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Exhibit 3.7
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD, MORTGAGED, PLEDGED OR TRANSFERRED
WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF
APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
THE SECURITIES REPRESENTED BY THIS WARRANT ARE SUBJECT TO A VOTING AGREEMENT
DATED AS OF DECEMBER 23, 1996 AND AMENDED AS OF JULY 28, 1998 (THE "AMENDED AND
RESTATED VOTING AGREEMENT"). THE TRANSFERABILITY OF THESE SECURITIES IS
RESTRICTED, AND THE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO THE TERMS AND CONDITIONS OF THE VOTING AGREEMENT. THE SECURITIES
REPRESENTED BY THIS WARRANT ARE ALSO SUBJECT TO A SECOND RESTATED INVESTOR
RIGHTS AGREEMENT DATED AS OF JULY 28, 1998 (THE "SECOND RESTATED INVESTOR
RIGHTS AGREEMENT"). COPIES OF THE VOTING AGREEMENT AND THE INVESTOR RIGHTS
AGREEMENT ARE ON FILE AT THE OFFICE OF THE SECRETARY OF THE COMPANY.
No. W- Right to Purchase
Shares of Common Stock of
AMERIGROUP Corporation
AMERIGROUP CORPORATION
COMMON STOCK PURCHASE WARRANT
AMERIGROUP Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, the individual or its entity listed on
Schedule I hereto or its assigns is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before
5:00 p.m., Eastern Standard Time, on , fully paid and
nonassessable shares of Common Stock, par value $0.01 per share, of the
Company, at a purchase price per share of $0.01 (as adjusted from time to time
as herein provided, the "Purchase Price"). The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
This Warrant is one of the Warrants evidencing the right to purchase
shares of Common Stock of the Company issued pursuant to a certain Series E
Redeemable Preferred Stock and Warrants Purchase Agreement (the "Agreement"),
dated as of July 28, 1998, by and among the Company, the Company's
subsidiaries, and each of the persons and entities set forth on Exhibit A
thereto and subject to the Amended and Restated Voting Agreement and the Second
Restated
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Investor Rights Agreement, copies of which agreements are on file at the
principal office of the Company, and the holder of this Warrant shall be
entitled to all of the benefits of and bound by all of the applicable
obligations of the Agreement, the Amended and Restated Voting Agreement and the
Second Restated Investor Rights Agreement, as provided therein.
Any capitalized terms used herein without definition shall have the
meanings given them in the Agreement. As used herein the following terms,
unless the context otherwise requires, have the following respective meanings:
(a) The term "Conversion Price" means the amount that the
Purchase Price would be, immediately prior to the determination of the
Conversion Price and giving effect to all adjustments that would have
been required under Section 5, if the initial Purchase Price had been
$3.00 per share of Common Stock.
(b) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, on the exercise of
the Warrants, in lieu of or in addition to Common Stock, or which at any
time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 5 or
otherwise.
1. Exercise of Warrant.
1.1 Exercise. This Warrant may be exercised, subject to Section
1.2 hereof, at any time and from time to time during normal business hours
before its expiration by the holder hereof by surrender of this Warrant, with
the form of subscription at the end hereof duly executed by such holder, to the
Company at its principal office, accompanied by payment, in cash or by
certified or official bank check payable to the order of the Company, in the
amount obtained in accordance with Section 1.2.
1.2 Limitations on Exercise; Calculation of Payment Amount.
Notwithstanding any provision herein to the contrary, a holder hereof may only
exercise this Warrant as to 1.125 shares of Common Stock for every one (1)
share of Series E Redeemable Preferred Stock, par value $.01 per share, of the
Company ("Series E Preferred Stock") issued pursuant to the Agreement and held
by the holder hereof which such share has been redeemed by the Company in
accordance with the terms of the Company's then-existing certificate of
incorporation. The amount payable by the holder on an exercise hereunder shall
be the amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the Subscription attached hereto by (b) the
Purchase Price then in effect; provided, however, that notwithstanding the fact
that for purposes of Section 5 of this Warrant the Purchase Price may be
adjusted to an amount less than $0.01 per share, for purposes of paying the
Purchase Price upon exercise of this Warrant, the Purchase Price shall in no
event be less than $0.01 per share. On any exercise of less than all of the
Warrants represented hereby the Company at its expense will forthwith issue and
deliver to or upon the order of the holder hereof a new Warrant or Warrants of
like tenor, in the name of the holder hereof or as such holder (upon payment by
such holder of
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any applicable transfer taxes) may request, calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock for which such
Warrant or Warrants may still be exercised.
