EXHIBIT 10.46
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES
LAWS"), AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS (1)
REGISTERED UNDER THE SECURITIES LAWS OR (2) EXEMPT FROM REGISTRATION UNDER THE
SECURITIES LAWS AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS OF MARCH 27, 1998
AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE
WITH THE COMPANY AND WILL BE FURNISHED WITHOUT COST TO THE HOLDER HEREOF UPON
WRITTEN REQUEST TO THE SECRETARY.
No. C-1 Warrant to Purchase 70,622 Shares of Series C Common
Stock
FOUNTAIN VIEW, INC.
Warrant
-------
Void after April 16, 2008
Fountain View, Inc., a Delaware corporation (the "Company"), hereby
-------
certifies that, for value received, Heritage Fund II Investment Corporation or
its permitted assigns (the "Holder"), is entitled, subject to the terms set
------
forth below, to purchase from the Company at any time on or after April 16,
1998, but in any event not later than 5:00 p.m., Eastern time, on April 16, 2008
(the "Expiration Date"), up to 70,622 fully paid and nonassessable shares of the
---------------
Company's Series C Common Stock at the purchase price (the "Warrant Price") of
-------------
$.01 per share and otherwise in accordance with the terms hereof.
Section 1. Certain Definitions. As used herein, the following terms have
--------- -------------------
the meanings set forth below:
"Stockholders Agreement" means the Stockholders Agreement dated as of March
----------------------
27, 1998 among the Company, Heritage Fund II, L.P., Heritage Investors II,
L.L.C., Heritage Fund II Investment Corporation, Robert Snukal, Sheila Snukal,
William Scott and certain other parties, as amended from time to time.
Capitalized terms used herein and not otherwise defined shall have the
meanings given to them in the Stockholders Agreement.
Section 2. Exercise. This Warrant shall be exercisable in full or in part
--------- --------
at any time prior to the Expiration Date. Except as otherwise provided in
Sections 7 and 8, this Warrant shall be exercisable by delivery by the Holder to
the Company of notice of exercise setting forth the number of shares for which
the Warrant is being exercised and payment in cash or by check of the Warrant
Price for each share for which this Warrant is being exercised.
Section 3. Delivery of Stock Certificates, etc. on Exercise. As soon as
--------- ------------------------------------------------
practicable after the exercise of this Warrant, and in any event within three
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, (i) a certificate or certificates for the number of
fully paid and nonassessable shares of Series C Common Stock to which the Holder
shall be entitled on such exercise, and (ii) a new Warrant to purchase all of
the shares, if any, to which the Holder shall be entitled to receive in
connection with the portion of the Warrant not so exercised.
Section 4. Adjustment for Stock Splits, Stock Dividends,
--------- ---------------------------------------------
Recapitalizations, etc. The Warrant Price and the number of shares of Series C
- ----------------------
Common Stock issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of Series C Common Stock. In case of any adjustment or
readjustment in the Warrant Price or number of shares of Series C Common Stock
issuable on the exercise of this Warrant, the Company will promptly give written
notice thereof to the Holder in the form of a certificate, certified and
confirmed by the president or treasurer of the Company, setting forth such
adjustment and showing in reasonable detail the facts upon which such adjustment
or readjustment is based.
Section 5. Adjustment for Conversions, Reclassifications, Mergers, etc.
--------- -----------------------------------------------------------
In case of any capital reorganization or any reclassification of the capital
stock of the Company or in case of the consolidation or merger of the Company
with or into another corporation or the conveyance of all or substantially all
of the assets of the Company to another corporation, this Warrant shall
thereafter be exercisable for the number of shares of stock or other securities
or property to which a holder of the number of shares of Series C Common Stock
of the Company deliverable upon exercise of the Warrant would have been entitled
to upon such conversion, reorganization, reclassification, consolidation, merger
or conveyance.
Section 6. Reservation of Shares. The Company (a) will at all times
--------- ---------------------
reserve and keep available a number of its authorized shares of Series C Common
Stock free from all preemptive or similar rights therein, which will be
sufficient to permit the
-2-
exercise of this Warrant, and (b) will take such action as may be necessary or
appropriate so that all shares of Series C Common Stock issued pursuant to the
exercise of this Warrant will, upon issuance, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, except for certain restrictions on transfer set forth in
the Stockholders Agreement and under applicable securities laws.
Section 7. Net Issue Exercise. In lieu of exercising this Warrant in
--------- ------------------
accordance with Section 2, the Holder may elect to receive shares equal to the
value of this Warrant (to the extent exercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election, in
which event the Company shall issue to the Holder a number of shares of the
Company's Series C Common Stock equal to the quotient obtained by dividing (a)
the value of the aggregate number of shares of Series C Common Stock for which
this Warrant is then exercised (determined by subtracting the aggregate Warrant
Price for such shares immediately prior to surrender from the aggregate Fair
Market Value (as hereinafter defined) of such shares), by (b) the Fair Market
Value of one share of Series C Common Stock immediately prior to surrender. For
purposes of this Section, the "Fair Market Value" of the Company's Series C
Common Stock shall mean (i) if the Company has consummated a registered public
offering of its common stock, the average of the closing sale prices of each
share of common stock into which the Company's Series C Common Stock was
converted for the ten (10) business days preceding the date upon which Fair
Market Value is to be determined, or (ii) if the Company has not consummated a
registered public offering of its common stock, the fair market value of each
share of Series C Common Stock, as determined in good faith by the Company's
Board of Directors.
In the event of the surrender of this Warrant, as described above,
certificates for the shares of stock issuable thereon shall be delivered to the
Holder as soon as possible and in any event within three days of receipt of
notice of surrender. If the Warrant is not exercised in full pursuant to such
surrender, a replacement warrant for the portion of the Warrant not so exercised
shall be issued in accordance with Section 3.
Section 8. Surrender of Preferred Stock. Upon the exercise of this
--------- ----------------------------
Warrant by any holder of shares of the Company's Series A Preferred Stock (the
"Preferred Stock"), such holder may, at its option, surrender a portion of such
Preferred Stock to the Company, together with written instructions from such
holder to apply all or a specified portion of the Liquidation Value (as defined
in the Company's Certificate of Incorporation) of the Preferred Stock against
the payment of some or all of the Warrant Price required upon such exercise, in
which case the Company will
-3-
accept such specified portion of the Preferred Stock in lieu of a like amount of
cash payment.
In the event of the surrender of Preferred Stock, as described above,
certificates for the number of shares of Series C Common Stock issuable
hereunder shall be delivered to the holder hereof as soon as possible and in any
event within three days of notice of surrender of the Preferred Stock, together
with a certificate therefor, duly endorsed for transfer and together with this
Warrant, and a certificate for the balance of the Preferred Stock surrendered to
the Company with such notice shall also be issued to the holder hereof as soon
as possible and in any event within such two-day period.
Section 9. Exchange of Warrants. On surrender for exchange of this
--------- --------------------
Warrant, properly endorsed, to the Company, and subject to the restrictions on
transfer set forth in the Stockholders Agreement, the Company at its expense
will issue and deliver to or on the order of the holder thereof a new Warrant of
like tenor, in the name of such holder or as such holder may direct, calling in
the aggregate on the face thereof for the number of shares of Series C Common
Stock called for on the face of the Warrant so surrendered.
Section 10. Replacement of Warrants. On receipt of evidence reasonably
---------- -----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
Section 11. Notices. Any notice or other communication given pursuant to
---------- -------
this Warrant shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested,
to the Company, at its address as it appears in the Stockholders Agreement and
(b) to the Holder, at such Holder's address as it appears in the Stockholders
Agreement (or, if not specified therein, at such Holder's address as it appears
in the records of the Company), unless otherwise indicated by the Company or
such Holder, as the case may be, in each case with any copies required by the
Stockholders Agreement.
