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EXHIBIT 99.2
WARRANT CERTIFICATE
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR ALTERRA HEALTHCARE CORPORATION SHALL HAVE RECEIVED AN
OPINION OF ITS COUNSEL (OR OTHER COUNSEL REASONABLY SATISFACTORY TO IT) THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF
SERIES B-1 NON-VOTING PARTICIPATING PREFERRED STOCK
OF
ALTERRA HEALTHCARE CORPORATION
Expires on the Expiration Date specified herein.
No.: _______ Number of Shares: ______
Original Issue Date: March 5, 2001
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Alterra Healthcare Corporation, a Delaware corporation (together
with its successors and assigns, the "Issuer"), hereby certifies that
__________, or its registered assigns is entitled to subscribe for and purchase,
during the period specified in this Warrant, up to ______ shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Series B-1 Preferred Stock of the Issuer at the
exercise prices specified in Section 2 hereof and subject to the provisions and
upon the terms and conditions hereinafter set forth. Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 8 hereof.
1. TERM. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the Original Issue Date of this Warrant and
shall expire on the Expiration Date (such period being referred to herein as the
"Term").
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2. WARRANT PRICE. Subject to the provisions of this Warrant, the Holder has
the right to purchase from the Issuer (and the Issuer will issue and sell to
such registered Holder) the Warrant Stock (as the same may be adjusted pursuant
to Section 5 hereof) at the exercise prices (as each such exercise price relates
to its corresponding tranche of Warrant Stock below and as the same may be
adjusted pursuant to Section 5 hereof, the "Warrant Price") equal to the
following:
(a) Tranche A. During the Term, the Holder may purchase _____ shares of
Warrant Stock (the "Tranche A Warrant Stock") at an exercise price per share of
Warrant Stock equal to $75.00;
(b) Tranche B. During the Term, the Holder may purchase _____ shares of
Warrant Stock (the "Tranche B Warrant Stock") at an exercise price per share of
Warrant Stock equal to $100.00; and
(c) Tranche C. During the Term, the Holder may purchase _____ shares of
Warrant Stock (the "Tranche C Warrant Stock") at an exercise price per share of
Warrant Stock equal to $125.00.
3. METHOD OF EXERCISE; ISSUANCE OF NEW WARRANT; TRANSFER AND EXCHANGE.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at the Holder's election by certified or official bank check
or wire transfer of immediately available funds.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
within a reasonable time, not exceeding three (3) business days after such
exercise, and the Holder shall be deemed for all purposes to be the holder of
the shares of Warrant Stock so purchased as of the date of such exercise, and
(ii) unless this Warrant has expired, a new Warrant representing the number of
shares of Warrant Stock, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the Holder hereof at the
Issuer's expense within such time.
(d) Transferability of Warrant. Subject to Section 3(e) hereof, this
Warrant may be transferred by the Holder without the consent of the Issuer. If
transferred pursuant to this paragraph and subject to the provisions of
subsection (e) of this Section 3, this Warrant may be transferred on the books
of the Issuer by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant at the principal office of the Issuer, properly
endorsed (by the
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Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder shall designate at the time of such exchange. All
Warrants issued on transfers or exchanges shall be dated the Original Issue Date
and shall be identical with this Warrant except as to the number of shares of
Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder, by acceptance hereof, acknowledges that this Warrant
and the shares of Warrant Stock to be issued upon exercise hereof are being
acquired solely for the Holder's own account and not as a nominee for any
other party, and for investment, and that the Holder will not offer, sell
or otherwise dispose of this Warrant or any shares of Warrant Stock to be
issued upon exercise hereof except pursuant to an effective registration
statement, or an exemption from registration, under the Securities Act and
any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing shares of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
"THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
ALTERRA HEALTHCARE CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL (OR OTHER COUNSEL REASONABLY SATISFACTORY TO IT) THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED."
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel reasonably satisfactory to it, in form and
substance reasonably satisfactory to the Issuer, addressed to the Issuer to
the effect that such restrictions are no longer required to ensure
compliance with the Securities Act and state securities laws or (C) upon
the Issuer's receipt of other evidence reasonably satisfactory to the
Issuer that such registration and qualification under federal and state
securities laws is not required. Whenever such restrictions shall
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cease and terminate as to any such Securities, the Holder shall be entitled
to receive from the Issuer (or its transfer agent and registrar), without
expense (other than applicable transfer taxes, if any), new Warrants (or,
in the case of shares of Warrant Stock, new stock certificates) of like
tenor not bearing the applicable legend required by paragraph (ii) above
relating to the Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to the Holder all rights to which the Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if the Holder shall fail to make any such request, the failure
shall not affect the continuing obligation of the Issuer to afford such rights
to the Holder.