1.3 Exercise on Initial Public Offering. Notwithstanding any
provision herein to the contrary, the Company may, at its option, require the
holder hereof to exercise any and all Warrants represented hereby which have
not previously been exercised, immediately prior to the closing of a firm
commitment underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer and
sale of Common Stock for the account of the Company. If not so exercised upon
the request of the Company, the portion of the Warrant as to which the Company
requested exercise shall immediately lapse and be of no further force and
effect.
1.4 Company Acknowledgment. The Company will, at the time of
the exercise of this Warrant, upon the request of the holder hereof,
acknowledge in writing its continuing obligation to afford to such holder any
rights to which such holder shall continue to be entitled after such exercise
in accordance with the provisions of this Warrant. If the holder shall fail to
make any such request, such failure shall not affect the continuing obligation
of the Company to afford to such holder any such rights.
1.5 Trustee for Warrant Holders. In the event that a bank or
trust company shall have been appointed as trustee for the holders of the
Warrants pursuant to subsection 4.2, such bank or trust company shall have all
the powers and duties of a warrant agent appointed pursuant to Section 13 and
shall accept, in its own name for the account of the Company or such successor
person as may be entitled thereto, all amounts otherwise payable to the Company
or such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.
1.6 Net Issue Election. The holder may elect to receive,
without the payment by the holder of any additional consideration, shares of
Common Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the net issue
election notice annexed hereto duly executed, at the office of the Company.
Thereupon, the Company shall issue to the holder such number of fully paid and
nonassessable shares of Common Stock as is computed using the following
formula:
X = Y (A-B)
-------
A
where X = the number of shares to be issued to the holder pursuant to this
Section 1.6.
Y = the number of shares covered by this Warrant in respect of which
the net issue election is made pursuant to this Section 1.6.
A = the fair market value of one share of Common Stock, as determined
in accordance with the provisions of this Section 1.6.
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B = the Purchase Price in effect under this Warrant at the time the
net issue election is made pursuant to this Section 1.6.
For purposes of this Section 1.6, the "fair market value" per share of the
Company's Common Stock shall mean:
(a) If the net issue election is exercised in connection with
and contingent upon the Company's initial public offering, and if the
Company's registration statement relating to such offering has been
declared effective by the Securities and Exchange Commission, then the
initial "Price to Public" specified in the final prospectus with respect
to such offering; or
(b) In all other cases, as determined by the Company's Board of
Directors in good faith.
2. Delivery of Stock Certificates, etc. on Exercise; No Fractional
Shares. As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within twenty (20) business days thereafter, the Company
at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the holder hereof, or as
such holder (upon payment by such holder of any applicable transfer taxes) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock (or Other Securities) to which such holder
shall be entitled on such exercise, rounded down to the nearest whole number.
Notwithstanding any other provision herein, no fractional shares of Common
Stock shall be issued by the Company upon exercise of the Warrants.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock (or Other Securities) in their capacity as such shall have
received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive,
without payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock-split (adjustments in respect of which are
provided for in Section 5), then and in each such case the holder of this
Warrant, on the exercise hereof as provided in Section 1, shall be entitled to
receive the amount of stock and other securities and property (including cash
in the
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cases referred to in subdivisions (b) and (c) of this Section 3) which such
holder would hold on the date of such exercise if on the date hereof he had
been the holder of record of the number of shares of Common Stock called for on
the face of this Warrant and had thereafter, during the period from the date
hereof to and including the date of such exercise, retained such shares and all
such other or additional stock and other securities and property (including
cash in the cases referred to in subdivisions (b) and (c) of this Section 3)
receivable by him as aforesaid during such period, giving effect to all
adjustments called for during such period by Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization, Consolidation, Merger, etc. In case at any
time or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any
plan or arrangement contemplating the dissolution of the Company, then, in each
such case, the holder of this Warrant, on the exercise hereof as provided in
Section 1 at any time after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall receive, in lieu of the Common Stock (or Other Securities)
issuable on such exercise prior to such consummation or such effective date,
the stock and other securities and property (including cash) to which such
holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such holder had so exercised this
Warrant, immediately prior thereto, all subject to further adjustment
thereafter as provided in Sections 3 and 5.