Section 12. Fractional Shares. The number of shares of Series C Common
---------- -----------------
Stock to be issued upon exercise of this Warrant shall be rounded to the nearest
whole share, with any fractional shares disregarded.
-4-
Section 13. Legend. A legend setting forth or referring to the
---------- ------
restrictions described on page 1 of this Warrant shall be placed on any
replacement hereof and any certificate representing securities issued pursuant
to the exercise of this Warrant.
Section 14. No Rights as Shareholder. This Warrant shall not entitle the
---------- ------------------------
holder to any voting rights or any other rights as a shareholder of the Company,
except the rights stated herein.
Section 15. Investment Intent. By accepting this Warrant, the holder
---------- -----------------
represents that it is acquiring this Warrant for investment and not with a view
to or for sale in connection with any distribution thereof. The Holder
represents that it is an accredited investor as defined in Regulation D under
the Securities Act.
Section 16. Miscellaneous. This Warrant and any term hereof may be
---------- -------------
amended, modified or waived only by an instrument in writing signed by the
Company and the Holder. This Warrant shall be governed by and construed in
accordance with the General Corporation Law of the State of Delaware and the
internal laws of the Commonwealth of Massachusetts (without regard for its
conflicts of laws principles).
IN WITNESS WHEREOF, this Warrant has been executed and delivered as a
sealed instrument as of the date first above written.
FOUNTAIN VIEW, INC.
By:/s/ Robert Snukal
-----------------------------
Robert Snukal, President
-5-
FORM OF EXERCISE NOTICE
(To be signed only on exercise of Warrant)
TO: FOUNTAIN VIEW, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________* shares of Series C Common Stock of Fountain
View, Inc., and herewith makes payment of $______ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to
_______________, whose address is _________________________________.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
* Insert here the number of shares as to which the Warrant is being
exercised.
-6-
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________ the right represented by the within Warrant to
purchase ______ shares of Series C Common Stock of Fountain View, Inc. to which
the within Warrant relates, and appoints _________________ its attorney to
transfer such right on the books of Fountain View, Inc. with full power of
substitution in the premises.
The undersigned represents and warrants that this transfer is
permitted by the restrictions contained in the Warrant, and acknowledges that
Fountain View, Inc. is entitled to require compliance with those restrictions as
a condition to recognition of this transfer. This Warrant is and remains subject
to the restrictions set forth in the Stockholders Agreement referenced in the
Warrant.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
-7-
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES
LAWS"), AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS (1)
REGISTERED UNDER THE SECURITIES LAWS OR (2) EXEMPT FROM REGISTRATION UNDER THE
SECURITIES LAWS AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS OF MARCH 27, 1998
AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE
WITH THE COMPANY AND WILL BE FURNISHED WITHOUT COST TO THE HOLDER HEREOF UPON
WRITTEN REQUEST TO THE SECRETARY.
No. C-2 Warrant to Purchase 34,257 Shares
of Series C Common Stock
FOUNTAIN VIEW, INC.
Warrant
-------
Void after April 16, 2008
Fountain View, Inc., a Delaware corporation (the "Company"), hereby
-------
certifies that, for value received, Baylor Health Care System or its permitted
assigns (the "Holder"), is entitled, subject to the terms set forth below, to
------
purchase from the Company at any time on or after April 16, 1998, but in any
event not later than 5:00 p.m., Eastern time, on April 16, 2008 (the "Expiration
----------
Date"), up to 34,257 fully paid and nonassessable shares of the Company's Series
- ----
C Common Stock at the purchase price (the "Warrant Price") of $.01 per share and
-------------
otherwise in accordance with the terms hereof.
Section 1. Certain Definitions. As used herein, the following terms have
--------- -------------------
the meanings set forth below:
"Stockholders Agreement" means the Stockholders Agreement dated as of March
----------------------
27, 1998 among the Company, Heritage Fund II, L.P., Heritage Investors II,
L.L.C., Heritage Fund II Investment Corporation, Robert Snukal, Sheila Snukal,
William Scott and certain other parties, as amended from time to time.
Capitalized terms used herein and not otherwise defined shall have the
meanings given to them in the Stockholders Agreement.
Section 2. Exercise. This Warrant shall be exercisable in full or in part
--------- --------
at any time prior to the Expiration Date. Except as otherwise provided in
Sections 7 and 8, this Warrant shall be exercisable by delivery by the Holder to
the Company of notice of exercise setting forth the number of shares for which
the Warrant is being exercised and payment in cash or by check of the Warrant
Price for each share for which this Warrant is being exercised.
Section 3. Delivery of Stock Certificates, etc. on Exercise. As soon as
--------- ------------------------------------------------
practicable after the exercise of this Warrant, and in any event within three
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, (i) a certificate or certificates for the number of
fully paid and nonassessable shares of Series C Common Stock to which the Holder
shall be entitled on such exercise, and (ii) a new Warrant to purchase all of
the shares, if any, to which the Holder shall be entitled to receive in
connection with the portion of the Warrant not so exercised.
Section 4. Adjustment for Stock Splits, Stock Dividends,
--------- ---------------------------------------------
Recapitalizations, etc. The Warrant Price and the number of shares of Series C
- ----------------------
Common Stock issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of Series C Common Stock. In case of any adjustment or
readjustment in the Warrant Price or number of shares of Series C Common Stock
issuable on the exercise of this Warrant, the Company will promptly give written
notice thereof to the Holder in the form of a certificate, certified and
confirmed by the president or treasurer of the Company, setting forth such
adjustment and showing in reasonable detail the facts upon which such adjustment
or readjustment is based.
Section 5. Adjustment for Conversions, Reclassifications, Mergers, etc.
--------- -----------------------------------------------------------
In case of any capital reorganization or any reclassification of the capital
stock of the Company or in case of the consolidation or merger of the Company
with or into another corporation or the conveyance of all or substantially all
of the assets of the Company to another corporation, this Warrant shall
thereafter be exercisable for the number of shares of stock or other securities
or property to which a holder of the number of shares of Series C Common Stock
of the Company deliverable upon exercise of the Warrant would have been entitled
to upon such conversion, reorganization, reclassification, consolidation, merger
or conveyance.
Section 6. Reservation of Shares. The Company (a) will at all times
--------- ---------------------
reserve and keep available a number of its authorized shares of Series C Common
Stock free from all preemptive or similar rights therein, which will be
sufficient to permit the
exercise of this Warrant, and (b) will take such action as may be necessary or
appropriate so that all shares of Series C Common Stock issued pursuant to the
exercise of this Warrant will, upon issuance, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, except for certain restrictions on transfer set forth in
the Stockholders Agreement and under applicable securities laws.
Section 7. Net Issue Exercise. In lieu of exercising this Warrant in
--------- ------------------
accordance with Section 2, the Holder may elect to receive shares equal to the
value of this Warrant (to the extent exercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election, in
which event the Company shall issue to the Holder a number of shares of the
Company's Series C Common Stock equal to the quotient obtained by dividing (a)
the value of the aggregate number of shares of Series C Common Stock for which
this Warrant is then exercised (determined by subtracting the aggregate Warrant
Price for such shares immediately prior to surrender from the aggregate Fair
Market Value (as hereinafter defined) of such shares), by (b) the Fair Market
Value of one share of Series C Common Stock immediately prior to surrender. For
purposes of this Section, the "Fair Market Value" of the Company's Series C
Common Stock shall mean (i) if the Company has consummated a registered public
offering of its common stock, the average of the closing sale prices of each
share of common stock into which the Company's Series C Common Stock was
converted for the ten (10) business days preceding the date upon which Fair
Market Value is to be determined, or (ii) if the Company has not consummated a
registered public offering of its common stock, the fair market value of each
share of Series C Common Stock, as determined in good faith by the Company's
Board of Directors.