4. STOCK FULLY PAID; RESERVATION AND LISTING OF SHARES; COVENANTS.
(a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Series B-1 Preferred
Stock to provide for the exercise of this Warrant.
(b) Reservation. The Issuer shall at all times have reserved for issuance a
sufficient number of shares of Series B-1 Preferred Stock to permit the exercise
in full of all Warrants and all other rights, options and warrants contained in
any Security relating to the issuance of Series B-1 Preferred Stock. If any
shares of Series B-1 Preferred Stock required to be reserved for issuance upon
exercise of the Warrants or as otherwise provided hereunder require registration
or qualification with any Governmental Authority under any federal or state law
before such shares may be so issued, the Issuer will in good faith use its best
efforts as expeditiously as possible and at its expense to cause such shares to
be duly registered or qualified. If the Issuer shall list any shares of Series
B-1 Preferred Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing of, all
shares of Warrant Stock from time to time issued upon exercise of this Warrant
or as otherwise provided hereunder, and, to the extent permissible under the
applicable securities exchange or market rules, all unissued shares of Warrant
Stock that are at any time issuable hereunder, so long as any shares of Series
B-1 Preferred Stock shall be so listed. The Issuer will also so list on each
securities exchange or market, and will maintain such listing of, any other
Securities which the Holder shall be entitled to receive upon the exercise of
this Warrant if at the time any Securities of the same class shall be listed on
such securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action, including, without
limitation, amending the Certificate of Incorporation or the Bylaws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the
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taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder against dilution (to the extent specifically
provided herein) or impairment. Without limiting the generality of the
foregoing, the Issuer will (i) not amend or modify any provision of the
Certificate of Incorporation or Bylaws of the Issuer in any manner that would
adversely affect in any way the powers, preferences or relative participating,
optional or other special rights of the Series B-1 Preferred Stock or which
would adversely affect the rights of the Holder, (ii) take all such action as
may be reasonably necessary in order that the Issuer may validly and legally
issue fully paid and nonassessable shares of Series B-1 Preferred Stock, free
and clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iii) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any
Governmental Authority or public regulatory body having jurisdiction thereof as
may be reasonably necessary to enable the Issuer to perform its obligations
under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership and the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Series B-1 Preferred Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holders of the Warrants (as amended from time to time, the
"Registration Rights Agreement").
5. ADJUSTMENT OF WARRANT PRICE AND SHARES OF WARRANT STOCK. The Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Subdivisions or Combinations. If the Issuer, at any time while this
Warrant is outstanding, shall subdivide or combine any shares of Common Stock or
Series B-1 Preferred Stock, then, (i) in case of a subdivision of shares, the
Warrant Price shall be proportionately reduced (as at the effective date of such
subdivision or, if the Issuer shall take a record of the holders of its Common
Stock or Series B-1 Preferred Stock for the purpose of so subdividing, as at the
applicable record date, whichever is earlier) to reflect the increase in the
total number of shares of Common Stock (taking into account that one share of
Series B-1 Preferred Stock is convertible into 100 shares of Common Stock) or
Series B-1 Preferred Stock outstanding as a result of such subdivision, or (ii)
in the case of a combination of shares, the Warrant Price shall be
proportionately increased (as at the effective date of such combination or, if
the Issuer shall take a record of the holders of its Common Stock or Series B-1
Preferred Stock for the purpose of so combining, as at the applicable record
date, whichever is earlier) to reflect the reduction in the total number of
shares of Common Stock (taking into account that one share of Series B-1
Preferred Stock is convertible into 100 shares of Common Stock) or Series B-1
Preferred Stock outstanding as a result of such combination.
