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EXHIBIT 10.5
WARRANT
TO PURCHASE COMMON STOCK OF
ARV ASSISTED LIVING, INC.
No. of Shares of Common Stock: 750,000
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TABLE OF CONTENTS
SECTION PAGE
1. DEFINITIONS...........................................................2
2. EXERCISE OF WARRANT...................................................5
2.1. Manner of Exercise...........................................5
2.2. Payment of Taxes.............................................7
2.3. Fractional Shares............................................7
2.4. Continued Validity...........................................7
2.5. Payment in Lieu of Shares....................................7
3. TRANSFER, DIVISION AND COMBINATION....................................9
3.1. Transfer.....................................................9
3.2. Division and Combination.....................................9
3.3. Expenses.....................................................9
3.4. Maintenance of Books.........................................9
4. ADJUSTMENTS...........................................................9
4.1. Stock Dividends, Subdivisions and Combinations...............9
4.2. Certain Other Distributions.................................10
4.3. Issuance of Additional Shares of Common Stock...............11
4.4. Issuance of Warrants or Other Rights........................12
4.5. Issuance of Convertible Securities..........................13
4.6. Superseding Adjustment......................................13
4.7. Other Provisions Applicable to Adjustments under
this Section................................................14
4.8. Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets....................................16
4.9. Other Action Affecting Common Stock.........................17
4.10. Certain Limitations.........................................17
5. NOTICES TO WARRANT HOLDERS...........................................17
5.1. Notice of Adjustments.......................................17
5.2. Notice of Corporate Action..................................18
6. NO IMPAIRMENT........................................................18
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH
OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY............................19
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TABLE OF CONTENTS
(CONTINUED)
SECTION PAGE
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS...................19
9. RESTRICTIONS ON TRANSFERABILITY......................................19
9.1. Restrictive Legend..........................................20
9.2. Notice of Proposed Transfers; Requests for Registration.....20
9.3. Required Registration.......................................21
9.4. Incidental Registration.....................................21
9.5. Registration Procedures.....................................22
9.6. Expenses....................................................24
9.7. Indemnification and Contribution............................24
9.8. 25
9.9. Termination of Restrictions.................................25
9.10. Listing on Securities Exchange..............................26
9.11. Certain Limitations on Registration Rights..................26
9.12. Selection of Managing Underwriters..........................26
10. SUPPLYING INFORMATION................................................26
11. LOSS OR MUTILATION...................................................26
12. OFFICE OF COMPANY....................................................27
13. Filings..............................................................27
14. limitation of liability..............................................27
15. MISCELLANEOUS........................................................27
15.1. Nonwaiver and Expenses......................................27
15.2. Notice Generally............................................27
15.3. No Stockholder Rights.......................................28
15.4. Indemnification.............................................28
15.5. Remedies....................................................29
15.6. Successors and Assigns......................................29
15.7. Amendment...................................................29
15.8. Severability................................................29
15.9. Headings....................................................29
15.10. Governing Law...............................................29
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TABLE OF CONTENTS
(CONTINUED)
SECTION PAGE
EXHIBIT A SUBSCRIPTION FORM...................................................31
EXHIBIT B ASSIGNMENT FORM.....................................................32
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THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF
THIS WARRANT.
No. of Shares of Common Stock: 750,000
WARRANT
To Purchase Common Stock of
ARV ASSISTED LIVING, INC.
THIS IS TO CERTIFY THAT LFSRI II Assisted Living LLC, or registered
assigns, is entitled, at any time prior to the Expiration Date (as hereinafter
defined), to purchase from ARV ASSISTED LIVING, INC., a Delaware corporation
("Company"), 750,000 shares (or such lesser number of shares as determined
pursuant to Section 2.1) of Common Stock (as hereinafter defined and subject to
adjustment as provided herein), in whole or in part, including fractional parts,
at a purchase price of $3.00 per share, all on the terms and conditions and
pursuant to the provisions hereinafter set forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of Common
Stock issued by Company after the Closing Date, other than Warrant Stock.
"Affiliate" has the meaning ascribed thereto in Rule 12b-2
promulgated under the Exchange Act, and as in effect on the date hereof.
"Business Day" shall mean any day that is not a Saturday or Sunday
or a day on which banks are required or permitted to be closed in the State of
New York or in the State of California.
"Closing Date" shall have the meaning set forth in the Loan
Agreement.
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the common stock, $.01 par value, of Company as constituted on the
Closing Date, and any capital stock into which such common stock may thereafter
be changed,
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and shall also include (i) capital stock of Company of any other class
(regardless of how denominated) issued to the holders of shares of common stock
upon any reclassification thereof which is also not preferred as to dividends or
assets over any other class of stock of Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation (as defined in Section 4.8) received by or distributed to the
holders of common stock of Company in the circumstances contemplated by Section
4.8.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property, for
Additional Shares of Common Stock, either immediately or upon the occurrence of
a specified date or a specified event.
"Current Market Price" shall mean, in respect of any share of
Common Stock on any date herein specified, the average of the daily market
prices for 30 consecutive Business Days commencing 45 days before such date. The
daily market price for each such Business Day shall be (i) the last sale price
on such day on the principal stock exchange or NASDAQ Stock Market ("NASDAQ") on
which such Common Stock is then listed or admitted to trading, (ii) if no sale
takes place on such day on any such exchange or NASDAQ, the average of the last
reported closing bid and asked prices on such day as officially quoted on any
such exchange or NASDAQ, (iii) if the Common Stock is not then listed or
admitted to trading on any stock exchange or NASDAQ, the average of the last
reported closing bid and asked prices on such day in the over-the-counter
market, as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the NASD selected mutually by the
Majority Holders and Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by the
Majority Holders and one of which shall be selected by Company.
"Current Warrant Price" shall mean, in respect of a share of Common
Stock at any date herein specified, the price at which a share of Common Stock
may be purchased pursuant to this Warrant on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Exercise Period" shall mean the period during which this Warrant
is exercisable pursuant to Section 2.1.
"Expiration Date" shall mean April 24, 2005.
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"Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock Outstanding at such date and all shares
of Common Stock issuable in respect of this Warrant, and other options or
warrants to purchase, or securities convertible into, shares of Common Stock
outstanding on such date which would be deemed outstanding in accordance with
GAAP for purposes of determining book value or net income per share.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
"Holder" shall mean the Person in whose name the Warrant set forth
herein is registered on the books of Company maintained for such purpose.
"Loan Agreement" shall mean the Term Loan Agreement dated as of
April 24, 2000 by and between Company and LFSRI II Assisted Living LLC, or any
successor agreement between such parties.
"Majority Holders" shall mean the holders of Warrants exercisable
for in excess of 50% of the aggregate number of shares of Common Stock then
purchasable upon exercise of all Warrants, whether or not then exercisable.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"Notes" shall have the meaning set forth in Section 2.1.
"Other Property" shall have the meaning set forth in Section 4.8.
"Outstanding" shall mean, when used with reference to Common Stock,
at any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of Company or any subsidiary thereof, and shall include all shares
issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.