In the event of the surrender of this Warrant, as described above,
certificates for the shares of stock issuable thereon shall be delivered to the
Holder as soon as possible and in any event within three days of receipt of
notice of surrender. If the Warrant is not exercised in full pursuant to such
surrender, a replacement warrant for the portion of the Warrant not so exercised
shall be issued in accordance with Section 3.
Section 8. Surrender of Preferred Stock. Upon the exercise of this
--------- ----------------------------
Warrant by any holder of shares of the Company's Series A Preferred Stock (the
"Preferred Stock"), such holder may, at its option, surrender a portion of such
Preferred Stock to the Company, together with written instructions from such
holder to apply all or a specified portion of the Liquidation Value (as defined
in the Company's Certificate of Incorporation) of the Preferred Stock against
the payment of some or all of the Warrant Price required upon such exercise, in
which case the Company will
accept such specified portion of the Preferred Stock in lieu of a like amount of
cash payment.
In the event of the surrender of Preferred Stock, as described above,
certificates for the number of shares of Series C Common Stock issuable
hereunder shall be delivered to the holder hereof as soon as possible and in any
event within three days of notice of surrender of the Preferred Stock, together
with a certificate therefor, duly endorsed for transfer and together with this
Warrant, and a certificate for the balance of the Preferred Stock surrendered to
the Company with such notice shall also be issued to the holder hereof as soon
as possible and in any event within such two-day period.
Section 9. Exchange of Warrants. On surrender for exchange of this
--------- --------------------
Warrant, properly endorsed, to the Company, and subject to the restrictions on
transfer set forth in the Stockholders Agreement, the Company at its expense
will issue and deliver to or on the order of the holder thereof a new Warrant of
like tenor, in the name of such holder or as such holder may direct, calling in
the aggregate on the face thereof for the number of shares of Series C Common
Stock called for on the face of the Warrant so surrendered.
Section 10. Replacement of Warrants. On receipt of evidence reasonably
---------- -----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
Section 11. Notices. Any notice or other communication given pursuant to
---------- -------
this Warrant shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested,
to the Company, at its address as it appears in the Stockholders Agreement and
(b) to the Holder, at such Holder's address as it appears in the Stockholders
Agreement (or, if not specified therein, at such Holder's address as it appears
in the records of the Company), unless otherwise indicated by the Company or
such Holder, as the case may be, in each case with any copies required by the
Stockholders Agreement.
Section 12. Fractional Shares. The number of shares of Series C Common
---------- -----------------
Stock to be issued upon exercise of this Warrant shall be rounded to the nearest
whole share, with any fractional shares disregarded.
Section 13. Legend. A legend setting forth or referring to the
---------- ------
restrictions described on page 1 of this Warrant shall be placed on any
replacement hereof and any certificate representing securities issued pursuant
to the exercise of this Warrant.
Section 14. No Rights as Shareholder. This Warrant shall not entitle the
---------- ------------------------
holder to any voting rights or any other rights as a shareholder of the Company,
except the rights stated herein.
Section 15. Investment Intent. By accepting this Warrant, the holder
---------- -----------------
represents that it is acquiring this Warrant for investment and not with a view
to or for sale in connection with any distribution thereof. The Holder
represents that it is an accredited investor as defined in Regulation D under
the Securities Act.
Section 16. Miscellaneous. This Warrant and any term hereof may be
---------- -------------
amended, modified or waived only by an instrument in writing signed by the
Company and the Holder. This Warrant shall be governed by and construed in
accordance with the General Corporation Law of the State of Delaware and the
internal laws of the Commonwealth of Massachusetts (without regard for its
conflicts of laws principles).
IN WITNESS WHEREOF, this Warrant has been executed and delivered as a
sealed instrument as of the date first above written.
FOUNTAIN VIEW, INC.
/s/ Robert Snukal
By:____________________________
Robert Snukal, President
FORM OF EXERCISE NOTICE
(To be signed only on exercise of Warrant)
TO: FOUNTAIN VIEW, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________* shares of Series C Common Stock of Fountain
View, Inc., and herewith makes payment of $______ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to
_______________, whose address is _________________________________.
Dated: __________, ____
______________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
* Insert here the number of shares as to which the Warrant is being
exercised.
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto __________________ the right represented by the within Warrant to purchase
______ shares of Series C Common Stock of Fountain View, Inc. to which the
within Warrant relates, and appoints _________________ its attorney to transfer
such right on the books of Fountain View, Inc. with full power of substitution
in the premises.
The undersigned represents and warrants that this transfer is permitted by
the restrictions contained in the Warrant, and acknowledges that Fountain View,
Inc. is entitled to require compliance with those restrictions as a condition to
recognition of this transfer. This Warrant is and remains subject to the
restrictions set forth in the Stockholders Agreement referenced in the Warrant.
Dated: __________, ____
______________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES
LAWS"), AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS (1)
REGISTERED UNDER THE SECURITIES LAWS OR (2) EXEMPT FROM REGISTRATION UNDER THE
SECURITIES LAWS AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS OF MARCH 27, 1998
AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE
WITH THE COMPANY AND WILL BE FURNISHED WITHOUT COST TO THE HOLDER HEREOF UPON
WRITTEN REQUEST TO THE SECRETARY.
No. C-3 Warrant to Purchase 10,371 Shares of Series C Common
Stock
FOUNTAIN VIEW, INC.
Warrant
-------
Void after April 16, 2008
Fountain View, Inc., a Delaware corporation (the "Company"), hereby
-------
certifies that, for value received,Baylor Health Care System or its permitted
assigns (the "Holder"), is entitled, subject to the terms set forth below, to
------
purchase from the Company at any time on or after April 16, 1998, but in any
event not later than 5:00 p.m., Eastern time, on April 16, 2008 (the "Expiration
----------
Date"), up to 10,371 fully paid and nonassessable shares of the Company's Series
- ----
C Common Stock at the purchase price (the "Warrant Price") of $.01 per share and
-------------
otherwise in accordance with the terms hereof.
Section 1. Certain Definitions. As used herein, the following terms have
--------- -------------------
the meanings set forth below:
"Stockholders Agreement" means the Stockholders Agreement dated as of March
----------------------
27, 1998 among the Company, Heritage Fund II, L.P., Heritage Investors II,
L.L.C., Heritage Fund II Investment Corporation, Robert Snukal, Sheila Snukal,
William Scott and certain other parties, as amended from time to time.
Capitalized terms used herein and not otherwise defined shall have the
meanings given to them in the Stockholders Agreement.
Section 2. Exercise. This Warrant shall be exercisable in full or in part
--------- --------
at any time prior to the Expiration Date. Except as otherwise provided in
Sections 7 and 8, this Warrant shall be exercisable by delivery by the Holder to
the Company of notice of exercise setting forth the number of shares for which
the Warrant is being exercised and payment in cash or by check of the Warrant
Price for each share for which this Warrant is being exercised.
Section 3. Delivery of Stock Certificates, etc. on Exercise. As soon as
--------- ------------------------------------------------
practicable after the exercise of this Warrant, and in any event within three
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, (i) a certificate or certificates for the number of
fully paid and nonassessable shares of Series C Common Stock to which the Holder
shall be entitled on such exercise, and (ii) a new Warrant to purchase all of
the shares, if any, to which the Holder shall be entitled to receive in
connection with the portion of the Warrant not so exercised.
