Exhibit 4.8
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WARRANT AGREEMENT
AMONG
CONCENTRA MANAGED CARE, INC.
and
the parties named herein
Dated as of August 17, 1999
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TABLE OF CONTENTS1
PAGE
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SECTION 1. Warrant Certificates...........................................1
SECTION 2. Execution of Warrant Certificates..............................1
SECTION 3. Registration...................................................2
SECTION 4. Registration of Transfers and Exchanges........................2
SECTION 5. Warrants; Exercise of Warrants.................................4
SECTION 6. Payment of Taxes...............................................6
SECTION 7. Mutilated or Missing Warrant Certificates......................6
SECTION 8. Reservation of Warrant Shares..................................6
SECTION 9. Obtaining Stock Exchange Listings..............................7
SECTION 10. Adjustment of Number of Warrant Shares Issuable................7
SECTION 11. Fractional Interests..........................................16
SECTION 12. Notices to Warrant Holders....................................16
SECTION 13. Registration Rights...........................................17
SECTION 14. Notices to Company and Warrant Holder.........................25
SECTION 15. Supplements and Amendments....................................26
SECTION 16. Successors....................................................26
SECTION 17. Termination...................................................26
SECTION 18. Governing Law.................................................26
SECTION 19. Benefits of This Agreement....................................27
SECTION 20. Counterparts..................................................27
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1 This Table of Contents does not constitute a part of this
Agreement or have any bearing upon the interpretation of any of
its terms or provisions.
WARRANT AGREEMENT (the "Warrant Agreement" or this "Agreement")
dated as of August 17, 1999 (the "Issue Date") between Concentra Managed Care,
Inc., a Delaware corporation (the "Company"), and the parties named herein
(together with their successors and assigns, the "Holders").
Terms defined in the Securities Purchase Agreement (the
"Securities Purchase Agreement") dated as of August 17, 1999 between the Company
and the purchasers named therein (the "Initial Purchasers") unless defined
herein are used as therein defined.
WHEREAS, the Company proposes to issue Warrants, as hereinafter
described (the "Warrants"), to purchase up to 1,595,406 shares of Common Stock
(the "Common Stock") of the Company (the Common Stock issuable on exercise of
the Warrants being referred to herein as the "Warrant Shares"), in connection
with a private placement of an aggregate of $216,230,000 principal amount of the
Company's Senior Discount Debentures due 2010 (the "Debentures") and each
Warrant entitling the Holder thereof to purchase one Warrant Share.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. WARRANT CERTIFICATES. The certificates evidencing the
Warrants (the "Warrant Certificates") to be delivered pursuant to this Agreement
shall be in registered form only and shall be substantially in the form set
forth in Exhibit A attached hereto.
SECTION 2. EXECUTION OF WARRANT CERTIFICATES. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board or its Chief Executive Officer or its President or its Chief Operating
Officer or its Chief Financial Officer or a Vice President and by its Secretary
or an Assistant Secretary under its corporate seal. Each such signature upon the
Warrant Certificates may be in the form of a facsimile signature of the present
or any future Chairman of the Board, Chief Executive Officer, President, Chief
Operating Officer, Chief Financial Officer, Vice President, Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, Chief
Executive Officer, President, Chief Operating Officer, Chief Financial Officer,
Vice President, Secretary or Assistant Secretary, notwithstanding the fact that
at the time the Warrant Certificates shall be delivered or disposed of he shall
have ceased to hold such office. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been disposed of by the Company, such Warrant
Certificates nevertheless may be delivered or disposed of as though such person
had not ceased to be such officer of the Company; and any Warrant Certificate
may be signed on behalf of the Company by any person who, at the actual
date of the execution of such Warrant Certificate, shall be a proper officer of
the Company to sign such Warrant Certificate, although at the date of the
execution of this Warrant Agreement any such person was not such an officer.
SECTION 3. REGISTRATION. The Company shall number and register
the Warrant Certificates in a register as they are issued. The Company may deem
and treat the registered Holder(s) of the Warrant Certificates as the absolute
owner(s) thereof (notwithstanding any notation of ownership or other writing
thereon made by anyone), for all purposes, and shall not be affected by any
notice to the contrary. The Company shall act as the registrar for the Warrants.
SECTION 4. REGISTRATION OF TRANSFERS AND EXCHANGES. (a) The
Company shall from time to time register the transfer of any outstanding Warrant
Certificates in a Warrant register to be maintained by the Company upon
surrender thereof accompanied by the Assignment Form on the reverse of the
Warrant Certificate, duly executed by the registered Holder or Holders thereof
or by the duly appointed legal representative thereof or by a duly authorized
attorney together with such legal opinions, certificates or other information
required by such Assignment Form. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee(s) and the surrendered
Warrant Certificate shall be canceled and disposed of by the Company.
(b) The Holders agree that each Warrant Certificate and any
certificate representing the Warrant Shares will bear the following legend (the
"Private Placement Legend"):
"THIS SECURITY (OR ITS PREDECESSOR) (AND, IF SUCH SECURITY
EVIDENCES A WARRANT, THE WARRANT SHARES ISSUABLE PURSUANT THERETO) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB")
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING
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THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT.
(c) The Holders agree that each Warrant Certificate issued during
the period such Warrants are subject to the restrictions in the Stockholders
Agreement of the Company dated August 17, 1999 (the "Stockholders Agreement")
shall bear the following legend (the "Stockholders Agreement Legend"):
THE SECURITY REPRESENTED BY THIS CERTIFICATE IS ALSO SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFERABILITY CONTAINED IN THE STOCKHOLDERS AGREEMENT
DATED AS OF AUGUST 17, 1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICES.
(d) Subject to the foregoing provisions, Warrant Certificates may
be exchanged at the option of the Holder(s) thereof, when surrendered to the
Company at its office for another Warrant Certificate or other Warrant
Certificates of like tenor and representing in the aggregate a like number of
Warrants. Upon any sale or transfer of any Warrant Certificate or Warrant Shares
pursuant to an effective registration statement under the Securities Act or
satisfying the condition set forth in clause (1)(D) of the above Private
Placement Legend, the Company shall permit the Holder thereof to exchange such
Warrant Certificate or such Warrant Shares for another Warrant Certificate or
certificate evidencing Warrant Shares, as applicable, that does not bear the
Private Placement Legend set forth above. At any time after the time that the
Warrants are not subject to the restrictions on transfer set forth in the
Stockholders Agreement, the Company shall permit the Holder thereof to exchange
such Warrant Certificate for another Warrant Certificate that does not bear the
Stockholders Agreement Legend. Warrant Certificates surrendered for exchange
shall be canceled and disposed of by the Company.
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(e) Each Holder of a Warrant Certificate, by accepting the same,
consents and agrees with the Company and with each subsequent holder of such
Warrant Certificate that, prior to due presentment of such Warrant Certificate
for registration of transfer, the Company may treat the person in whose name the
Warrant Certificate is registered as the owner thereof for all purposes and as
the person entitled to exercise the rights granted under the Warrants, and
neither the Company nor any agent thereof shall be affected by any notice to the
contrary.