"Permitted Issuances" shall mean (i) the issuance of stock options
or other securities or rights pursuant to a stock option, stock purchase, equity
incentive, or similar plan or related agreement approved by Company's Board of
Directors or a committee thereof, (ii) the issuance of stock options or other
securities or rights to a director, officer, employee or consultant of Company
as approved by Company's Board of Directors or a committee thereof, (iii) the
issuance of securities upon the exercise of any stock options or other
securities or rights referred to in clause (i) or clause (ii), (iv) the issuance
of Common Stock in exchange for all or part of the principal amount of any of
Company's 6 3/4% Convertible Subordinated Notes Due 2006 (the "Convertible
Notes"), and (v) the issuance of securities upon the conversion of all or part
of the Convertible Notes.
"Person" shall mean any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association,
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corporation, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).
"Restricted Common Stock" shall mean shares of Common Stock which
are, or which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in Section
9.1(a).
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Settlement Agreement" shall mean that certain Settlement
Agreement, dated as of September 29, 1999, among the Company, Prometheus
Assisted Living LLC, Lazard Freres Real Estate Investors L.L.C., LF Strategic
Realty Investors II L.P., LFSRI II Alternative Partnership L.P., LFSRI II-CADIM
Alternative Partnership L.P., Atria Communities, Inc., and Kapson Senior
Quarters Corp.
"Transfer" shall mean any disposition of any Warrant or Warrant
Stock or of any interest in either thereof, which would constitute a sale
thereof within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning set forth in Section 9.2.
"Warrants" shall mean this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, any thereof. All
Warrants shall at all times be identical as to terms and conditions and date,
except as to the number of shares of Common Stock for which they may be
exercised.
"Warrant Price" shall mean an amount equal to (i) the number of
shares of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date of such
exercise.
"Warrant Stock" shall mean the shares of Common Stock issuable to
the Holder upon the exercise of the Warrant.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise. From and after the Closing Date and until 5:00
P.M., New York time, on the Expiration Date, Holder may exercise this Warrant,
on any Business Day, for all or any part of the number of shares of Common Stock
purchasable hereunder at the time of such exercise. In the event that Company
does not borrow an aggregate of $10,000,000 under the Loan Agreement, the number
of shares of Common Stock for which this Warrant shall be exercisable will, at
any time, be equal to (x) 75,000 shares of Common Stock, as such number may be
adjusted pursuant to Section 4 (such adjustment in Section 4 to be calculated
assuming that the number of shares of Common Stock for which this Warrant is
exercisable on the Closing Date is 75,000 shares)
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multiplied by (y) the aggregate amount of borrowings made under the Loan
Agreement at such time divided by $1,000,000.
In order to exercise this Warrant, in whole or in part, Holder
shall deliver to Company at its principal office at 000 Xxxxxxx Xxxxxx, Xxxxx
X-0, Xxxxx Xxxx, Xxxxxxxxxx 00000 or at the office or agency designated by
Company pursuant to Section 12, (i) a written notice of Xxxxxx's election to
exercise this Warrant, which notice shall specify the number of shares of Common
Stock to be purchased, (ii) payment of the Warrant Price and (iii) this Warrant.
Such notice shall be substantially in the form of the subscription form
appearing at the end of this Warrant as Exhibit A, duly executed by Holder or
its agent or attorney. Upon receipt thereof, Company shall, as promptly as
practicable, and in any event within five (5) Business Days thereafter, execute
or cause to be executed and deliver or cause to be delivered to Holder a
certificate or certificates representing the aggregate number of full shares of
Common Stock issuable upon such exercise, together with cash in lieu of any
fraction of a share, as hereinafter provided. The stock certificate or
certificates so delivered shall be, to the extent possible, in such denomination
or denominations as such Holder shall request in the notice and shall be
registered in the name of Holder or, subject to Section 9, such other name as
shall be designated in the notice. This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have been
issued, and Holder or, subject to Section 9, any other Person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the notice, together with the cash or
check or checks and this Warrant, is received by Company as described above and
all taxes required to be paid by Holder, if any, pursuant to Section 2.2 prior
to the issuance of such shares have been paid. If this Warrant shall have been
exercised in part, Company shall, at the time of delivery of the certificate or
certificates representing Warrant Stock, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant, or, at the request of Holder, appropriate
notation may be made on this Warrant and the same returned to Holder.
Notwithstanding any provision herein to the contrary, Company shall not be
required to register shares in the name of any Person who acquired this Warrant
(or part hereof) or any Warrant Stock otherwise than in accordance with this
Warrant.
Payment of the Warrant Price shall be made at the option of the
Holder by (i) certified or official bank check, (ii) by the surrender of one or
more of the notes (collectively, the "Notes") issued by Company and evidencing
the loans made pursuant to the Loan Agreement, (iii) by the Holder's surrender
to Company of that number of shares of Common Stock having an aggregate Current
Market Price equal to the Current Warrant Price for Shares of Common Stock then
being purchased, (iv) a written notice to Company that Holder is exercising the
Warrant (or a portion thereof) by authorizing Company to withhold from issuance
a number of shares of Common Stock issuable upon such exercise of the Warrant
which when multiplied by the Current Market Price of the Common Stock is equal
to the Warrant Price (and such withheld shares of Common Stock shall no longer
be issuable under this Warrant), or (v) any combination thereof, duly endorsed
by or accompanied by appropriate instruments of transfer duly executed by Xxxxxx
or by Xxxxxx's attorney duly authorized in writing. For the purposes of making
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payment of the Warrant Price, the Notes shall have a value equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon to the date of
surrender in respect of payment of the Warrant Price. If a Holder surrenders
Notes having an aggregate value which exceeds the aggregate Warrant Price,
Company shall, at its option, pay the Holder an amount in cash equal to all or
part of such excess (if any) over the Warrant Price and/or issue a new Note in
the principal amount equal to that portion of such surrendered principal amount
not applied to the Warrant Price or paid in cash to the Holder. If the Holder
surrenders the Notes, the Holder shall specify the portion of the value of each
such Note surrendered to be applied toward the Warrant Price. Notwithstanding
any provision of the Loan Agreement, no payment or issuance of a Note pursuant
to this Section 2.1 or any other provision of this Warrant shall constitute a
prepayment requiring Company to pay a prepayment premium.
2.2. Payment of Taxes. All shares of Common Stock issued upon the exercise
of this Warrant against payment of the Warrant Price pursuant to the terms
hereof shall be validly issued, fully paid and nonassessable and without any
preemptive rights. Company shall pay all expenses in connection with, and all
taxes and other governmental charges (other than those on or measured by the
income of Holder) that may be imposed with respect to, the issue or delivery
thereof. Company shall not be required, however, to pay any tax or other charge
imposed in connection with any transfer involved in the issue of any certificate
for shares of Common Stock issuable upon exercise of this Warrant in any name
other than that of Holder, and in such case Company shall not be required to
issue or deliver any stock certificate until such tax or other charge has been
paid or it has been established to the satisfaction of Company that no such tax
or other charge is due.
2.3. Fractional Shares. Company shall not be required to issue a fractional
share of Common Stock upon exercise of any Warrant. As to any fraction of a
share which the Holder of one or more Warrants would otherwise be entitled to
purchase upon such exercise, Company shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of (x) the Current Market
Price per share of Common Stock on the date of exercise, if there is a public
market for the Common Stock, or (y) the fair market value per share of Common
Stock on the date of exercise as determined by the Board of Directors of
Company, if there is no public market for the Common Stock.