Section 4. Adjustment for Stock Splits, Stock Dividends,
--------- ---------------------------------------------
Recapitalizations, etc. The Warrant Price and the number of shares of Series C
- ----------------------
Common Stock issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of Series C Common Stock. In case of any adjustment or
readjustment in the Warrant Price or number of shares of Series C Common Stock
issuable on the exercise of this Warrant, the Company will promptly give written
notice thereof to the Holder in the form of a certificate, certified and
confirmed by the president or treasurer of the Company, setting forth such
adjustment and showing in reasonable detail the facts upon which such adjustment
or readjustment is based.
Section 5. Adjustment for Conversions, Reclassifications, Mergers, etc.
--------- -----------------------------------------------------------
In case of any capital reorganization or any reclassification of the capital
stock of the Company or in case of the consolidation or merger of the Company
with or into another corporation or the conveyance of all or substantially all
of the assets of the Company to another corporation, this Warrant shall
thereafter be exercisable for the number of shares of stock or other securities
or property to which a holder of the number of shares of Series C Common Stock
of the Company deliverable upon exercise of the Warrant would have been entitled
to upon such conversion, reorganization, reclassification, consolidation, merger
or conveyance.
Section 6. Reservation of Shares. The Company (a) will at all times
--------- ---------------------
reserve and keep available a number of its authorized shares of Series C Common
Stock free from all preemptive or similar rights therein, which will be
sufficient to permit the
exercise of this Warrant, and (b) will take such action as may be necessary or
appropriate so that all shares of Series C Common Stock issued pursuant to the
exercise of this Warrant will, upon issuance, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, except for certain restrictions on transfer set forth in
the Stockholders Agreement and under applicable securities laws.
Section 7. Net Issue Exercise. In lieu of exercising this Warrant in
--------- ------------------
accordance with Section 2, the Holder may elect to receive shares equal to the
value of this Warrant (to the extent exercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election, in
which event the Company shall issue to the Holder a number of shares of the
Company's Series C Common Stock equal to the quotient obtained by dividing (a)
the value of the aggregate number of shares of Series C Common Stock for which
this Warrant is then exercised (determined by subtracting the aggregate Warrant
Price for such shares immediately prior to surrender from the aggregate Fair
Market Value (as hereinafter defined) of such shares), by (b) the Fair Market
Value of one share of Series C Common Stock immediately prior to surrender. For
purposes of this Section, the "Fair Market Value" of the Company's Series C
Common Stock shall mean (i) if the Company has consummated a registered public
offering of its common stock, the average of the closing sale prices of each
share of common stock into which the Company's Series C Common Stock was
converted for the ten (10) business days preceding the date upon which Fair
Market Value is to be determined, or (ii) if the Company has not consummated a
registered public offering of its common stock, the fair market value of each
share of Series C Common Stock, as determined in good faith by the Company's
Board of Directors.
In the event of the surrender of this Warrant, as described above,
certificates for the shares of stock issuable thereon shall be delivered to the
Holder as soon as possible and in any event within three days of receipt of
notice of surrender. If the Warrant is not exercised in full pursuant to such
surrender, a replacement warrant for the portion of the Warrant not so exercised
shall be issued in accordance with Section 3.
Section 8. Surrender of Preferred Stock. Upon the exercise of this
--------- ----------------------------
Warrant by any holder of shares of the Company's Series A Preferred Stock (the
"Preferred Stock"), such holder may, at its option, surrender a portion of such
Preferred Stock to the Company, together with written instructions from such
holder to apply all or a specified portion of the Liquidation Value (as defined
in the Company's Certificate of Incorporation) of the Preferred Stock against
the payment of some or all of the Warrant Price required upon such exercise, in
which case the Company will
accept such specified portion of the Preferred Stock in lieu of a like amount of
cash payment.
In the event of the surrender of Preferred Stock, as described above,
certificates for the number of shares of Series C Common Stock issuable
hereunder shall be delivered to the holder hereof as soon as possible and in any
event within three days of notice of surrender of the Preferred Stock, together
with a certificate therefor, duly endorsed for transfer and together with this
Warrant, and a certificate for the balance of the Preferred Stock surrendered to
the Company with such notice shall also be issued to the holder hereof as soon
as possible and in any event within such two-day period.
Section 9. Exchange of Warrants. On surrender for exchange of this
--------- --------------------
Warrant, properly endorsed, to the Company, and subject to the restrictions on
transfer set forth in the Stockholders Agreement, the Company at its expense
will issue and deliver to or on the order of the holder thereof a new Warrant of
like tenor, in the name of such holder or as such holder may direct, calling in
the aggregate on the face thereof for the number of shares of Series C Common
Stock called for on the face of the Warrant so surrendered.
Section 10. Replacement of Warrants. On receipt of evidence reasonably
---------- -----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
Section 11. Notices. Any notice or other communication given pursuant to
---------- -------
this Warrant shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested,
to the Company, at its address as it appears in the Stockholders Agreement and
(b) to the Holder, at such Holder's address as it appears in the Stockholders
Agreement (or, if not specified therein, at such Holder's address as it appears
in the records of the Company), unless otherwise indicated by the Company or
such Holder, as the case may be, in each case with any copies required by the
Stockholders Agreement.
Section 12. Fractional Shares. The number of shares of Series C Common
---------- -----------------
Stock to be issued upon exercise of this Warrant shall be rounded to the nearest
whole share, with any fractional shares disregarded.
Section 13. Legend. A legend setting forth or referring to the
---------- ------
restrictions described on page 1 of this Warrant shall be placed on any
replacement hereof and any certificate representing securities issued pursuant
to the exercise of this Warrant.
Section 14. No Rights as Shareholder. This Warrant shall not entitle the
---------- ------------------------
holder to any voting rights or any other rights as a shareholder of the Company,
except the rights stated herein.
Section 15. Investment Intent. By accepting this Warrant, the holder
---------- -----------------
represents that it is acquiring this Warrant for investment and not with a view
to or for sale in connection with any distribution thereof. The Holder
represents that it is an accredited investor as defined in Regulation D under
the Securities Act.
Section 16. Miscellaneous. This Warrant and any term hereof may be
---------- -------------
amended, modified or waived only by an instrument in writing signed by the
Company and the Holder. This Warrant shall be governed by and construed in
accordance with the General Corporation Law of the State of Delaware and the
internal laws of the Commonwealth of Massachusetts (without regard for its
conflicts of laws principles).
IN WITNESS WHEREOF, this Warrant has been executed and delivered as a
sealed instrument as of the date first above written.
FOUNTAIN VIEW, INC.
By:/s/ Robert Snukal
-----------------
Robert Snukal, President
FORM OF EXERCISE NOTICE
(To be signed only on exercise of Warrant)
TO: FOUNTAIN VIEW, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________* shares of Series C Common Stock of Fountain
View, Inc., and herewith makes payment of $______ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to
_______________, whose address is _________________________________.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
* Insert here the number of shares as to which the Warrant is being
exercised.
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto __________________ the right represented by the within Warrant to purchase
______ shares of Series C Common Stock of Fountain View, Inc. to which the
within Warrant relates, and appoints _________________ its attorney to transfer
such right on the books of Fountain View, Inc. with full power of substitution
in the premises.
