purposes of this subsection (c) not be deemed issued until the
occurrence of the earliest Trigger Event.
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(x) Special Dividends. In case the Company after the date
hereof shall distribute to all holders of shares of Common Stock
evidences of its indebtedness or assets (excluding any regular periodic
cash dividend), Equity Securities (other than Common Stock) or rights
to subscribe (excluding those referred to in subsection (c) above) for
Equity Securities other than Common Stock, in each such case the
Exercise Price in effect immediately prior to the close of business on
the record date for the determination of stockholders entitled to
receive such distribution shall be adjusted to a price obtained by
multiplying such Exercise Price by a fraction of which (x) the
numerator shall be the Closing Price per share of Common Stock on such
record date, less the then-current fair market value as of such record
date (as determined by the Board of Directors in its good faith
judgment) of the portion of assets or evidences of indebtedness or
Equity Securities or subscription rights so distributed applicable to
one share of Common Stock, and (y) the denominator shall be such
Closing Price, such adjustment to become effective immediately prior to
the opening of business on the day following such record date;
provided, however, that no adjustment shall be made (1) if the Company
issues or distributes to each Warrantholder the subscription rights
referred to above that each Warrantholder would have been entitled to
receive had the Warrants held by such Warrantholder been exercised
prior to such record date or (2) if the Company grants to each
Warrantholder the right to receive, upon the exercise of the Warrants
held by such Warrantholder at any time after the distribution of the
evidences of indebtedness or assets or Equity Securities referred to
above, the evidences of indebtedness or assets or Equity Securities
that such Warrantholder would have been entitled to receive had such
Warrants been exercised prior to such record date. The Company shall
provide any Warrantholder, upon receipt of a written request therefor,
with any indenture or other instrument defining the rights of the
holders of any indebtedness, assets, subscription rights or Equity
Securities referred to in this subsection (d). Rights or warrants
issued by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase Equity Securities, which
rights or warrants (i) are deemed to be transferred with such shares of
Common Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of Common Stock, including shares of Common
Stock issued upon exercise of the Warrants evidenced by this Warrant
Certificate, in each case in clauses (i) through (iii) until the
occurrence of a Trigger Event, shall for purposes of this subsection
(d) not be deemed issued until the occurrence of the earliest Trigger
Event.
(e) Tender or Exchange Offer. In case a tender or exchange
offer made by the Company or any Subsidiary of the Company for all or
any portion of the Common Stock shall be consummated and such tender
offer shall involve an aggregate consideration having a fair market
value (as determined by the Board of Directors in its good faith
judgment) at the last time (the "Offer Time") tenders
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may be made pursuant to such tender or exchange offer (as it may be
amended) that, together with the aggregate of the cash plus the fair
market value (as determined by the Board of Directors in its good faith
judgment), as of the Offer Time, of consideration payable in respect of
any tender or exchange offer by the Company or any such Subsidiary for
all or any portion of the Common Stock consummated preceding the Offer
Time and in respect of which no Exercise Price adjustment pursuant to
this subsection (e) has been made, exceeds 5% of the product of the
Closing Price of the Common Stock at the Offer Time multiplied by the
number of shares of Common Stock outstanding (including any tendered
shares) at the Offer Time, the Exercise Price shall be reduced so that
the same shall equal the price determined by multiplying the Exercise
Price in effect immediately prior to the Offer Time by a fraction of
which (x) the numerator shall be (i) the product of the Closing Price
of the Common Stock at the Offer Time multiplied by the number of
shares of Common Stock outstanding (including any tendered shares) at
the Offer Time minus (ii) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered and not
withdrawn as of the Offer Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y)
the denominator shall be the product of (i) such Closing Price at the
Offer Time multiplied by (ii) such number of outstanding shares at the
Offer Time minus the number of Purchased Shares, such reduction to
become effective immediately prior to the opening of business on the
day following the Offer Time. For purposes of this subsection (e), the
number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock.
(f) Closing Price Determination. For the purpose of any
computation under subsections (c) and (d) of this Section 9.1, the
Closing Price of Common Stock on any date shall be deemed to be the
average of the Closing Prices for the five consecutive Trading Days
ending not later than the day in question and commencing on a day
selected at random in good faith by the Company which is not more than
20 Trading Days before the day in question, provided, however, that (i)
if the "ex" date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Exercise
Price pursuant to this Section 9 occurs on or after the 20th Trading
Day prior to the day in question and prior to the "ex" date for the
issuance or distribution requiring such computation, the Closing Price
for each Trading Day prior to the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the same fraction
which the Exercise Price is so required to be adjusted as a result of
such other event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the
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Exercise Price pursuant to this Section 9 occurs on or after the "ex"
date for the issuance or distribution requiring such computation and on
or prior to the day in question, the Closing Price for each Trading Day
on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by
which the Exercise Price is so required to be adjusted as a result of
such other event, and (iii) if the "ex" date for the issuance or
distribution requiring such computation is on or prior to the day in
question, after taking into account any adjustment required pursuant to
clause (ii) of this proviso, the Closing Price for each Trading Day on
or after such "ex" date shall be adjusted by adding thereto the fair
market value on the day in question (as determined by the Board of
Directors in a manner consistent with any determination of such value
for the purposes of subsection (d) of this Section 9.1) of the assets,
evidences of indebtedness, Equity Securities or subscription rights
being distributed applicable to one share of Common Stock as of the
close of business on the day before such "ex" date. For the purposes of
any computation under subsection (e) of this Section 9.1, the Closing
Price on any date shall be deemed to be the average of the daily
Closing Prices for the five consecutive Trading Days ending not later
than the Offer Time of such tender or exchange offer and commencing on
a day selected at random in good faith by the Company which date shall
be on or after the latest (the "Commencement Date") of (i) the date 20
Trading Days before the date in question, (ii) the date of commencement
of the tender or exchange offer requiring such computation and (iii)
the date of the last amendment, if any, of such tender or exchange
offer involving a change in the maximum number of shares for which
tenders are sought or a change in the consideration offered; provided,
however, that if the "ex" date for any event (other than the tender or
exchange offer requiring such computation) that requires an adjustment
to the Exercise Price pursuant to this Section 9 occurs on or after the
Commencement Date and prior to the Offer Time for the tender or
exchange offer requiring such computation, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by
which the Exercise Price is so required to be adjusted as a result of
such other event. For purposes of this subsection (f), the term "ex"
date, (i) when used with respect to any issuance or distribution, means
the first date on which the Common Stock trades regular way on Nasdaq
or on the relevant exchange or in the relevant market from which the
Closing Price was obtained without the right to receive such issuance
or distribution, (ii) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on Nasdaq or such exchange or in
such market after the time at which such subdivision or combination
becomes effective, and (iii) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades
regular way on Nasdaq or such exchange or in such market after the
Offer Time of such tender or exchange offer.
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(g) Minimum Adjustment Requirement. No adjustment shall be
required unless such adjustment would result in an increase or decrease
of at least $0.01 in the Exercise Price then subject to adjustment;
provided, however, that any adjustments that are not made by reason of
this subsection (g) shall be carried forward and taken into account in
any subsequent adjustment. In case the Company shall at any time issue
shares of Common Stock by way of dividend on any stock of the Company
or subdivide or combine the outstanding shares of Common Stock, said
amount of $0.01 specified in the preceding sentence (as theretofore
increased or decreased, if said amount shall have been adjusted in
accordance with the provisions of this subsection (g)) shall forthwith
be proportionately increased in the case of such a combination or
decreased in the case of such a subdivision or stock dividend so as
appropriately to reflect the same.
(h) Calculations. All calculations under this Section 9.1
shall be made to the nearest $0.01.
(i) Certificate. Whenever an adjustment in the Exercise Price
is made as required or permitted by the provisions of this Section 9.1,
the Company shall promptly file with the Warrant Agent a certificate of
its chief financial officer setting forth (A) the adjusted Exercise
Price as provided in this Section 9.1 and a brief statement of the
facts requiring such adjustment and the computation thereof and (B) the
number of shares of Common Stock (or portions thereof) purchasable upon
exercise of a Warrant after such adjustment in the Exercise Price in
accordance with Section 9.2 hereof and the record date therefor, and
promptly after such filing shall mail or cause to be mailed a notice of
such adjustment to each Warrantholder at his or her last address as the
same appears on the Warrant Register. Such certificate, in the absence
of manifest error, shall be conclusive and final evidence of the
correctness of such adjustment. The Warrant Agent shall be entitled to
rely upon such certificate, and shall be under no duty or
responsibility with respect to any such certificate except to exhibit
the same to any Warrantholder desiring inspection thereof.
