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EXHIBIT 1.2
THE UNDERWRITER'S WARRANTS AND THE SHARES OF COMMON STOCK UNDERLYING
THESE UNDERWRITER'S WARRANTS REPRESENTED BY THIS CERTIFICATE (THE
"SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AND WITH THE SECURITIES ADMINISTRATORS OF
CERTAIN STATES UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH STATES.
HOWEVER, THE UNDERWRITER'S WARRANTS MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED EXCEPT AS OTHERWISE PROVIDED HEREIN AND THE HOLDER OF THIS
UNDERWRITER'S WARRANT, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT
SELL, TRANSFER OR ASSIGN UNDERWRITER'S WARRANTS EXCEPT AS OTHERWISE
PROVIDED HEREIN.
MAXICARE HEALTH PLANS, INC.
Underwriter's Warrant for the Purchase of Shares
No.
THIS CERTIFIES that for $100 and for other good and valuable
consideration, the receipt of which is hereby acknowledged, MDB CAPITAL GROUP,
LLC (the "Holder"), is entitled to subscribe for and purchase from MAXICARE
HEALTH PLANS, INC., a Delaware corporation (the "Company"), upon the terms and
conditions set forth herein, 1,000,000 shares (a "Share" or the "Shares") of the
common stock of the Company at an exercise price of $1.50 per Share or 150% of
the offering price (the "Exercise Price") of Shares sold by the Company in a
rights offering (the "Rights Offering") of 28,088,072 shares of the Company's
common stock pursuant to a registration statement on Form S-2 (the "Registration
Statement") filed with the Securities and Exchange Commission (the "Commission")
in which the Holder acted as standby underwriter. The Registration Statement was
declared effective on _________, 2000. These Underwriter's Warrants shall be
exercisable for a period of seven years from the date of issuance (the "Exercise
Period") but may not be exercised during the first twelve months following
issuance.
The term the "Holder" as used herein shall include any transferee to
whom this Underwriter's Warrant has been transferred in accordance with the
terms hereof. As used herein the term "this Underwriter's Warrant" shall mean
and include this Underwriter's Warrant and any Underwriter's Warrant or
Underwriter's Warrants hereafter issued as a consequence of the exercise or
transfer of this Underwriter's Warrant in whole or in part, and the term "Common
Stock" shall mean and include the Company's Common Stock with ordinary voting
power, which class at the date hereof is publicly traded.
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1. This Underwriter's Warrant may not be sold, transferred, assigned, pledged or
hypothecated until ___________ (12 months from the date of issuance) except that
it may be transferred, in whole or in part, (i) to one or more officers,
employees or partners of the Holder (or the officers, employees or partners of
any such partner); (ii) to a member of the underwriting syndicate and/or its
officers, employees or partners; or (iii) by operation of law. After __________,
this Underwriter's Warrant, in whole or in part, may be sold, transferred,
assigned or hypothecated in accordance with applicable law.
a. This Underwriter's Warrant may be exercised during the Exercise
Period as to the whole or any lesser number of Shares, by the surrender of this
Underwriter's Warrant (with the election attached hereto duly executed) to the
Company at its office at 1149 South Broadway Street, Los Angeles, California, or
such other place as is designated in writing by the Company, together with a
certified or bank cashier's check payable to the order of the Company in an
amount equal to the Exercise Price.
2. Upon each exercise of this Underwriter's Warrant, the Holder shall be deemed
to be the holder of record of the Shares issuable upon such exercise,
notwithstanding that the transfer books of the Company shall then be closed or
certificates representing such Shares shall not then have been actually
delivered to the Holder. As soon as practicable after each such exercise of this
Underwriter's Warrant, the Company shall issue and deliver to the Holder a
certificate or certificates for the Common Stock issuable upon such exercise,
registered in the name of the Holder or its designee. If this Underwriter's
Warrant should be exercised in part only, the Company shall, upon surrender of
this Underwriter's Warrant for cancellation, execute and deliver a new
Underwriter's Warrant evidencing the right of the Holder to purchase the balance
of the Shares (or portions thereof) subject to purchase hereunder.
3. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of this Underwriter's Warrant, such number of shares of Common
Stock as shall, from time to time, be sufficient therefor. The Company covenants
that all shares of Common Stock issuable upon exercise of this Underwriter's
Warrant shall be validly issued, fully paid, nonassessable, and free of
preemptive rights.
a. [language to follow]
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b. The following provisions, in addition to other provisions of this
section shall be applicable in determining any adjustment under (a) above:
i. [language to follow]
ii.
iii. [language to follow]
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Except as otherwise specifically provided herein, the date of
issuance or sale of Common Stock shall be deemed to be the date the Company is
legally obligated to issue such Common Stock or the date the Company is legally
obligated to issue any Warrant or Convertible Security. If the Company shall
take a record date for the purpose of determining holders of Common Stock
entitled to (A) receive a dividend or other distribution payable in Common Stock
or in Warrants or Convertible Securities or (B) subscribe for or purchase Common
Stock, Warrants or Convertible Securities, such record date shall be deemed to
be the date of issue or sale of the Common Stock, Warrants or Convertible
Securities.
c. The number of shares of Common Stock outstanding at any given time
shall not include treasury shares but the disposition of any such treasury
shares shall be considered an issue or sale of Common Stock for the purposes of
this section.
Anything hereinabove to the contrary notwithstanding, no adjustment
shall be made pursuant to (a) above to the Exercise Price or to the number of
Shares purchasable upon:
(A) The issuance or sale by the Company of any Shares, Common
Stock or Warrants pursuant to these Underwriter's Warrants, any securities
offered in a public offering underwritten by MDB Capital Group, LLC., any
shares, Warrants or Convertible Securities issued and outstanding at the
effective date of such public offering, any shares issuable pursuant to the
Company's stock option plans currently in effect.
(B) The issuance or sale by the Company of any Common Stock
pursuant to any Warrants or Convertible Securities issued and outstanding prior
to the date of Effective Date of the Registration Statement.
(C) The issuance or sale of Common Stock pursuant to the exercise
of Warrants or conversion or exchange of Convertible Securities hereinafter
issued for which an adjustment has been made (or was not required to be made)
pursuant to the provisions hereof.
(D) The increase in the number of shares of Common Stock subject
to any Warrant or Convertible Security referred to in subsections (A), (B) or
(C) hereof pursuant to the provisions of such Warrant or Convertible Securities
designed to protect against dilution.
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d. If the Company shall at any time subdivide its outstanding Common
Stock by recapitalization, reclassification or split-up thereof, the number of
Shares subject to this Underwriter's Warrant immediately prior to such
subdivision shall be proportionately increased, and if the Company shall at any
time combine the outstanding Common Stock by recapitalization, reclassification
or combination thereof, the number of Shares subject to this Underwriter's
Warrant immediately prior to such combination shall be proportionately
decreased. Any corresponding adjustment to the Exercise Price shall become
effective at the close of business on the record date for such subdivision or
combination.
e. If the Company after the date hereof shall distribute to the holders
of its Common Stock any securities or other assets (other than a distribution of
Common Stock or a cash distribution made as a dividend payable out of earnings
or out of any earned surplus legally available for dividends under the laws of
the jurisdiction of incorporation of the Company), the Board of Directors shall
be required to make such equitable adjustment in the Exercise Price in effect
immediately prior to the record date of such distribution as may be necessary to
preserve the rights substantially proportionate to those enjoyed hereunder by
the Holder immediately prior to such distribution. Any such adjustment made in
good faith by the Board of Directors shall be final and binding upon the Holder
and shall become effective as of the record date for such distribution.
f. No adjustment in the number of Shares subject to this Underwriter's
Warrant shall be required unless such adjustment would require an increase or
decrease in such number of Shares of at least 1% of the then adjusted number of
Shares issuable upon exercise of this Underwriter's Warrant, provided, however,
that any adjustments which by reason of the foregoing are not required at the
time to be made shall be carried forward and taken into account and included in
determining the amount of any subsequent adjustment; and provided further,
however, that in case the Company shall at any time subdivide or combine the
outstanding Common Stock or issue any additional Common Stock as a dividend,
said percentage shall forthwith be proportionately increased in the case of a
combination or decreased in the case of a subdivision or dividend of Common
Stock so as to appropriately reflect the same. If the Company shall make a
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or distribution and legally abandon its plan to pay or
deliver such dividend or distribution then no adjustment in the number of Shares
subject to this Underwriter's Warrant shall be required by reason of the making
of such record.