4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including cash,
where applicable) receivable by the holders of the Warrants after the effective
date of such dissolution pursuant to this Section 4 to a bank or trust company
having its principal office in Washington, D.C., as trustee for the holder or
holders of the Warrants.
4.3 Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 4, this Warrant shall continue in full force and
effect, subject to expiration in accordance with Section 18 hereof, and the
terms hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 7.
5. Anti-Dilution Adjustment.
5.1 General. The Purchase Price shall be subject to adjustment
from time to time as hereinafter provided. Upon each adjustment of the Purchase
Price, the holder of this
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Warrant shall thereafter be entitled to purchase, at the Purchase Price
resulting from such adjustment (but in no event for less than $0.01 per share,
even though the Purchase Price may be adjusted pursuant to less than $0.01 per
share), the number of shares obtained by multiplying the Purchase Price in
effect immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Purchase Price resulting from such adjustment.
5.2 Purchase Price Adjustments. If and whenever after the date
hereof the Company shall issue or sell any shares of its Common Stock for a
consideration per share less than the Purchase Price in effect immediately
prior to the time of such issue or sale, and/or the Company shall issue or sell
any shares of its Common Stock for a consideration per share less than the
Conversion Price in effect on the date of such issue or sale, or shall be
deemed under the provisions of this Section 5 to have effected any such
issuance or sale, except in any instance for (i) issuances upon the exercise of
options to purchase Common Stock pursuant to plans adopted or approved by the
Board of Directors of the Company, including a majority of the directors
designated solely by the holders of the Series A Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock, to directors, officers,
employees or consultants of the Company in connection with their service as
directors of the Company, their employment by the Company or their retention as
consultants by the Company, (ii) issuances upon the conversion of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock or
the Series D Preferred Stock, (iii) stock issued for the acquisition, in
effect, (whether by merger, stock purchase, asset purchase or otherwise) of the
assets or business of other persons or entities by the Company or any of its
subsidiaries which acquisition is approved by the Board of Directors of the
Company, including a majority of the directors designated solely by the holders
of the Series A Preferred Stock, the Series B Preferred Stock and the Series C
Preferred Stock and (iv) issuances upon the exercise of one or more of the
Warrants, then, forthwith upon such issue or sale, the Purchase Price shall be
reduced to the price (calculated to the nearest $0.0001) obtained by
multiplying the Purchase Price in effect immediately prior to the time of such
issue or sale by a fraction, (a) the numerator of which shall be the sum of (i)
the number of shares of Common Stock outstanding immediately prior to such
issue or sale multiplied by the Conversion Price immediately prior to such
issue or sale plus (ii) the consideration received by the Company upon such
issue or sale, and (b) the denominator of which shall be the product of (x) the
total number of shares of Common Stock outstanding immediately after such issue
or sale, multiplied by (y) the Conversion Price immediately prior to such issue
or sale. Notwithstanding the foregoing, no adjustment of the Purchase Price
shall be made in an amount less than $0.0001 per share, but any such lesser
adjustment shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which together with any
adjustments so carried forward shall amount to $0.0001 per share or more.
5.3 Option or Rights Grants. In case at any time the Company
shall in any manner issue or grant (whether directly or by assumption in a
merger or otherwise) any warrants or other rights to subscribe for or to
purchase, or any options for the purchase of, Common Stock or any stock or
security convertible into or exchangeable for Common Stock (such warrants,
rights or options being called "Options" and such convertible or exchangeable
stock or securities
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being called "Convertible Securities") whether or not such Options or the right
to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
the exercise of such Options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (a) the total amount, if any,
received or receivable by the Company as consideration for the granting or
issuing of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable upon the
issue or sale of such Convertible Securities and upon the conversion or
exchange thereof, by (b) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or exchange
of all such Convertible Securities issuable upon the exercise of such Options)
shall be less than the Purchase Price in effect immediately prior to the time
of the granting of such Options (or less than the Conversion Price, determined
as of the date of granting such Options, as the case may be), then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding. Except as otherwise provided in Section 5.5,
no further adjustment of the Purchase Price shall be made upon the actual issue
of such Common Stock or of such Convertible Securities upon exercise of such
Options or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities.