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(b) Certain Dividends and Distributions. Except in a transaction of the
type otherwise described in this Section 5, if the Issuer, at any time while
this Warrant is outstanding, shall pay a dividend in, or make any other
distribution to the holders of one or more classes of its capital stock (without
consideration therefor) of, shares of:
(i) Common Stock, then (A) the Warrant Price shall be adjusted, at the
date the Issuer shall take a record of the holders of the Issuer's Capital
Stock for the purpose of receiving such dividend or other distribution (or
if no such record is taken, as at the date of such payment or other
distribution), to that price determined by multiplying the Warrant Price in
effect immediately prior to such record date (or if no such record is
taken, then immediately prior to such payment or other distribution), by
the product obtained by multiplying one hundred (100) times a fraction: (1)
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (2) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution (plus in the
event that the Issuer paid cash for fractional shares, the number of
additional shares which would have been outstanding had the Issuer issued
fractional shares in connection with said dividends); and (B) the aggregate
number of shares of Warrant Stock on such date shall be adjusted by
multiplying such aggregate number by the product obtained by multiplying
one one-hundredth (.01) times a fraction: (1) the numerator of which shall
be the total number of shares of Common Stock outstanding immediately after
such dividend or distribution (plus in the event that the Issuer paid cash
for fractional shares, the number of additional shares which would have
been outstanding had the Issuer issued fractional shares in connection with
said dividends), and (2) the denominator of which shall be the total number
of shares of Common Stock outstanding immediately prior to such dividend or
distribution;
(ii) Series B-1 Preferred Stock, then (i) the Warrant Price shall be
adjusted, at the date the Issuer shall take a record of the holders of the
Issuer's Capital Stock for the purpose of receiving such dividend or other
distribution (or if no such record is taken, as at the date of such payment
or other distribution), to that price determined by multiplying the Warrant
Price in effect immediately prior to such record date (or if no such record
is taken, then immediately prior to such payment or other distribution), by
a fraction: (A) the numerator of which shall be the total number of shares
of Series B-1 Preferred Stock outstanding immediately prior to such
dividend or distribution, and (B) the denominator of which shall be the
total number of shares of Series B-1 Preferred Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); and (ii) the aggregate number of shares
of Warrant Stock on such date shall be adjusted by multiplying such
aggregate number by a fraction: (A) the numerator of which shall be the
total number of shares of Series B-1 Preferred Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends), and (B) the
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denominator of which shall be the total number of shares of Series B-1
Preferred Stock outstanding immediately prior to such dividend or
distribution; or
(iii) Capital Stock that ranks pari passu with the Common Stock with
respect to dividend rights and rights on liquidation, winding up or
dissolution or that entitles the holder thereof to share with the holders
of Common Stock in the distribution of dividends or any distributions in
connection with the liquidation, winding up or dissolution of the Issuer
("Parity Stock"), then the adjustments contemplated by Section 5(b)(i)
above shall be made as nearly as possible in the manner provided in such
Section, with such changes as are necessary to account for the relative
rights of such shares of Parity Stock in relation to the Common Stock, so
as to protect the Holder against the effect of such diluting issuance.
(c) Adjustment of Warrant Stock and Warrant Price for Diluting Issues.
Except as otherwise provided in this Section 5(c), in the event the Issuer sells
or issues any Common Stock, Series B-1 Preferred Stock, Parity Stock, or Stock
Equivalents (other than in a transaction of the type described in Section 5(d)
hereof) at a Per Share Consideration (as defined below) less than the Warrant
Price then in effect for the Warrant Stock, then the Warrant Price and the
number of shares of Warrant Stock then in effect hereunder shall be adjusted as
provided in paragraphs (i), (ii), (iii) and (iv) of this Section 5(c). For
purposes of this Section 5(c), the term "Per Share Consideration" shall mean,
with respect to the sale or issuance of (x) Common Stock, one hundred (100)
times the price per share received by the Issuer for the issuance of such shares
of Common Stock after the payment of any commissions, discounts and other
similar costs; (y) Series B-1 Preferred Stock, the price per share received by
the Issuer after the payment of any commissions, discounts and other similar
costs; (z) Parity Stock, the price per share (adjusted as necessary to account
for the relative rights of the such Parity Stock in relation to the Common
Stock) received by the Issuer for the issuance of such shares of Parity Stock