(j) Notice. In case:
(i) the Company shall declare any dividend or any
distribution of any kind or character (whether in cash,
securities or other property) on or in respect of shares of
Common Stock or to the stockholders of the Company (in their
capacity as such), excluding any regular periodic cash
dividend paid out of current or retained earnings (as such
terms are used in generally accepted accounting principles);
or
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(ii) the Company shall authorize the granting to the
holders of shares of Common Stock of rights to subscribe for
or purchase any shares of capital stock or of any other right;
or
(iii) of any reclassification of shares of Common
Stock (other than a subdivision or combination of outstanding
shares of Common Stock), or of any consolidation or merger to
which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the
Company; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be filed with the Warrant Agent and
shall mail or cause to be mailed to the Warrantholders, at their last
addresses as they shall appear upon the Warrant Register, at least 30
days prior to the applicable record date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or, if a record is not
to be taken, the date as of which the holders of shares of Common Stock
of record to be entitled to such dividend, distribution or rights are
to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or
winding up is expected to become effective, and, if applicable, the
date as of which it is expected that holders of shares of Common Stock
of record shall be entitled to exchange their shares of Common Stock
for securities or other property (including cash) deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give any such notice, or any
defect therein, shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.
(k) Section 305. Anything in this Section 9.1 to the contrary
notwithstanding, the Company shall be entitled, but not required, to
make such reductions in the Exercise Price, in addition to those
required by this Section 9.1, as it in its discretion shall determine
to be advisable, including, without limitation, in order that any
dividend in or distribution of shares of Common Stock or shares of
capital stock of any class other than Common Stock, subdivision,
reclassification or combination of shares of Common Stock, issuance of
rights or warrants, or any other transaction having a similar effect,
shall not be treated as a distribution of property by the Company to
its stockholders under Section 305 of the Internal Revenue Code of
1986, as amended, or any successor provision and shall not be taxable
to them.
(l) No Adjustment. Anything to the contrary herein
notwithstanding, no adjustment to the Exercise Price or the number of
shares of Common Stock
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purchasable upon exercise of a Warrant shall be made pursuant to this
Section 9.1 or Section 9.2 hereof as a result of, or in connection
with, the issuance of options or rights to purchase Common Stock issued
to employees of the Company or its Subsidiaries pursuant to a stock
option or other similar plan adopted by the Board of Directors or an
employment agreement approved by the Board of Directors, or the
modification, renewal or extension of any such plan or agreement if
approved by the Board of Directors.
(m) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for purposes of taking any
action that requires an adjustment of the Exercise Price under this
Section 9, and shall, thereafter and before the effective date of such
action, legally abandon its plan to take such action, then thereafter
no adjustment shall be required by reason of the taking of such record
and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
9.2. Adjustment to Number of Warrant Shares. Upon each
adjustment of the Exercise Price pursuant to Section 9.1 hereof the number of
Warrant Shares purchasable upon exercise of a Warrant outstanding prior to the
effectiveness of such adjustment shall be adjusted to the number, calculated to
the nearest one-hundredth of a share, obtained by (x) multiplying the number of
Warrant Shares purchasable immediately prior to such adjustment upon the
exercise of a Warrant by the Exercise Price in effect prior to such adjustment
and (y) dividing the product so obtained by the Exercise Price in effect after
such adjustment of the Exercise Price.
9.3. Organic Change.
(a) Company Survives. Upon the consummation of an Organic
Change (other than a transaction in which the Company is not the surviving
entity), lawful provision shall be made as part of the terms of such transaction
whereby the terms of the Warrant Certificates shall be modified, without payment
of any additional consideration therefor, so as to provide that upon exercise of
Warrants following the consummation of such Organic Change, the Warrantholders
of such Warrants shall have the right to purchase only the kind and amount of
securities, cash and other property receivable upon such Organic Change by a
holder of the number of Warrant Shares into which such Warrants might have been
exercised immediately prior to such Organic Change, assuming such holder of
Warrant Shares (i) is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which a sale,
transfer or lease of all or substantially all of the assets of the Company was
made, as the case may be (a "Constituent Person"), or an Affiliate of a
Constituent Person, and (ii) failed to exercise his rights of election, if any,
as to the kind and amount of securities, cash and other property receivable upon
such Organic Change (provided that if the kind and amount of securities, cash
and other property receivable
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upon such Organic Change is not the same for each share of Common Stock held
immediately prior to such Organic Change by others than a Constituent Person or
an Affiliate thereof and in respect of which such rights of election shall not
have been exercised ("non-electing shares"), then for the purpose of this
subsection (a) the kind and amount of securities, cash and other property
receivable upon such Organic Change by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality of the
non-electing shares); provided, however, that no adjustment shall be made as a
result of such Organic Change to the Exercise Price or the number of Warrant
Shares notwithstanding any provision of Section 9 hereof unless any event
requiring any such adjustment shall have occurred or shall occur prior to, upon
or after such Organic Change. Lawful provision also shall be made as part of the
terms of the Organic Change so that all other terms of the Warrant Certificates
shall remain in full force and effect following such an Organic Change. The
provisions of this Section 9.3(a) shall similarly apply to successive Organic
Changes.
(b) Company Does Not Survive. The Company shall not enter into
an Organic Change that is a transaction in which the Company is not the
surviving entity unless lawful provision shall be made as part of the terms of
such transaction whereby the surviving entity shall issue new securities to each
Warrantholder, without payment of any additional consideration therefor, with
terms that provide that upon the exercise of the Warrants, the Warrantholders of
such Warrants shall have the right to purchase only the kind and amount of
securities, cash and other property receivable upon such Organic Change by a
holder of the number of Warrant Shares into which such Warrants might have been
exercised immediately prior to such Organic Change, assuming such holder of
Warrant Shares (i) is not a Constituent Person or an Affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to the
kind and amount of securities, cash and other property receivable upon such
Organic Change (provided that if the kind and amount of securities, cash and
other property receivable upon such Organic Change is not the same for each
non-electing share, then for the purpose of this subsection (b) the kind and
amount of securities, cash and other property receivable upon such Organic
Change by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares); provided,
however, that no adjustment shall be made as a result of such Organic Change to
the Exercise Price or the number of Warrant Shares notwithstanding any provision
of Section 9 hereof unless any event requiring any such adjustment shall have
occurred or shall occur prior to, upon or after such Organic Change. The
certificate or articles of incorporation or other constituent document of the
surviving entity shall provide for such adjustments which, for events subsequent
to the effective date of such certificate or articles of incorporation or other
constituent document, shall be equivalent to the adjustments provided for in
Section 9.1 hereof.
9.4. Statement on Warrants. The form of Warrant Certificate
need not be changed because of any adjustment made pursuant to Section 9.1 or
Section
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9.2 hereof, and Warrants issued after such adjustment may state the same
Exercise Price and the same number of Warrant Shares as are stated in this
Warrant Certificate.
Section 10. Warrant Agent. The Company shall cause to be
appointed in the Borough of Manhattan, The City of New York, a Warrant Agent,
having a capital and surplus of at least $50,000,000. Initially, ChaseMellon
Shareholder Services, L.L.C. will act as Warrant Agent.
Section 11. Fractional Interests. The Company shall not be
required to issue Fractional Warrant Shares on the exercise of the Warrants
evidenced by this Warrant Certificate. If any Fractional Warrant Share would,
but for the provisions of this Section 11, be issuable on the exercise of the
Warrants evidenced by this Warrant Certificate (or specified portions thereof),
the Company shall pay an amount in cash equal to the fraction of a Warrant Share
represented by such Fractional Warrant Share multiplied by the Closing Price on
the day of such exercise.