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g. Whenever the number of Shares purchasable upon the exercise of this
Underwriter's Warrant is adjusted as provided herein, the Exercise Price shall
be adjusted (to the nearest one tenth of a cent) by respectively multiplying
such Exercise Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of Shares purchasable upon the exercise
of this Underwriter's Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of Shares purchasable immediately
thereafter.
h. In case of any reclassification of the outstanding Common Stock
(other than a change covered by (c) hereof or which solely affects the par value
of such Common Stock) or in the case of any merger or consolidation of the
Company with or into another corporation (other than a consolidation or merger
in which the Company is the continuing corporation and which does not result in
any reclassification or capital reorganization of the outstanding Common Stock),
or in the case of any sale or conveyance to another corporation of the property
of the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Holder of this Underwriter's Warrant shall
have the right thereafter (until the expiration of the right of exercise of this
Underwriter's Warrant) to [language to come].
i. Upon occurrence of each event requiring an adjustment of the Exercise
Price and of the number of Shares purchasable upon exercise of this
Underwriter's Warrant in accordance with, and as required by, the terms hereof,
the Company shall forthwith employ a firm of certified public accountants (who
may be the regular accountants for the Company) who shall compute the adjusted
Exercise Price and the adjusted number of Shares purchasable at such adjusted
Exercise Price by reason of such event in accordance herewith. The Company shall
give to each Holder of the Underwriter's Warrants a copy of such computation
which shall be conclusive and shall be binding upon such Holders unless
contested by Holders by written notice to the Company within thirty (30) days
after receipt thereof.
j. In case the Company after the date hereof shall propose (A) to pay
any dividend payable in stock to the holders of its Common Stock or to make any
other distribution (other than cash dividends) to the holders of its Common
Stock or to grant rights to subscribe to or purchase any additional shares of
any class or any other rights or Warrants, (B) to effect any reclassification
involving merely the subdivision or combination of outstanding Common Stock, or
(C) any capital reorganization or any consolidation or merger, or any sale,
transfer or other disposition of its property, assets and business substantially
as an entirety, or the liquidation, dissolution or winding up of the Company,
then in each such case, the Company shall obtain
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the computation described above and if an adjustment to the Exercise Price is
required, the Company shall notify the Holders of the Underwriter's Warrants of
such proposed action, which shall specify the record date for any such action or
if no record date is established with respect thereto, the date on which such
action shall occur or commence, or the date of participation therein by the
holders of Common Stock if any such date is to be fixed, and shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action on the Exercise Price and the number, or
kind, or class of shares or other securities or property obtainable upon
exercise of this Underwriter's Warrant after giving effect to any adjustment
which will be required as a result of such action. Such notice shall be given at
least twenty (20) days prior to the record date for determining holders of the
Common Stock for purposes of any such action, and in the case of any action for
which a record date is not established then such notice shall be mailed at least
twenty (20) days prior to the taking of such proposed action.
k. Failure to file any certificate or notice or to give any notice, or
any defect in any certificate or notice, shall not effect the legality or
validity of the adjustment in the Exercise Price or in the number, or kind, or
class of shares or other securities or property obtainable upon exercise of the
Underwriter's Warrants or of any transaction giving rise thereto.
l. The Company shall not be required to issue fractional Shares upon any
exercise of the Underwriter's Warrants. As to any final fraction of a Share
which the Holder of a Underwriter's Warrant would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect
of such final fraction in an amount equal to the same fraction of the combined
market price of such share of Common Stock and Warrant on the business day
preceding the day of exercise. The Holder of a Underwriter's Warrant, by his
acceptance of a Underwriter's Warrant, expressly waives any right to receive any
fractional Shares.
m. Regardless of any adjustments pursuant to this section in the
Exercise Price or in the number, or kind, or class of shares or other securities
or other property obtainable upon exercise of a Underwriter's Warrant, a
Underwriter's Warrant may continue to express the Exercise Price and the number
of Shares obtainable upon exercise at the same price and number of Shares as are
stated herein.