after the payment of any commissions, discounts and other similar costs; (aa)
Stock Equivalents that are convertible into or exchangeable for Common Stock
without further consideration, the number obtained by multiplying one hundred
(100) times the quotient obtained by dividing the aggregate consideration
received by the Issuer upon the sale or issuance of such Stock Equivalents after
the payment of any commissions, discounts and other similar costs, by the
maximum number of shares (as set forth in the instrument relating thereto) of
Common Stock issuable with respect to such Stock Equivalents; (bb) Stock
Equivalents that are convertible into or exchangeable for Series B-1 Preferred
Stock without further consideration, the number obtained by dividing the
aggregate consideration received by the Issuer upon the sale or issuance of such
Stock Equivalents after the payment of any commissions, discounts and other
similar costs, by the maximum number of shares (as set forth in the instrument
relating thereto) of Series B-1 Preferred Stock issuable with respect to such
Stock Equivalents; (cc) Stock Equivalents that are convertible into or
exchangeable for Parity Stock without further consideration, the number obtained
by dividing the aggregate consideration received by the Issuer upon the sale or
issuance of such Stock Equivalents (adjusted as necessary to account for the
relative rights of the such Parity Stock in relation to the Series B-1 Preferred
Stock) after the payment of any commissions, discounts and other similar costs,
by the maximum number of shares (as set forth in the instrument relating
thereto) of Parity Stock (expressed in terms of the equivalent number of shares
of Series B-1 Preferred Stock represented thereby) issuable with respect to such
Stock
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Equivalents; (dd) other Stock Equivalents with respect to which Common Stock is
issuable, the number obtained by multiplying one hundred (100) times the
quotient obtained by dividing the total aggregate consideration received by the
Issuer upon the sale or issuance of such Stock Equivalents plus the total
consideration receivable by the Issuer upon the conversion or exercise of such
Stock Equivalents after the payment of any commissions, discounts and other
similar costs, by the maximum number of shares (as set forth in the instrument
relating thereto) of Common Stock issuable with respect to such Stock
Equivalents; (ee) other Stock Equivalents with respect to which Series B-1
Preferred Stock is issuable, the number obtained by dividing the total aggregate
consideration received by the Issuer upon the sale or issuance of such Stock
Equivalents plus the total consideration receivable by the Issuer upon the
conversion or exercise of such Stock Equivalents after the payment of any
commissions, discounts and other similar costs, by the maximum number of shares
(as set forth in the instrument relating thereto) of Series B-1 Preferred Stock
issuable with respect to such Stock Equivalents; (ff) other Stock Equivalents
with respect to which Parity Stock is issuable, the number obtained by dividing
the total aggregate consideration received by the Issuer upon the sale or
issuance of such Stock Equivalents (adjusted as necessary to account for the
relative rights of the such Parity Stock in relation to the Series B-1 Preferred
Stock) plus the total consideration receivable by the Issuer upon the conversion
or exercise of such Stock Equivalents after the payment of any commissions,
discounts and other similar costs, by the maximum number of shares (as set forth
in the instrument relating thereto) of Parity Stock (expressed in terms of the
equivalent number of shares of Series B-1 Preferred Stock represented thereby)
issuable with respect to such Stock Equivalents; (gg) Common Stock, Parity
Stock, Series B-1 Preferred Stock or Stock Equivalents for no consideration,
$.001 for the Common Stock and $.00001 in all other cases; and (hh) Common
Stock, Series B-1 Preferred Stock, Parity Stock and/or Stock Equivalents for
non-cash consideration, an amount determined by the Board in good faith. In the
event of the issuance of any Stock Equivalents which contain provisions for
adjustment after the date of issuance in the number or price at which such Stock
Equivalents are, directly or indirectly, exerciseable for, or exchangeable or
convertible into, shares of Common Stock, Series B-1 Preferred Stock or Parity
Stock, the calculations pursuant to this Section 5 upon the issuance of such
Stock Equivalents shall disregard such adjustment provisions, but upon the
occurrence of any event which results in such an adjustment pursuant to the
provisions of such Stock Equivalents, the Warrant Price and number of Warrant
Shares shall be further adjusted pursuant to the provisions of this Section 5 to
take into account such adjustment pursuant to such Stock Equivalents. If the
terms of any Stock Equivalents which are presently outstanding or may hereafter
by outstanding are renegotiated so as to affect the number of shares or price at
which such Stock Equivalents are, directly or indirectly, exerciseable for, or
exchangeable or convertible into, shares of Common Stock, Series B-1 Preferred
Stock or Parity Stock, the provisions of this Section 5 shall be applied to take
into effect, as appropriate, such renegotiated terms.