Section 12. No Rights as Shareholder. Nothing in this Warrant
Certificate shall be construed as conferring upon the Warrantholder or its
transferees any rights as a shareholder of the Company, including the right to
vote, receive dividends, consent or receive notices as a shareholder with
respect to any meeting of shareholders for the election of directors of the
Company or any other matter.
Section 13. Successors. All the covenants and provisions of
this Warrant Certificate by or for the benefit of the Company or the
Warrantholder shall bind and inure to the benefit of their respective successors
and permitted assigns hereunder.
Section 14. Governing Law; Choice of Forum, Etc. The validity,
construction and performance of this Warrant Certificate shall be governed by,
and interpreted in accordance with, the laws of New York without reference to
its conflict of laws rules. The Company and the Warrantholder (the "parties
hereto") agree that the appropriate and exclusive forum for any disputes arising
out of this Warrant Certificate solely between or among any or all of the
Company, on the one hand, and the Investor and/or any Person who has become a
Warrantholder, on the other, shall be the United States District Court for the
Southern District of New York, and, if such court will not hear any such suit,
the courts of the state of the Company's incorporation, and the parties hereto
irrevocably consent to the exclusive jurisdiction of such courts, and agree to
comply with all requirements necessary to give such courts jurisdiction. The
parties hereto further agree that the parties will not bring suit with respect
to any disputes, except as expressly set forth below, arising out of this
Warrant Certificate for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
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postage prepaid, if to (i) the Company, at 00 Xxxxxx Xxxxxxxx, Xxxxxxxx, XX
00000, Attention: General Counsel, or at such other address specified by the
Company in writing to the Warrant Agent, and (ii) any Warrantholder, at the
address of such Warrantholder specified in the Warrant Register. The foregoing
shall not limit the rights of any party hereto to serve process in any other
manner permitted by the law or to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted by law, that
final and unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and the amount of indebtedness. The parties agree to waive any and all rights
that they may have to a jury trial with respect to disputes arising out of this
Warrant Certificate.
Section 15. Benefits of this Warrant Certificate. Nothing in
this Warrant Certificate shall be construed to give to any Person other than the
Company and the Warrantholder any legal or equitable right, remedy or claim
under this Warrant Certificate, and this Warrant Certificate shall be for the
sole and exclusive benefit of the Company and the Warrantholder. This Warrant
Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Warrant Agent.
Section 16. Other Obligations. The parties hereby acknowledge
that, pursuant to the Warrant Agreement, nothing in the Warrant Agreement shall
permit the Company or the Warrant Agent to authorize or take action that alters
or reduces the rights of the Existing Holders (as defined in the Warrant
Agreement) under the Investment Agreement or the Warrants. In the event of any
inconsistency between the provisions of the Warrant Agreement, on the one hand,
and this Warrant Certificate, on the other hand, the provisions of this Warrant
Certificate shall control. With respect to Existing Holders, in the case of any
inconsistency between the provisions of the Warrant Agreement, on the one hand,
and the Investment Agreement, on the other hand, the provisions of the
Investment Agreement shall control to the extent applicable, except that
Section 2.4 of the Warrant Agreement supersedes Section 8.10 of the Investment
Agreement, and Section 6.4(a) of the Warrant Agreement supersedes Section 10 of
Exhibit B to the Investment Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, as of this __ day of ________________,
______________.
OXFORD HEALTH PLANS, INC.
By:__________________________
Name:
Title:
Attest:
__________________________
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., as Warrant Agent
By:__________________________
Name:
Title:
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ELECTION TO EXERCISE
(To be executed upon exercise of Warrants)
To OXFORD HEALTH PLANS, INC.:
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the within Warrant Certificate for, and to
purchase thereunder, _____________ Warrant Shares, as provided for therein, and
tenders herewith payment of the purchase price in full in the form of [COMPLETE
WHERE APPLICABLE]:
[ ] cash or a certified or official bank check in the amount of
$__________; and/or
[ ] $__________ Stated Value of Senior Preferred Stock (as to
which $ of accumulated dividends are unpaid), of which
$____________ Stated Value and the corresponding accumulated
dividends should be applied toward the payment of such Warrant
Shares; and/or
[ ] ___________ aggregate principal amount of Debentures (as to
which $__________ of accrued interest is unpaid), of which
$________ aggregate principal amount and the corresponding
accrued interest should be applied toward the payment of such
Warrant Shares; and/or
[ ] ____________ number of Warrants, valued at $__________ each
(such value arrived at by subtracting the Exercise Price of
$__________ from the Warrant Market Price of $__________, both
the Exercise Price and Warrant Market Price determined in
accordance with the provisions of the Warrant Certificate);
For a total purchase price of $__________.
If the Stated Value and accumulated and unpaid dividends of
the shares of Senior Preferred Stock, the principal amount of and accrued and
unpaid interest on the Debentures or the value of the Warrants evidenced by the
Warrant Certificate delivered herewith exceeds that portion of the payment which
is to be paid by the surrender of such shares, Debentures or Warrants, you are
authorized, as agent of the undersigned, to deliver to the Company such shares,
Debentures or Warrant Certificate delivered herewith for exchange into smaller
denominations in order that you may deliver to the undersigned new shares of
Senior Preferred Stock, new Debentures or Warrant Certificates, in Stated Value,
principal amount or number as the case may be, equal to the difference between
the Stated Value, principal amount or number as the case may be, of the Senior
Preferred Stock, Debentures or Warrants surrendered, less the Stated Value,
principal amount or number as the case may be, thereof, used to purchase Warrant
Shares.
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Please issue a certificate or certificates for such Warrant Shares in the name
of, and pay any cash for any Fractional Warrant Shares to (please print name
address and social security or other identifying number)*:
Name: _________________________________________________________________________
Address: ______________________________________________________________________
Soc. Sec. #: __________________________________________________________________
AND, if said number of Warrant 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 the undersigned for the balance remaining of the Warrant Shares
purchasable thereunder rounded up to the next higher whole number of Warrant
Shares.
Signature:**_________________________________
__________
* The Warrant Certificate and the Investment Agreement contain restrictions on
the sale and other transfer of the Warrants evidenced by such Warrant
Certificate.
** The above signature should correspond exactly with the name on the face of
this Warrant Certificate or with the name of the assignee appearing in the
assignment form below.
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ASSIGNMENT FORM
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
________________________________________________________________________________
________________________________________________________________________________
(Name and Address of Assignee must be Printed or Typewritten)
Warrants to purchase ______ Warrant Shares of the Company, evidenced by the
within Warrant Certificate hereby irrevocably constituting and appointing ______
_________________ Attorney to transfer said Warrants on the books of the
Company, with full power of substitution in the premises.
Dated: ________________ ,_______
______________________________
Signature of Registered Holder*
Signature Guaranteed: _______________________________
Signature of Guarantor
_____________________________
__________
* The above signature should correspond exactly with the name on the face of
this Warrant Certificate.
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Exhibit B
Form of Series B Warrant Certificate
THE SECURITIES EVIDENCED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND WERE NOT REGISTERED UNDER ANY
STATE SECURITIES LAW, AND THE SECURITIES EVIDENCED HEREBY AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THE SECURITIES EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.
IF THE WARRANTHOLDER SPECIFIED IN THIS CERTIFICATE IS AN EXISTING HOLDER (AS
DEFINED IN THE WARRANT AGREEMENT), THEN THIS CERTIFICATE ALSO EVIDENCES AND
ENTITLES SUCH EXISTING HOLDER, AS A HOLDER HEREOF, TO CERTAIN RIGHTS AS SET
FORTH IN THE REGISTRATION RIGHTS AGREEMENT DATED AS OF FEBRUARY 23, 1998, BY AND
BETWEEN TPG OXFORD LLC AND OXFORD HEALTH PLANS, INC. (THE "COMPANY"), THE TERMS
OF WHICH ARE INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY AND AT THE PRINCIPAL OFFICE OF THE
WARRANT AGENT.