2.4. Continued Validity. A holder of shares of Common Stock issued upon the
exercise of this Warrant, in whole or in part (other than a holder who acquires
such shares after the same have been publicly sold pursuant to a registration
statement under the Securities Act or sold pursuant to Rule 144 thereunder),
shall continue to be entitled with respect to such shares to all rights to which
it would have been entitled as Holder under Sections 9, 10 and 14 of this
Warrant.
2.5. Payment in Lieu of Shares.
(a) As used in this Section 2.5: (i) "Triggering Percentage" means, at
any time, the lowest percentage of Aggregate Beneficial Ownership that would
result in (A) a "Trigger Event" as defined in the Rights Agreement dated as of
May 14, 1998 between Company and ChaseMellon Shareholder Services, L.L.C. as
amended and in effect on the
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date hereof (the "Rights Agreement") or (B) any "Change of Control" (or similar
term) as defined in the Loan Agreement, the indenture for the Convertible Notes,
or any lease, credit, employment or other agreement to which Company or a
subsidiary of Company is a party as of the date of this Agreement, the
occurrence of which would require Company or a subsidiary of Company to make any
payment to any other Person or otherwise materially and adversely affect Company
or a subsidiary of Company, (ii) "Adjustment Number" means, at any time, a
number of shares of Common Stock which, if subtracted from the number of shares
of Common Stock for which this Warrant, but for the provisions of this Section
2.5, otherwise would be exercisable at such time, would cause the Aggregate
Beneficial Ownership to be an amount equal to the Triggering Percentage at such
time, minus one-tenth of one percent (.10%), and (iii) "Aggregate Beneficial
Ownership" means the aggregate beneficial ownership of shares of Common Stock by
Holder and all Affiliates and Associates (as such terms are defined in the
Rights Agreement).
(b) Notwithstanding any other provision of this Agreement, if at any
time the Aggregate Beneficial Ownership, but for the provisions of this Section
2.5, would otherwise equal or exceed the Triggering Percentage, then (i) the
number of shares of Common Stock for which this Warrant is exercisable shall be
a number equal to (A) the number of shares of Common Stock for which this
Warrant, but for the provisions of this Section 2.5, would otherwise then be
exercisable minus (B) the Adjustment Number at such time and (ii) in addition,
Holder shall have a right (the "Cash Right"), which may be exercised in whole or
in part, to receive immediately available funds from Company in an amount equal
to the Adjustment Number at such time (or such portion of such number exercised
by Holder) multiplied by the closing price of Common Stock on the date of such
exercise, which right may otherwise be exercised upon the same terms and
conditions, and shall be subject to the same Section 4 adjustments, as the right
to exercise this Warrant to purchase shares of Common Stock.
(c) If, at any time after an adjustment pursuant to this Section 2.5
in the number of shares of Common Stock for which this Warrant is exercisable,
the Aggregate Beneficial Ownership becomes less than the Triggering Percentage
minus one-tenth of one percent (.10%), then the adjustment and the Cash Right
pursuant to this Section 2.5 shall be recalculated based on the Adjustment
Number at such time effective immediately after such time.
Any adjustment made pursuant to this Section 2.5 to the number of
shares of Common Stock or Cash Right for which this Warrant may be exercised
shall be effective immediately prior to the occurrence that would have caused
the Holder's Aggregate Beneficial Ownership to equal or exceed the Triggering
Percentage.
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3. TRANSFER, DIVISION AND COMBINATION
3.1. Transfer. Subject to compliance with Section 9, transfer of this
Warrant and all rights hereunder, in whole or in part, shall be registered on
the books of Company to be maintained for such purpose, upon surrender of this
Warrant at the principal office of Company referred to in Section 2.1 or the
office or agency designated by Company pursuant to Section 12, together with a
written assignment of this Warrant substantially in the form of Exhibit B hereto
duly executed by Holder or its agent or attorney together with funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, Company shall, subject to Section 9,
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. A
Warrant, if properly assigned in compliance with Section 9, may be exercised by
a new Holder for the purchase of shares of Common Stock without having a new
Warrant issued.
3.2. Division and Combination. Subject to Section 9, this Warrant may be
divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of Company, together with a written notice specifying
the names and denominations in which new Warrants are to be issued, signed by
Holder or its agent or attorney. Subject to compliance with Section 3.1 and with
Section 9, as to any transfer which may be involved in such division or
combination, Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
3.3. Expenses. Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 3.
3.4. Maintenance of Books. Company agrees to maintain, at its aforesaid
office or agency, books for the registration and the registration of transfer of
the Warrants.
4. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise of
this Warrant, shall be subject to adjustment from time to time as set forth in
this Section 4. Company shall promptly, but in any event within 3 Business Days,
after the happening of any event described below which requires an adjustment
pursuant to this Section 4 give each Holder notice of such event.
4.1. Stock Dividends, Subdivisions and Combinations. If at any time
Company shall:
(a) take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend payable in, or other distribution of,
Additional Shares of Common Stock,
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(b) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.
4.2. Certain Other Distributions. If at any time Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of:
(a) cash,
(b) any evidences of its indebtedness, any shares of its stock or any
other securities or property of any nature whatsoever (other than cash,
Convertible Securities or Additional Shares of Common Stock), or
(c) any warrants or other rights to subscribe for or purchase any
evidences of its indebtedness, any shares of its stock or any other securities
or property of any nature whatsoever (other than cash, Convertible Securities or
Additional Shares of Common Stock),
then (i) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such adjustment
multiplied by a fraction (A) the numerator of which shall be the Current Market
Price per share of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Current Market Price per share of Common
Stock minus the amount allocable to one share of Common Stock of any such cash
so distributable and of the fair value (as determined in good faith by the Board
of Directors of Company and supported by an opinion from an investment banking
firm of recognized national standing acceptable to the Majority Holders) of any
and all such evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights so distributable,
and (ii) the Current Warrant Price shall be adjusted to equal (A) the Current
Warrant Price multiplied by the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to the adjustment divided by (B) the
number of shares for which this Warrant is exercisable immediately after such
adjustment. A reclassification of the Common Stock (other than a change in par
value, or from par value to no par value
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or from no par value to par value) into shares of Common Stock and shares of any
other class of stock shall be deemed a distribution by Company to the holders of
its Common Stock of such shares of such other class of stock within the meaning
of this Section 4.2 and, if the outstanding shares of Common Stock shall be
changed into a larger or smaller number of shares of Common Stock as a part of
such reclassification, such change shall be deemed a subdivision or combination,
as the case may be, of the outstanding shares of Common Stock within the meaning
of Section 4.1.