The undersigned represents and warrants that this transfer is permitted by
the restrictions contained in the Warrant, and acknowledges that Fountain View,
Inc. is entitled to require compliance with those restrictions as a condition to
recognition of this transfer. This Warrant is and remains subject to the
restrictions set forth in the Stockholders Agreement referenced in the Warrant.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES
LAWS"), AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS (1)
REGISTERED UNDER THE SECURITIES LAWS OR (2) EXEMPT FROM REGISTRATION UNDER THE
SECURITIES LAWS AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS OF MARCH 27, 1998
AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE
WITH THE COMPANY AND WILL BE FURNISHED WITHOUT COST TO THE HOLDER HEREOF UPON
WRITTEN REQUEST TO THE SECRETARY.
No. C-4 Warrant to Purchase 10,371 Shares of Series C Common
Stock
FOUNTAIN VIEW, INC.
Warrant
-------
Void after April 16, 2008
Fountain View, Inc., a Delaware corporation (the "Company"), hereby
-------
certifies that, for value received, Baylor Health Care System or its permitted
assigns (the "Holder"), is entitled, subject to the terms set forth below, to
------
purchase from the Company at any time on or after April 16, 1998, but in any
event not later than 5:00 p.m., Eastern time, on April 16, 2008 (the "Expiration
----------
Date"), up to 10,371 fully paid and nonassessable shares of the Company's Series
- ----
C Common Stock at the purchase price (the "Warrant Price") of $.01 per share and
-------------
otherwise in accordance with the terms hereof.
Section 1. Certain Definitions. As used herein, the following terms have
--------- -------------------
the meanings set forth below:
"Stockholders Agreement" means the Stockholders Agreement dated as of March
----------------------
27, 1998 among the Company, Heritage Fund II, L.P., Heritage Investors II,
L.L.C., Heritage Fund II Investment Corporation, Robert Snukal, Sheila Snukal,
William Scott and certain other parties, as amended from time to time.
Capitalized terms used herein and not otherwise defined shall have the
meanings given to them in the Stockholders Agreement.
Section 2. Exercise. This Warrant shall be exercisable in full or in part
--------- --------
at any time prior to the Expiration Date. Except as otherwise provided in
Sections 7 and 8, this Warrant shall be exercisable by delivery by the Holder to
the Company of notice of exercise setting forth the number of shares for which
the Warrant is being exercised and payment in cash or by check of the Warrant
Price for each share for which this Warrant is being exercised.
Section 3. Delivery of Stock Certificates, etc. on Exercise. As soon as
--------- ------------------------------------------------
practicable after the exercise of this Warrant, and in any event within three
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, (i) a certificate or certificates for the number of
fully paid and nonassessable shares of Series C Common Stock to which the Holder
shall be entitled on such exercise, and (ii) a new Warrant to purchase all of
the shares, if any, to which the Holder shall be entitled to receive in
connection with the portion of the Warrant not so exercised.
Section 4. Adjustment for Stock Splits, Stock Dividends,
--------- ---------------------------------------------
Recapitalizations, etc. The Warrant Price and the number of shares of Series C
- ----------------------
Common Stock issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of Series C Common Stock. In case of any adjustment or
readjustment in the Warrant Price or number of shares of Series C Common Stock
issuable on the exercise of this Warrant, the Company will promptly give written
notice thereof to the Holder in the form of a certificate, certified and
confirmed by the president or treasurer of the Company, setting forth such
adjustment and showing in reasonable detail the facts upon which such adjustment
or readjustment is based.
Section 5. Adjustment for Conversions, Reclassifications, Mergers, etc.
--------- -----------------------------------------------------------
In case of any capital reorganization or any reclassification of the capital
stock of the Company or in case of the consolidation or merger of the Company
with or into another corporation or the conveyance of all or substantially all
of the assets of the Company to another corporation, this Warrant shall
thereafter be exercisable for the number of shares of stock or other securities
or property to which a holder of the number of shares of Series C Common Stock
of the Company deliverable upon exercise of the Warrant would have been entitled
to upon such conversion, reorganization, reclassification, consolidation, merger
or conveyance.
Section 6. Reservation of Shares. The Company (a) will at all times
--------- ---------------------
reserve and keep available a number of its authorized shares of Series C Common
Stock free from all preemptive or similar rights therein, which will be
sufficient to permit the
exercise of this Warrant, and (b) will take such action as may be necessary or
appropriate so that all shares of Series C Common Stock issued pursuant to the
exercise of this Warrant will, upon issuance, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, except for certain restrictions on transfer set forth in
the Stockholders Agreement and under applicable securities laws.
Section 7. Net Issue Exercise. In lieu of exercising this Warrant in
--------- ------------------
accordance with Section 2, the Holder may elect to receive shares equal to the
value of this Warrant (to the extent exercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election, in
which event the Company shall issue to the Holder a number of shares of the
Company's Series C Common Stock equal to the quotient obtained by dividing (a)
the value of the aggregate number of shares of Series C Common Stock for which
this Warrant is then exercised (determined by subtracting the aggregate Warrant
Price for such shares immediately prior to surrender from the aggregate Fair
Market Value (as hereinafter defined) of such shares), by (b) the Fair Market
Value of one share of Series C Common Stock immediately prior to surrender. For
purposes of this Section, the "Fair Market Value" of the Company's Series C
Common Stock shall mean (i) if the Company has consummated a registered public
offering of its common stock, the average of the closing sale prices of each
share of common stock into which the Company's Series C Common Stock was
converted for the ten (10) business days preceding the date upon which Fair
Market Value is to be determined, or (ii) if the Company has not consummated a
registered public offering of its common stock, the fair market value of each
share of Series C Common Stock, as determined in good faith by the Company's
Board of Directors.
In the event of the surrender of this Warrant, as described above,
certificates for the shares of stock issuable thereon shall be delivered to the
Holder as soon as possible and in any event within three days of receipt of
notice of surrender. If the Warrant is not exercised in full pursuant to such
surrender, a replacement warrant for the portion of the Warrant not so exercised
shall be issued in accordance with Section 3.
Section 8. Surrender of Preferred Stock. Upon the exercise of this
--------- ----------------------------
Warrant by any holder of shares of the Company's Series A Preferred Stock (the
"Preferred Stock"), such holder may, at its option, surrender a portion of such
Preferred Stock to the Company, together with written instructions from such
holder to apply all or a specified portion of the Liquidation Value (as defined
in the Company's Certificate of Incorporation) of the Preferred Stock against
the payment of some or all of the Warrant Price required upon such exercise, in
which case the Company will
accept such specified portion of the Preferred Stock in lieu of a like amount of
cash payment.
In the event of the surrender of Preferred Stock, as described above,
certificates for the number of shares of Series C Common Stock issuable
hereunder shall be delivered to the holder hereof as soon as possible and in any
event within three days of notice of surrender of the Preferred Stock, together
with a certificate therefor, duly endorsed for transfer and together with this
Warrant, and a certificate for the balance of the Preferred Stock surrendered to
the Company with such notice shall also be issued to the holder hereof as soon
as possible and in any event within such two-day period.
Section 9. Exchange of Warrants. On surrender for exchange of this
--------- --------------------
Warrant, properly endorsed, to the Company, and subject to the restrictions on
transfer set forth in the Stockholders Agreement, the Company at its expense
will issue and deliver to or on the order of the holder thereof a new Warrant of
like tenor, in the name of such holder or as such holder may direct, calling in
the aggregate on the face thereof for the number of shares of Series C Common
Stock called for on the face of the Warrant so surrendered.
Section 10. Replacement of Warrants. On receipt of evidence reasonably
---------- -----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
Section 11. Notices. Any notice or other communication given pursuant to
---------- -------
this Warrant shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested,
to the Company, at its address as it appears in the Stockholders Agreement and
(b) to the Holder, at such Holder's address as it appears in the Stockholders
Agreement (or, if not specified therein, at such Holder's address as it appears
in the records of the Company), unless otherwise indicated by the Company or
such Holder, as the case may be, in each case with any copies required by the
Stockholders Agreement.