(i) Upon each issuance of:
(A) Common Stock for a Per Share Consideration less than the
Warrant Price in effect on the date of such issuance, (1) the Warrant
Price in effect on such date shall be adjusted by multiplying it by a
fraction: (x) the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
Additional Securities, plus the number
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of shares of Common Stock that the aggregate net consideration
received by the Issuer for the total number of such Additional
Securities so issued would purchase at one one-hundredth (.01) of the
Warrant Price then in effect; and (y) the denominator of which shall
be the number of shares of Common Stock outstanding immediately prior
to the issuance of such Additional Securities, plus the number of such
Additional Securities so issued; and (2) the aggregate number of
shares of Warrant Stock on such date shall be adjusted by multiplying
such aggregate number by a fraction: (x) the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior
to the issuance of such Additional Securities, plus the number of such
Additional Securities so issued, and (y) the denominator of which
shall be the number of shares of Common Stock outstanding immediately
prior to the issuance of such Additional Securities, plus the number
of shares of Common Stock that the aggregate net consideration
received by the Issuer for the total number of such Additional
Securities so issued would purchase at one one-hundredth (.01) of the
Warrant Price then in effect; or
(B) Series B-1 Preferred Stock for a Per Share Consideration less
than the Warrant Price in effect on the date of such issuance, (1) the
Warrant Price in effect on such date shall be adjusted by multiplying
it by a fraction: (x) the numerator of which shall be the number of
shares of Series B-1 Preferred Stock outstanding immediately prior to
the issuance of such Additional Securities, plus the number of shares
of Series B-1 Preferred Stock that the aggregate net consideration
received by the Issuer for the total number of such Additional
Securities so issued would purchase at the Warrant Price then in
effect; and (y) the denominator of which shall be the number of shares
of Series B-1 Preferred Stock outstanding immediately prior to the
issuance of such Additional Securities, plus the number of such
Additional Securities so issued; and (2) the aggregate number of
shares of Warrant Stock on such date shall be adjusted by multiplying
such aggregate number by a fraction: (x) the numerator of which shall
be the number of shares of Series B-1 Preferred Stock outstanding
immediately prior to the issuance of such Additional Securities, plus
the number of such Additional Securities so issued, and (y) the
denominator of which shall be the number of shares of Series B-1
Preferred Stock outstanding immediately prior to the issuance of such
Additional Securities, plus the number of shares of Series B-1
Preferred Stock that the aggregate net consideration received by the
Issuer for the total number of such Additional Securities so issued
would purchase at the Warrant Price then in effect.
(C) Parity Stock, the adjustments contemplated by Section
5(c)(i)(A) above shall be made as nearly as possible in the manner
provided in such Section, with such changes as are necessary to
account for the relative rights of the such Parity Stock in relation
to the Common Stock, so as to protect the Holder against the effect of
such diluting issuance.
(ii) Upon each issuance of Stock Equivalents exerciseable for, or
convertible or exchangeable into, without further consideration Common
Stock, Series B-1 Preferred Stock or Parity Stock for a Per Share
Consideration less than the Warrant Price in effect
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on the date of such issuance, the Warrant Price and the number of shares of
Warrant Stock in effect hereunder on such date shall be adjusted as in
paragraph (i) of this Section (5)(c) on the basis that the Additional
Securities underlying such Stock Equivalents are to be treated as having
been issued on the date of issuance of the Stock Equivalents and the
aggregate consideration received by the Issuer for such Stock Equivalents
shall be deemed to have been received for such underlying Additional
Securities.
(iii) Upon each issuance of Stock Equivalents other than those
described in paragraph (ii) of this Section 5(c) for a Per Share
Consideration less than the Warrant Price in effect on the date of such
issuance, the Warrant Price and the number of shares of Warrant Stock in
effect on such date shall be adjusted as in paragraph (i) of this Section
5(c) on the basis that the Additional Securities underlying such Stock
Equivalents are to be treated as having been issued on the date of issuance
of such Stock Equivalents, and the aggregate consideration received and
receivable by the Issuer on conversion or exercise of such Stock
Equivalents shall be deemed to have been received for such underlying
Additional Securities.
(iv) Once any Additional Securities have been treated as having been
issued for the purpose of this Section 5(c), they shall be treated as
issued and outstanding shares of the Issuer whenever any subsequent
calculations must be made pursuant hereto; provided, however, that on the
expiration of any options, warrants or rights to purchase Additional
Securities of the Issuer, the termination of any rights to convert or
exchange for Additional Securities of the Issuer, or the expiration of any
options or rights related to such convertible or exchangeable Securities on
account of which an adjustment in the Warrant Price and Warrant Stock has
been made previously pursuant to this Section 5(c), the Warrant Price and
the Warrant Stock shall forthwith be readjusted to such Warrant Price and
Warrant Stock as would have obtained had the adjustment made upon the
issuance of such options, warrants, rights, securities or options or rights
related to such Securities been made upon the basis of the issuance of only
the number of shares of Securities of the Issuer actually issued upon the
exercise of such options, warrants or rights, upon the conversion or
exchange of such Securities or upon the exercise of the options or rights
related thereto.
(v) The foregoing notwithstanding, no adjustment of the Warrant Price
or Warrant Stock under this Section 5(c) shall be made as a result of the
issuance of:
(A) any Securities pursuant to which the Warrant Price and the
number of shares of Warrant Stock are adjusted under Section 5(a) or
5(b) hereof; or
(B) any Securities issued pursuant to the exchange, conversion or
exercise of any Stock Equivalents that have previously been
incorporated into computations hereunder on the date when such Stock
Equivalents were issued.