SECTION 5. WARRANTS; EXERCISE OF WARRANTS. Subject to the terms
of this Agreement, each Holder shall have the right, which may be exercised
commencing at the opening of business on the Exercisability Date and until 5:00
p.m., New York City time on August 15, 2010, to receive from the Company the
number of fully paid and nonassessable Warrant Shares and any other capital
stock of the Company issuable upon exercise of the Warrant as provided for in
Section 10(a) ("Additional Warrant Shares") which the Holder may at the time be
entitled to receive on exercise of such Warrants and payment of the Exercise
Price then in effect for such Warrant Shares; provided, however, that Holders
will be able to exercise their Warrants only if (i) a registration statement
relating to the Warrant Shares is effective or (ii) the exercise of such
Warrants is exempt from the registration requirements of the Securities Act (and
the Company has received such information as the Company may reasonably request
to confirm that such transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act). Each Warrant not exercised prior to 5:00 p.m., New York City time, on
August 15, 2010 shall become void and all rights thereunder and all rights in
respect thereof under this agreement shall cease as of such time. The
"Exercisability Date" shall be the earlier of (i) the second anniversary of the
Issue Date and (ii) the date following the sale by the Initial Purchasers of
more than 50% of the outstanding Debentures.
A Warrant may be exercised upon surrender to the Company at its
office designated for such purpose (the address of which is set forth in Section
14 hereof) of the Warrant Certificate or Certificates evidencing the Warrants to
be exercised with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be guaranteed by a bank or trust
company having an office or correspondent in the United States or a broker or
dealer which is a member of a registered securities exchange or the National
Association of Securities Dealers, Inc., and upon payment to the Company of the
exercise price (the "Exercise Price") which is set forth in the form of Warrant
Certificate attached hereto as Exhibit A as adjusted as herein provided, for the
number of Warrant Shares and Additional Warrant Shares, if any, in respect of
which such Warrants are then exercised. Payment of the aggregate Exercise Price
shall be made in cash or by certified or official bank check to the order of the
Company. In lieu of exercising a Warrant by paying in full the Exercise Price
plus transfer taxes (if applicable pursuant to Section 6), if any, the Holder
may, from time to time, convert a Warrant, in whole or in part, into a number of
shares of Common Stock determined by dividing (a) the aggregate current market
price of the number of shares of Common Stock represented by the Warrants
converted, minus the aggregate Exercise Price for such shares of Common Stock,
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minus transfer taxes, if any, by (b) the current market price of one share of
Common Stock (a "Cash-Less Exercise"). The current market price shall be
determined pursuant to Section 10(f).
Subject to the provisions of Section 6 hereof, upon such
surrender of Warrant Certificates and payment of the Exercise Price (if such
exercise is not a Cash-Less Exercise) the Company shall issue and cause to be
delivered with all reasonable dispatch (and in any event within five Business
Days after such receipt) to or upon the written order of the Holder and, subject
to Section 4, in such name or names as the Holder may designate, a certificate
or certificates for the number of full Warrant Shares and Additional Warrant
Shares, if any, issuable upon the exercise of such Warrants together with cash
as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger
or lease or sale of assets is proposed to be effected by the Company as
described in subsection (k) of Section 10 hereof, or a tender offer or an
exchange offer for shares of Common Stock of the Company shall be made, upon
such surrender of Warrant Certificates and payment of the Exercise Price as
aforesaid (if such exercise is not a Cash-Less Exercise), the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
issue and cause to be delivered the full number of Warrant Shares and Additional
Warrant Shares, if any, issuable upon the exercise of such Warrants in the
manner described in this sentence together with cash, if any, as provided in
Section 11. Such certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of record of such Warrant Shares and Additional Warrant Shares, if any,
as of the date of the surrender of such Warrant Certificates and payment of the
Exercise Price (if such exercise is not a Cash-Less Exercise).
Prior to the exercise of the Warrants, except as may be
specifically provided for herein, (i) no Holder of a Warrant Certificate, as
such, shall be entitled to any of the rights of a holder of Common Stock of the
Company, including, without limitation, the right to vote at or to receive any
notice of any meetings of stockholders; (ii) the consent of any such Holder
shall not be required with respect to any action or proceeding of the Company;
(iii) except as provided in Section 10(i), no such Holder, by reason of the
ownership or possession of a Warrant or the Warrant Certificate representing the
same, shall have any right to receive any cash dividends, stock dividends,
allotments or rights or other distributions paid, allotted or distributed or
distributable to the stockholders of the Company prior to, or for which the
relevant record date preceded, the date of the exercise of such Warrant; and
(iv) no such Holder shall have any right not expressly conferred by the Warrant
or Warrant Certificate held by such Holder.
The Warrants shall be exercisable, at the election of the Holders
thereof, either in full or from time to time in part and, in the event that a
Warrant Certificate is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration of
the Warrants, a new Warrant Certificate evidencing the remaining Warrant or
Warrants will be issued and delivered pursuant to the provisions of this Section
and of Section 2 hereof.
All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled and disposed of by the Company. The Company shall keep copies
of this Agreement and any
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notices given or received hereunder available for inspection by the Holders
during normal business hours at its office.
Notwithstanding anything contained herein to the contrary, no
Warrant shall be exercisable by any Regulated Warrantholder and no Warrant
Shares shall be issued to any Regulated Warrantholder if, after giving effect to
such exercise, issuance or action, such Regulated Warrantholder would own more
than 4.99% of any class of voting securities of the Company (other than any
class of voting securities which is (or is made prior to any such exercise,
issuance or action) convertible into a class of non-voting securities which are
otherwise identical to the voting securities and convertible into such voting
securities on terms reasonably acceptable to such Regulated Warrantholder) or
more than 24.99% of the total equity of the Company or more than 24.99% of the
total value of all capital stock and subordinated debt of the Company (in each
case determined by assuming such Regulated Warrantholder (but no other holder)
has exercised, converted or exchanged all of its options, warrants and other
convertible or exchangeable securities). For purposes of this paragraph,
"REGULATED WARRANTHOLDER" shall mean Chase Equity Associates, L.P. or any other
Holder that (i) is subject to the provisions of Regulation Y of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 225 (or any successor to
such Regulation), (ii) holds Warrants or shares of Common Stock and (iii) has
provided written notice of the Company of its status as a "Regulated
Stockholder" hereunder.
SECTION 6. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares and
Additional Warrant Shares, if any, upon the exercise of Warrants; PROVIDED,
HOWEVER, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares or Additional Warrant
Shares, if any, in a name other than that of the registered Holder of a Warrant
Certificate surrendered for registration of transfer or upon the exercise of a
Warrant, and the Company shall not be required to issue or deliver such Warrant
Certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the reasonable satisfaction of the Company that such tax has been
paid.
SECTION 7. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any
of the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also reasonably satisfactory to it. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
SECTION 8. RESERVATION OF WARRANT SHARES. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or other capital stock of
the class with respect to Additional Warrant
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Shares, if any, or its authorized and issued Common Stock or other capital stock
of the class with respect to Additional Warrant Shares, if any, held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares and Additional Warrant Shares, if any, upon exercise of Warrants,
the maximum number of shares of Common Stock and other capital stock with
respect to Additional Warrant Shares, if any, which may then be deliverable upon
the exercise of all outstanding Warrants.