Section 12. Fractional Shares. The number of shares of Series C Common
---------- -----------------
Stock to be issued upon exercise of this Warrant shall be rounded to the nearest
whole share, with any fractional shares disregarded.
Section 13. Legend. A legend setting forth or referring to the
---------- ------
restrictions described on page 1 of this Warrant shall be placed on any
replacement hereof and any certificate representing securities issued pursuant
to the exercise of this Warrant.
Section 14. No Rights as Shareholder. This Warrant shall not entitle the
---------- ------------------------
holder to any voting rights or any other rights as a shareholder of the Company,
except the rights stated herein.
Section 15. Investment Intent. By accepting this Warrant, the holder
---------- -----------------
represents that it is acquiring this Warrant for investment and not with a view
to or for sale in connection with any distribution thereof. The Holder
represents that it is an accredited investor as defined in Regulation D under
the Securities Act.
Section 16. Miscellaneous. This Warrant and any term hereof may be
---------- -------------
amended, modified or waived only by an instrument in writing signed by the
Company and the Holder. This Warrant shall be governed by and construed in
accordance with the General Corporation Law of the State of Delaware and the
internal laws of the Commonwealth of Massachusetts (without regard for its
conflicts of laws principles).
IN WITNESS WHEREOF, this Warrant has been executed and delivered as a
sealed instrument as of the date first above written.
FOUNTAIN VIEW, INC.
By:/s/ Robert Snukal
-----------------
Robert Snukal, President
FORM OF EXERCISE NOTICE
(To be signed only on exercise of Warrant)
TO: FOUNTAIN VIEW, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________* shares of Series C Common Stock of Fountain
View, Inc., and herewith makes payment of $______ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to
_______________, whose address is _________________________________.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
* Insert here the number of shares as to which the Warrant is being
exercised.
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto __________________ the right represented by the within Warrant to purchase
______ shares of Series C Common Stock of Fountain View, Inc. to which the
within Warrant relates, and appoints _________________ its attorney to transfer
such right on the books of Fountain View, Inc. with full power of substitution
in the premises.
The undersigned represents and warrants that this transfer is permitted by
the restrictions contained in the Warrant, and acknowledges that Fountain View,
Inc. is entitled to require compliance with those restrictions as a condition to
recognition of this transfer. This Warrant is and remains subject to the
restrictions set forth in the Stockholders Agreement referenced in the Warrant.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES
LAWS"), AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS (1)
REGISTERED UNDER THE SECURITIES LAWS OR (2) EXEMPT FROM REGISTRATION UNDER THE
SECURITIES LAWS AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS OF MARCH 27, 1998
AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE
WITH THE COMPANY AND WILL BE FURNISHED WITHOUT COST TO THE HOLDER HEREOF UPON
WRITTEN REQUEST TO THE SECRETARY.
No. C-5 Warrant to Purchase 4,267 Shares of Series C Common
Stock
FOUNTAIN VIEW, INC.
Warrant
-------
Void after April 16, 2008
Fountain View, Inc., a Delaware corporation (the "Company"), hereby
-------
certifies that, for value received, Buckner Foundation or its permitted assigns
(the "Holder"), is entitled, subject to the terms set forth below, to purchase
------
from the Company at any time on or after April 16, 1998, but in any event not
later than 5:00 p.m., Eastern time, on April 16, 2008 (the "Expiration Date"),
---------------
up to 4,267 fully paid and nonassessable shares of the Company's Series C Common
Stock at the purchase price (the "Warrant Price") of $.01 per share and
-------------
otherwise in accordance with the terms hereof.
Section 1. Certain Definitions. As used herein, the following terms have
--------- -------------------
the meanings set forth below:
"Stockholders Agreement" means the Stockholders Agreement dated as of March
----------------------
27, 1998 among the Company, Heritage Fund II, L.P., Heritage Investors II,
L.L.C., Heritage Fund II Investment Corporation, Robert Snukal, Sheila Snukal,
William Scott and certain other parties, as amended from time to time.
Capitalized terms used herein and not otherwise defined shall have the
meanings given to them in the Stockholders Agreement.
Section 2. Exercise. This Warrant shall be exercisable in full or in part
--------- --------
at any time prior to the Expiration Date. Except as otherwise provided in
Sections 7 and 8, this Warrant shall be exercisable by delivery by the Holder to
the Company of notice of exercise setting forth the number of shares for which
the Warrant is being exercised and payment in cash or by check of the Warrant
Price for each share for which this Warrant is being exercised.
Section 3. Delivery of Stock Certificates, etc. on Exercise. As soon as
--------- ------------------------------------------------
practicable after the exercise of this Warrant, and in any event within three
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, (i) a certificate or certificates for the number of
fully paid and nonassessable shares of Series C Common Stock to which the Holder
shall be entitled on such exercise, and (ii) a new Warrant to purchase all of
the shares, if any, to which the Holder shall be entitled to receive in
connection with the portion of the Warrant not so exercised.
Section 4. Adjustment for Stock Splits, Stock Dividends,
--------- ---------------------------------------------
Recapitalizations, etc. The Warrant Price and the number of shares of Series C
- ----------------------
Common Stock issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of Series C Common Stock. In case of any adjustment or
readjustment in the Warrant Price or number of shares of Series C Common Stock
issuable on the exercise of this Warrant, the Company will promptly give written
notice thereof to the Holder in the form of a certificate, certified and
confirmed by the president or treasurer of the Company, setting forth such
adjustment and showing in reasonable detail the facts upon which such adjustment
or readjustment is based.
Section 5. Adjustment for Conversions, Reclassifications, Mergers, etc.
--------- -----------------------------------------------------------
In case of any capital reorganization or any reclassification of the capital
stock of the Company or in case of the consolidation or merger of the Company
with or into another corporation or the conveyance of all or substantially all
of the assets of the Company to another corporation, this Warrant shall
thereafter be exercisable for the number of shares of stock or other securities
or property to which a holder of the number of shares of Series C Common Stock
of the Company deliverable upon exercise of the Warrant would have been entitled
to upon such conversion, reorganization, reclassification, consolidation, merger
or conveyance.
Section 6. Reservation of Shares. The Company (a) will at all times
--------- ---------------------
reserve and keep available a number of its authorized shares of Series C Common
Stock free from all preemptive or similar rights therein, which will be
sufficient to permit the
exercise of this Warrant, and (b) will take such action as may be necessary or
appropriate so that all shares of Series C Common Stock issued pursuant to the
exercise of this Warrant will, upon issuance, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, except for certain restrictions on transfer set forth in
the Stockholders Agreement and under applicable securities laws.
Section 7. Net Issue Exercise. In lieu of exercising this Warrant in
--------- ------------------
accordance with Section 2, the Holder may elect to receive shares equal to the
value of this Warrant (to the extent exercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election, in
which event the Company shall issue to the Holder a number of shares of the
Company's Series C Common Stock equal to the quotient obtained by dividing (a)
the value of the aggregate number of shares of Series C Common Stock for which
this Warrant is then exercised (determined by subtracting the aggregate Warrant
Price for such shares immediately prior to surrender from the aggregate Fair
Market Value (as hereinafter defined) of such shares), by (b) the Fair Market
Value of one share of Series C Common Stock immediately prior to surrender. For
purposes of this Section, the "Fair Market Value" of the Company's Series C
Common Stock shall mean (i) if the Company has consummated a registered public
offering of its common stock, the average of the closing sale prices of each
share of common stock into which the Company's Series C Common Stock was
converted for the ten (10) business days preceding the date upon which Fair
Market Value is to be determined, or (ii) if the Company has not consummated a
registered public offering of its common stock, the fair market value of each
share of Series C Common Stock, as determined in good faith by the Company's
Board of Directors.