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No. [Number of Warrants]
SERIES B WARRANTS
Exercisable commencing May 13, 1998;
Void after Expiration Time (as defined herein)
OXFORD HEALTH PLANS, INC., a Delaware corporation (the
"Company"), hereby certifies that, for value received, ____________________, or
registered assigns (the "Warrantholder"), is the owner of ______________Warrants
(as defined below), each of which entitles the Warrantholder to purchase from
the Company one fully paid, duly authorized and nonassessable share of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock"), at any
time from and after May 13, 1998 (the "Issue Date") and continuing up to the
Expiration Time (as defined herein) at a per share exercise price determined
according to the terms and subject to the conditions set forth in this
certificate (the "Warrant Certificate"). The number of shares of Common Stock
issuable upon exercise of each such Warrant and the exercise price per share of
Common Stock are subject to adjustment from time to time pursuant to the
provisions of Section 9 of this Warrant Certificate. The Warrants evidenced by
this Warrant Certificate are part of a series of warrants to purchase up to
6,730,000 shares of Common Stock (collectively, the "Warrants"), issued pursuant
to an Investment Agreement, dated as of February 23, 1998 (as it may be amended,
supplemented or otherwise modified from time to time, the "Investment
Agreement"), by and between TPG Oxford LLC, a Delaware limited liability company
(the "Investor"), and the Company, or pursuant to the Warrant Agreement, dated
as of December, 1999 (as it may be amended, supplemented or otherwise modified
from time to time, the "Warrant Agreement"), between the Company and ChaseMellon
Shareholder Services, L.L.C., as Warrant Agent.
Section 1 Definitions. As used in this Warrant Certificate,
the following terms shall have the meanings set forth below:
"Board of Directors" means the board of directors of the
Company.
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46
"Business Day" means any day, other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Certificate of Designations" means, with respect to the
Series D Preferred Stock or the Series E Preferred Stock, as the case
may be, the Certificate of Designations therefor filed by the Company
with the Secretary of State of the State of Delaware.
"Certificate of Incorporation" means the Second Amended and
Restated Certificate of Incorporation of the Company, as amended from
time to time.
"Closing Price" with respect to a share of Common Stock on any
day means, subject to Section 9.1(f) hereof, the last reported sale
price on that day or, in case no such reported sale takes place on such
day, the average of the last reported bid and asked prices, regular
way, on that day, in either case, as reported in the consolidated
transaction reporting system with respect to securities quoted on
Nasdaq or, if the shares of Common Stock are not quoted on Nasdaq, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading or, if the shares of Common Stock are not quoted on Nasdaq and
not listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid
and low asked prices on such other nationally recognized quotation
system then in use, or, if on any such day the shares of Common Stock
are not quoted on any such quotation system, the average of the closing
bid and asked prices as furnished by a professional market maker
selected by the Board of Directors making a market in the shares of
Common Stock. If the shares of Common Stock are not publicly held or so
listed, quoted or publicly traded, the "Closing Price" means the fair
market value of a share of Common Stock, as determined in good faith by
the Board of Directors.
"Common Stock" has the meaning set forth in the preamble
hereto.
"Company" has the meaning set forth in the preamble hereto.
"Debentures" means the Series D Debentures and the Series E
Debentures.
"Equity Securities" of any Person means any and all common
stock, preferred stock, any other class of capital stock and
partnership or limited liability company interests of such Person or
any other similar interests of any Person that is not a corporation,
partnership or limited liability company.
"Exercise Price" has the meaning set forth in Section 8
hereof.
"Expiration Date" means the earlier of (i) May 13, 2008, and
(ii) the date of an Optional Redemption.
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"Expiration Time" means 5:00 P.M., New York City time, on the
Expiration Date.
"Fractional Warrant Share" means any fraction of a whole share
of Common Stock issued, or issuable upon, exercise of the Warrants.
"Investment Agreement" has the meaning set forth in the
preamble hereto.
"Investor" has the meaning set forth in the preamble hereto.
"Issue Date" has the meaning set forth in the preamble hereto.
"Nasdaq" means The Nasdaq Stock Market's National Market.
"Offer Time" has the meaning set forth in Section 9.1(e)
hereof.
"Optional Redemption" means a redemption of the Series E
Preferred Stock pursuant to Article V, Section A of the Certificate of
Designations therefor or a redemption of the Series E Debentures
pursuant to Section 6.1 of the Series E Indenture.
"Organic Change" means, with respect to any Person, any
transaction (including without limitation any recapitalization, capital
reorganization or reclassification of any class or series of Equity
Securities, any consolidation of such Person with, or merger of such
Person into, any other Person, any merger of another Person into such
Person (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding
shares of capital stock of such Person), and any sale or transfer or
lease of all or substantially all of the assets of such Person, but not
including any stock split, combination or subdivision which is the
subject of Section 9.1(b)hereof) pursuant to which any class or series
of Equity Securities of such Person is converted into the right to
receive other securities, cash or other property.
"Person" means any individual, firm, corporation, company,
limited liability company, association, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Senior Preferred Stock" means the Series D Preferred Stock
and Series E Preferred Stock.
"Series D Debentures" means the Series D Junior Subordinated
Debentures due May 13, 2008 of the Company.
"Series D Preferred Stock" means the Series D Cumulative
Preferred Stock, par value $0.01 per share, of the Company.
B-4
48
"Series E Debentures" means the Series E Junior Subordinated
Debentures due May 13, 2008 of the Company.
"Series E Indenture" means the indenture, between the Company
and the trustee specified therein, pursuant to which the Series E
Debentures are issued.
"Series E Preferred Stock" means the Series E Cumulative
Preferred Stock, par value $0.01 per share, of the Company.
"Stated Value" means the stated value of the Series D
Preferred Stock or the Series E Preferred Stock, as the case may be, in
each case as set forth in the Certificate of Designations therefor.
"Subsidiary" means, as to any Person, any other Person of
which more than 50% of the shares of the voting stock or other voting
interests are owned or controlled, or the ability to select or elect
50% or more of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries or
by such first Person and one or more of its Subsidiaries.
"Trading Day" means any day on which Nasdaq is open for
trading, or if the shares of Common Stock are not quoted on Nasdaq, any
day on which the principal national securities exchange or national
quotation system on which the shares of Common Stock are listed,
admitted to trading or quoted is open for trading, or if the shares of
Common Stock are not so listed, admitted to trading or quoted, any
Business Day.
"Warrant" has the meaning set forth in the preamble hereto.
"Warrant Agent" means the Person named or otherwise appointed
as such as set forth in Section 10 hereof.
"Warrant Agreement" has the meaning set forth in the preamble
hereto.
"Warrant Certificate" has the meaning in the preamble hereto.
"Warrant Market Price" means the average of the Closing Prices
of a share of Common Stock for the ten consecutive Trading Days ending
on the Trading Day immediately prior to the day on which the Election
to Exercise is delivered.
"Warrant Register" has the meaning set forth in Section 2.2
hereof.
"Warrant Shares" means the shares of Common Stock issued, or
issuable upon, exercise of the Warrants.
"Warrantholder" has the meaning set forth in the preamble
hereto.
Section 2. Transferability.
2.1 Registration. The Warrants shall be issued only in
registered form.
2.2 Transfer. The Warrants evidenced by this Warrant
Certificate may be sold or otherwise transferred at any time (except as such
sale or transfer may be restricted pursuant to the Securities Act or any
applicable state securities laws) and any such sale or transfer shall be
effected on the books of the Company (the "Warrant Register") maintained at the
corporate trust office of the Warrant Agent upon surrender of this Warrant
Certificate at the corporate trust
B-5
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office of the Warrant Agent for registration of transfer duly endorsed by the
Warrantholder or by its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. Upon any registration of transfer, the Company shall execute, and the
Warrant Agent shall countersign and deliver a new Warrant Certificate or
Certificates in appropriate denominations to the Person or Persons entitled
thereto.
2.3. Legend on Warrant Certificates and Warrant Shares. If and
for so long as required by the Warrant Agreement, this Warrant Certificate and
certificates representing the Warrant Shares shall contain a legend as specified
in Section 2.4 of the Warrant Agreement.
Section 3. Exchange of Warrant Certificate. Any Warrant
Certificate may be exchanged for another certificate or certificates of like
tenor entitling the Warrantholder to purchase a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitles such
Warrantholder to purchase. Any Warrantholder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Warrant Agent,
and shall surrender, properly endorsed, the certificate evidencing the Warrant
to be so exchanged. Thereupon, the Company shall execute, and the Warrant Agent
shall countersign and deliver to the Person entitled thereto, a new Warrant
certificate or Certificates as so requested.