The Company or, if appointed, the transfer agent for the Common
Stock (the "Transfer Agent") and every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of any of the rights
of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will furnish such Transfer Agent a copy
of all notices of adjustments and certificates related thereto, transmitted to
each Holder pursuant to Section 12 hereof.
Before taking any action which would cause an adjustment pursuant
to Section 10 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
The Company represents and warrants that the initial Warrant
Shares issuable upon conversion of Warrants have been duly authorized and
covenants that all Warrant Shares and Additional Warrant Shares, if any, which
may be issued upon exercise of Warrants will, upon issue, be fully paid,
nonassessable, free of preemptive rights (other than as set forth in the
Stockholders Agreement) and, subject to Section 6, free from all taxes, liens,
charges and security interests with respect to the issue thereof.
`
SECTION 9. OBTAINING STOCK EXCHANGE LISTINGS. The Company will
from time to time take all action which may be necessary so that the Warrant
Shares and the Additional Warrant Shares, if any, immediately upon their
issuance upon the exercise of Warrants, will be listed on the principal
securities exchanges and markets within the United States of America, if any, on
which other shares of Common Stock or the Additional Warrant Shares, if any, as
the case may be, are then listed.
SECTION 10. ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE. The
number of Warrant Shares issuable upon the exercise of each Warrant are subject
to adjustment from time to time upon the occurrence of the events enumerated in
this Section 10. For purposes of this Section 10, "Common Stock" means shares
now or hereafter authorized of any class of common stock of the Company and any
other stock of the Company, however designated, that
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has the right (subject to any prior rights of any class or series of preferred
stock) to participate in any distribution of the assets or earnings of the
Company without limit as to per share amount.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If the Company:
(1) pays a dividend or makes a distribution on its Common Stock
in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of
its capital stock;
then the number and kind of shares of its capital stock issuable upon exercise
of any Warrant in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he or she would have owned immediately following such action if
such Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a Holder of a Warrant upon exercise of
it may receive shares of two or more classes of capital stock of the Company,
the exercise privilege of each class of capital stock shall thereafter be
subject to adjustment on terms comparable to those applicable to Common Stock in
this Section.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) ADJUSTMENT FOR RIGHTS ISSUE.
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If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 45 days
after the record date mentioned below to purchase shares of Common Stock or
securities directly or indirectly convertible into or exchangeable for Common
Stock (or options or rights with respect to such securities) at a price per
share less than the current market price per share on that record date, the
number of Warrant Shares issuable upon exercise of one Warrant shall be adjusted
in accordance with the formula:
N' = N x (O + A)
--------------
(O + (A x P))
-
M
where:
N' = the adjusted number of Warrant Shares issuable upon exercise of one
Warrant.
N = the current number of Warrant Shares issuable upon exercise of one
Warrant.
O = the number of shares of Common Stock outstanding on the record date.
A = the number of additional shares of Common Stock offered pursuant to
such rights issuance.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the number of Warrant Shares issuable upon exercise
of the Warrants shall be immediately readjusted to what it would have been if
the shares represented by "A" in the above formula had been the number of shares
actually issued.
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS.
If the Company distributes to all holders of its Common Stock any
of its assets (including but not limited to cash), debt securities, or any
rights or warrants to purchase debt securities, assets or other securities of
the Company, the number of Warrant Shares issuable upon exercise of one Warrant
shall be adjusted in accordance with the formula:
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N' = N x M
----
M-F
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of one Warrant.
N = the current number of Warrant Shares issuable upon
exercise of one Warrant.
M = the current market price per share of Common Stock on
the record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of
Common Stock. The Board of Directors shall determine the
fair market value in good faith.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
No adjustment shall be made pursuant to this subsection (c) if
the fair market value on the applicable record date of the assets, securities,
rights or warrants applicable to one share of Common Stock is equal to or
greater than the current market price per share of Common Stock on such record
date.
This subsection does not apply to rights, options or warrants
referred to in subsection (b) of this Section 10.
(d) ADJUSTMENT FOR COMMON STOCK ISSUE.
If the Company issues shares of Common Stock for a consideration
per share less than the current market price per share on the date the Company
fixes the offering price of such additional shares, the number of Warrant Shares
issuable upon exercise of one Warrant shall be adjusted in accordance with the
formula:
N' = N x A
-----
O + P
-
M
where:
N' = the adjusted number of Warrant Shares issuable upon exercise of one
Warrant.
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N = the then current number of Warrant Shares issuable upon
exercise of one Warrant.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the current market price per share on the date of sale of such
additional shares.
A = the number of shares outstanding immediately after the issuance
of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (b) and (c)
of this Section 10,
(2) the exercise of Warrants, or the conversion or exchange of
other securities convertible or exchangeable for Common Stock,
(3) Common Stock issued upon the exercise of warrants and stock
options outstanding on the Issue Date, or
(4) Common Stock issued in a bona fide public offering pursuant
to a firm commitment underwriting.
(e) ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 10) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the current market price per share on the date of issuance
of such securities, the number of Warrant Shares issuable upon exercise of one
Warrant shall be adjusted in accordance with this formula:
N' = N x O + D
-----
O + P
-
M
11
where:
N' = the adjusted number of Warrant Shares issuable upon exercise of one
Warrant.
N = the then current number of Warrant Shares issuable upon
exercise of one Warrant.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share on the date of sale of such
securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, then the number of Warrant Shares issuable upon exercise of
one Warrant shall promptly be readjusted to the number of Warrant Shares
issuable upon exercise of one Warrant which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of the
actual number of shares of Common Stock issued upon conversion or exchange of
such securities.
This subsection (e) does not apply to convertible securities
issued in a bona fide public offering pursuant to a firm commitment
underwriting.
(f) CURRENT MARKET PRICE.
In Sections 5 and 11 and in subsections (b), (c), (d) and (e) of
this Section 10 the current market price per share of Common Stock on any date
is the average of the Quoted Prices of the Common Stock for 30 consecutive
trading days commencing 45 trading days before the date in question. The "Quoted
Price" of the Common Stock is the last reported sales price of the Common Stock
as reported by NASDAQ, National Market System, or if the Common Stock is listed
on a securities exchange, the last reported sales price of the Common Stock on
such exchange which shall be for consolidated trading if applicable to such
exchange, or if neither so reported or listed, the last reported bid price of
the Common Stock. In the absence of such quotations, the Board of Directors of
the Company shall determine the current market price (i) based on the most
recently completed arm's-length transaction between the Company and a person
other than an Affiliate of the Company and the closing of which occurs on such
date or
12
shall have occurred within the three months preceding such date or (ii) if no
such transaction shall have occurred on such date or within such three-month
period, the value of the security determined in good faith by (A) the Board of
Directors of the Company, which determination shall be described in a Board
resolution or (B) by an independent nationally recognized investment banking
firm or appraisal firm.
(g) CONSIDERATION RECEIVED.
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 10, the following shall
apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that
in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Company for any underwriting of the issue
or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors (irrespective of the
accounting treatment thereof), whose determination shall be conclusive,
absent manifest error, and described in a Board resolution;
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor
shall be deemed to be the consideration received by the Company for the
issuance of such securities plus the additional minimum consideration,
if any, to be received by the Company upon the conversion or exchange
thereof (the consideration in each case to be determined in the same
manner as provided in clauses (1) and (2) of this subsection).