4.3. Issuance of Additional Shares of Common Stock. (a) If at any time
Company shall (except as hereinafter provided) issue or sell any Additional
Shares of Common Stock, other than Permitted Issuances, in exchange for
consideration in an amount per Additional Share of Common Stock less than the
Current Warrant Price at the time the Additional Shares of Common Stock are
issued, then (i) the Current Warrant Price as to the number of shares for which
this Warrant is exercisable prior to such adjustment shall be reduced to a price
determined by dividing (A) an amount equal to the sum of (x) the number of
shares of Common Stock Outstanding immediately prior to such issue or sale
multiplied by the then existing Current Warrant Price, plus (y) the
consideration, if any, received by Company upon such issue or sale, by (B) the
total number of shares of Common Stock Outstanding immediately after such issue
or sale; and (ii) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product obtained by multiplying the
Current Warrant Price in effect immediately prior to such issue or sale by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such issue or sale and dividing the product thereof by the
Current Warrant Price resulting from the adjustment made pursuant to clause (i)
above.
(b) If at any time Company shall (except as hereinafter provided) at
any time issue or sell any Additional Shares of Common Stock, other than
Permitted Issuances, for consideration in an amount per Additional Share of
Common Stock less than the Current Market Price, then (i) the number of shares
of Common Stock for which this Warrant is exercisable shall be adjusted to equal
the product obtained by multiplying the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such issue or sale by a
fraction (A) the numerator of which shall be the number of shares of Common
Stock Outstanding immediately after such issue or sale, and (B) the denominator
of which shall be the number of shares of Common Stock Outstanding immediately
prior to such issue or sale plus the number of shares which the aggregate
offering price of the total number of such Additional Shares of Common Stock
would purchase at the then Current Market Price; and (ii) the Current Warrant
Price as to the number of shares for which this Warrant is exercisable prior to
such adjustment shall be adjusted by multiplying such Current Warrant Price by a
fraction (X) the numerator of which shall be the number of shares for which this
Warrant is exercisable immediately prior to such issue or sale; and (Y) the
denominator of which shall be the number of shares of Common Stock purchasable
immediately after such issue or sale.
(c) If at any time Company (except as hereinafter provided) shall
issue or sell any Additional Shares of Common Stock, other than Permitted
Issuances, in exchange for consideration in an amount per Additional Share of
Common Stock which
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is less than the Current Warrant Price and Current Market Price (as defined
above) at the time the Additional Shares of Common Stock are issued, the
adjustment required under Section 4.3 shall be made in accordance with the
formula in paragraph (a) or (b) above which results in the lower Current Warrant
Price following such adjustment. The provisions of paragraphs (a) and (b) of
Section 4.3 shall not apply to any issuance of Additional Shares of Common Stock
for which an adjustment is provided under Section 4.1 or 4.2. No adjustment of
the number of shares of Common Stock for which this Warrant shall be exercisable
shall be made under paragraph (a) or (b) of Section 4.3 upon the issuance of any
Additional Shares of Common Stock which are issued pursuant to the exercise of
any warrants or other subscription or purchase rights or pursuant to the
exercise of any conversion or exchange rights in any Convertible Securities, if
any such adjustment shall previously have been made upon the issuance of such
warrants or other rights or upon the issuance of such Convertible Securities (or
upon the issuance of any warrant or other rights therefor) pursuant to Section
4.4 or Section 4.5.
(d) If any Additional Shares of Common Stock, other than Permitted
Issuances, are issued or sold in exchange for consideration in an amount per
Additional Share of Common Stock equal to or greater than the Current Warrant
Price and the Current Market Price at the time the Additional Shares are issued,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product obtained by multiplying the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such adjustment by a fraction (A) the numerator of which
shall be the number of shares of Common Stock Outstanding immediately after the
issuance of such Additional Shares of Common Stock, and (B) the denominator of
which shall be the number of shares of Common Stock Outstanding immediately
prior to the issuance of such Additional Shares of Common Stock; and (ii) the
Current Warrant Price as to the number of shares of Common Stock for which this
Warrant is exercisable prior to such adjustment shall not change but the Current
Warrant Price for each of the incremental number of shares of Common Stock for
which this Warrant becomes exercisable after such adjustment shall be equal to
the fair value of such consideration per Additional Share of Common Stock.
4.4. Issuance of Warrants or Other Rights. If at any time Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a distribution of, or shall in any manner (whether directly or
by assumption in a merger in which Company is the surviving corporation) issue
or sell, any warrants or other rights to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Securities, whether or not
the rights to exchange or convert thereunder are immediately exercisable, and
the price per share for which Common Stock is issuable upon the exercise of such
warrants or other rights or upon conversion or exchange of such Convertible
Securities shall be less than the Current Warrant Price or the Current Market
Price in effect immediately prior to the time of such issue or sale, then the
number of shares for which this Warrant is exercisable and the Current Warrant
Price shall be adjusted as provided in Section 4.3 on the basis that the maximum
number of Additional Shares of Common Stock issuable pursuant to all such
warrants or other rights or necessary to effect the conversion or exchange of
all such Convertible Securities shall be deemed to have been issued and
outstanding and Company shall be deemed to have
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received all of the consideration payable therefor, if any, as of the date of
the issuance of such warrants or other rights. No further adjustments of the
number of shares of Common Stock for which this Warrant is exercisable or the
Current Warrant Price shall be made upon the actual issue of such Common Stock
or of such Convertible Securities upon exercise of such warrants or other rights
or upon the actual issue of such Common Stock upon such conversion or exchange
of such Convertible Securities.
4.5. Issuance of Convertible Securities. If at any time Company shall take
a record of the holders of its Common Stock for the purpose of entitling them to
receive a distribution of, or shall in any manner (whether directly or by
assumption in a merger in which Company is the surviving corporation) issue or
sell, any Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per share for
which Common Stock is issuable upon such conversion or exchange shall be less
than the Current Warrant Price or Current Market Price in effect immediately
prior to the time of such issue or sale, then the number of Shares for which
this Warrant is exercisable and the Current Warrant Price shall be adjusted as
provided in Section 4.3 on the basis that the maximum number of Additional
Shares of Common Stock necessary to effect the conversion or exchange of all
such Convertible Securities shall be deemed to have been issued and outstanding
and Company shall have received all of the consideration payable therefor, if
any, as of the date of issuance of such Convertible Securities. No adjustment of
the number of Shares for which this Warrant is exercisable and the Current
Warrant Price shall be made under this Section 4.5 upon the issuance of any
Convertible Securities which are issued pursuant to the exercise of any warrants
or other subscription or purchase rights therefor, if any such adjustment shall
previously have been made upon the issuance of such warrants or other rights
pursuant to Section 4.4. No further adjustments of the number of shares of
Common Stock for which this Warrant is exercisable or the Current Warrant Price
shall be made upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities and, if any issue or sale of such
Convertible Securities is made upon exercise of any warrant or other right to
subscribe for or to purchase any such Convertible Securities for which
adjustments of the number of shares of Common Stock for which this Warrant is
exercisable and the Current Warrant Price have been or are to be made pursuant
to other provisions of this Section 4, no further adjustments of the number of
shares of Common Stock for which this Warrant is exercisable or the Current
Warrant Price shall be made by reason of such issue or sale.