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n. The number of Shares, the Exercise Price and all other terms and
provisions of the Company's agreement with the Holder of this Underwriter's
Warrant shall be determined exclusively pursuant to the provisions hereof.
o. The above provisions of this section 6 shall similarly apply to
successive transactions which require adjustments.
p. Notwithstanding any other language to the contrary herein, (i) the
anti-dilution terms of this Underwriter's Warrant will not be enforced so as to
provide the Holder the right to receive, or for the accrual of, cash dividends
prior to the exercise of this Underwriter's Warrant, and (ii) the anti-dilution
terms of this Underwriter's Warrant will not be enforced in such a manner as to
provide the Holder with disproportionate rights, privileges and economic
benefits not provided to purchasers of the Shares in the Rights Offering.
7. The issuance of any Shares or other securities upon the exercise of
this Underwriter's Warrant and the delivery of certificates or other instruments
representing such securities, or other securities, shall be made without charge
to the Holder for any tax or other charge in respect of such issuance. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of any certificate in
a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
8. The Shares underlying the Underwriter's Warrants (the "Warrant
Shares") have been registered with the Commission in connection with the
Registration Statement which was declared effective by the Commission on
_____________. If for any reason the Registration Statement ceases to be
effective during the term of the Underwriter's Warrants so that the Holder is
not permitted to sell publicly the balance of the Warrant Shares, the Holder
shall have the following rights:
a. If, at any time, commencing upon such date as the Registration
Statement ceases to be effective, and ending ____________ (seven years after
issuance of the Underwriter's Warrant), the Company shall file a registration
statement (other than on Form S-4, Form S-8, or any successor form) with the
Commission while Shares are available for purchase upon exercise of this
Underwriter's Warrant, the Company shall, on two occasions only, give the
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Holder and all the then holders of such Underwriter's Warrants at least 30 days
prior written notice of the filing of such registration statement. If requested
by the Holder or by any such holder in writing within 20 days after receipt of
any such notice, the Company shall, at the Company's sole expense (other than
the fees and disbursements of counsel for the Holder or such holder and the
underwriting discounts and non-accountable expenses, if any, payable in respect
of the securities sold by the Holder or any such holder), register or qualify
the Warrant Shares of the Holder or any such holders who shall have made such
request concurrently with the registration of such other securities, all to the
extent requisite to permit the public offering and sale of such securities, and
will use its best efforts through its officers, directors, auditors and counsel
to cause such registration statement to become effective as promptly as
practicable. The Common Stock to be registered is hereinafter referred to as
"Registrable Securities." Notwithstanding the foregoing, if the managing
underwriter of any such offering shall advise the Company in writing that, in
its opinion, the distribution of all or a portion of the Registrable Securities
requested to be included in the registration concurrently with the securities
being registered by the Company would materially adversely affect the
distribution of such securities by the Company for its own account, then the
Holder or any such holder who shall have requested registration of his or its
Registrable Securities shall delay the offering and sale of such Registrable
Securities (or the portions thereof so designated by such managing underwriter)
for such period, not to exceed 90 days, as the managing underwriter shall
request, provided that no such delay shall be required as to any Registrable
Securities if any securities of the Company are included in such registration
statement for the account of any person other than the Company and the Holder
unless the securities included in such registration statement for such other
person shall have been reduced pro rata to the reduction of the Registrable
Securities which were requested to be included in such registration.