5.4 Convertible Security Grants. In case the Company shall in
any manner issue (whether directly or by assumption in a merger or otherwise)
or sell any Convertible Securities, whether or not the rights to exchange or
convert any such Convertible Securities are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (a) the total amount received or receivable by
the Company as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exchange thereof, by (b) the
total maximum number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities) shall be less than the Purchase
Price in effect immediately prior to the time of such issue or sale (or less
than the Conversion Price, determined as of the date of such issue of sale of
such Convertible Securities, as the case may be), then the total maximum number
of shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to have been issued for such price per
share as of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding, provided that (a) except as
otherwise provided in Section 5.5, no further adjustment of the Purchase Price
shall be made upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities and (b) if any such issue or sale of
such Convertible Securities is made upon exercise of any Options to purchase
any such Convertible Securities for which adjustments of the Purchase Price
have been or are to be made pursuant to other provisions of this Section 5, no
further adjustment of the Purchase Price shall be made by reason of such issue
or sale.
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5.5 Effect of Alteration to Option or Convertible Security
Terms. In connection with any change in, or the expiration or termination of,
the purchase rights under any Option or the conversion or exchange rights under
any Convertible Securities, the following provisions shall apply:
Upon the happening of any of the following events, namely, if the
purchase price provided for in any Option referred to in Section 5.3 or
5.4, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in Section 5.3 or 5.4,
or the rate at which Convertible Securities referred to in Section 5.3 or
5.4 are convertible into or exchangeable for Common Stock shall change at
any time (including, but not limited to, changes under or by reason of
provisions designed to protect against dilution), the Purchase Price in
effect at the time of such event shall forthwith be readjusted to the
Purchase Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold, but only
if as a result of such adjustment the Purchase Price then in effect
hereunder is thereby reduced; and on the termination of any such Option
or any such right to convert or exchange such Convertible Securities, the
Purchase Price then in effect hereunder shall forthwith be increased to
the Purchase Price which would have been in effect at the time of such
termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such termination, never been issued.
5.6 Dividends of Common Stock, Options or Convertible
Securities. In case the Company shall declare a dividend or make any other
distribution upon any stock of the Company (other than the Common Stock)
payable in Common Stock, Options or Convertible Securities, then any Common
Stock, Options or Convertible Securities, as the case may be, issuable in
payment of such dividend or distribution shall be deemed to have been issued or
sold without consideration unless such dividend or distribution is subject to
Section 3 hereof.
5.7 Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold by the Company, or shall become subject to
issue upon the conversion or exchange of any stock (or Other Securities) of the
Company (or any other issuer of Other Securities or any other person referred
to in Section 4) or to subscription, purchase or other acquisition pursuant to
any rights or options granted by the Company (or such other issuer or person),
for a consideration per share such as to dilute the purchase rights evidenced
by this Warrant, the computations, adjustments and readjustments provided for
in this Section 5 with respect to the Purchase Price and the number of shares
of Common Stock issuable upon exercise of this Warrant shall be made as nearly
as possible in the manner so provided and applied to determine the amount of
Other Securities from time to time receivable on the exercise of the Warrants,
so as to protect the holders of the Warrants against the effect of such
dilution.
5.8 Stock Splits and Reverse Splits. If the Company shall at
any time or from time to time effect a subdivision of the outstanding Common
Stock, the Purchase Price in effect
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immediately before that subdivision shall be proportionately decreased.
Conversely, if the Company shall at any time or from time to time combine the
outstanding shares of Common Stock into a smaller number of shares, the
applicable Purchase Price in effect immediately before the combination shall be
proportionately increased. Any adjustment under this Section 5.8 shall become
effective at the close of business on the date the subdivision or combination
becomes effective. Except as provided in this Section 5.8 no adjustment in the
Purchase Price shall be made under this Section 5 as a result of or by reason
of any such subdivision or combination.
5.9 Determination of Consideration Received. For purposes of
this Section 5, the amount of consideration received by the Company in
connection with the issuance or sale of Common Stock, Options or Convertible
Securities shall be determined in accordance with the following:
In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for cash, the consideration received therefor
shall be deemed to be the amount received by the Company therefor,
without deduction therefrom of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith. In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for a consideration other than cash,
the amount of the consideration other than cash received by the Company
shall be deemed to be the fair value of such consideration as determined
in good faith by the Board of Directors of the Company, without deduction
of any expenses incurred or any underwriting commissions or concessions
paid or allowed by the Company in connection therewith. In case any
Options shall be issued in connection with the issue and sale of other
securities of the Company, together comprising one integral transaction
in which no specific consideration is allocated to such Options by the
parties thereto, such Options shall be deemed to have been issued for
such consideration as determined in good faith by the Board of Directors
of the Company.