Section 4. Term of Warrants; Exercise of Warrants.
4.1. Duration of Warrant. On the terms and subject to the
conditions set forth in this Warrant Certificate, the Warrantholder may exercise
the Warrants evidenced hereby, in whole or in part, at any time and from time to
time after the Issue Date and before the Expiration Time. If the Warrants
evidenced hereby are not exercised by the Expiration Time, they shall become
void, and all rights hereunder shall thereupon cease.
4.2. Exercise of Warrant.
(a) On the terms and subject to the conditions set forth in
this Warrant Certificate, the Warrantholder may exercise the Warrants evidenced
hereby, in whole or in part, by presentation and surrender to the Warrant Agent
of this Warrant Certificate together with the attached Election to Exercise duly
filled in and signed, and accompanied by payment to the Company of the Exercise
Price for the number of Warrant Shares specified in such Election to Exercise.
Payment of the aggregate Exercise Price shall be made (i) in cash in an amount
equal to the aggregate Exercise Price; (ii) by certified or official bank check
in an amount equal to the aggregate Exercise Price; (iii) by an exchange (which
shall be treated as a recapitalization to the extent allowable under the
Internal Revenue Code of 1986, as amended, and applicable regulations
thereunder) with the Company of a number of shares of Senior Preferred Stock
having an aggregate Stated Value plus accumulated and unpaid dividends thereon
equal to the aggregate Exercise Price or by an exchange (which shall be treated
as a recapitalization to the extent allowable under the Internal Revenue Code of
1986, as amended, and applicable regulations thereunder) with the Company of a
principal amount of Debentures having an aggregate principal amount plus accrued
and unpaid interest thereon equal to the aggregate Exercise Price; (iv) by an
exchange (which shall be treated as a recapitalization to the extent allowable
under the Internal Revenue Code of 1986, as amended, and applicable regulations
thereunder) with the Company of outstanding Warrants (other than the Warrants
being exercised) to purchase Warrant Shares having an aggregate Warrant Market
Price which, after subtracting the aggregate exercise prices thereof, equals the
aggregate Exercise Price of the Warrants being exercised; or (v) by any
combination of the foregoing; provided,
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however, that (except to the extent expressly permitted by the proviso in
Section 5(b) of the Share Exchange Agreement, dated as of February 13, 1999, by
and among the Company and the investors named therein) the Warrantholders may
not use shares of Series D Preferred Stock pursuant to clause (iii) or (v) in
connection with any exercise prior to May 13, 2000.
(b) On the terms and subject to the conditions set forth in
this Warrant Certificate, upon such presentation and surrender of this Warrant
Certificate and payment of such aggregate Exercise Price as set forth in
subsection (a) above, the Company shall promptly issue and cause to be delivered
to the Warrant Agent a certificate or certificates (in such name or names as the
Warrantholder may designate in writing) for the specified number of duly
authorized, fully paid and non-assessable Warrant Shares issuable upon exercise,
and shall deliver to the Warrantholder cash, as provided in Section 11 hereof,
with respect to any Fractional Warrant Shares otherwise issuable upon such
surrender. Upon receipt of such Warrant Shares, the Warrant Agent shall transmit
such Warrant Shares to the Warrantholder, or to such Persons as the
Warrantholder may designate in writing. In the event that the Warrants evidenced
by this Warrant Certificate are exercised in part prior to the Expiration Time,
the Company shall issue and cause to be delivered to the Warrant Agent a
certificate or certificates (in such name or names as the Warrantholder may
designate in writing) evidencing any remaining unexercised Warrants. Upon
receipt of such Warrant Certificate, the Warrant Agent shall countersign and
deliver such Warrant Certificate to the Warrantholder, or to such persons as the
Warrantholder may designate in writing.
(c) Each Person in whose name any certificate for Warrant
Shares is issued shall for all purposes be deemed to have become the holder of
record of the Warrant Shares represented thereby on the first date on which both
the Warrant Certificate evidencing the respective Warrants was surrendered and
payment of the Exercise Price and any applicable taxes was made, irrespective of
date of issue or delivery of such certificate.
Section 5. Payment of Taxes. The Company shall pay any and all
documentary, stamp or similar issue or transfer taxes and other governmental
charges that may be imposed under the laws of the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
any issue or delivery of Warrant Shares or of other securities or property
deliverable upon exercise of the Warrants evidenced by this Warrant Certificate
or certificates representing such shares or securities (other than income taxes
imposed on the Warrantholder); provided that the Company shall not be required
to pay any such tax or other charge that may be imposed in connection with any
transfer involved in the issue of any certificate for Warrant Shares or other
securities or property, or payment of cash, to any Person other than the holder
of the Warrant Certificate surrendered upon exercise, and in case of any such
tax or charge, the Warrant Agent and the Company shall not be required to issue
any security or property or pay any cash until such tax or charge has been paid
or it has been established to the Warrant Agent's and the Company's satisfaction
that no such tax or charge is payable.
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Section 6. Mutilated or Missing Warrant. If any Warrant
Certificate is lost, stolen, mutilated or destroyed, the Company shall issue and
the Warrant Agent shall countersign, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, upon receipt
of a proper affidavit or other evidence reasonably satisfactory to the Company
and the Warrant Agent (and surrender of any mutilated Warrant Certificate) and
bond of indemnity in form and amount and with corporate surety reasonably
satisfactory to the Company and the Warrant Agent in each instance protecting
the Company and the Warrant Agent, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants as the Warrant Certificate so
lost, stolen, mutilated or destroyed. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by anyone. An applicant for such substitute Warrant
Certificate shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company or the Warrant Agent may prescribe.
All Warrant Certificates shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement of lost,
stolen, mutilated or destroyed Warrant Certificates, and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement of negotiable
instruments or other securities without their surrender.
Section 7. Reservation of Shares. The Company hereby agrees
that there shall be reserved for issuance and delivery upon exercise of Warrants
evidenced by this Warrant Certificate, free from preemptive rights, the number
of shares of authorized but unissued shares of Common Stock as shall be required
for issuance or delivery upon exercise of the Warrants evidenced by this Warrant
Certificate. The Company further agrees that it will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company. Without
limiting the generality of the foregoing, the Company agrees that before taking
any action which would cause an adjustment reducing the Exercise Price below the
then-par value of Warrant Shares issuable upon exercise of the Warrants
evidenced hereby, the Company shall from time to time take all such action that
may be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock at the Exercise Price as so
adjusted.
Section 8. Exercise Price. The price per share (the "Exercise
Price") at which Warrant Shares shall be purchasable upon the exercise of the
Warrants evidenced by this Warrant Certificate shall be $17.75, subject to
adjustment pursuant to Section 9 hereof.
Section 9. Adjustment of Exercise Price and Number of Shares.
The number and kind of securities purchasable upon the exercise of the Warrants
evidenced by this Warrant Certificate and the Exercise Price thereof shall be
subject to adjustment from time to time after the date hereof upon the happening
of certain events, as follows:
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9.1. Adjustments to Exercise Price. The Exercise Price shall
be subject to adjustment as follows:
(a) Stock Dividends. In case the Company after the date hereof
shall pay a dividend or make a distribution to all holders of shares of
Common Stock in shares of Common Stock, then in any such case the
Exercise Price in effect at the opening of business on the day
following the record date for the determination of stockholders
entitled to receive such dividend or distribution shall be reduced to a
price obtained by multiplying such Exercise Price by a fraction of
which (x) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such record date and (y) the
denominator shall be the sum of such number of shares of Common Stock
outstanding and the total number of shares of Common Stock constituting
such dividend or distribution, such reduction to become effective
immediately after the opening of business on the day following such
record date. For purposes of this subsection (a), the number of shares
of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company.