b. If, at any time, commencing upon such date as the Registration
Statement ceases to be effective, and ending ____________ (seven years after
issuance of the Underwriter's Warrant), the Company shall receive a written
request from holders of Underwriter's Warrants who, in the aggregate, own (or
upon exercise of all Underwriter's Warrants will own) a majority of the total
number of Shares issuable upon exercise of the Underwriter's Warrants, the
Company shall, as promptly as practicable, prepare and file with the Commission
a registration statement sufficient to permit the public offering and sale of
the Registrable Securities, and will use its best efforts through its officers,
directors, auditors and counsel to cause such registration statement to become
effective as promptly as practicable; provided, however, that the Company shall
only be obligated to file and obtain effectiveness of one such registration
statement for which all expenses incurred in connection with such registration
(other than the fees and
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disbursements of counsel for the Holder or such holders and underwriting
discounts and non-accountable expenses, if any, payable in respect of the
Registrable Securities sold by the Holder or any such holder) shall be borne by
the Company. In addition to the one demand registration provided for herein
above, the holders of the Registrable Securities who, in the aggregate, own (or
upon exercise of all Underwriter's Warrants will own) a majority of the total
number of Shares issued or issuable upon exercise of the Underwriter's Warrants
may request that the Company prepare and file a registration statement to permit
the public offering and sale of the Registrable Securities on two additional
occasions only, but the costs of preparation and filing of such additional
registration statements shall be at the then holders' cost and expense unless
the Company elects to register additional shares of Common Stock, in which case
the cost and expense of such registration statements will be prorated between
the Company and the holders of the Registrable Securities according to the
aggregate sales price of the securities being issued.
c. In the event of a registration pursuant to the provisions of this
section 8 , the Company shall use its best efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holder or such holders
may reasonably request; provided, however, that the Company shall not be
required to qualify to do business in any state by reason of this section 8(c)
in which it is not otherwise required to qualify to do business and provided
further, that the Company has no obligation to qualify the Registrable
Securities where such qualification would cause any unreasonable delay or
expenditure by the Company.
d. The Company shall keep effective any registration or qualification
contemplated by this section 8 and shall from time to time amend or supplement
each applicable registration statement, preliminary prospectus, final
prospectus, application, document and communication for such period of time as
shall be required to permit the Holder or such holders to complete the offer and
sale of the Registrable Securities covered thereby. The Company shall in no
event be required to keep any such registration or qualification in effect for a
period in excess of nine months from the date on which the Holder and such
holders are first free to sell such Registrable Securities; provided, however,
that if the Company is required to keep any such registration or qualification
in effect with respect to securities other than the Registrable Securities
beyond such period, the Company shall keep such registration or qualification in
effect as it relates to the Registrable Securities for so long as such
registration or qualification remains or is required to remain in effect in
respect of such other securities.
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e. In the event of a registration pursuant to the provisions of this
section 8, the Company shall furnish to the Holder and to each such holder such
reasonable number of copies of the registration statement and of each amendment
and supplement thereto (in each case, including all exhibits), such reasonable
number of copies of each prospectus contained in such registration statement and
each supplement or amendment thereto (including each preliminary prospectus),
all of which shall conform to the requirements of the Act and the rules and
regulations thereunder, and such other documents as the Holder or such holders
may reasonably request in order to facilitate the disposition of the Registrable
Securities included in such registration.
f. In the event of a registration pursuant to the provisions of this
section 8, the Company shall furnish the Holder and each holder of any
Registrable Securities so registered with an opinion of its counsel to the
effect that (i) the registration statement has become effective under the Act
and no order suspending the effectiveness of the registration statement,
preventing or suspending the use of the registration statement, any preliminary
prospectus, any final prospectus, or any amendment or supplement thereto has
been issued, nor to such counsel's actual knowledge has the Securities and
Exchange Commission or any securities or blue sky authority of any jurisdiction
instituted or threatened to institute any proceedings with respect to such an
order and (ii) the registration statement and each prospectus forming a part
thereof (including each preliminary prospectus), and any amendment or supplement
thereto, complies as to form with the Act and the rules and regulations
thereunder. Such counsel shall also provide a Blue Sky Memorandum setting forth
the jurisdictions in which the Registrable Securities have been registered or
qualified for sale pursuant to the provisions of section 8(c).