4.6. Superseding Adjustment. If, at any time after any adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Current Warrant Price shall have been made pursuant to Section 4.4 or Section
4.5 as the result of any issuance of warrants, rights or Convertible Securities,
(a) such warrants or rights, or the right of conversion or exchange in
such other Convertible Securities, shall expire, and all or a portion of such
warrants or rights, or the right of conversion or exchange with respect to all
or a portion of such other Convertible Securities, as the case may be, shall not
have been exercised, or
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(b) the consideration per share for which shares of Common Stock are
issuable pursuant to such warrants or rights, or the terms of such other
Convertible Securities, shall be increased solely by virtue of provisions
therein contained for an automatic increase in such consideration per share upon
the occurrence of a specified date or event,
then for each outstanding Warrant such previous adjustment shall be rescinded
and annulled and the Additional Shares of Common Stock which were deemed to have
been issued by virtue of the computation made in connection with the adjustment
so rescinded and annulled shall no longer be deemed to have been issued by
virtue of such computation. Thereupon, a recomputation shall be made of the
effect of such rights or options or other Convertible Securities on the basis of
(i) treating the number of Additional Shares of Common Stock or
other property, if any, theretofore actually issued or
issuable pursuant to the previous exercise of any such
warrants or rights or any such right of conversion or
exchange, as having been issued on the date or dates of any
such exercise and for the consideration actually received
and receivable therefor, and
(ii) treating any such warrants or rights or any such other
Convertible Securities which then remain outstanding as
having been granted or issued immediately after the time of
such increase of the consideration per share for which
shares of Common Stock or other property are issuable under
such warrants or rights or other Convertible Securities;
whereupon a new adjustment of the number of shares of Common Stock for which
this Warrant is exercisable and the Current Warrant Price shall be made, which
new adjustment shall supersede the previous adjustment so rescinded and
annulled.
4.7. Other Provisions Applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Current Warrant Price provided for in this Section 4:
(a) Computation of Consideration. To the extent that any Additional
Shares of Common Stock or any Convertible Securities or any warrants or other
rights to subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Securities shall be issued for cash consideration, the consideration
received by Company therefor shall be the amount of the cash received by Company
therefor, or, if such Additional Shares of Common Stock or Convertible
Securities are offered by Company for subscription, the subscription price, or,
if such Additional Shares of Common Stock or Convertible Securities are sold to
underwriters or dealers for public offering without a subscription offering, the
initial public offering price (in any such case subtracting any amounts paid or
receivable for accrued interest or accrued dividends and any compensation,
discounts or expenses paid or incurred by Company for and in the
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underwriting of, or otherwise in connection with, the issuance thereof). To the
extent that such issuance shall be for a consideration other than cash, then,
except as herein otherwise expressly provided, the amount of such consideration
shall be deemed to be the fair value of such consideration at the time of such
issuance as determined in good faith by the Board of Directors of Company. In
case any Additional Shares of Common Stock or any Convertible Securities or any
warrants or other rights to subscribe for or purchase such Additional Shares of
Common Stock or Convertible Securities shall be issued in connection with any
merger in which Company issues any securities, the amount of consideration
therefor shall be deemed to be the fair value, as determined in good faith by
the Board of Directors of Company, of such portion of the assets and business of
the nonsurviving corporation as such Board in good faith shall determine to be
attributable to such Additional Shares of Common Stock, Convertible Securities,
warrants or other rights, as the case may be. The consideration for any
Additional Shares of Common Stock issuable pursuant to any warrants or other
rights to subscribe for or purchase the same shall be the consideration received
by Company for issuing such warrants or other rights plus the additional
consideration payable to Company upon exercise of such warrants or other rights.
The consideration for any Additional Shares of Common Stock issuable pursuant to
the terms of any Convertible Securities shall be the consideration received by
Company for issuing warrants or other rights to subscribe for or purchase such
Convertible Securities, plus the consideration paid or payable to Company in
respect of the subscription for or purchase of such Convertible Securities, plus
the additional consideration, if any, payable to Company upon the exercise of
the right of conversion or exchange in such Convertible Securities. In case of
the issuance at any time of any Additional Shares of Common Stock or Convertible
Securities in payment or satisfaction of any dividends upon any class of stock
other than Common Stock, Company shall be deemed to have received for such
Additional Shares of Common Stock or Convertible Securities a consideration
equal to the amount of such dividend so paid or satisfied.
(b) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event requiring
an adjustment shall occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
shares of Common Stock, as provided for in Section 4.1) up to, but not beyond
the date of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than 1% of the shares of
Common Stock for which this Warrant is exercisable immediately prior to the
making of such adjustment. Any adjustment representing a change of less than
such minimum amount (except as aforesaid) which is postponed shall be carried
forward and made as soon as such adjustment, together with other adjustments
required by this Section 4 and not previously made, would result in a minimum
adjustment of at least 1% or in any event, on the date of exercise. For the
purpose of any adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.
(c) Fractional Interests. In computing adjustments under this Section
4, fractional interests in Common Stock shall be taken into account to the
nearest 1/10th of a share.
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(d) When Adjustment Not Required. If Company shall take a record of
the holders of its Common Stock for the purpose of entitling them to receive a
dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, 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.
(e) Escrow of Warrant Stock. If Holder exercises this Warrant after
any property becomes distributable pursuant to this Section 4 by reason of the
taking of any record of the holders of Common Stock but prior to the occurrence
of the event for which such record is taken, any Additional Shares of Common
Stock issuable upon exercise of this Warrant shall be held in escrow, upon
payment of the Current Warrant Price, for Holder by Company to be issued to
Holder upon and to the extent that the event actually takes place.
Notwithstanding any other provision to the contrary herein, if the event for
which such record was taken fails to occur or is rescinded, then such escrowed
shares shall be cancelled by Company.
(f) Challenge to Good Faith Determination. Whenever the Board of
Directors of Company shall be required to make a determination in good faith of
the fair value of any item under this Section 4, such determination may be
challenged in good faith by the Majority Holders, and any dispute shall be
resolved by an investment banking firm of recognized national standing selected
by Company and acceptable to the Majority Holders.
4.8. Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In case Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where Company is
not the surviving corporation or where there is a change in or distribution with
respect to the Common Stock of Company), or sell, transfer or otherwise dispose
of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, any cash, shares of stock or
other securities or property of any nature whatsoever including warrants or
other subscription or purchase rights or any shares of common stock of the
successor or acquiring corporation (collectively, "Other Property"), are to be
received by or distributed to the holders of Common Stock of Company, then each
Holder shall have the right thereafter to receive, upon exercise of such
Warrant, the number of shares of common stock of the successor or acquiring
corporation or of Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than Company) shall expressly assume the due
and punctual observance and performance of each and every covenant and condition
of this Warrant to be performed and observed by Company and all the obligations
and liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the
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Board of Directors of Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 4. For
purposes of this Section 4.8, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4.8 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
4.9. Other Action Affecting Common Stock. In case at any time or from time
to time Company shall take any action in respect of its Common Stock, other than
any action described in this Section 4, then, unless such action will not have a
materially adverse effect upon the rights of the Holders, the number of shares
of Common Stock or other stock for which this Warrant is exercisable and/or the
purchase price thereof shall be adjusted in such manner as may be equitable in
the circumstances.
4.10. Certain Limitations. Notwithstanding anything herein to the contrary,
Company agrees not to enter into any transaction which, by reason of any
adjustment hereunder, would cause the Current Warrant Price to be less than the
par value per share of Common Stock.