(h) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED.
No adjustment in the number of Warrant Shares issuable upon
exercise of one Warrant need be made unless the adjustment would require an
increase or decrease of at least 1% in the number of Warrant Shares issuable
upon exercise of one Warrant. Any adjustments that are not made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section shall be made to the nearest
1/100th of a share.
(i) WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for a transaction referred to in
Section 10(a), (b), (c), (d) or (e), if Holders are to participate (without
being required to exercise their Warrants) in the transaction on a basis and
with notice that the Board of Directors of the Company determines
13
to be fair and appropriate in light of the basis and notice on which Holders of
Common Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(j) NOTICE OF ADJUSTMENT.
Whenever the number of Warrant Shares issuable upon exercise of
one Warrant is adjusted, the Company shall provide the notices required by
Section 12 hereof.
(k) REORGANIZATION OF COMPANY.
If the Company consolidates or merges with or into, or transfers
or leases all or substantially all its assets to, any person, upon consummation
of such transaction the Warrants shall automatically become exercisable for the
kind and amount of securities, cash or other assets which the Holder of a
Warrant would have owned immediately after the consolidation, merger, transfer
or lease if the Holder had exercised the Warrant immediately before the
effective date of the transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such consolidation or
merger if other than the Company, or the person to which such sale or conveyance
shall have been made, shall enter into a supplemental Warrant Agreement so
providing and further providing for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this Section.
The successor company shall mail to Holders a notice describing the supplemental
Warrant Agreement as soon as reasonably practicable after the execution of any
such supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this subsection (k) applies, subsections (a), (b), (c), (d)
and (e) of this Section 10 do not apply.
(l) COMPANY DETERMINATION FINAL.
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Any determination that the Company or the Board of Directors must
make pursuant to subsection (a), (b), (c), (d), (e), (f), (g), (h) or (i) of
this Section 10 which is made in good faith shall be conclusive absent manifest
error.
(m) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED.
In any case in which this Section 10 shall require that an
adjustment in the number of Warrant Shares issuable upon exercise of one Warrant
be made effective as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event (i) issuing to the Holder of
any Warrant exercised after such record date the Warrant Shares and other
capital stock of the Company, if any, issuable upon such exercise over and above
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the current number of Warrant Shares issuable upon
exercise of one Warrant and (ii) paying to such Holder any amount in cash in
lieu of a fractional share pursuant to Section 11; PROVIDED, HOWEVER, that the
Company shall deliver to such Holder a due bill or other appropriate instrument
evidencing such Holder's right to receive such additional Warrant Shares, other
capital stock and cash upon the occurrence of the event requiring such
adjustment.
(n) ADJUSTMENT IN EXERCISE PRICE.
Upon each adjustment of the number of Warrant Shares pursuant to
this Section 10, the Exercise Price for each Warrant outstanding prior to the
making of the adjustment in the number of Warrant Shares shall thereafter be
adjusted to the Exercise Price (calculated to the nearest hundredth of one cent)
obtained from the following formula:
E'= E x N
-
N'
where:
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
N' = the adjusted number of Warrant Shares issuable upon exercise of
a Warrant.
N = the number or Warrant Shares previously issuable upon exercise
of a Warrant prior to adjustment.
(o) FORM OF WARRANTS.
Irrespective of any adjustments in the number or kind of shares
purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express
15
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
SECTION 11. FRACTIONAL INTERESTS. Any one Warrant may be
exercised only in full and not in part. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so requested to be exercised. If any
fraction of a Warrant Share would, except for the provisions of this Section 11,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the product of (i) such fraction of
a Warrant Share and (ii) the difference between the current market price of a
share of Common Stock and the Exercise Price.
SECTION 12. NOTICES TO WARRANT HOLDERS. Upon any adjustment of
the Exercise Price or the number of Warrant Shares issuable upon exercise of one
Warrant pursuant to Section 10, the Company shall promptly thereafter (i) cause
to be filed with the Company a certificate which includes the report of a firm
of independent public accountants of recognized standing selected by the Board
of Directors of the Company (who may be the regular auditors of the Company)
setting forth the Exercise Price and the number of Warrant Shares issuable upon
exercise of one Warrant after such adjustment and setting forth in reasonable
detail the method of calculation and the facts upon which such calculations are
based, which certificate shall be conclusive evidence of the correctness of the
matters set forth therein absent manifest error, and (ii) cause to be given to
each of the registered Holders of the Warrant Certificates at his or her address
appearing on the Warrant register written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 12.
In case:
(a) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification
or change of Common Stock issuable upon exercise of the Warrants (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common
Stock; or
(b) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
16
(c) the Company proposes to take any action which would require
an adjustment of the number of Warrant Shares issuable upon exercise of
one Warrant pursuant to Section 10;
then the Company shall cause to be given to each of the registered Holders of
the Warrant Certificates at his or her address appearing on the Warrant
register, at least 20 days (or 10 days in any case specified in clauses (a) or
(b) above) prior to the applicable record date hereafter specified, or promptly
in the case of events for which there is no record date, by first class mail,
postage prepaid, a written notice stating (i) the date as of which the holders
of record of shares of Common Stock to be entitled to receive any such rights,
options, warrants or distribution are to be determined, or (ii) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any such consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 12 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 13. REGISTRATION RIGHTS.
(a) PIGGYBACK REGISTRATION.
If the Company at any time proposes to register any Registrable
Securities under the Securities Act for sale to the public, whether for its own
account or for the account of other securityholders or both (except (x) in
connection with an initial public offering of Common Stock or (x) with respect
to registration statements on Form S-4 or S-8 or another form not available for
registering the Registrable Securities for sale to the public), it will give
written notice at such time to all Holders of outstanding Registrable Securities
of its intention to do so. Upon the written request of any such Holder, given
within 20 days after receipt of any such notice by the Company, to register any
of its Registrable Securities (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause the
Registrable Securities, as to which registration shall have been so requested,
to be included in the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent required to permit the
sale or other disposition by the Holder (in accordance with its written request)
of such Registrable Securities so registered; PROVIDED that nothing herein shall
prevent the Company from abandoning or delaying such registration at any time;
PROVIDED FURTHER
17
that the only securities the Company shall be required to register pursuant
hereto with respect to a registration statement shall be Registrable Securities
of the same class of securities as proposed by the Company to be registered on
such registration statement (except that the Company shall be required to
register Warrants with respect to a registration statement in connection with
the registration of Common Stock). In the event that any registration pursuant
to this Section 13(a) shall be, in whole or in part, an underwritten public
offering of Registrable Securities, any request by a Holder pursuant to this
Section 13(a) to register Registrable Securities shall specify that either (i)
such Registrable Securities are to be included in the underwriting on the same
terms and conditions as the shares of Registrable Securities otherwise being
sold through underwriters under such registration or (ii) such Registrable
Securities are to be sold in the open market without any underwriting, on terms
and conditions comparable to those normally applicable to offerings of such
securities in reasonably similar circumstances. The number of shares of
Registrable Securities to be included in such an underwriting may be reduced
(PRO RATA among the Holders of Registrable Securities requesting registration
pursuant to this Section 13(a) based on the number of shares of Registrable
Securities owned by any such Holder on the date of such request out of the total
outstanding shares of Registrable Securities on that date) if and to the extent
that the managing underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein; PROVIDED, HOWEVER, that such number of shares of Registrable Securities
shall not be reduced if any shares are to be included in such underwriting for
the account of any person other than the Company and the Holders of Registrable
Securities.