g. The Company agrees that until all the Registrable Securities have
been sold under a registration statement or pursuant to Rule 144 under the Act,
it shall keep current in filing all reports, statements and other materials
required to be filed with the Commission to permit holders of the Registrable
Securities to sell such securities under Rule 144.
h. The Holder and any holders who propose to register their Registrable
Securities under the Act shall execute and deliver to the Company a selling
stockholder questionnaire on a form to be provided by the Company.
i. In addition to the rights above provided, the Company will cooperate
with the then holders of the Underwriter's Warrants and underlying Registrable
Securities in preparing and signing a registration statement, on two occasions
only in addition to the registration statements
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discussed above, required in order to sell or transfer the Registrable
Securities and will supply all information required therefor, but such
additional registration statements shall be at the then Holders' cost and
expense unless the Company elects to register additional shares of the Company's
Common Stock in which case the cost and expense of such registration statements
will be prorated between the Company and the Holders of the Underwriter's
Warrants and Registrable Securities according to the aggregate sales prices of
the securities being sold.
9.a. Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Holder, any holder of any of the Registrable
Securities, their officers, directors, partners, employees, agents and counsel,
and each person, if any, who controls any such person within the meaning of
Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), from and against any and all loss, liability,
charge, claim, damage and expense whatsoever (which shall include, for all
purposes of this section 9, but not be limited to, attorneys' fees and any and
all expense whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), as and when
incurred, arising out of, based upon, or in connection with (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
registration statement, preliminary prospectus or final prospectus (as from time
to time amended and supplemented), or any amendment or supplement thereto, or
(B) in any application or other document or communication (in this section 9
collectively called an "application") executed by or on behalf of the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to register or qualify any of the Registrable
Securities under the securities or blue sky laws thereof or filed with the
Commission or any securities exchange; or any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company with respect to the Holder or any holder of any of the Registrable
Securities by or on behalf of such person expressly for inclusion in any
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(ii) any breach of any representation, warranty, covenant or agreement of the
Company contained in this Underwriter's Warrant. The foregoing agreement to
indemnify shall be in addition to any liability the Company may otherwise have,
including liabilities arising under this Underwriter's Warrant.
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If any action is brought against the Holder or any holder of any
of the Registrable Securities or any of its officers, directors, partners,
employees, agents or counsel, or any controlling persons of such person (an
"indemnified party") in respect of which indemnity may be sought against the
Company pursuant to the foregoing section, such indemnified party or parties
shall promptly notify the Company in writing of the institution of such action
(but the failure so to notify shall not relieve the Company from any liability
it may otherwise have to Holder or any holder of any of the Registrable
Securities) and the Company shall promptly assume the defense of such action,
including the employment of counsel (reasonably satisfactory to such indemnified
party or parties) and payment of expenses. Such indemnified party or parties
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
action or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties to have charge of the defense
of such action or such indemnified party or parties shall have reasonably
concluded that there may be one or more legal defenses available to it or them
or to other indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees and expenses shall be
borne by the Company and the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties. Anything
in this section to the contrary notwithstanding, the Company shall not be liable
for any settlement of any such claim or action effected without its written
consent.
b. The Holder and each holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering the Registrable Securities held
by the Holder and each holder and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Holder and each holder in section 9(a), but only with respect to statements
or omissions, if any, made in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, or in any application, in reliance upon
and in conformity with written information furnished to the Company with respect
to the Holder and each holder by or on behalf of the Holder and each holder
expressly for inclusion in any such registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement thereto, or in
any application, as the case may be. If any action shall be brought against the
Company or any other person so indemnified based on any such registration
statement, preliminary prospectus,
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or final prospectus, or any amendment or supplement thereto, or in any
application, and in respect of which indemnity may be sought against the Holder
and each holder pursuant to this section 9(b), the Holder and each holder shall
have the rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of section 9(a).