5.10 Record Date as Date of Issue or Sale. In the event that at
any time the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Options or Convertible Securities, or (ii) to
subscribe for or purchase Common Stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.
5.11 Treasury Stock. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares (other than
their cancellation without reissuance) shall be considered an issue or sale of
Common Stock for the purposes of this Section 5.
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6. Additional Warrants. In the event the Company fails for any reason
to redeem when so required the shares of its Series E Preferred Stock, pursuant
to and in accordance with Section 8(a) of the Company's Amended and Restated
Certificate of Incorporation (the "Series E Mandatory Redemption") on the dates
required therein (irrespective of the reason for such failure, including any
failure due to restrictions under applicable law or under agreements for
indebtedness entered into by the Company), the Company shall issue to the
holder hereof a warrant to purchase 20 shares of Common Stock of the Company,
on the same terms contained herein, for each 200 shares of Series E Preferred
Stock held by such holder (the "Additional Warrant"); provided that such
issuance of Additional Warrants shall only be made on the date which is three
months after the Series E Mandatory Redemption Date (as such term is defined in
said Certificate) on which such failure to redeem occurred (an "Additional
Warrants Issue Date"), provided no Series E Mandatory Redemption (as such term
is defined in said Certificate) has occurred as of such date. In addition,
Additional Warrants shall be issued by the Company again on each successive
three month anniversary of the original Additional Warrants Issue Date, if, and
only to the extent, the Series E Mandatory Redemption has not been fully
consummated by the Company on the date of any such anniversary. Any such
anniversary date shall also constitute an Additional Warrants Issue Date.
Notwithstanding anything herein to the contrary, no Additional Warrants shall
be issued by the Company after the date which is thirty-six (36) months after
said Series E Mandatory Redemption Date.
Notwithstanding the foregoing, in the event the Company redeems less than
all of the Series E Preferred Stock it is required to so redeem on the Series E
Mandatory Redemption Date, the Company shall only be required to issue to the
holder hereof on any Additional Warrants Issue Date that percentage of the
Additional Warrants which is equivalent to the percentage of Series E Preferred
Stock which was, at the applicable Additional Warrants Issue Date, required to
be redeemed from such holder but not so redeemed.
7. No Dilution or Impairment. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of the Warrants, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holders of
the Warrants against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (a) will not increase the par value or
stated value of any shares of stock receivable on the exercise of the Warrants
above the amount payable therefor on such exercise, (b) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of stock on the exercise
of all Warrants from time to time outstanding, (c) will not issue any capital
stock of any class which is preferred as to dividends or as to the distribution
of assets upon voluntary or involuntary dissolution, liquidation or winding up,
unless the rights of the holders thereof shall be limited to a fixed sum or
percentage of par value in respect of participation in dividends and in any
such distribution of assets, and (d) will not transfer all or substantially all
of its properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
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consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and become
bound by all the terms of the Warrants.
8. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on
the exercise of the Warrants, the Company at its expense will promptly cause
its chief financial officer or other authorized officer to compute such
adjustment or readjustment in accordance with the terms of the Warrants and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based,
including a statement of (a) the consideration received or receivable by the
Company for any additional shares of Common Stock (or Other Securities) issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and
(c) the Purchase Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such issue or
sale and as adjusted and readjusted as provided in this Warrant. The Company
will forthwith mail a copy of each such certificate to each holder of a
Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the Purchase
Price at the time in effect and showing how it was calculated.
9. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of stock
of any class or any other securities or property, or to receive any other
right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company
or any transfer of all or substantially all the assets of the Company to
or consolidation or merger of the Company with or into any other person,
or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of
stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities (other than the issue of Common Stock (i)
upon the exercise of options to purchase Common Stock pursuant to plans
adopted or approved by the Board of Directors of the Company, including a
majority of the directors designated solely by the holders of the Series
A Preferred Stock, the Series B Preferred Stock and the Series C
Preferred Stock, to directors, officers, employees or consultants of the
Company in connection with their service as directors of
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the Company, their employment by the Company or their retention as
consultants by the Company, (ii) upon the conversion of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock or the Series D Preferred Stock, (iii) issued for the acquisition,
in effect, (whether by merger, stock purchase, asset purchase or
otherwise) of the assets or business of other persons or entities by the
Company or any of its subsidiaries which acquisition is approved by the
Board of Directors of the Company, including a majority of the directors
designated solely by the holders of the Series A Preferred Stock, the
Series B Preferred Stock and the Series C Preferred Stock and (iv) upon
the exercise of one or more of the Warrants,)
then and in each such event the Company will mail or cause to be mailed to each
holder of a Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, (ii)
the date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange
their shares of Common Stock (or Other Securities) for securities or other
property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock or other
securities, or rights or options with respect thereto, proposed to be issued or
granted, the date of such proposed issue or grant and the persons or class of
persons to whom such proposed issue or grant is to be offered or made. Such
notice shall be mailed at least ten (10) Business Days prior to the date
specified in such notice on which any such action is to be taken.
10. Reservation of Stock, etc. Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrants.
11. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (on payment by such
holder of any applicable transfer taxes) may direct, calling in the aggregate
on the face or faces thereof for the number of shares of Common Stock called
for on the face or faces of the Warrant or Warrants so surrendered.
12. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Warrant and, in the case of any such loss, theft or destruction of any
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
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13. Warrant Agent. The Company may, by written notice to each holder
of a Warrant, appoint an agent for the purpose of issuing Common Stock (or
Other Securities) on the exercise of the Warrants pursuant to Section 1,
exchanging Warrants pursuant to Section 11, and replacing Warrants pursuant to
Section 12, 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 Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that 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.
15. Negotiability, etc. This Warrant is issued upon the following
terms, to all of which each holder or owner hereof by the taking hereof
consents and agrees:
(a) subject to the terms of the Amended and Restated Voting
Agreement, title to this Warrant may be transferred by endorsement (by
the holder hereof executing the form of assignment attached hereto) and
delivery in the same manner as in the case of a negotiable instrument
transferable by endorsement and delivery; and
(b) any person in possession of this Warrant properly endorsed
for transfer to such person (including endorsed in blank) is authorized
to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives
and renounces all of his equities or rights in this Warrant in favor of
each such bona fide purchaser, and each such bona fide purchaser shall
acquire absolute title hereto and to all rights represented hereby.
Nothing in this paragraph (b) shall create any liability on the part of
the Company beyond any liability or responsibility it has under law.
16. Notices, etc. All notices and other communications from the
Company to the holder of this Warrant shall be mailed by first class registered
or certified mail, postage prepaid, at such address as may have been furnished
to the Company in writing by such holder or, until any such holder furnishes to
the Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
17. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware, other than
conflict of laws rules. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms
hereof. This Warrant is being executed as an instrument under seal. The
invalidity or unenforceability of any provision hereof shall in no
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way affect the validity or enforceability of any other provision.
18. Expiration. The right to exercise this Warrant shall expire at
5:00 p.m., Eastern Standard Time, on July 28, 2005 and at such time this
Warrant lapses in accordance with the second sentence of Section 1.3.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
15
IN WITNESS WHEREOF, the Company has executed this Warrant under seal as of the
date first written above.
AMERIGROUP CORPORATION
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
16
SCHEDULE I
17
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
AMERIGROUP Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, ________
shares of Common Stock of AMERIGROUP Corporation and herewith makes payment of
$________ therefor, and requests that the certificates for such shares be
issued in the name of, and delivered to ____________, federal taxpayer
identification number ____________, whose address is
__________________________________.
Dated:
(Signature must conform to name of holder
as specified on the face of the Warrant)
(Address)
Signed in the presence of:
---------------------
---------------------------
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ___________, federal taxpayer identification number ___________, whose
address is _____________, the right represented by the within Warrant to
purchase ___________ shares of Common Stock of AMERIGROUP Corporation to which
the within Warrant relates, and appoints _________________ Attorney to transfer
such right on the books of AMERIGROUP Corporation with full power of
substitution in the premises.
Dated:
(Signature must conform to name of holder
as specified on the face of the Warrant)
(Address)
Signed in the presence of:
-----------------------
18
FORM OF NET ISSUE ELECTION
(To be signed only on net issue exercise of the Warrant)
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant with respect to ____________ shares of Common
Stock of AMERIGROUP Corporation pursuant to the net issuance provisions set
forth in Section 1.6 of this Warrant, and requests that the certificates for
the number of shares of Common Stock issuable pursuant to said Section 1.6
after application of the net issuance formula to such _________ shares be
issued in the name of, and delivered to __________, federal taxpayer
identification number ____________, whose address is _______________.
Dated:
(Signature must conform to name of holder
as specified on the face of the Warrant)
(Address)