(b) Stock Splits and Reverse Splits. In case after the date
hereof outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Exercise Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case after the date hereof outstanding shares of Common
Stock shall be combined into a smaller number of shares of Common
Stock, the Exercise Price in effect at the opening of business on the
day following the day upon which such combination becomes effective
shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(c) Issuances Below Market. In case the Company after the date
hereof shall issue rights or warrants to holders of shares of Common
Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Closing Price per share on the
record date for the determination of stockholders entitled to receive
such rights or warrants, the Exercise Price in effect at the opening of
business on the day following such record date shall be adjusted to a
price obtained by multiplying such Exercise Price by a fraction of
which (x) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such record date plus the
number of shares of Common Stock that the aggregate offering price of
the total number of shares so to be offered would purchase at such
Closing Price and (y) the denominator shall be the number of shares of
Common Stock outstanding at the close of business on such record date
plus the number of additional shares of Common Stock so to be offered
for
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subscription or purchase, such adjustment to become effective
immediately after the opening of business on the day following such
record date; provided, however, that no adjustment shall be made if the
Company issues or distributes to each Warrantholder the rights or
warrants that each Warrantholder would have been entitled to receive
had the Warrants held by such Warrantholder been exercised prior to
such record date; and provided, further, that in no event shall the
fact that the Series B Warrants of the Company became exercisable for
shares of Common Stock upon occurrence of the Shareholder Approval (as
defined in the Investment Agreement) constitute an issuance of rights
or warrants for purposes of this subsection (c). For purposes of this
subsection (c), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any rights or warrants in respect of shares of
Common Stock held in the treasury of the Company. Rights or warrants
issued by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase Equity Securities, which
rights or warrants (i) are deemed to be transferred with such shares of
Common Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of Common Stock, including shares of Common
Stock issued upon exercise of the Warrants evidenced by this Warrant
Certificate, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events (a "Trigger Event"), shall
for purposes of this subsection (c) not be deemed issued until the
occurrence of the earliest Trigger Event.
(d) Special Dividends. In case the Company after the date
hereof shall distribute to all holders of shares of Common Stock
evidences of its indebtedness or assets (excluding any regular periodic
cash dividend), Equity Securities (other than Common Stock) or rights
to subscribe (excluding those referred to in subsection (c) above) for
Equity Securities other than Common Stock, in each such case the
Exercise Price in effect immediately prior to the close of business on
the record date for the determination of stockholders entitled to
receive such distribution shall be adjusted to a price obtained by
multiplying such Exercise Price by a fraction of which (x) the
numerator shall be the Closing Price per share of Common Stock on such
record date, less the then-current fair market value as of such record
date (as determined by the Board of Directors in its good faith
judgment) of the portion of assets or evidences of indebtedness or
Equity Securities or subscription rights so distributed applicable to
one share of Common Stock, and (y) the denominator shall be such
Closing Price, such adjustment to become effective immediately prior to
the opening of business on the day following such record date;
provided, however, that no adjustment shall be made (1) if the Company
issues or distributes to each Warrantholder the subscription rights
referred to above that each Warrantholder would have been entitled to
receive had the Warrants held by such Warrantholder been exercised
prior to such record date or (2) if the Company grants to each
Warrantholder the right to receive, upon the exercise of the Warrants
held by such Warrantholder at any time after the distribution of the
evidences of indebtedness or assets or Equity Securities referred to
above, the evidences of
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54
indebtedness or assets or Equity Securities that such Warrantholder
would have been entitled to receive had such Warrants been exercised
prior to such record date. The Company shall provide any Warrantholder,
upon receipt of a written request therefor, with any indenture or other
instrument defining the rights of the holders of any indebtedness,
assets, subscription rights or Equity Securities referred to in this
subsection (d). Rights or warrants issued by the Company to all holders
of Common Stock entitling the holders thereof to subscribe for or
purchase Equity Securities, which rights or warrants (i) are deemed to
be transferred with such shares of Common Stock, (ii) are not
exercisable and (iii) are also issued in respect of future issuances of
Common Stock, including shares of Common Stock issued upon exercise of
the Warrants evidenced by this Warrant Certificate, in each case in
clauses (i) through (iii) until the occurrence of a Trigger Event,
shall for purposes of this subsection (d) not be deemed issued until
the occurrence of the earliest Trigger Event.
(e) Tender or Exchange Offer. In case a tender or exchange
offer made by the Company or any Subsidiary of the Company for all or
any portion of the Common Stock shall be consummated and such tender
offer shall involve an aggregate consideration having a fair market
value (as determined by the Board of Directors in its good faith
judgment) at the last time (the "Offer Time") tenders may be made
pursuant to such tender or exchange offer (as it may be amended) that,
together with the aggregate of the cash plus the fair market value (as
determined by the Board of Directors in its good faith judgment), as of
the Offer Time, of consideration payable in respect of any tender or
exchange offer by the Company or any such Subsidiary for all or any
portion of the Common Stock consummated preceding the Offer Time and in
respect of which no Exercise Price adjustment pursuant to this
subsection (e) has been made, exceeds 5% of the product of the Closing
Price of the Common Stock at the Offer Time multiplied by the number of
shares of Common Stock outstanding (including any tendered shares) at
the Offer Time, the Exercise Price shall be reduced so that the same
shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the Offer Time by a fraction of which (x)
the numerator shall be (i) the product of the Closing Price of the
Common Stock at the Offer Time multiplied by the number of shares of
Common Stock outstanding (including any tendered shares) at the Offer
Time minus (ii) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered and not withdrawn as of the Offer
Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the denominator shall be
the product of (i) such Closing Price at the Offer Time multiplied by
(ii) such number of outstanding shares at the Offer Time minus the
number of Purchased Shares, such reduction to become effective
immediately prior to the opening of business on the day following the
Offer Time. For purposes of this subsection (e), the number of shares
of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company but shall include
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shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock.
(f) Closing Price Determination. For the purpose of any
computation under subsections (c) and (d) of this Section 9.1, the
Closing Price of Common Stock on any date shall be deemed to be the
average of the Closing Prices for the five consecutive Trading Days
ending not later than the day in question and commencing on a day
selected at random in good faith by the Company which is not more than
20 Trading Days before the day in question, provided, however, that (i)
if the "ex" date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Exercise
Price pursuant to this Section 9 occurs on or after the 20th Trading
Day prior to the day in question and prior to the "ex" date for the
issuance or distribution requiring such computation, the Closing Price
for each Trading Day prior to the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the same fraction
which the Exercise Price is so required to be adjusted as a result of
such other event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the Exercise Price pursuant to this Section 9 occurs on
or after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the Exercise Price is so required to be
adjusted as a result of such other event, and (iii) if the "ex" date
for the issuance or distribution requiring such computation is on or
prior to the day in question, after taking into account any adjustment
required pursuant to clause (ii) of this proviso, the Closing Price for
each Trading Day on or after such "ex" date shall be adjusted by adding
thereto the fair market value on the day in question (as determined by
the Board of Directors in a manner consistent with any determination of
such value for the purposes of subsection (d) of this Section 9.1) of
the assets, evidences of indebtedness, Equity Securities or
subscription rights being distributed applicable to one share of Common
Stock as of the close of business on the day before such "ex" date. For
the purposes of any computation under subsection (e) of this Section
9.1, the Closing Price on any date shall be deemed to be the average of
the daily Closing Prices for the five consecutive Trading Days ending
not later than the Offer Time of such tender or exchange offer and
commencing on a day selected at random in good faith by the Company
which date shall be on or after the latest (the "Commencement Date") of
(i) the date 20 Trading Days before the date in question, (ii) the date
of commencement of the tender or exchange offer requiring such
computation and (iii) the date of the last amendment, if any, of such
tender or exchange offer involving a change in the maximum number of
shares for which tenders are sought or a change in the consideration
offered; provided, however, that if the "ex" date for any event (other
than the tender or exchange offer requiring such computation) that
requires an adjustment to the Exercise Price pursuant to this Section 9
occurs on or after the Commencement Date and prior to the Offer Time
for the tender or exchange offer requiring such computation, the
Closing Price for each Trading Day prior to the "ex" date
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for such other event shall be adjusted by multiplying such Closing
Price by the same fraction by which the Exercise Price is so required
to be adjusted as a result of such other event. For purposes of this
subsection (f), the term "ex" date, (i) when used with respect to any
issuance or distribution, means the first date on which the Common
Stock trades regular way on Nasdaq or on the relevant exchange or in
the relevant market from which the Closing Price was obtained without
the right to receive such issuance or distribution, (ii) when used with
respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades regular way on
Nasdaq or such exchange or in such market after the time at which such
subdivision or combination becomes effective, and (iii) when used with
respect to any tender or exchange offer means the first date on which
the Common Stock trades regular way on Nasdaq or such exchange or in
such market after the Offer Time of such tender or exchange offer.