c. To provide for just and equitable contribution, if (i) an indemnified
party makes a claim for indemnification pursuant to sections 9(a) or 9(b)
(subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act or otherwise because the
indemnification provided for in this section 9 is for any reason held to be
unenforceable by the Company and the Holder and any holder, then the Company
(including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed any such
registration statement and any controlling person of the Company), as one
entity, and the Holder and any holder of any of the Registrable Securities
included in such registration in the aggregate (including for this purpose any
contribution by or on behalf of the Holder or any holder), as a second entity,
shall contribute to the losses, liabilities, claims, damages and expenses
whatsoever to which any of them may be subject, on the basis of relevant
equitable considerations such as the relative fault of the Company and the
Holder or any such holder in connection with the facts which resulted in such
losses, liabilities, claims, damages and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission or alleged
omission, shall be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by the Company, by the Holder or by any holder of Registrable Securities
included in such registration, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement,
alleged statement, omission or alleged omission. The Company and the Holder
agree that it would be unjust and inequitable if the respective obligations of
the Company and the Holder for contribution were determined by pro rata or per
capita allocation of the aggregate losses, liabilities, claims, damages and
expenses (even if the Holder and the other indemnified parties were treated as
one entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this section 9(c). No person
guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who is not guilty of
such fraudulent misrepresentation. For purposes of this section 9(c), each
person, if any, who
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controls the Holder or any holder of any of the Registrable Securities within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and
each officer, director, partner, employee, agent and counsel of each such
person, shall have the same rights to contribution as such person and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, each officer of the Company who shall
have signed any such registration statement, and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to the provisions of this section 9(c). Anything in this section 9(c) to the
contrary notwithstanding, no party shall be liable for contribution with respect
to the settlement of any claim or action effected without its written consent.
This section 9(c) is intended to supersede any right to contribution under the
Act, the Exchange Act or otherwise.
10. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Underwriter's Warrant (and upon
surrender of any Underwriter's Warrant if mutilated), and upon reimbursement of
the Company's reasonable incidental expenses, the Company shall execute and
deliver to the Holder thereof a new Underwriter's Warrant of like date, tenor
and denomination.
11. The Holder of any Underwriter's Warrant shall not have, solely on
account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Underwriter's Warrant.
12. This Underwriter's Warrant shall be construed in accordance with the
laws of the State of California, without giving effect to conflict of laws.
Dated: _____________, 2000
MAXICARE HEALTH PLANS, INC.
By:
---------------------------
Richard A. Link,
Chief Financial Officer
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Underwriter's Warrant.)
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto ________________________ Underwriter's Warrant to
purchase __________ Shares of Maxicare Health Plans, Inc. (the "Company"),
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ____________________________ attorney to transfer such
Underwriter's Warrant on the books of the Company, with full power of
substitution.
Dated:
----------------------
Signature:
--------------------------------
Signature Guaranteed:
NOTICE
The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Underwriter's Warrant in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.
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ELECTION TO EXERCISE
(To be executed by the holder if such holder desires to
exercise the attached Underwriter's Warrant)
The undersigned hereby exercises his or its rights to subscribe for
__________ Shares covered by the within Underwriter's Warrant (each as defined
in the within Underwriter's Warrant) and tenders payment herewith in the amount
of $__________ in accordance with the terms thereof, and requests that
certificates for such Shares be issued in the name of, and delivered to:
--------------------------------
--------------------------------
--------------------------------
(Print Name, Address and Social Security or
Tax Identification Number)
and, if such number of Shares (or portions thereof) shall not be all the Shares
covered by the within Underwriter's Warrant, that a new Underwriter's Warrant
for the balance of the Underwriter's Warrant (or portions thereof) covered by
the within Underwriter's Warrant be registered in the name of, and delivered to,
the undersigned at the address stated below.
Name:
---------------------
(Print)
Address:
----------------------------
(Signature)
Dated: Signature Guaranteed:
NOTICE
The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Underwriter's Warrant in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.
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