5. NOTICES TO WARRANT HOLDERS
5.1. Notice of Adjustments. Whenever the number of shares of Common Stock
for which this Warrant is exercisable, or whenever the price at which a share of
such Common Stock may be purchased upon exercise of the Warrants, shall be
adjusted pursuant to Section 4, Company shall forthwith prepare a certificate to
be executed by the chief financial officer of Company setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which
the Board of Directors of Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights referred to in Section 4.2 or 4.7(a)),
specifying the number of shares of Common Stock for which this Warrant is
exercisable and (if such adjustment was made pursuant to Section 4.8 or 4.9)
describing the number and kind of any other shares of stock or Other Property
for which this Warrant is exercisable, and any change in the purchase price or
prices thereof, after giving effect to such adjustment or change. Company shall
promptly cause a signed copy of such certificate to be delivered to each Holder
in accordance with Section 15.2. Company shall keep at its office or agency
designated pursuant to Section 12 copies of all such certificates and cause the
same to be available for inspection at said office during normal business hours
by any Holder or any prospective purchaser of a Warrant designated by a Holder
thereof.
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5.2. Notice of Corporate Action. If at any time
(a) Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend or other distribution, or
any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or
(b) there shall be any capital reorganization of Company, any
reclassification or recapitalization of the capital stock of Company or any
consolidation or merger of Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of
Company to, another corporation, or
(c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of Company;
then, in any one or more of such cases, Company shall give to Holder (i) at
least 30 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 30 days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of Company and delivered in
accordance with Section 15.2.
6. NO IMPAIRMENT
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, Company
will (a) not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all such
action as may be
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necessary or appropriate in order that Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant, and (c) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable Company to perform its obligations under
this Warrant.
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Closing Date, Company shall at all times reserve
and keep available for issuance upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. Company represents and
warrants that, as of the Closing Date, the Company has 17,459,689 shares of
Common Stock issued and outstanding and 100,000,000 shares of Common Stock
authorized and available for issuance.
Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Warrants, Company shall take any corporate
action which may be necessary in order that Company may validly and legally
issue fully paid and non-assessable shares of such Common Stock at such adjusted
Current Warrant Price.
Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Current Warrant Price, Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
If any shares of Common Stock required to be reserved for issuance
upon exercise of Warrants require registration or qualification with any
governmental authority or other governmental approval or filing under any
federal or state law (otherwise than as provided in Section 9) before such
shares may be so issued, Company will in good faith and as expeditiously as
possible and at its expense endeavor to cause such shares to be duly registered.
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by Company to the
holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, Company will in each such case
take such a record and will take such record as of the close of business on a
Business Day. Company will not at any time, except upon dissolution, liquidation
or winding up of Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.
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9. RESTRICTIONS ON TRANSFERABILITY
The Warrants and the Warrant Stock may be transferred, hypothecated or
assigned, as collateral or otherwise, upon satisfaction of the conditions
specified in this Section 9, which conditions are intended to ensure compliance
with the provisions of the Securities Act with respect to the Transfer of any
Warrant or any Warrant Stock. Holder, by acceptance of this Warrant, agrees to
be bound by the provisions of this Section 9.
9.1. Restrictive Legend. (a) Except as otherwise provided in this Section
9, each certificate for Warrant Stock initially issued upon the exercise of this
Warrant, and each certificate for Warrant Stock issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and are
subject to the conditions specified in a certain Warrant dated April
24, 2000, originally issued by ARV Assisted Living, Inc. No transfer
of the shares represented by this certificate shall be valid or
effective until such conditions have been fulfilled. A copy of the
form of said Warrant is on file with the Secretary of ARV Assisted
Living, Inc. The holder of this certificate, by acceptance of this
certificate, agrees to be bound by the provisions of such Warrant."
(a) Except as otherwise provided in this Section 9, each Warrant shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, and may not
be transferred in violation of such Act, the rules and regulations
thereunder or the provisions of this Warrant."
9.2. Notice of Proposed Transfers; Requests for Registration. Prior to or
promptly following any Transfer of any Warrants or any shares of Restricted
Common Stock, the holder of such Warrants or Restricted Common Stock shall give
written notice (a "Transfer Notice") to Company of such Transfer. Each
certificate, if any, evidencing such shares of Restricted Common Stock issued
upon such Transfer shall bear the restrictive legend set forth in Section
9.1(a), and each Warrant issued upon such Transfer shall bear the restrictive
legend set forth in Section 9.1(b), unless in the opinion of counsel to such
holder which is reasonably acceptable to Company such legend is not required in
order to ensure compliance with the Securities Act.
The holders of Warrants and Warrant Stock shall have the right to
request registration of such Warrant Stock pursuant to Sections 9.3 and 9.4.
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9.3. Required Registration. After receipt of a written notice from one or
more holders of Warrants and/or Warrant Stock requesting that Company effect the
registration under the Securities Act of either (i) 350,000 or more shares of
Warrant Stock or (ii) Warrant Stock with an anticipated aggregate offering price
of at least $1,000,000 and specifying the intended method or methods of
disposition thereof, Company shall promptly notify all holders of Warrants and
Warrant Stock in writing of the receipt of such request. Thereupon, each such
holder, in lieu of exercising its rights under Section 9.4, may elect (by
written notice sent to Company within ten Business Days from the date of such
holder's receipt of the aforementioned Company's notice) to have its shares of
Warrant Stock included in such registration thereof pursuant to this Section
9.3. Thereupon, Company shall then, as expeditiously as is possible, use its
best efforts to effect the registration under the Securities Act of all shares
of Warrant Stock which Company has been so requested to register by such holders
for sale, all to the extent required to permit the disposition (in accordance
with the intended method or methods thereof, as aforesaid) of the Warrant Stock
so registered; provided, however, that Company shall not be required to effect
more than one registration of any Warrant Stock pursuant to this Section 9.3 in
any 12-month period.
9.4. Incidental Registration. If Company at any time proposes to file on
its behalf and/or on behalf of any of its security holders (the "demanding
security holders") a Registration Statement under the Securities Act on any form
(other than a Registration Statement on Form S-4 or S-8 or any successor form
for securities to be offered in a transaction of the type referred to in Rule
145 under the Securities Act or to employees of Company pursuant to any employee
benefit plan, respectively) for the general registration of securities to be
sold for cash with respect to its Common Stock or any other class of equity
security (as defined in Section 3(a)(11) of the Exchange Act) of Company, it
will give written notice to all holders of Warrants or Warrant Stock at least 60
days before the initial filing with the Commission of such Registration
Statement, which notice shall set forth the intended method of disposition of
the securities proposed to be registered by Company. The notice shall offer to
include in such filing the aggregate number of shares of Warrant Stock, and the
number of shares of Common Stock for which this Warrant is exercisable, as such
holders may request.
Each holder of any such Warrants or any such Warrant Stock desiring to
have Warrant Stock registered under this Section 9.4 shall advise Company in
writing within 30 days after the date of receipt of such offer from Company,
setting forth the amount of such Warrant Stock for which registration is
requested. Company shall thereupon include in such filing the number of shares
of Warrant Stock for which registration is so requested, subject to the next
sentence, and shall use its best efforts to effect registration under the
Securities Act of such shares. If the managing underwriter of a proposed public
offering shall advise Company in writing that, in its opinion, the distribution
of the Warrant Stock requested to be included in the registration concurrently
with the securities being registered by Company or such demanding security
holder would materially and adversely affect the distribution of such securities
by Company or such demanding security holder, then all selling security holders
(other than any demanding security holder who initially requested such
registration) shall reduce the amount of securities each intended to distribute
through such offering on a pro rata basis.