In the event of the surrender of this Warrant, as described above,
certificates for the shares of stock issuable thereon shall be delivered to the
Holder as soon as possible and in any event within three days of receipt of
notice of surrender. If the Warrant is not exercised in full pursuant to such
surrender, a replacement warrant for the portion of the Warrant not so exercised
shall be issued in accordance with Section 3.
Section 8. Surrender of Preferred Stock. Upon the exercise of this
--------- ----------------------------
Warrant by any holder of shares of the Company's Series A Preferred Stock (the
"Preferred Stock"), such holder may, at its option, surrender a portion of such
Preferred Stock to the Company, together with written instructions from such
holder to apply all or a specified portion of the Liquidation Value (as defined
in the Company's Certificate of Incorporation) of the Preferred Stock against
the payment of some or all of the Warrant Price required upon such exercise, in
which case the Company will
accept such specified portion of the Preferred Stock in lieu of a like amount of
cash payment.
In the event of the surrender of Preferred Stock, as described above,
certificates for the number of shares of Series C Common Stock issuable
hereunder shall be delivered to the holder hereof as soon as possible and in any
event within three days of notice of surrender of the Preferred Stock, together
with a certificate therefor, duly endorsed for transfer and together with this
Warrant, and a certificate for the balance of the Preferred Stock surrendered to
the Company with such notice shall also be issued to the holder hereof as soon
as possible and in any event within such two-day period.
Section 9. Exchange of Warrants. On surrender for exchange of this
--------- --------------------
Warrant, properly endorsed, to the Company, and subject to the restrictions on
transfer set forth in the Stockholders Agreement, the Company at its expense
will issue and deliver to or on the order of the holder thereof a new Warrant of
like tenor, in the name of such holder or as such holder may direct, calling in
the aggregate on the face thereof for the number of shares of Series C Common
Stock called for on the face of the Warrant so surrendered.
Section 10. Replacement of Warrants. On receipt of evidence reasonably
---------- -----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
Section 11. Notices. Any notice or other communication given pursuant to
---------- -------
this Warrant shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested,
to the Company, at its address as it appears in the Stockholders Agreement and
(b) to the Holder, at such Holder's address as it appears in the Stockholders
Agreement (or, if not specified therein, at such Holder's address as it appears
in the records of the Company), unless otherwise indicated by the Company or
such Holder, as the case may be, in each case with any copies required by the
Stockholders Agreement.
Section 12. Fractional Shares. The number of shares of Series C Common
---------- -----------------
Stock to be issued upon exercise of this Warrant shall be rounded to the nearest
whole share, with any fractional shares disregarded.
Section 13. Legend. A legend setting forth or referring to the
---------- ------
restrictions described on page 1 of this Warrant shall be placed on any
replacement hereof and any certificate representing securities issued pursuant
to the exercise of this Warrant.
Section 14. No Rights as Shareholder. This Warrant shall not entitle the
---------- ------------------------
holder to any voting rights or any other rights as a shareholder of the Company,
except the rights stated herein.
Section 15. Investment Intent. By accepting this Warrant, the holder
---------- -----------------
represents that it is acquiring this Warrant for investment and not with a view
to or for sale in connection with any distribution thereof. The Holder
represents that it is an accredited investor as defined in Regulation D under
the Securities Act.
Section 16. Miscellaneous. This Warrant and any term hereof may be
---------- -------------
amended, modified or waived only by an instrument in writing signed by the
Company and the Holder. This Warrant shall be governed by and construed in
accordance with the General Corporation Law of the State of Delaware and the
internal laws of the Commonwealth of Massachusetts (without regard for its
conflicts of laws principles).
IN WITNESS WHEREOF, this Warrant has been executed and delivered as a
sealed instrument as of the date first above written.
FOUNTAIN VIEW, INC.
By:/s/ Robert Snukal
-----------------
Robert Snukal, President
FORM OF EXERCISE NOTICE
(To be signed only on exercise of Warrant)
TO: FOUNTAIN VIEW, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________* shares of Series C Common Stock of Fountain
View, Inc., and herewith makes payment of $______ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to
_______________, whose address is _________________________________.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
* Insert here the number of shares as to which the Warrant is being
exercised.
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto __________________ the right represented by the within Warrant to purchase
______ shares of Series C Common Stock of Fountain View, Inc. to which the
within Warrant relates, and appoints _________________ its attorney to transfer
such right on the books of Fountain View, Inc. with full power of substitution
in the premises.
The undersigned represents and warrants that this transfer is permitted by
the restrictions contained in the Warrant, and acknowledges that Fountain View,
Inc. is entitled to require compliance with those restrictions as a condition to
recognition of this transfer. This Warrant is and remains subject to the
restrictions set forth in the Stockholders Agreement referenced in the Warrant.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES
LAWS"), AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS (1)
REGISTERED UNDER THE SECURITIES LAWS OR (2) EXEMPT FROM REGISTRATION UNDER THE
SECURITIES LAWS AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS OF MARCH 27, 1998
AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE
WITH THE COMPANY AND WILL BE FURNISHED WITHOUT COST TO THE HOLDER HEREOF UPON
WRITTEN REQUEST TO THE SECRETARY.
No. C-6 Warrant to Purchase 11,853 Shares of Series C Common
Stock
FOUNTAIN VIEW, INC.
Warrant
-------
Void after April 16, 2008
Fountain View, Inc., a Delaware corporation (the "Company"), hereby
-------
certifies that, for value received, Heritage Fund II Investment Corporation or
its permitted assigns (the "Holder"), is entitled, subject to the terms set
------
forth below, to purchase from the Company at any time on or after April 16,
1998, but in any event not later than 5:00 p.m., Eastern time, on April 16, 2008
(the "Expiration Date"), up to 11,853 fully paid and nonassessable shares of the
---------------
Company's Series C Common Stock at the purchase price (the "Warrant Price") of
-------------
$.01 per share and otherwise in accordance with the terms hereof.
Section 1. Certain Definitions. As used herein, the following terms have
--------- -------------------
the meanings set forth below:
"Stockholders Agreement" means the Stockholders Agreement dated as of March
----------------------
27, 1998 among the Company, Heritage Fund II, L.P., Heritage Investors II,
L.L.C., Heritage Fund II Investment Corporation, Robert Snukal, Sheila Snukal,
William Scott and certain other parties, as amended from time to time.
Capitalized terms used herein and not otherwise defined shall have the
meanings given to them in the Stockholders Agreement.
Section 2. Exercise. This Warrant shall be exercisable in full or in part
--------- --------
at any time prior to the Expiration Date. Except as otherwise provided in
Sections 7 and 8, this Warrant shall be exercisable by delivery by the Holder to
the Company of notice of exercise setting forth the number of shares for which
the Warrant is being exercised and payment in cash or by check of the Warrant
Price for each share for which this Warrant is being exercised.
Section 3. Delivery of Stock Certificates, etc. on Exercise. As soon as
--------- ------------------------------------------------
practicable after the exercise of this Warrant, and in any event within three
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, (i) a certificate or certificates for the number of
fully paid and nonassessable shares of Series C Common Stock to which the Holder
shall be entitled on such exercise, and (ii) a new Warrant to purchase all of
the shares, if any, to which the Holder shall be entitled to receive in
connection with the portion of the Warrant not so exercised.