Notwithstanding anything to the contrary contained in this
Section 13(a) hereof, in the event that there is a firm commitment underwritten
public offering of securities of the Company pursuant to a registration covering
Registrable Securities and a Holder of Registrable Securities does not elect to
sell his Registrable Securities to the underwriters of the Company's securities
in connection with such offering, such Holder shall, to the extent required by
such underwriters with respect to all Holders of Registrable Securities, refrain
from selling such Registrable Securities during the period of distribution of
the Company's securities by such underwriters and the period in which the
underwriting syndicate participates in the after market; PROVIDED, HOWEVER, that
such Holder shall, in any event, be entitled to sell its Registrable Securities
commencing on the 120th day after the effective date of such registration
statement.
(b) REGISTRATION PROCEDURES.
If and whenever the Company is required by the provisions of
Section 13(a) hereof to use its best efforts to effect the registration of any
of the Registrable Securities held by Holders under the Securities Act, the
Company will, as expeditiously as possible:
(i) in accordance with the Securities Act and all applicable
rules and regulations, prepare (and afford counsel for the selling
holders reasonable opportunity to review and comment thereon) and file
with the Commission a registration statement with respect to such
securities and use its best efforts to cause such registration statement
to
18
become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
(ii) prepare (and afford counsel for the selling holders
reasonable opportunity to review and comment thereon) and file with the
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith and any
documents incorporated by reference therein and file such other
documents as may be necessary to keep such registration statement
effective for the period specified in paragraph (a) above and to comply
with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(iii) furnish to each seller and to each underwriter such number
of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus), and all amendments,
supplements, and exhibits thereto, and such other documents as such
persons may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities covered by such
registration statement (and the Company hereby consents to the use of
any such prospectus, together with such supplements and amendments, by
the sellers and underwriters, if any, in connection with the offer and
sale covered thereby);
(iv) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities
or blue sky laws of such jurisdictions as the sellers of Registrable
Securities or, in the case of an underwritten public offering, the
managing underwriter, shall reasonably request (provided that the
Company will not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this paragraph (iv), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any
jurisdiction);
(v) immediately notify each seller under such registration
statement and each underwriter, (A) when such registration statement or
any post-effective amendment or supplement thereto becomes effective or
a supplement to any prospectus forming a part of such registration
statement has been filed; (B) of the issuance by the Commission or any
state securities authority of any stop order, injunction or other order
or requirement suspending the effectiveness of such registration
statement (and the Company shall use best efforts to prevent the
initiation of proceedings for, prevent the entry of and/or remove such
order or requirement); (C) of the happening of any event as a result of
which such registration statement, as then in effect, the prospectus
contained therein or any document incorporated by reference therein
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; or (D) of any
19
request by the Commission for the amending or supplementing of such
registration statement or prospectus or for additional information;
(vi) use its best efforts to furnish, at the request of any
seller, on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration statement, if such
securities are being sold through underwriters, or on the date that the
registration statement becomes effective, if such securities are not
being sold through underwriters: (A) an opinion dated such date of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to such seller, stating that
such registration statement has become effective under the Securities
Act and that (1) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Securities Act, (2) the registration statement, the related
prospectus, and each amendment or supplement thereof, comply as to form
in all material respects with the requirements of the Securities Act and
the applicable rules and regulations of the Commission thereunder
(except that such counsel need express no opinion as to financial
statements, the notes thereto, and the financial schedules and other
financial and statistical data contained therein) and (3) to such other
effects as may reasonably be requested by counsel for the underwriters
or by such seller or its counsel, and (B) a letter dated such date from
the independent public accountants retained by the Company, addressed to
the underwriters, if any, and to such sellers stating that they are
independent public accountants within the meaning of the Securities Act
and that, in the opinion of such accountants, the financial statements
of the Company included in the registration statement or the prospectus,
or any amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other
financial matters (including information as to the period ending no 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
such underwriters or sellers may reasonably request;
(vii) take such actions as may be necessary or appropriate to
cause the Registrable Securities so to be registered to be listed on the
principal securities exchange (or on the NASDAQ National Market System,
as the case may be) on which shares of Registrable Securities are then
traded (or, in the case of an initial public offering, on such national
securities exchange (or on the NASDAQ National Market System) as the
Company shall elect);
(viii) use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to any Holder of
Registrable Securities, as soon as reasonably practicable (but not more
than 15 months) after the effective date of the registration statement,
an earnings statement which shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations promulgated
thereunder; and
20
(ix) make available for inspection by each seller, any
underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement and permit such seller, attorney, accountant or agent to
participate in the preparation of such registration statement.
For purposes of paragraphs (i) and (ii) above hereof, the period of distribution
of Registrable Securities in a firm commitment underwritten public offering
shall be deemed to extend until each underwriter has completed the distribution
of all securities purchased by it, and the period of distribution of Registrable
Securities in any other registration shall be deemed to extend until the earlier
of the sale of all Registrable Securities covered thereby or six months after
the effective date thereof.
In connection with each registration hereunder, the selling
Holders of Registrable Securities will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by them as
shall be reasonably necessary in order to assure compliance with federal and
applicable state securities laws.
In connection with each registration pursuant to Section 13(a)
hereof covering an underwritten public offering, the Company agrees to enter
into a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature; PROVIDED, HOWEVER, that
such agreement shall not contain any such provision applicable to the Company
which is inconsistent with the provisions hereof and PROVIDED, FURTHER, HOWEVER,
that the time and place of the closing under said agreement shall be as mutually
agreed upon among the Company, such managing underwriter and the selling Holders
of Registrable Securities.
(c) EXPENSES.
All expenses incurred by the Company in complying with Section
13(a) hereof, including, without limitation, all registration, listing and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company (including with respect to any
special audit or "cold comfort" letters), fees of the National Association of
Securities Dealers, Inc., transfer taxes and fees of transfer agents and
registrars, as well as reasonable fees and out-of pocket expenses of not more
than one counsel for all the Holders, but excluding any Selling Expenses, are
herein called "REGISTRATION EXPENSES." All underwriting discounts and selling
commissions applicable to the sale of Registrable Securities are herein called
"SELLING EXPENSES."
21
The Company will pay all Registration Expenses in connection with
each registration statement filed pursuant to Section 13(a) hereof. All Selling
Expenses in connection with any registration statement filed pursuant to Section
13(a) hereof shall be borne by the participating sellers in proportion to the
number of shares sold by each, or by such persons other than the Company (except
to the extent the Company shall be a seller) as they may agree.
(d) INDEMNIFICATION.