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Except as otherwise provided in Section 9.6, all expenses of such registration
shall be borne by Company.
9.5. Registration Procedures. If Company is required by the provisions of
this Section 9 to use its best efforts to effect the registration of any of its
securities under the Securities Act, Company will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement with
respect to such securities and use its best efforts to cause such Registration
Statement to become and remain effective for a period of time required for the
disposition of such securities by the holders thereof;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such Registration Statement until
the earlier of such time as all of such securities have been disposed of in a
public offering;
(c) furnish to such selling security holders such number of copies of
a summary prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as such selling security holders may reasonably request;
(d) notify such selling security holders at any time when a summary
prospectus or other prospectus including a preliminary prospectus, is required
to be delivered under the Securities Act, of the happening of any event as a
result of which such prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of such selling security
holders, Company shall prepare a supplement or amendment to such prospectus so
that, such prospectus shall not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein not
misleading;
(e) use its best efforts to register or qualify the securities covered
by such Registration Statement under such other securities or blue sky laws of
such jurisdictions within the United States and Puerto Rico as each holder of
such securities shall request (provided, however, that Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then qualified or to file any general
consent to service or process), and do such other reasonable acts and things as
may be required of it to enable such holder to consummate the disposition in
such jurisdiction of the securities covered by such Registration Statement;
(f) furnish, at the request of any holder requesting registration of
Warrant Stock pursuant to Section 9.3, on the date that such shares of Warrant
Stock are delivered to the underwriters for sale pursuant to such registration
or, if such Warrant Stock is not
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being sold through underwriters, on the date that the Registration Statement
with respect to such shares of Warrant Stock becomes effective, (1) an opinion,
dated such date, of the independent counsel representing Company for the
purposes of such registration, addressed to the underwriters, if any, and if
such Warrant Stock is not being sold through underwriters, then to the holders
making such request, in customary form and covering matters of the type
customarily covered in such legal opinions; and (2) a comfort letter dated such
date, from the independent certified public accountants of Company, addressed to
the underwriters, if any, and if such Warrant Stock is not being sold through
underwriters, then to the holder making such request and, if such accountants
refuse to deliver such letter to such holder, then to Company in a customary
form and covering matters of the type customarily covered by such comfort
letters as the underwriters or such holders shall reasonably request. Such
opinion of counsel shall additionally cover such other legal matters with
respect to the registration in respect of which such opinion is being given as
such holders holding a majority of the Warrant Stock being so registered may
reasonably request. Such letter from the independent certified public
accountants shall additionally cover such other financial matters (including
information as to the period ending not more than five Business Days prior to
the date of such letter) with respect to the registration in respect of which
such letter is being given as the holders holding a majority of the Warrant
Stock being so registered may reasonably request;
(g) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such securities;
and
(h) make available for inspection by such selling security holders,
any underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by any such
selling security holder or underwriter, all financial and other records,
pertinent corporate documents and properties of Company, and cause Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such Selling Security holder,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(i) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, but not later than 18 months after the
effective date of the Registration Statement, an earnings statement covering the
period of at least 12 months beginning with the first full month after the
effective date of such Registration Statement, which earnings statements shall
satisfy the provisions of Section 11(a) of the Securities Act.
It shall be a condition precedent to the obligation of Company to take
any action pursuant to this Section 9 in respect of the securities which are to
be registered at the request of any holder of Warrants or Warrant Stock that
such holder shall furnish to Company such information regarding the securities
held by such holder and the intended
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method of disposition thereof as Company shall reasonably request and as shall
be required in connection with the action taken by Company.
9.6. Expenses. All expenses incurred in complying with Section 9,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), printing expenses, fees and
disbursements of counsel for Company, the reasonable fees and expenses of one
counsel for the selling security holders (selected by those holding a majority
of the shares being registered), expenses of any special audits incident to or
required by any such registration and expenses of complying with the securities
or blue sky laws of any jurisdictions pursuant to Section 9.5(d), shall be paid
by Company, except that Company shall not be liable for any fees, discounts or
commissions to any underwriter or any fees or disbursements of counsel for any
underwriter in respect of the securities sold by such holder of Warrant Stock.
9.7. Indemnification and Contribution. (a) In the event of any registration
of any of the Warrant Stock under the Securities Act pursuant to this Section 9,
Company shall indemnify and hold harmless the holder of such Warrant Stock, such
holder's directors and officers, and each other Person (including each
underwriter) who participated in the offering of such Warrant Stock and each
other Person, if any, who controls such holder or such participating Person
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such holder or any such director or
officer or participating Person or controlling Person may become subject under
the Securities Act or any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any alleged untrue statement of any material fact
contained, on the effective date thereof, in any Registration Statement under
which such securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or (ii) any alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and shall reimburse such holder or such director, officer or participating
Person or controlling Person for any legal or any other expenses reasonably
incurred by such holder or such director, officer or participating Person or
controlling Person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or alleged
omission made in such Registration Statement, preliminary prospectus, prospectus
or amendment or supplement in reliance upon and in conformity with written
information furnished to Company by such holder specifically for use therein or
(in the case of any registration pursuant to Section 9.3) so furnished for such
purposes by any underwriter. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such holder or
such director, officer or participating Person or controlling Person, and shall
survive the transfer of such securities by such holder.
(b) Each holder of any Warrant Stock, by acceptance thereof, agrees to
indemnify and hold harmless Company, its directors and officers and each other
Person, if any, who controls Company within the meaning of the Securities Act
against any
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losses, claims, damages or liabilities, joint or several, to which Company or
any such director or officer or any such Person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon information in writing provided to Company by such holder of such
Warrant Stock specifically for use in the following documents and contained, on
the effective date thereof, in any Registration Statement under which securities
were registered under the Securities Act at the request of such holder, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, but in no event, in an amount exceeding the net proceeds
received by such holder in the offering.
(c) If the indemnification provided for in this Section 9 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. The liability of any holder of Warrant Stock
hereunder shall not exceed the net proceeds received by it in the offering.
9.8. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9.7(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
9.9. Termination of Restrictions. Notwithstanding the foregoing provisions
of Section 9, the restrictions imposed by this Section upon the transferability
of the Warrants, the Warrant Stock and the Restricted Common Stock (or Common
Stock issuable upon the exercise of the Warrants) and the legend requirements of
Section 9.1 shall terminate as to any particular Warrant or share of Warrant
Stock or Restricted Common Stock (or Common Stock issuable upon the exercise of
the Warrants) (i) when and so long as such security shall have been effectively
registered under the Securities Act and disposed of pursuant thereto, (ii) when
such security is disposed of pursuant to
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Rule 144 under the Securities Act, or (iii) when Company shall have received an
opinion of counsel reasonably satisfactory to it that such shares may be
transferred without registration thereof under the Securities Act. Whenever the
restrictions imposed by this Section shall terminate as to any share of
Restricted Common Stock, as hereinabove provided, the holder thereof shall be
entitled to receive from Company, at Company's expense, a new certificate
representing such Common Stock not bearing the restrictive legend set forth in
Section 9.1(a).