Section 4. Adjustment for Stock Splits, Stock Dividends,
--------- ---------------------------------------------
Recapitalizations, etc. The Warrant Price and the number of shares of Series C
- ----------------------
Common Stock issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of Series C Common Stock. In case of any adjustment or
readjustment in the Warrant Price or number of shares of Series C Common Stock
issuable on the exercise of this Warrant, the Company will promptly give written
notice thereof to the Holder in the form of a certificate, certified and
confirmed by the president or treasurer of the Company, setting forth such
adjustment and showing in reasonable detail the facts upon which such adjustment
or readjustment is based.
Section 5. Adjustment for Conversions, Reclassifications, Mergers, etc.
--------- -----------------------------------------------------------
In case of any capital reorganization or any reclassification of the capital
stock of the Company or in case of the consolidation or merger of the Company
with or into another corporation or the conveyance of all or substantially all
of the assets of the Company to another corporation, this Warrant shall
thereafter be exercisable for the number of shares of stock or other securities
or property to which a holder of the number of shares of Series C Common Stock
of the Company deliverable upon exercise of the Warrant would have been entitled
to upon such conversion, reorganization, reclassification, consolidation, merger
or conveyance.
Section 6. Reservation of Shares. The Company (a) will at all times
--------- ---------------------
reserve and keep available a number of its authorized shares of Series C Common
Stock free from all preemptive or similar rights therein, which will be
sufficient to permit the
exercise of this Warrant, and (b) will take such action as may be necessary or
appropriate so that all shares of Series C Common Stock issued pursuant to the
exercise of this Warrant will, upon issuance, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, except for certain restrictions on transfer set forth in
the Stockholders Agreement and under applicable securities laws.
Section 7. Net Issue Exercise. In lieu of exercising this Warrant in
--------- ------------------
accordance with Section 2, the Holder may elect to receive shares equal to the
value of this Warrant (to the extent exercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election, in
which event the Company shall issue to the Holder a number of shares of the
Company's Series C Common Stock equal to the quotient obtained by dividing (a)
the value of the aggregate number of shares of Series C Common Stock for which
this Warrant is then exercised (determined by subtracting the aggregate Warrant
Price for such shares immediately prior to surrender from the aggregate Fair
Market Value (as hereinafter defined) of such shares), by (b) the Fair Market
Value of one share of Series C Common Stock immediately prior to surrender. For
purposes of this Section, the "Fair Market Value" of the Company's Series C
Common Stock shall mean (i) if the Company has consummated a registered public
offering of its common stock, the average of the closing sale prices of each
share of common stock into which the Company's Series C Common Stock was
converted for the ten (10) business days preceding the date upon which Fair
Market Value is to be determined, or (ii) if the Company has not consummated a
registered public offering of its common stock, the fair market value of each
share of Series C Common Stock, as determined in good faith by the Company's
Board of Directors.
In the event of the surrender of this Warrant, as described above,
certificates for the shares of stock issuable thereon shall be delivered to the
Holder as soon as possible and in any event within three days of receipt of
notice of surrender. If the Warrant is not exercised in full pursuant to such
surrender, a replacement warrant for the portion of the Warrant not so exercised
shall be issued in accordance with Section 3.
Section 8. Surrender of Preferred Stock. Upon the exercise of this
--------- ----------------------------
Warrant by any holder of shares of the Company's Series A Preferred Stock (the
"Preferred Stock"), such holder may, at its option, surrender a portion of such
Preferred Stock to the Company, together with written instructions from such
holder to apply all or a specified portion of the Liquidation Value (as defined
in the Company's Certificate of Incorporation) of the Preferred Stock against
the payment of some or all of the Warrant Price required upon such exercise, in
which case the Company will
accept such specified portion of the Preferred Stock in lieu of a like amount of
cash payment.
In the event of the surrender of Preferred Stock, as described above,
certificates for the number of shares of Series C Common Stock issuable
hereunder shall be delivered to the holder hereof as soon as possible and in any
event within three days of notice of surrender of the Preferred Stock, together
with a certificate therefor, duly endorsed for transfer and together with this
Warrant, and a certificate for the balance of the Preferred Stock surrendered to
the Company with such notice shall also be issued to the holder hereof as soon
as possible and in any event within such two-day period.
Section 9. Exchange of Warrants. On surrender for exchange of this
--------- --------------------
Warrant, properly endorsed, to the Company, and subject to the restrictions on
transfer set forth in the Stockholders Agreement, the Company at its expense
will issue and deliver to or on the order of the holder thereof a new Warrant of
like tenor, in the name of such holder or as such holder may direct, calling in
the aggregate on the face thereof for the number of shares of Series C Common
Stock called for on the face of the Warrant so surrendered.
Section 10. Replacement of Warrants. On receipt of evidence reasonably
---------- -----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
Section 11. Notices. Any notice or other communication given pursuant to
---------- -------
this Warrant shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested,
to the Company, at its address as it appears in the Stockholders Agreement and
(b) to the Holder, at such Holder's address as it appears in the Stockholders
Agreement (or, if not specified therein, at such Holder's address as it appears
in the records of the Company), unless otherwise indicated by the Company or
such Holder, as the case may be, in each case with any copies required by the
Stockholders Agreement.
Section 12. Fractional Shares. The number of shares of Series C Common
---------- -----------------
Stock to be issued upon exercise of this Warrant shall be rounded to the nearest
whole share, with any fractional shares disregarded.
Section 13. Legend. A legend setting forth or referring to the
---------- ------
restrictions described on page 1 of this Warrant shall be placed on any
replacement hereof and any certificate representing securities issued pursuant
to the exercise of this Warrant.
Section 14. No Rights as Shareholder. This Warrant shall not entitle the
---------- ------------------------
holder to any voting rights or any other rights as a shareholder of the Company,
except the rights stated herein.
Section 15. Investment Intent. By accepting this Warrant, the holder
---------- -----------------
represents that it is acquiring this Warrant for investment and not with a view
to or for sale in connection with any distribution thereof. The Holder
represents that it is an accredited investor as defined in Regulation D under
the Securities Act.
Section 16. Miscellaneous. This Warrant and any term hereof may be
---------- -------------
amended, modified or waived only by an instrument in writing signed by the
Company and the Holder. This Warrant shall be governed by and construed in
accordance with the General Corporation Law of the State of Delaware and the
internal laws of the Commonwealth of Massachusetts (without regard for its
conflicts of laws principles).
IN WITNESS WHEREOF, this Warrant has been executed and delivered as a
sealed instrument as of the date first above written.
FOUNTAIN VIEW, INC.
By:/s/ Robert Snukal
-----------------
Robert Snukal, President
FORM OF EXERCISE NOTICE
(To be signed only on exercise of Warrant)
TO: FOUNTAIN VIEW, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________* shares of Series C Common Stock of Fountain
View, Inc., and herewith makes payment of $______ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to
_______________, whose address is _________________________________.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)
* Insert here the number of shares as to which the Warrant is being
exercised.
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto __________________ the right represented by the within Warrant to purchase
______ shares of Series C Common Stock of Fountain View, Inc. to which the
within Warrant relates, and appoints _________________ its attorney to transfer
such right on the books of Fountain View, Inc. with full power of substitution
in the premises.
The undersigned represents and warrants that this transfer is permitted by
the restrictions contained in the Warrant, and acknowledges that Fountain View,
Inc. is entitled to require compliance with those restrictions as a condition to
recognition of this transfer. This Warrant is and remains subject to the
restrictions set forth in the Stockholders Agreement referenced in the Warrant.
Dated: __________, ____
_____________________________
(Signature must conform in all
respects to name of holder
specified on the face of the
Warrant)