(d) Reorganization, Reclassification, Consolidation, Merger or Sale of
Assets. If any reorganization or reclassification of the Capital Stock of the
Issuer (other than by virtue of a change in par value, or from par value to no
par value, or from no par value to par value, where such change in par value
does not result in any change in the number of outstanding shares), or
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consolidation or merger of the Issuer with another corporation, or the sale of
all or substantially all of its assets to another corporation, shall be effected
in such a way that holders of the Common Stock or Series B-1 Preferred Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for the Common Stock or Series B-1 Preferred Stock, then, as a
condition of such reorganization, reclassification, consolidation, merger or
sale, the Holder shall have the right, and the Issuer shall enter into such
agreements as may be necessary to effectuate such right, thereafter and until
the expiration of the Term, to convert this Warrant into the same kind and
amount of stock, securities or assets as the stock, securities or assets
receivable upon such reorganization, reclassification, consolidation, merger or
sale by a holder of either (i) the same number of shares of the Series B-1
Preferred Stock as the number of shares of Warrant Stock then subject to this
Warrant, or (ii) one hundred (100) times the same number of shares of Common
Stock as the number of shares of Warrant Stock then subject to this Warrant, as
the case may be.
(e) De Minimis Adjustments. No adjustment in the Warrant Price or the
number of shares of Warrant Stock issuable hereunder shall be required unless
such adjustment would require an increase or decrease of at least one-tenth of
one percent (.1%) in the Warrant Price or the number of shares of Warrant Stock
issuable upon the exercise of this Warrant; provided, however, that any
adjustments which by reason of this Section 5(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest cent or one-thousandth of a share.
(f) Form May Remain Unchanged. The form of this Warrant need not be changed
because of any adjustments in the Warrant Price or the number and kind of
Securities purchasable upon the exercise of this Warrant.
6. NOTICE OF ADJUSTMENTS. Whenever the Warrant Price shall be adjusted
pursuant to Section 5 hereof (for purposes of this Section 6, each an
"adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and
execute a certificate setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Issuer's Board made any determination hereunder), and the Warrant Price and
number of shares of Warrant Stock after giving effect to such adjustment, and
shall cause a copy of such certificate to be delivered to the Holder promptly
after each adjustment. Any dispute between the Issuer and the Holder with
respect to the matters set forth in such certificate may at the option of the
Holder be submitted to one of the national accounting firms currently known as
the "big five" selected by the Holder, provided that the Issuer shall have
twenty (20) days after receipt of notice from such Holder of its selection of
such firm to object thereto, in which case the Holder shall select another such
firm and the Issuer shall have no such right of objection. The firm selected by
the Holder as provided in the preceding sentence shall be instructed to deliver
a written opinion as to such matters to the Issuer and the Holder within thirty
(30) days after submission to it of such dispute. Such opinion shall be final
and binding on the parties hereto. The fees and expenses of such accounting firm
shall be paid by the Issuer.
7. FRACTIONAL SHARES. No fractional shares of Warrant Stock (other than
with respect to 1/100th of a share or even multiple thereof) will be issued in
connection with this issuance and exercise of this Warrant, but in lieu of any
fractional shares (other than with respect to 1/100th of
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a share or even multiple thereof), the Issuer shall make a cash payment therefor
equal in amount to the product of the applicable fraction multiplied by the
product obtained by multiplying one hundred (100) by the Per Share Market Value
then in effect.
8. DEFINITIONS. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Securities" shall mean shares of Common Stock, Series B-1
Preferred Stock or Parity Stock issued subsequent to the Original Issue
Date or, with respect to the issuance of Stock Equivalents, the maximum
number of shares (as set forth in the instrument relating thereto) of
Common Stock, Series B-1 Preferred Stock or Parity Stocki issuable in
exchange for or upon conversion or exercise of, such Stock Equivalents.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Restated Certificate of
Incorporation of the Issuer, as amended, as in effect on the Original Issue
Date, and as hereafter from time to time amended, modified, supplemented or
restated in accordance with the terms hereof and thereof and pursuant to
applicable law.
"Common Stock" means the Common Stock, $.01 par value per share, of
the Issuer.
"Convertible Security" means any Security, directly or indirectly,
convertible into, exchangeable or exerciseable for, or containing any right
to receive shares of Common Stock, Series B-1 Preferred Stock or Parity
Stock.
"Expiration Date" means March 5, 2006.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holder" means the Person or Persons who shall from time to time own
this Warrant.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the
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Capital Stock or assets of corporations or other entities as going
concerns, and which is not affiliated with either the Issuer or the Holder.