(g) Minimum Adjustment Requirement. No adjustment shall be
required unless such adjustment would result in an increase or decrease
of at least $0.01 in the Exercise Price then subject to adjustment;
provided, however, that any adjustments that are not made by reason of
this subsection (g) shall be carried forward and taken into account in
any subsequent adjustment. In case the Company shall at any time issue
shares of Common Stock by way of dividend on any stock of the Company
or subdivide or combine the outstanding shares of Common Stock, said
amount of $0.01 specified in the preceding sentence (as theretofore
increased or decreased, if said amount shall have been adjusted in
accordance with the provisions of this subsection (g)) shall forthwith
be proportionately increased in the case of such a combination or
decreased in the case of such a subdivision or stock dividend so as
appropriately to reflect the same.
(h) Calculations. All calculations under this Section 9.1
shall be made to the nearest $0.01.
(i) Certificate. Whenever an adjustment in the Exercise Price
is made as required or permitted by the provisions of this Section 9.1,
the Company shall promptly file with the Warrant Agent a certificate of
its chief financial officer setting forth (A) the adjusted Exercise
Price as provided in this Section 9.1 and a brief statement of the
facts requiring such adjustment and the computation thereof and (B) the
number of shares of Common Stock (or portions thereof) purchasable upon
exercise of a Warrant after such adjustment in the Exercise Price in
accordance with Section 9.2 hereof and the record date therefor, and
promptly after such filing shall mail or cause to be mailed a notice of
such adjustment to each Warrantholder at his or her last address as the
same appears on the Warrant Register. Such certificate, in the absence
of manifest error, shall be conclusive and final evidence of the
correctness of such adjustment. The Warrant Agent shall be entitled to
rely upon such certificate, and shall be under no duty or
responsibility with respect to any such certificate except to exhibit
the same to any Warrantholder desiring inspection thereof.
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(j) Notice. In case:
(a) the Company shall declare any dividend or any
distribution of any kind or character (whether in cash,
securities or other property) on or in respect of shares of
Common Stock or to the stockholders of the Company (in their
capacity as such), excluding any regular periodic cash
dividend paid out of current or retained earnings (as such
terms are used in generally accepted accounting principles);
or
(b) the Company shall authorize the granting to the
holders of shares of Common Stock of rights to subscribe for
or purchase any shares of capital stock or of any other right;
or
(c) of any reclassification of shares of Common Stock
(other than a subdivision or combination of outstanding shares
of Common Stock), or of any consolidation or merger to which
the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be filed with the Warrant Agent and shall mail
or cause to be mailed to the Warrantholders, at their last addresses as they
shall appear upon the Warrant Register, at least 30 days prior to the applicable
record date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution or rights
or, if a record is not to be taken, the date as of which the holders of shares
of Common Stock of record to be entitled to such dividend, distribution or
rights are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and, if applicable, the date as of which it is
expected that holders of shares of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
(including cash) deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up. Failure to give any such
notice, or any defect therein, shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.
(k) Section 305. Anything in this Section 9.1 to the contrary
notwithstanding, the Company shall be entitled, but not required, to
make such reductions in the Exercise Price, in addition to those
required by this Section 9.1, as it in its discretion shall determine
to be advisable, including, without limitation, in order that any
dividend in or distribution of shares of Common Stock or shares of
capital stock of any class other than Common Stock, subdivision,
reclassification or combination of shares of Common Stock, issuance of
rights or warrants, or any other transaction having a similar effect,
shall not be
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58
treated as a distribution of property by the Company to its
stockholders under Section 305 of the Internal Revenue Code of 1986, as
amended, or any successor provision and shall not be taxable to them.
(l) No Adjustment. Anything to the contrary herein
notwithstanding, no adjustment to the Exercise Price or the number of
shares of Common Stock purchasable upon exercise of a Warrant shall be
made pursuant to this Section 9.1 or Section 9.2 hereof as a result of,
or in connection with, the issuance of options or rights to purchase
Common Stock issued to employees of the Company or its Subsidiaries
pursuant to a stock option or other similar plan adopted by the Board
of Directors or an employment agreement approved by the Board of
Directors, or the modification, renewal or extension of any such plan
or agreement if approved by the Board of Directors.
(m) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for purposes of taking any
action that requires an adjustment of the Exercise Price under this
Section 9, and shall, thereafter and before the effective date of such
action, legally abandon its plan to take such action, then thereafter
no adjustment shall be required by reason of the taking of such record
and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
9.2. Adjustment to Number of Warrant Shares. Upon each
adjustment of the Exercise Price pursuant to Section 9.1 hereof the number of
Warrant Shares purchasable upon exercise of a Warrant outstanding prior to the
effectiveness of such adjustment shall be adjusted to the number, calculated to
the nearest one-hundredth of a share, obtained by (x) multiplying the number of
Warrant Shares purchasable immediately prior to such adjustment upon the
exercise of a Warrant by the Exercise Price in effect prior to such adjustment
and (y) dividing the product so obtained by the Exercise Price in effect after
such adjustment of the Exercise Price.
9.3. Organic Change.
(a) Company Survives. Upon the consummation of an Organic
Change (other than a transaction in which the Company is not the surviving
entity), lawful provision shall be made as part of the terms of such transaction
whereby the terms of the Warrant Certificates shall be modified, without payment
of any additional consideration therefor, so as to provide that upon exercise of
Warrants following the consummation of such Organic Change, the Warrantholders
of such Warrants shall have the right to purchase only the kind and amount of
securities, cash and other property receivable upon such Organic Change by a
holder of the number of Warrant Shares into which such Warrants might have been
exercised immediately prior to such Organic Change, assuming such holder of
Warrant Shares (i) is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which a sale,
transfer or lease of all or substantially all of the assets of the Company was
made, as the case may be (a "Constituent Person"), or an Affiliate of a
Constituent Person, and (ii) failed to exercise his rights of election, if any,
as to the kind and amount of securities, cash and other property receivable upon
such Organic Change (provided that if the kind and amount of securities, cash
and other
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59
property receivable upon such Organic Change is not the same for each share of
Common Stock held immediately prior to such Organic Change by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing shares"), then for the
purpose of this subsection (a) the kind and amount of securities, cash and other
property receivable upon such Organic Change by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares); provided, however, that no adjustment shall be made as a
result of such Organic Change to the Exercise Price or the number of Warrant
Shares notwithstanding any provision of Section 9 hereof unless any event
requiring any such adjustment shall have occurred or shall occur prior to, upon
or after such Organic Change. Lawful provision also shall be made as part of the
terms of the Organic Change so that all other terms of the Warrant Certificates
shall remain in full force and effect following such an Organic Change. The
provisions of this Section 9.3(a) shall similarly apply to successive Organic
Changes.
(b) Company Does Not Survive. The Company shall not enter into
an Organic Change that is a transaction in which the Company is not the
surviving entity unless lawful provision shall be made as part of the terms of
such transaction whereby the surviving entity shall issue new securities to each
Warrantholder, without payment of any additional consideration therefor, with
terms that provide that upon the exercise of the Warrants, the Warrantholders of
such Warrants shall have the right to purchase only the kind and amount of
securities, cash and other property receivable upon such Organic Change by a
holder of the number of Warrant Shares into which such Warrants might have been
exercised immediately prior to such Organic Change, assuming such holder of
Warrant Shares (i) is not a Constituent Person or an Affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to the
kind and amount of securities, cash and other property receivable upon such
Organic Change (provided that if the kind and amount of securities, cash and
other property receivable upon such Organic Change is not the same for each
non-electing share, then for the purpose of this subsection (b) the kind and
amount of securities, cash and other property receivable upon such Organic
Change by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares); provided,
however, that no adjustment shall be made as a result of such Organic Change to
the Exercise Price or the number of Warrant Shares notwithstanding any provision
of Section 9 hereof unless any event requiring any such adjustment shall have
occurred or shall occur prior to, upon or after such Organic Change. The
certificate or articles of incorporation or other constituent document of the
surviving entity shall provide for such adjustments which, for events subsequent
to the effective date of such certificate or articles of incorporation or other
constituent document, shall be equivalent to the adjustments provided for in
Section 9.1 hereof.