9.10. Listing on Securities Exchange. So long as any shares of Common Stock
are listed on any securities exchanges, Company shall increase the number of
shares listed on such securities exchanges to cover all shares of Common Stock
issued or, to the extent permissible under the applicable securities exchange
rules, issuable upon the exercise of this Warrant.
9.11. Certain Limitations on Registration Rights. Notwithstanding the other
provisions of Section 9, Company shall not be obligated to register the Warrant
Stock of any holder if, in the written opinion of counsel to Company reasonably
satisfactory to the holder and its counsel (or, if the holder has engaged an
investment banking firm, to such investment banking firm and its counsel), the
sale or other disposition of such holder's Warrant Stock, in the manner proposed
by such holder (or by such investment banking firm), may be effected without
registering such Warrant Stock under the Securities Act.
9.12. Selection of Managing Underwriters. The managing underwriter or
underwriters for any offering of Warrant Stock to be registered pursuant to
Section 9.3 shall be selected by the holders of a majority of the shares being
so registered (other than any shares being registered pursuant to Section 9.4)
and shall be reasonably acceptable to Company.
10. SUPPLYING INFORMATION
Company shall cooperate with each Holder of a Warrant and each holder
of Restricted Common Stock in supplying such information as may be reasonably
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any Warrant
or Restricted Common Stock.
11. LOSS OR MUTILATION
Upon receipt by Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it being
understood that the written agreement of such Holder shall be sufficient
indemnity), and in case of mutilation upon surrender and cancellation hereof,
Company will execute and deliver in lieu hereof a new Warrant of like tenor to
such Holder; provided, in the case of mutilation, no indemnity shall be required
if this Warrant in identifiable form is surrendered to Company for cancellation.
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12. OFFICE OF COMPANY
As long as any of the Warrants remain outstanding, Company shall
maintain an office or agency (which may be the principal executive offices of
Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.
13. FILINGS
Company will file on or before the required date all regular or
periodic reports (pursuant to the Exchange Act) with the Commission and will
deliver to Holder promptly upon their becoming available one copy of each
report, notice or proxy statement sent by Company to its stockholders generally,
and of each regular or periodic report (pursuant to the Exchange Act) and any
Registration Statement, prospectus or written communication (other than
transmittal letters) (pursuant to the Securities Act), filed by Company with (i)
the Commission or (ii) any securities exchange on which shares of Common Stock
are listed.
14. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by Holder to
purchase shares of Common Stock, and no enumeration herein of the rights or
privileges of Holder hereof, shall give rise to any liability of such Holder for
the purchase price of any Common Stock or as a stockholder of Company, whether
such liability is asserted by Company or by creditors of Company.
15. MISCELLANEOUS
15.1. Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of a party hereto shall operate as a
waiver of such right or otherwise prejudice that party's rights, powers or
remedies. If a party hereto fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, that
party shall pay to the other party such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys'
fees, including those of appellate proceedings, incurred by such other party in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.
15.2. Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant shall be sufficiently given or made if in writing
and either delivered in person with receipt acknowledged or sent by registered
or certified mail, return receipt requested, postage prepaid, or by telecopy and
confirmed by telecopy answerback, addressed as follows:
(a) If to any Holder or holder of Warrant Stock, at its last known
address appearing on the books of Company maintained for such purpose.
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(b) If to Company at
ARV Assisted Living, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx X-0
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
Telecopy Number: (000) 000-0000
With a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention Xxxx X. Xxxxxx, Esq.
Telecopy Number: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback, or three (3) Business Days after the same shall have been deposited
in the United States mail. Failure or delay in delivering copies of any notice,
demand, request, approval, declaration, delivery or other communication to the
person designated above to receive a copy shall in no way adversely affect the
effectiveness of such notice, demand, request, approval, declaration, delivery
or other communication.
15.3. No Stockholder Rights. Prior to the effective exercise of this
Warrant in accordance with the provisions hereof, Holder shall not be entitled
to any rights of a stockholder with respect to any shares of Warrant Stock,
including (without limitation) the right to vote such shares or to receive
dividends or other distributions thereon.
15.4. Indemnification. Company agrees to indemnify and hold harmless Holder
from and against any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, attorneys' fees, expenses and
disbursements of any kind which may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of the issuance of this
Warrant to Holder (but not relating to or arising out of any exercise of any
Warrant); provided, however, that Company will not be liable hereunder to the
extent that any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, attorneys' fees, expenses or disbursements (i)
arise solely out of Holder's violation of any state or federal securities laws,
(ii) arise out of any matter for which Company has expressly retained the right
to pursue such matter against the Holder pursuant to Section 5.01(c) of the
Settlement Agreement or (iii) are found in a final non-appealable judgment by a
court to have resulted from Xxxxxx's gross negligence, bad faith or willful
misconduct in its capacity as a stockholder or warrantholder of Company.
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15.5. Remedies. Each party hereto, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under Section 9 of this Warrant.
Each party agrees that monetary damages would not be adequate compensation for
any loss incurred by the other party by reason of a breach by it of the
provisions of Section 9 of this Warrant and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.
15.6. Successors and Assigns. Subject to the provisions of Sections 3.1 and
9, this Warrant and the rights evidenced hereby shall inure to the benefit of
and be binding upon the successors of Company and the successors and assigns of
Xxxxxx. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and, with respect to Section 9 hereof,
holders of Warrant Stock, and shall be enforceable by any such Holder or holder
of Warrant Stock.
15.7. Amendment. This Warrant and all other Warrants may be modified or
amended or the provisions hereof waived with the written consent of Company and
the Majority Holders, provided that no such Warrant may be modified or amended
to reduce the number of shares of Common Stock for which such Warrant is
exercisable or to increase the price at which such shares may be purchased upon
exercise of such Warrant (before giving effect to any adjustment as provided
therein) without the prior written consent of the Holder thereof.
15.8. Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant.
15.9. Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
15.10. Governing Law. This Warrant shall be governed by the laws of the
State of New York, without regard to the provisions thereof relating to conflict
of laws.
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IN WITNESS WHEREOF, Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
Dated: April 24, 2000
ARV Assisted Living, Inc.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President and
Secretary
Attest:
By: /s/ Xxxxxxx Xxxxxxx-Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxx-Xxxxxx
Title: Assistant Secretary
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EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of ______ Shares of Common Stock of ARV Assisted
Living, Inc. and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_____________ whose address is _________________ and, if such shares of Common
Stock shall not include all of the shares of Common Stock issuable as provided
in this Warrant, that a new Warrant of like tenor and date for the balance of
the shares of Common Stock issuable hereunder be delivered to the undersigned.
-------------------------------
(Name of Registered Owner)
-------------------------------
(Signature of Registered Owner)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
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EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of
Common Stock
and does hereby irrevocably constitute and appoint __________________________
attorney-in-fact to register such transfer on the books of ARV Assisted Living,
Inc. maintained for the purpose, with full power of substitution in the
premises.
Dated:__________________ Print Name:
--------------------------
Signature:
--------------------------
Witness:
-----------------------------
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