In the event of a registration of any of the Registrable
Securities under the Securities Act pursuant to Section 13(a) hereof, the
Company will indemnify and hold harmless, to the fullest extent permitted by
law, each seller of such Registrable Securities thereunder, each underwriter of
Registrable Securities thereunder, each of their respective affiliates, each of
their and their affiliates' respective directors, officers, fiduciaries,
trustees, agents, employees, stockholders, general and limited partners and
members, and each other person, if any, who controls such seller or underwriter
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether commenced or
threatened) in respect thereof (all of the foregoing, collectively, "CLAIMS")
and expenses (including fees and expenses of counsel, and amounts paid in any
settlement effected with the Company's consent, which consent shall not be
unreasonably withheld or delayed) to which such indemnified party may become
subject under the Securities Act or otherwise, insofar as such Claims or
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Registrable Securities were registered under the Securities Act
pursuant to Section 13(a), any preliminary prospectus, summary or final
prospectus contained therein, or any amendment or supplement of any thereof, or
any documents incorporated by reference therein, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each such indemnified party for any legal or other expenses
incurred by them in connection with investigating or defending any such Claim;
PROVIDED, HOWEVER, that the Company will not be liable to any such indemnified
party if and to the extent that any such Claim or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information pertaining to such
indemnified party furnished by such indemnified party in writing specifically
for use in such registration statement or prospectus.
In the event of a registration of any of the Registrable
Securities under the Securities Act pursuant to Section 13(a) hereof, each
seller of such Registrable Securities thereunder, severally and not jointly,
will indemnify and hold harmless, to the fullest extent permitted by law, the
Company and each person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Securities Act, each other
Holder selling Registrable Securities under
22
such registration statement and each affiliate, officer, director, fiduciary,
trustee, agent, employee, stockholder, general or limited partner or member of
such selling Holder against all Claims and expenses (including fees and expenses
of counsel, and amounts paid in any settlement effected with the indemnifying
party's consent, which consent shall not be unreasonably withheld or delayed) to
which the Company or such officer or director or underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
Claims or expenses arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the
Securities Act pursuant to Section 13(a) any preliminary prospectus, summary or
final prospectus contained therein, or any amendment or supplement of any
thereof, or any documents incorporated by reference therein, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such indemnified party for
any legal or other expenses incurred by them in connection with investigating or
defending any such Claim; PROVIDED, HOWEVER, that such seller will be liable
hereunder to any such indemnified party if and only to the extent that any such
Claim or expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to such seller, as such, furnished in
writing to the Company by such seller specifically for use in such registration
statement or prospectus; PROVIDED, FURTHER, HOWEVER, that the liability of each
seller hereunder shall be limited to the proceeds (net of underwriting discounts
and commissions) received by such seller from the sale of Registrable Securities
covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party under this Section 13(d) except to the extent such
indemnifying party is materially prejudiced thereby, and in any event will not
relieve such indemnifying party from any liability which it may have to any
indemnified party other than under this Section 13(d). In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 13(d) for
any legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; PROVIDED, HOWEVER, that, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the indemnifying party, or if the interests of the
23
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, or if the indemnifying party shall not diligently continue
such defense in good faith, the indemnified party shall have the right to select
a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have
the right to retain its own counsel in any such action, but except as set forth
above the fees and disbursements of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party shall have failed to retain
counsel for the indemnified person as aforesaid or (ii) the indemnifying party
and such indemnified party shall have mutually agreed to the retention of such
counsel. It is understood that the indemnifying party shall not, in connection
with any action or related actions in the same jurisdiction, be liable for the
fees and disbursements of more than one firm (together with local counsel) to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
(which shall not be unreasonably withheld or delayed), but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the written consent of the indemnified party (which shall not be
unreasonably withheld or delayed), effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action in respect of which indemnification may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such action) unless
such settlement, compromise or judgment (i) includes an unconditional release of
such indemnified party from all liability arising out of such action and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of such indemnified party.
If for any reason the indemnification provided for in the first
two paragraphs of this Section 13(d) is unavailable or insufficient to hold
harmless an indemnified party under such paragraphs in respect of any Claims or
expenses in respect thereof referred to therein, then each indemnifying party
shall in lieu of indemnifying such indemnified party contribute to the amount
paid or payable by such indemnified party as a result of such Claims or expenses
in such proportion as appropriate to reflect the relative fault of the Company,
on the one hand, and the underwriters and the sellers of such Registrable
Securities, on the other, in connection with the statements or omissions which
resulted in such Claims or expenses as well as any other relevant equitable
considerations, including the failure to give any notice under the third
paragraph of this Section 13(d). The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by the indemnifying party, on
the one hand, or the indemnified party, on the other, and to the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each of you agree that it
would not be just and equitable if contributions pursuant to this paragraph were
determined by PRO RATA allocation (even
24
if all of the sellers of such Registrable Securities were treated as one entity
for such purpose) or by any other method of allocation which did not take
account of the equitable considerations referred to above in this paragraph. The
amount paid or payable by an indemnified party as a result of the Claims and
expenses in respect thereof, referred to above in this paragraph, shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph, no seller of such
Registrable Securities or related indemnified party shall be required to
contribute any amount in excess of the amount of proceeds (net of underwriting
discounts and commissions) received by such seller from the sale of Registrable
Securities covered by such registration statement. No person guilty of
fraudulent misrepresentations (within the meaning of Section 11(f) of the
Securities Act), shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.
The indemnification of underwriters provided for in this Section
13(d) shall be on such other terms and conditions as are at the time customary
and reasonably required by such underwriters. In that event the indemnification
of the sellers of Registrable Securities in such underwriting shall at the
sellers' request be modified to conform to such terms and conditions.
The indemnification and contribution agreements contained herein
shall be in addition to any other rights to indemnification and contribution
which any indemnified party may have pursuant to law or contract or otherwise,
shall remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified party and shall
survive the transfer of Registrable Securities by any such party.
(e) CERTAIN DEFINITION.
The term "Registrable Securities" shall mean the Warrants, the
Warrant Shares and the Additional Warrant Shares, if any. As to any
particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (A) a registration statement
with respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been disposed of
in accordance with such registration statement, (B) they shall have been
distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (C) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting
further transfer shall have been delivered by the Company and subsequent
disposition of them shall not require registration or qualification of
them under the Securities Act or any similar state law then in force, or
(D) they shall have ceased to be outstanding.
SECTION 14. NOTICES TO COMPANY AND WARRANT HOLDER. Any notice or
demand authorized by this Agreement to be given or made by the registered Holder
of any Warrant Certificate to or on the Company shall be sufficiently given or
made when and if deposited in the mail, first class or registered, postage
prepaid, addressed to the office of the Company expressly
25
designated by the Company at its office for purposes of this Agreement (until
the Holders are otherwise notified in accordance with this Section by the
Company), as follows:
Concentra Managed Care, Inc.
312 Union Wharf
Boston, MA 02109
Attention: General Counsel
Any notice pursuant to this Agreement to be given by the Company
to the registered Holder(s) of any Warrant Certificate shall be sufficiently
given when and if deposited in the mail, first class or registered, postage
prepaid, addressed (until the Company is otherwise notified in accordance with
this Section by such Holder) to such Holder at the address appearing on the
Warrant register of the Company.