"Issuer" means Alterra Healthcare Corporation, a Delaware corporation,
and its successors.
"Original Issue Date" means March 5, 2001.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Parity Stock" has the meaning specified in Section 5(b)(iii).
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Consideration" has the meaning specified in Section 5(c)
hereof.
"Per Share Market Value" means on any particular date (a) the last
sales price per share of the Common Stock on such date on the American
Stock Exchange or other registered national stock exchange on which the
Common Stock is then listed or if there is no such price on such date, then
the closing bid price on such exchange or quotation system on the date
nearest preceding such date, or (b) if the Common Stock is not listed then
on the American Stock Exchange or any registered national stock exchange,
then the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the OTC Bulletin Board or in the
National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices), at the close of business
on such date, or (c) if the Common Stock is not then reported by the OTC
Bulletin Board or the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices),
then the average of the "Pink Sheet" quotes for the relevant conversion
period, as determined in good faith by the Issuer or the Holder, as the
context requires, or (d) if the Common Stock is not then publicly traded,
then the fair market value of a share of Common Stock as determined by an
Independent Appraiser selected in good faith by the Issuer or the Holder,
as the context requires; provided, however, that after receiving the
determination by such Independent Appraiser, the party receiving such
determination shall have the right to select an additional Independent
Appraiser, in which case, the fair market value shall be equal to the
average of the determinations by each such Independent Appraiser; and
provided further, however, that all determinations of the Per Share Market
Value shall be appropriately adjusted for any stock dividends, stock splits
or other similar transactions during such period. The fees and expenses of
such Independent Appraisers shall be paid by the Issuer. The determination
of fair market value by an Independent Appraiser shall be based upon the
fair market value of the Issuer determined as between a willing buyer and a
willing seller and taking into account all relevant factors determinative
of value, and shall be final and binding on all parties. In determining the
fair market value of any shares of Common Stock, no consideration shall be
given to any
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restrictions on transfer of the Common Stock imposed by agreement or by
federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
4(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Series B-1 Preferred Stock" means the Issuer's Series B-1 Non-Voting
Participating Preferred Stock, with a stated value of $75.00 per share, as
adjusted, and any other Capital Stock into which such stock may hereafter
be changed.
"Stock Equivalent" means any Convertible Security or any warrant,
option or other right, directly or indirectly, to subscribe for or purchase
or receive any additional shares of Common Stock, Series B-1 Preferred
Stock, Parity Stock or any Convertible Security.
"Term" has the meaning specified in Section 1 hereof.
"Trading Day" means (a) a day on which the Common Stock is traded on
the American Stock Exchange as reported by Bloomberg L.P., or (b) if the
Common Stock is not listed on the American Stock Exchange, then a day on
which the Common Stock is traded on any other registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, then a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a), (b) and (c)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions
in the State of New York are authorized or required by law or other
government action to close.
"Warrant" means this Warrant (and any other warrant or warrants of
like tenor issued in substitution or exchange for this Warrant pursuant to
the provisions of Section 3(c), 3(d) or 3(e) hereof), and all other
Warrants issued by the Company on the Original Issue Date to purchase
shares of Series B-1 Stock (and any other warrant or warrants of like tenor
issued in substitution or exchange thereof pursuant to Section 3(c), 3(d)
or 3(e) thereof).
"Warrant Price" has the meaning specified in Section 2 hereof.
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"Warrant Stock" means collectively the Tranche A Warrant Stock,
Tranche B Warrant Stock and Tranche C Warrant Stock.
9. OTHER NOTICES. In case at any time:
(a) the Issuer shall make any distributions to the holders of the Common
Stock, the Series B-1 Preferred Stock or Parity Stock; or
(b) the Issuer shall authorize the granting to all holders of its Common
Stock, Series B-1 Preferred Stock or Parity Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Stock Equivalents or
Convertible Securities or other rights; or
(c) there shall be any reclassification of the Capital Stock of the Issuer;
or
(d) there shall be any capital reorganization by the Issuer; or
(e) there shall be any (i) consolidation or merger involving the Issuer or
(ii) sale, transfer or other disposition of all or substantially all of the
Issuer's property, assets or business (except a merger or other reorganization
in which the Issuer shall be the surviving corporation and its shares of Capital
Stock shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned subsidiary
of the Issuer); or
(f) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Issuer or any partial liquidation of the Issuer or
distribution to holders of the Common Stock or the Series B-1 Preferred Stock;
then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of the Common
Stock, the Series B-1 Preferred Stock or Parity Stock of record shall
participate in such dividend, distribution or subscription rights, or shall be
entitled to exchange their certificates for Common Stock, Series B-1 Preferred
Stock, or Parity Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be. Such notice shall be
given at least twenty (20) days prior to the action in question and not less
than twenty (20) days prior to the record date or the date on which the Issuer's
transfer books are closed in respect thereto. The Issuer shall give to the
Holder notice of all meetings and actions by written consent of its
stockholders, at the same time and in the same manner as notice of any meetings
of stockholders is required to be given to stockholders who do not waive such
notice (or, if such requires no notice, then two business days' written notice
thereof describing the matters upon which action is to be taken). The Holder
shall have the right to send two representatives selected by it to each meeting,
who shall be permitted to attend, but not vote at, such meeting and any
adjournments thereof. This Warrant entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Common Stock, the Series B-1 Preferred Stock or Parity Stock.