9.4. Statement on Warrants. The form of Warrant Certificate
need not be changed because of any adjustment made pursuant to Section 9.1 or
Section 9.2
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hereof, and Warrants issued after such adjustment may state the same Exercise
Price and the same number of Warrant Shares as are stated in this Warrant
Certificate.
Section 10. Warrant Agent. The Company shall cause to be
appointed in the Borough of Manhattan, The City of New York, a Warrant Agent,
having a capital and surplus of at least $50,000,000. Initially, ChaseMellon
Shareholder Services, L.L.C., will act as Warrant Agent.
Section 11. Fractional Interests. The Company shall not be
required to issue Fractional Warrant Shares on the exercise of the Warrants
evidenced by this Warrant Certificate. If any Fractional Warrant Share would,
but for the provisions of this Section 11, be issuable on the exercise of the
Warrants evidenced by this Warrant Certificate (or specified portions thereof),
the Company shall pay an amount in cash equal to the fraction of a Warrant Share
represented by such Fractional Warrant Share multiplied by the Closing Price on
the day of such exercise.
Section 12. No Rights as Shareholder. Nothing in this Warrant
Certificate shall be construed as conferring upon the Warrantholder or its
transferees any rights as a shareholder of the Company, including the right to
vote, receive dividends, consent or receive notices as a shareholder with
respect to any meeting of shareholders for the election of directors of the
Company or any other matter.
Section 13. Successors. All the covenants and provisions of
this Warrant Certificate by or for the benefit of the Company or the
Warrantholder shall bind and inure to the benefit of their respective successors
and permitted assigns hereunder.
Section 14. Governing Law; Choice of Forum, Etc. The validity,
construction and performance of this Warrant Certificate shall be governed by,
and interpreted in accordance with, the laws of New York without reference to
its conflict of laws rules. The Company and the Warrantholders (the "parties
hereto") agree that the appropriate and exclusive forum for any disputes arising
out of this Warrant Certificate solely between or among any or all of the
Company, on the one hand, and the Investor and/or any Person who has become a
Warrantholder, on the other, shall be the United States District Court for the
Southern District of New York, and, if such court will not hear any such suit,
the courts of the state of the Company's incorporation, and the parties hereto
irrevocably consent to the exclusive jurisdiction of such courts, and agree to
comply with all requirements necessary to give such courts jurisdiction. The
parties hereto further agree that the parties will not bring suit with respect
to any disputes, except as expressly set forth below, arising out of this
Warrant Certificate for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, if to (i) the Company, at 00 Xxxxxx Xxxxxxxx, Xxxxxxxx,XX
00000, Attention: General Counsel, or at such other address specified by the
Company in writing to the Warrant Agent, and (ii) any Warrantholder, at the
address of such Warrantholder specified in the Warrant Register.
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The foregoing shall not limit the rights of any party hereto to serve process in
any other manner permitted by the law or to obtain execution of judgment in any
other jurisdiction. The parties further agree, to the extent permitted by law,
that final and unappealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. The parties agree to waive any and all
rights that they may have to a jury trial with respect to disputes arising out
of this Warrant Certificate.
Section 15. Benefits of this Warrant Certificate. Nothing in
this Warrant Certificate shall be construed to give to any Person other than the
Company and the Warrantholder any legal or equitable right, remedy or claim
under this Warrant Certificate, and this Warrant Certificate shall be for the
sole and exclusive benefit of the Company and the Warrantholder. This Warrant
Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Warrant Agent.
Section 16. Other Obligations. The parties hereby acknowledge
that, pursuant to the Warrant Agreement, nothing in the Warrant Agreement shall
permit the Company or the Warrant Agent to authorize or take action that alters
or reduces the rights of the Existing Holders (as defined in the Warrant
Agreement) under the Investment Agreement or the Warrants. In the event of any
inconsistency between the provisions of the Warrant Agreement, on the one hand,
and this Warrant Certificate, on the other hand, the provisions of this Warrant
Certificate shall control. With respect to Existing Holders, in the case of any
inconsistency between the provisions of the Warrant Agreement, on the one hand,
and the Investment Agreement, on the other hand, the provisions of the
Investment Agreement shall control to the extent applicable, except that Section
2.4 of the Warrant Agreement supersedes Section 8.10 of the Investment
Agreement, and Section 6.4(a) of the Warrant Agreement supersedes Section 10 of
Exhibit D to the Investment Agreement.
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62
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, as of this __ day of __________________,
_____________________.
OXFORD HEALTH PLANS, INC.
By:______________________
Name:
Title:
Attest:
______________________
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C. , as Warrant Agent
By:______________________
Name:
Title:
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63
ELECTION TO EXERCISE
(To be executed upon exercise of Warrants)
To OXFORD HEALTH PLANS, INC.:
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the within Warrant Certificate for, and to
purchase thereunder, ____________ Warrant Shares, as provided for therein, and
tenders herewith payment of the purchase price in full in the form of [COMPLETE
WHERE APPLICABLE]:
[ ] cash or a certified or official bank check in the amount of
$__________; and/or
[ ] $__________ Stated Value of Senior Preferred Stock (as to
which $__________ of accumulated dividends are unpaid), of
which $____________ Stated Value and the corresponding
accumulated dividends should be applied toward the payment of
such Warrant Shares; and/or
[ ] ___________ aggregate principal amount of Debentures (as to
which $__________ of accrued interest is unpaid), of which
$________ aggregate principal amount and the corresponding
accrued interest should be applied toward the payment of such
Warrant Shares; and/or
[ ] _______ number of Warrants, valued at $__________ each (such
value arrived at by subtracting the Exercise Price of
$__________ from the Warrant Market Price of $__________, both
the Exercise Price and Warrant Market Price determined in
accordance with the provisions of the Warrant Certificate);
For a total purchase price of $__________.
If the Stated Value and accumulated and unpaid dividends of
the shares of Senior Preferred Stock, the principal amount of an accrued and
unpaid interest on the Debentures or the value of the Warrants evidenced by the
Warrant Certificate delivered herewith exceeds that portion of the payment which
is to be paid by the surrender of such shares, Debentures or Warrants, you are
authorized, as agent of the undersigned, to deliver to the Company such shares,
Debentures or Warrant Certificate delivered herewith for exchange into smaller
denominations in order that you may deliver to the undersigned new shares of
Senior Preferred Stock, new Debentures or Warrant Certificates, in Stated Value,
principal amount or number as the case may be, equal to the difference between
the Stated Value, principal amount or number as the case may be, of the Senior
Preferred Stock, Debentures or Warrants surrendered, less the Stated Value,
principal amount or number as the case may be, thereof, used to purchase Warrant
Shares.
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Please issue a certificate or certificates for such Warrant Shares in the name
of, and pay any cash for any Fractional Warrant Shares to (please print name
address and social security or other identifying number)*:
Name: _________________________________________________________________________
Address: ______________________________________________________________________
Soc. Sec. #: __________________________________________________________________
AND, if said number of Warrant 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 the undersigned for the balance remaining of the Warrant Shares
purchasable thereunder rounded up to the next higher whole number of Warrant
Shares.
Signature:** ________________________________
__________
* The Warrant Certificate and the Investment Agreement contain restrictions on
the sale and other transfer of the Warrants evidenced by such Warrant
Certificate.
** The above signature should correspond exactly with the name on the face of
this Warrant Certificate or with the name of the assignee appearing in the
assignment form below.
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65
ASSIGNMENT FORM
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
_______________________________________________________________________________
_______________________________________________________________________________
(Name and Address of Assignee must be Printed or Typewritten)
Warrants to purchase ______ Warrant Shares of the Company, evidenced by the
within Warrant Certificate hereby irrevocably constituting and appointing _____
_________________ Attorney to transfer said Warrants on the books of the
Company, with full power of substitution in the premises.
Dated: ________________ ,_______
______________________________
Signature of Registered Holder*
Signature Guaranteed: ______________________________
Signature of Guarantor
_____________________________
__________
* The above signature should correspond exactly with the name on the face of
this Warrant Certificate.
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