SECTION 15. SUPPLEMENTS AND AMENDMENTS. The Company may from time
to time supplement or amend this Agreement without the approval of any Holders
of Warrant Certificates in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company may deem necessary or
desirable and which shall not in any way adversely affect the interests of the
Holders of Warrant Certificates or discriminate against any Holder of Warrant
Certificates. Any amendment or supplement to this Agreement that has an adverse
effect on the interests of Holders shall require the written consent of
registered Holders of two-thirds of the then outstanding Warrant Shares issued
or issuable upon exercise of the Warrants (excluding Warrant Shares held by the
Company or any of its Affiliates). The consent of each Holder of a Warrant
affected shall be required for any amendment pursuant to which the number of
Warrant Shares purchasable upon exercise of Warrants would be decreased or the
Exercise Price increased (other than in accordance with Section 10 or 11
hereof).
SECTION 16. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company shall bind and inure to the
benefit of its respective successors and assigns hereunder.
SECTION 17. TERMINATION. This Agreement (except for Section
13(d) and for the restrictions on transfer of Warrant Shares specified in
Section 4) shall terminate at 5:00 p.m., New York City time on August 15, 2010.
SECTION 18. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE.
26
SECTION 19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company
and the registered Holders of the Warrant Certificates or Warrant Shares any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company and the
registered Holders of the Warrant Certificates and the Warrant Shares. Nothing
herein shall prohibit or limit the Company from entering into an agreement
providing holders of securities which may hereafter be issued by the Company
with such registration rights exercisable at such time or times and in such
manner as the Board of Directors shall deem in the best interests of the Company
so long as the performance by the Company of its obligations under such other
agreement will not cause the Company to breach its obligations hereunder to the
Holders.
SECTION 20. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
CONCENTRA MANAGED CARE, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Executive Vice President and
General Counsel
WCAS CAPITAL PARTNERS III, L.P.
By: WCAS CP III Associates, L.L.C., General Partner
By /s/ Paul Queally
--------------------------
Managing Member
JP MORGAN DIRECT CORPORATE FINANCE
INSTITUTIONAL INVESTORS, LLC
By: /s/ Julian E. Shles
--------------------------------
Name: Julian E. Shles
Title: Vice President of J.P. Morgan Investment
Management, Inc., as Investment Advisor
JP MORGAN DIRECT CORPORATE FINANCE
PRIVATE INVESTORS, LLC
By: /s/ Julian E. Shles
--------------------------------
Name: Julian E. Shles
Title: Vice President of J.P. Morgan Investment
Management, Inc., as Investment Advisor
CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By: /s/ David E.J. Maxwell
--------------------------------
Name: David E. J. Maxwell
Title: Principal Investment Officer
CALIFORNIA STATE TEACHERS'
RETIREMENT SYSTEM
By: /s/ Eileen Y. Okada
--------------------------------
Name: Eileen Y. Okada
Title: Director of Investment
Administration and
External Relations
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners,
its General Partner
By: /s/ Jonas Steinman
------------------------
Name: Jonas Steinman
Title:
CMS CO-INVESTMENT SUBPARTNERSHIP II
By: CMS CO-INVESTMENT SUBPARTNERSHIP,
a Delaware general partnership
By: CMS Co-Investment Partners, L.P., a Delaware limited
partnership
By: CMS/Co-Investment Associates, L.P., a Delaware
limited partnership
By: MSPS/Co-Investment, Inc.,
a Delaware corporation
By:/s/ Richard Mitchell
-----------------------------
Its: Vice President
By: CMS 1997 Investment Partners, L.P., a Delaware
limited partnership
By: CMS 1997, Inc.
a Delaware corporation
By:/s/ Richard Mitchell
-----------------------------
Its: Vice President
By: CMS Co-Investment Partners I-Q, L.P., a Delaware
limited partnership
By: CMS/Co-Investment Associates, L.P., a Delaware
limited partnership
By: MSPS/Co-Investment, Inc.,
a Delaware corporation
By:/s/ Richard Mitchell
-----------------------------
Its: Vice President
By: CMS 1997 Investment Partners, L.P., a Delaware
limited partnership
By: CMS 1997, Inc.
a Delaware corporation
By:/s/ Richard Mitchell
-----------------------------
Its: Vice President
By: /s/ Ira Brind
------------------
Ira Brind
By: /s/ Bruce Lindsay
---------------------
Bruce Lindsay
CMS DIVERSIFIED PARTNERS, L.P.
By: CMS/DP Associates, L.P, a general partner
By: MSPS/DP, Inc., its general partner
By: /s/ Richard Mitchell
------------------------------
Vice President
By: CMS 1995 Investment Partners, L.P, a general partner
By: CMS 1995, Inc., its general partner
By: /s/ Richard Mitchell
-------------------------------
Vice President
BT CAPITAL INVESTORS, L.P.
By: /s/ Heidi Silverstein
-------------------------
Name: Heidi Silverstein
Title: Director
FINANCIERE ET INDUSTRIELLE GAZ ET EAUX
By: /s/ Bertrand Soleil
-------------------------------
Name: Bertrand Soleil
Title:
GS PRIVATE EQUITY PARTNERS II, L.P.
By: GS PEP II Advisors, L.L.C.,
its General Partner
By: GSAM Gen-Par, L.L.C.,
its Managing Member
By: /s/ Jerome Truzzolino
---------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS II OFFSHORE, L.P.
By: GS PEP II Offshore Advisors, Inc., its General
Partner
By: /s/ Jerome Truzzolino
-------------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS II -
DIRECT INVESTMENT FUND, L.P.
By: GS PEP II Direct Investment Advisors, L.L.C.,
its General Partner
By: GSAM Gen-Par, L.L.C.,
its Managing Member
By: /s/ Jerome Truzzolino
--------------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS III, L.P.
By: GS PEP III Advisors, L.L.C., its
General Partner
By: GSAM Gen-Par, L.L.C., its Managing Partner
By: /s/ Jerome Truzzolino
--------------------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS III OFFSHORE, L.P.
By: GS PEP III Offshore Advisors, Inc., its
General Partner
By: /s/ Jerome Truzzolino
--------------------------------
Name: Jerome Truzzolino
Title: Vice President
NBK/GS PRIVATE EQUITY PARTNERS, L.P.
By: GS PEP Offshore Advisors (NBK), Inc. General
Partner
By: /s/ Jerome Truzzolino
--------------------------------
Name: Jerome Truzzolino
Title: Vice President
HAMILTON LANE PRIVATE EQUITY PARTNERS, L.P.
By: HLSP Investment Management, LLC
By: /s/ Mario L. Giannini
---------------------------
Mario L. Giannini
Managing Member
HAMILTON LANE PRIVATE EQUITY FUND, PLC
By: HLSP Investment Management, LLC
By: /s/ Mario L. Giannini
---------------------------
Mario L. Giannini
Managing Member
A.S.F. CO-INVESTMENT PARTNERS, L.P.
By: /s/ Jonathan F. Murphy
------------------------------
Name: Jonathan F. Murphy
Title: Managing Member of Old Kings LLC, the
Sole Member of PAF 10/98, LLC, the Sole
General Partner of A.S.F. Co-Investment
Partners L.P.
NASSAU CAPITAL PARTNERS III L.P.