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10. AMENDMENT AND WAIVER. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Holder.
11. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
12. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern standard time,
on a business day, (ii) the business day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., pacific standard time, on any
date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the
business day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Alterra Healthcare Corporation
10000 Innovation Drive
Milwaukee, Wisconsin 53226
Attention: Chief Executive Officer
Facsimile: (414) 918-5055
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other party hereto by
such notice. Copies of notices to the Issuer shall be sent to Rogers & Hardin
LLP, 2700 International Tower, Peachtree Street, N.E., Atlanta, Georgia 30303,
Attn: Alan C. Leet, Facsimile No.: (404) 525-2224.
13. WARRANT AGENT. The Issuer may, by written notice to the Holder, appoint
an agent for the purpose of issuing shares of Warrant Stock on the exercise of
this Warrant pursuant to subsection (b) of Section 3 hereof, exchanging this
Warrant pursuant to subsection (d) of Section 3 hereof or replacing this Warrant
pursuant to subsection (d) of Section 4 hereof, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
14. REMEDIES. The Issuer stipulates that the remedies at law of the Holder
in the event of any default or threatened default by the Issuer in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
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15. SUCCESSORS AND ASSIGNS. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer and the Holder and shall be enforceable thereby.
16. MODIFICATION AND SEVERABILITY. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
17. HEADINGS. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
executed, delivered and acknowledged by their respective duly authorized
officers as of the day and year first above written.
ALTERRA HEALTHCARE CORPORATION
By:
--------------------------------
Name:
Title:
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EXERCISE FORM
Alterra Healthcare Corporation (the "Corporation")
The undersigned holder of the within Warrant, pursuant to the provisions
thereof, hereby elects to purchase (i) _________ shares of Series B-1 Non-Voting
Participating Preferred Stock of the Corporation covered by the within Warrant
pursuant to Section 2(a) thereof, (ii) ________ shares of Series B-1 Non-Voting
Participating Preferred Stock of the Corporation covered by the within Warrant
pursuant to Section 2(b) thereof, and (iii) _________ shares of Series B-1
Non-Voting Participating Preferred Stock of the Corporation covered by the
within Warrant pursuant to Section 2(c) thereof.
Dated: Signature
------------------------- --------------------------------
Address
--------------------------------
--------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned holder of the within Warrant hereby sells,
assigns and transfers unto ________________________________ the within Warrant
and all rights evidenced thereby and does irrevocably constitute and appoint
___________________________, attorney, to transfer the said Warrant on the books
of the Corporation.
Dated: Signature
------------------------- --------------------------------
Address
--------------------------------
--------------------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, the undersigned holder of the within Warrant hereby sells,
assigns and transfers unto ___________________________________ the right to
purchase (i) _______ shares of Warrant Stock pursuant to Section 2(a) of the
within Warrant, (ii) _______ shares of Warrant Stock pursuant to Section 2(b) of
the within Warrant, and (iii) _______ shares of Warrant Stock pursuant to
Section 2(c) of the within Warrant, together with all rights therein, and does
irrevocably constitute and appoint ________________________, attorney, to
transfer that part of the said Warrant on the books of the Corporation.
Dated: Signature
------------------------- --------------------------------
Address
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FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ cancelled (or transferred or exchanged) this _____ day
of _________ __________________, 20____, ______________ shares of Series B-1
Non-Voting Participating Preferred Stock issued therefor in the name of
_____________________________, and Warrant No. W-____ issued for (i) _________
shares of Series B-1 Non-Voting Participating Preferred Stock pursuant to
Section 2(a) thereof, (ii) _________ shares of Series B-1 Non-Voting
Participating Preferred Stock pursuant to Section 2(b) thereof, and (iii)
_________ shares of Series B-1 Non-Voting Participating Preferred Stock pursuant
to Section 2(c) thereof, in the name of _______________________________________.