By: Nassau Capital L.L.C.,
its General Partner
By: /s/ John G. Quigley
------------------------
Name: John G. Quigley
Title: Member
NAS PARTNERS LLC
By: /s/ John G. Quigley
------------------------
Name: John G. Quigley
Title: Member
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Steven M. Benevento
-------------------------
Name: Steven M. Benevento
Title: Director
EXHIBIT A
[Form of Warrant Certificate]
[Face]
"THIS SECURITY (OR ITS PREDECESSOR)(AND THE WARRANT SHARES
ISSUABLE PURSUANT THERETO) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB")
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATIONS UNDER THE SECURITIES ACT.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFERABILITY CONTAINED IN THE STOCKHOLDERS AGREEMENT
DATED AS OF AUGUST 17, 1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICES.
EXERCISABLE ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME ON AUGUST 15, 2010.
No. ____ Warrants
Warrant Certificate
Concentra Managed Care, Inc.
This Warrant Certificate certifies that _____________, or
registered assigns, is the registered holder of [ ] Warrants expiring August 15,
2010 (the "Warrants") to purchase Common Stock, $.01 par value (the "Common
Stock"), of Concentra Managed Care, Inc., a Delaware corporation (the
"Company"). Each Warrant entitles the holder upon exercise to receive from the
Company on or before 5:00 p.m. New York City Time on August 15, 2010, one fully
paid and nonassessable share of Common Stock (a "Warrant Share") at the exercise
price (the "Exercise Price") of $.01 for each Warrant Share payable in lawful
money of the United States of America upon surrender of this Warrant Certificate
and payment of the Exercise Price at the office of the Company designated for
such purpose, but only subject to the conditions set forth herein and in the
Warrant Agreement referred to on the reverse hereof. In lieu of exercising this
Warrant by paying in full the Exercise Price plus transfer taxes (if applicable
pursuant to Section 6 of the Warrant Agreement), if any, the Warrant holder may,
from time to time, convert this Warrant, in whole or in part, into a number of
Warrant Shares determined by dividing (a) the aggregate current market price of
the number of shares of Common Stock represented by the Warrants converted,
minus the aggregate Exercise Price for such shares of Common Stock, minus
transfer taxes, if any, by (b) the current market price of one share of Common
Stock. The current market price shall be determined pursuant to Section 10(f) of
the Warrant Agreement.
The number of Warrant Shares and Additional Warrant Shares, if
any, issuable upon exercise of the Warrants is subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York City Time
on August 15, 2010, and to the extent not exercised by such time such Warrants
shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
IN WITNESS WHEREOF, Concentra Managed Care, Inc. has caused this
Warrant Certificate to be signed by the appropriate officers, each by a
facsimile of his signature, and has caused a facsimile of its corporate seal to
be affixed hereunto or imprinted hereon.
Dated:
CONCENTRA MANAGED CARE, INC.
By:
---------------------
Name:
Title:
By:
---------------------
Name:
Title:
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring August 15, 2010, entitling the holder
on exercise to receive shares of Common Stock, $.01 par value, of the Company
(the "Common Stock"), and are issued or to be issued pursuant to a Warrant
Agreement dated as of August 17, 1999 (the "Warrant Agreement"), duly executed
and delivered by the Company, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants. A
copy of the Warrant Agreement may be obtained by the holder hereof upon written
request to the Company.
Subject to the terms of the Warrant Agreement, Warrants may be
exercised commencing at the opening of business on the Exercisability Date and
until 5:00 p.m., New York City time, on August 15, 2010. The holder of Warrants
evidenced by this Warrant Certificate may exercise them by surrendering this
Warrant Certificate, with the form of election to purchase set forth hereon
properly completed and executed, together with payment of the Exercise Price in
cash at the office of the Company designated for such purpose. In lieu of
exercising this Warrant by paying in full the Exercise Price plus transfer taxes
(if applicable pursuant to Section 6 of the Warrant Agreement), if any, the
Warrant holder may, from time to time, convert this Warrant, in whole or in
part, into a number of shares of Common Stock determined by dividing (a) the
aggregate current market price of the number of Warrant Shares represented by
the Warrants converted, minus the aggregate Exercise Price for such shares of
Common Stock, minus transfer taxes, if any, by (b) the current market price of
one share of Common Stock. The current market price shall be determined pursuant
to Section 10(f) of the Warrant Agreement. In the event that upon any exercise
of Warrants evidenced hereby the number of Warrants exercised shall be less than
the total number of Warrants evidenced hereby, there shall be issued to the
holder hereof or his assignee a new Warrant Certificate evidencing the number of
Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the number of Warrant Shares issuable upon exercise of one
Warrant set forth on the face hereof and the Exercise Price of a Warrant may,
subject to certain conditions, be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
The holders of the Warrants are entitled to certain registration
rights with respect to the Common Stock purchasable upon exercise thereof. Said
registration rights are set forth in Section 13 of the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Company a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company may deem and treat the registered holder(s) thereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary. Neither the Warrants nor this Warrant Certificate entities any holder
hereof to any rights of a stockholder of the Company.
ASSIGNMENT FORM
If you the Holder want to assign this Warrant, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Warrant to:
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
agent to transfer this Warrant on the books of the Company. The agent may
substitute another to act for him.
Date: Signed:
(Signed exactly as your name appears on the
other side of this Warrant)
Signature Guarantee: ____________________________
The undersigned confirms that this Warrant is being transferred:
[CHECK ONE]
(1) __ to the Company or a subsidiary thereof;
(2) __ pursuant to and in compliance with Rule 144A under the Securities Act;
(3) __ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act;
(4) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act;
(5) __ pursuant to another available exemption from the registration
requirements of the Securities Act; or
(6) __ pursuant to an effective registration statement under the Securities Act.
Unless one of the boxes is checked, the Company will refuse to register any of
the Warrants evidenced by this certificate in the name of any person other than
the registered holder thereof; PROVIDED that (i) if box (5) is checked, the
Company may require, prior to registering any such transfer of the Notes, in its
sole discretion, such legal opinions, certifications and other information as
the Company may reasonably request to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and (ii) if box (2) is checked,
the purchaser shall furnish an executed certification in the form which appears
below.
If none of the foregoing boxes is checked, the Company shall not be obligated to
register this Warrant in the name of any person other than the holder hereof
unless and until the conditions to any such transfer of registration set forth
herein shall have been satisfied.
Date: Signed:
(Signed exactly as your name appears on the
other side of this Warrant)
Signature Guarantee:
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED]
The undersigned represents and warrants that it is purchasing
this Warrant for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:
NOTICE: To be executed by an executive
officer
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
Warrant, represented by this Warrant Certificate, to receive ___ shares of
Common Stock and herewith (check item)
(i) tenders payment for such shares to the order of
Concentra Managed Care, Inc. in the amount of $_________ in
accordance with the terms hereof; or
(ii) converts this Warrant, in whole or in part, into a
number of shares of Common Stock determined by dividing (a) the
aggregate current market price of the number of shares of Common
Stock represented by this Warrant, minus the aggregate Exercise
Price for such shares of Common Stock, minus transfer taxes, if any,
by (b) the current market price of one share of Common Stock.
The undersigned requests that a certificate for such shares
be registered in the name of ___________, whose address is ____________________,
and that such shares be delivered to ___________________________________________
__________________, whose address is ________________________.
If said number of shares is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares be registered in
the name of _____________________, whose address is, _____________________ and
that such Warrant Certificate be delivered to, __________________ whose address
is ________________________.
Signature:
Date:
Signature Guaranteed: