EXECUTION VERSION
EXHIBIT 10.10
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WARRANT AGREEMENT
by and between
WORLDWIDE XCEED GROUP, INC.,
and
SPHERION CORPORATION
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Dated as of November 15, 2000
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TABLE OF CONTENTS
Page
1. GRANT.....................................................................................1
2. WARRANT CERTIFICATES......................................................................1
3. EXERCISE OF WARRANT.......................................................................1
4. ISSUANCE OF CERTIFICATES..................................................................2
5. PRICE.....................................................................................3
5.1 INITIAL AND ADJUSTED EXERCISE PRICES....................................................3
5.2 EXERCISE PRICE..........................................................................3
6. REGISTRATION RIGHTS.......................................................................3
6.1 REGISTRATION UNDER THE SECURITIES ACT OF 1933...........................................3
6.2 REGISTRABLE SECURITIES..................................................................3
6.3 PIGGYBACK REGISTRATION..................................................................3
6.4 S-3 REGISTRATION........................................................................4
6.5 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION...................................5
6.6 REPORTS UNDER THE 1934 ACT..............................................................6
6.7 ASSIGNMENT OF REGISTRATION RIGHTS.......................................................7
6.8 LIMITATIONS ON SUBSEQUENT SUPERIOR REGISTRATION RIGHTS..................................7
6.9 EXPENSES OF REGISTRATION................................................................7
6.10 INDEMNIFICATION.........................................................................7
6.11 ASSIGNMENT OF REGISTRATION RIGHTS......................................................10
6.12 "MARKET STAND-OFF" AGREEMENT...........................................................10
7. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SECURITIES...................................10
7.1 SUBDIVISION AND COMBINATION............................................................11
7.2 ADJUSTMENT IN NUMBER OF SECURITIES.....................................................11
7.3 RECLASSIFICATION, CONSOLIDATION, MERGER, ETC...........................................11
7.4 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES.......................................11
7.5 DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO OUTSTANDING SECURITIES...............11
7.6 SUBSCRIPTION RIGHTS FOR SHARES OF COMMON STOCK OR OTHER SECURITIES.....................12
7.7 ISSUANCE OF SECURITIES BELOW FAIR MARKET VALUE.........................................12
8. EXTRAORDINARY CORPORATE EVENTS...........................................................12
9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES.........................................13
10. ELIMINATION OF FRACTIONAL INTERESTS......................................................13
11. RESERVATION AND LISTING OF SECURITIES....................................................13
12. NOTICES TO WARRANT HOLDERS...............................................................13
13. NOTICES..................................................................................14
14. SUPPLEMENTS AND AMENDMENTS...............................................................15
15. SUCCESSORS...............................................................................16
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16. GOVERNING LAW............................................................................16
17. BENEFITS OF THIS AGREEMENT...............................................................16
18. COUNTERPARTS.............................................................................16
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EXHIBITS
EXHIBIT A Definitions
EXHIBIT B Warrant Certificate
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of November 15, 2000 by and between
WORLDWIDE XCEED GROUP, INC., a Delaware corporation (the "COMPANY"), and
SPHERION CORPORATION, a Delaware corporation (hereinafter referred to as
"SPHERION").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to Spherion warrants
("WARRANTS") to purchase up to 3,500,000 shares (the "SHARES") of common stock
of the Company, par value $0.01 per share (the "COMMON STOCK"); and
WHEREAS, Spherion and the Company desire to enter into a Revolving
Credit Agreement (the "REVOLVING CREDIT AGREEMENT") dated the date hereof,
whereby Spherion shall make available to the Company a revolving credit facility
in the aggregate principal amount of up to $5,000,000; and
WHEREAS, in consideration for and as a condition to Spherion entering
into the Revolving Credit Agreement, the Company has agreed to issue to Spherion
the Warrants. All capitalized terms used but not defined herein shall have the
meanings set forth in EXHIBIT A hereto.
NOW, THEREFORE, in consideration of the premises, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. GRANT.
Spherion, and/or its designees are hereby granted the right to
purchase, at any time from November 15, 2000 until 5:00 P.M., New York time, on
November 15, 2005 (the "WARRANT EXERCISE TERM"), up to 3,500,000 fully-paid and
non assessable Shares at an initial exercise price (subject to adjustment as
provided in Section 7 hereof) of $1.6875 per share.
2. WARRANT CERTIFICATES.
The warrant certificates (the "WARRANT CERTIFICATES") delivered and to
be delivered pursuant to this Agreement shall be in the form set forth in
EXHIBIT B hereto and made a part hereof, with such appropriate insertions,
omissions, substitutions and other variations as required or permitted by this
Agreement.
3. EXERCISE OF WARRANT.
The Warrants initially are exercisable at a price of $1.6875 per share
of Common Stock purchased, payable (I) in cash or (II) by wire transfer if
immediately available funds to
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an account designated in writing by the Company or (III) by check to the order
of the Company, or (IV) any combination of cash, wire transfer, or check,
subject to adjustment as provided in Section 7 hereof. Upon surrender of the
Warrant Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price (as hereinafter defined) for the
Shares purchased, at the Company's principal offices in New York (currently
located at 223 Broadway, New York, New York, 10279) the registered holder of a
Warrant Certificate ("HOLDER" or "HOLDERS") shall be entitled to receive a
certificate or certificates for the Shares so purchased. The purchase rights
represented by each Warrant Certificate are exercisable at the option of the
Holder hereof, in whole or in part (but not as to fractional Shares). In the
case of the purchase of less than all the Shares purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Shares purchasable thereunder.
4. ISSUANCE OF CERTIFICATES.
Upon the exercise of the Warrants, the issuance of certificates for the
Shares shall be made forthwith (and in any event within three business days
thereafter) and such certificates shall (subject to the provisions of this
Section 4) be issued in the name of, or in such names as may be directed by, the
Holder thereof. The Warrant Certificates and the certificates representing the
Shares shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chief Executive Officer, Chief Financial
Officer or Chief Operating Officer of the Company, attested to by the manual or
facsimile signature of the present or any future Secretary or Assistant
Secretary of the Company. Certificates representing the Shares shall be dated
the date of execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
Upon exercise, in part or in whole, of the Warrants, certificates
representing the Shares (the "WARRANT SECURITIES"), shall bear a legend
substantially similar to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"ACT"), nor any state securities laws and may not be offered
or sold except (I) pursuant to an effective registration
statement under the Act and applicable state securities laws,
(II) to the extent applicable, pursuant to Rule 144 under the
Act (or any similar rule under such Act relating to the
disposition of securities) or (III) upon the delivery by the
holder to the Company of an opinion of counsel, reasonably
satisfactory to counsel to the issuer, stating that an
exemption from registration under such Act or applicable state
securities laws is available."
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5. PRICE.
5.1 INITIAL AND ADJUSTED EXERCISE PRICES. The initial exercise
price of each Warrant shall be $1.6875 per Share. The adjusted exercise price
shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Section 7 hereof.
5.2 EXERCISE PRICE. The term "EXERCISE PRICE" herein shall
mean the initial exercise price or the adjusted exercise price, depending upon
the context.
6. REGISTRATION RIGHTS.
6.1 REGISTRATION UNDER THE SECURITIES ACT OF 1933. Neither the
Warrants nor the Shares have been registered for purposes of public distribution
under the Securities Act of 1933, as amended (the "SECURITIES ACT").
6.2 REGISTRABLE SECURITIES. As used herein the term
"REGISTRABLE SECURITY" means the Shares and any shares of Common Stock issued
upon any stock split or stock dividend in respect of such Shares; PROVIDED,
HOWEVER, that with respect to any particular Registrable Security, such security
shall cease to be a Registrable Security when, as of the date of determination,
(i) that it has been effectively registered under the Securities Act and
disposed of pursuant thereto, (ii) registration under the Securities Act is no
longer required for subsequent public distribution of such security pursuant to
Rule 144 under the Securities Act (or any successor provision), or (iii) it has
ceased to be outstanding. The term "REGISTRABLE SECURITIES" means any and/or all
of the securities falling within the foregoing definition of a "REGISTRABLE
SECURITY." In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be made in the definition of "REGISTRABLE SECURITY"
as is appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Section 6.
6.3 PIGGYBACK REGISTRATION. If, at any time after the date
hereof, the Company proposes to prepare and file any new registration statement
or post-effective amendments thereto covering equity or debt securities of the
Company, or any such securities of the Company held by its shareholders (in any
such case, other than pursuant to Form S-4 or Form S-8 or successor form) (for
purposes of this Section 6, collectively, the "REGISTRATION STATEMENT"), it will
give written notice of its intention to do so ("NOTICE"), at least twenty (20)
business days prior to the filing of each such Registration Statement, to all
Holders of the Warrants and the Registrable Securities. Upon the written request
of such a Holder (a "REQUESTING HOLDER"), made within twenty (20) business days
after receipt of the Notice, that the Company include any of the Requesting
Holder's Registrable Securities in the proposed Registration Statement, the
Company shall, as to each such Requesting Holder, effect the registration under
the Securities Act of the Registrable Securities which it has been so requested
to register ("PIGGYBACK REGISTRATION"), at the Company's sole cost and expense
(including the expense of the Holder's counsel) and at no cost or expense to
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the Requesting Holders (other than underwriting discounts and commissions);
PROVIDED, however, that if, in the written opinion of the Company's managing
underwriter, if any, for such offering, the inclusion of all or a portion of the
Registrable Securities requested to be registered, when added to the securities
being registered by the Company or the selling shareholder(s), will exceed the
maximum amount of the Company's securities which can be marketed without
materially adversely affecting the entire offering, then the Company may exclude
from such offering all or a portion of the Registrable Securities which it has
been requested to register.
If securities are proposed to be offered for sale pursuant to such
Registration Statement by other security holders of the Company and the total
number of securities to be offered by the Requesting Holders and such other
selling security holders is required to be reduced pursuant to a request from
the managing underwriter (which request shall be made only for the reason and in
the manner set forth above) the aggregate number of Registrable Securities to be
offered by Requesting Holders pursuant to such Registration Statement shall
equal the number which bears the same ratio to the maximum number of securities
that the underwriter believes may be included for all the selling security
holders (including the Requesting Holders) as the original number of Registrable
Securities proposed to be sold by the Requesting Holders bears to the total
original number of securities proposed to be offered by the Requesting Holders
and the other selling security holders. Notwithstanding anything to the contrary
contained herein, the number of Registrable Securities to be included in any
registration pursuant to this Section 6.3 shall be subject to the contractual
rights granted on or prior to the date hereof by the Company to any other holder
of its securities.
6.4 S-3 REGISTRATION. (a) Any Holder of the Registrable
Securities shall have the right (which right is in addition to the piggyback
registration rights provided for under Section 6.3 hereof), exercisable by
written notice to the Company (the "S-3 REGISTRATION REQUEST"), to have the
Company prepare and file with the Securities and Exchange Commission (the
"COMMISSION"), at the sole expense of the Company (excluding any underwriting or
selling commissions but including the fees and expenses of the Holder's
counsel), a Form S-3 Registration Statement and such other documents, including
a prospectus, as may be necessary (in the opinion of both counsel for the
Company and counsel for such Holder) in order to comply with the provisions of
the Securities Act, so as to permit a public offering and sale of the
Registrable Securities by the Holders thereof until the later of (i) the sale of
all of the Registrable Securities or (ii) nine (9) consecutive months; provided
that the Company shall not be obligated to file such Form S-3 Registration
Statement if (x) the Holders, together with the holders of any other securities
of the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at an aggregate price
to the public of less than $1,000,000 or (y) two Form S-3 Registration
Statements filed pursuant to S-3 Registration Requests have been declared
effective by the Commission within the preceding twelve months.
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(b) The Company covenants and agrees to give written
notice of any S-3 Registration Request to all Holders of the Registrable
Securities within ten (10) days from the date of the Company's receipt of any
such S-3 Registration Request. After receiving notice from the Company as
provided in this Section 6.4(b), Holders of Registrable Securities may request
the Company to include their Registrable Securities in the Registration
Statement to be filed pursuant to Section 6.4(a) hereof by notifying the Company
of their decision to have such securities included within ten (10) days of their
receipt of the Company's notice.
(c) Notwithstanding the foregoing, if the Company
shall inform the Holders requesting the filing of a registration statement
pursuant to this Section 6.4 that, in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such Registration Statement to be filed and it is therefore
essential to defer the filing of such Registration Statement, then the Company
shall have the right to defer such filing for a period of not more than 60 days
after receipt of the request of the initiating Holders; PROVIDED, HOWEVER, that
the Company may not utilize this right more than once in any twelve (12) month
period.
6.5 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. The
Company covenants and agrees as follows:
(a) In connection with any registration under
Section 6.3 or 6.4 hereof, the Company shall file the Registration Statement as
expeditiously as possible and shall use its best efforts to have any such
Registration Statement declared effective at the earliest possible time, and
shall furnish each Holder of Registrable Securities such number of prospectuses
as shall reasonably be requested.
(b) The Company will take all necessary action which
may be required in qualifying or registering the Registrable Securities included
in a Registration Statement, for offering and sale under the securities or blue
sky laws of such states as are requested by the Holders of such securities,
provided that the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(c) The Company shall indemnify any Holder of the
Registrable Securities to be sold pursuant to any Registration Statement and any
underwriter or person deemed to be an underwriter under the Securities Act and
each person, if any, who controls such Holder or underwriter or person deemed to
be an underwriter within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended ("EXCHANGE
ACT"), against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, arising from such registration
statement.
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(d) Each of the Holders holding securities included
in any registration, shall furnish to the Company such information regarding
such Holder and the distribution proposed by such Holder as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this Section
6.4.
(e) Any Holder of Registrable Securities to be sold
pursuant to a registration statement, and its successors and assigns, shall
severally, and not jointly, indemnify, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Securities Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holder, or
its successors or assigns, for specific inclusion in such Registration
Statement.
6.6 REPORTS UNDER THE 1934 ACT. With a view to making
available to Spherion the benefits of Rule 144 promulgated under the Act and any
other rule or regulation of the SEC that may at any time permit Spherion to sell
securities of the Company to the public without registration, the Company agrees
to use its commercially reasonable efforts to:
(a) make and keep available public information
concerning the Company, as those terms are understood and defined in the
Commission's Rule 144, at all times;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection with such Registration Statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement;
(c) furnish to the Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them;
(d) in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering;
(e) notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue
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statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; and
(f) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act.
6.7 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned (but only with all related obligations) by Spherion, provided: (a) the
Company is, as soon as practicable after such transfer, furnished with written
notice of the name and address of such assignee and the securities with respect
to which such registration rights are being assigned; and (b) such assignee
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement.
6.8 LIMITATIONS ON SUBSEQUENT SUPERIOR REGISTRATION RIGHTS.
From and after the date of this Agreement, the Company shall not, without the
prior written consent of the Holders of a majority of the Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company that would allow such holder or prospective holder
to include securities of such Holder in any registration filed under this
Section 6 hereof in priority to the rights of the holders of the Registrable
Securities granted hereunder.
6.9 EXPENSES OF REGISTRATION. All expenses (other than
underwriting discounts and commissions, which shall be paid by the participating
Holders) incurred in connection with registrations, filings or qualifications
pursuant to this Section 6, including (without limitation) all registration,
filing and qualification fees, printers' fees and fees and disbursements of
accountants and counsel for the Company and one counsel for the Holders shall be
borne by the Company.
6.10 INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this Section 6:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners or officers, directors and
shareholders of each Holder, legal counsel and accountants for each Holder, any
underwriter (as defined in the Securities Act) for such Holder and each person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or any state securities laws, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "VIOLATION"): (I) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (II) the omission or alleged omission to
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state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (III) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities laws or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities laws; and the Company will reimburse
each such Holder, underwriter or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 6.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person; provided further, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder or underwriter, or any person controlling such Holder or
underwriter, from whom the person asserting any such losses, claims, damages or
liabilities purchased shares in the offering, if a copy of the prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such Holder or
underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the shares to such person, and
if the prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, legal counsel
and accountants for the Company, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Securities Act, the Exchange Act or any state securities laws, insofar
as such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will reimburse any
person intended to be indemnified pursuant to this subsection 6.10(b), for any
legal or other expenses reasonably incurred by such person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
6.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder (which consent shall not be unreasonably withheld).
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(c) Promptly after receipt by an indemnified party under this
Section 6.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 6.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 6.10.
(d) If the indemnification provided for in this Section 6.10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) Notwithstanding the provisions of this Section 6.10, no
Holder shall be required to contribute any amount in excess of the net proceeds
received by it from the sale of Registrable Securities, less the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of
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Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(g) The obligations of the Company and Holders under this
Section 6.10 shall survive the completion of any offering of Registrable
Securities in a Rregistration Statement under this Section 6, and otherwise.
6.11 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 6 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities of such Holder; provided: (A) the Company is, within
five (5) days after such transfer, furnished with written notice of the name and
address of such transferee or assignee and the securities with respect to which
such registration rights are being assigned; (B) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement, and (C) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act.
6.12 "MARKET STAND-OFF" AGREEMENT. Spherion hereby agrees that it will
not, without the prior written consent of the Company, during the period
commencing on the effective date of any registration statement covering
Registrable Securities and ending on the date specified by the Company and an
underwriter of Common Stock (such period not to exceed ninety (90) days, unless
the underwriter of Common Stock requests one hundred eighty (180) days) (i)
lend, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of (other than to donees
who agree to be similarly bound), directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by
Spherion or are thereafter acquired), or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise, except Common Stock
included in such registration; PROVIDED that the foregoing shall only apply if
the underwriter has required that all officers, directors and affiliates (as
defined in the Exchange Act) of the Company agree to such restrictions; and
PROVIDED FURTHER, that the restrictions contained in this Section 6.12 shall not
apply to any Registration Statement (including, but not limited to, a Form S-3
Registration Statement) covering Registrable Securities pursuant to Section 6.3
or Section 6.4 hereof.
In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the Registrable Securities of
Spherion until the end of such period.
7. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SECURITIES.
10
The following adjustments apply to the Exercise Price of the Warrants with
respect to the Shares and the number of Shares purchasable upon exercise of the
Warrants.
7.1 SUBDIVISION AND COMBINATION. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
7.2 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 7, the number of
securities issuable upon the exercise of each Warrant shall be adjusted to the
nearest full number by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of securities issuable upon exercise of
the Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
7.3 RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger in which the Company is the surviving corporation
and which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or in the
case of a sale or conveyance to another corporation of the property of the
Company as an entirety, the Holders shall thereafter have the right to purchase
the kind and number of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holders were the owners of the Shares underlying the
Warrants immediately prior to any such events, at a price equal to the product
of (x) the number of shares of Common Stock issuable upon exercise of the
Warrants and (y) the Exercise Price in effect immediately prior to the record
date for such reclassification, change, consolidation, merger, sale or
conveyance as if such Holders had exercised the Warrants.
7.4 [Intentionally Ommited]
7.5 DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO OUTSTANDING
SECURITIES. In the event that the Company shall at any time prior to the
exercise of all Warrants declare a dividend (other than a dividend consisting
solely of shares of Common Stock or a cash dividend or distribution payable out
of current or retained earnings) or otherwise distribute to its shareholders any
monies, assets, property, rights, evidences of indebtedness, securities (other
than shares of Common Stock), whether issued by the Company or by another person
or entity, or any other thing of value, the Holders of the unexercised Warrants
shall thereafter be entitled, to exercise such Warrants prior to the record date
for such dividend so that upon the exercise of such Warrants, the Holders will
11
be entitled to receive the same monies, property, assets, rights, evidences of
indebtedness, securities or any other thing of value.
7.6 SUBSCRIPTION RIGHTS FOR SHARES OF COMMON STOCK OR OTHER
SECURITIES. In the case that the Company or an affiliate of the Company shall at
any time after the date hereof and prior to the exercise of all the Warrants
issue any rights to subscribe for shares of Common Stock or any other securities
of the Company or of such affiliate to all the shareholders of the Company, the
Holders of the unexercised Warrants shall be entitled, in addition to the shares
of Common Stock or other securities receivable upon the exercise of the
Warrants, to receive such rights at the time such rights are distributed to the
other shareholders of the Company.
7.7 ISSUANCE OF SECURITIES BELOW FAIR MARKET VALUE. The Company shall
not issue any of its securities below their fair market value without the prior
written consent of Spherion, which consent may be withheld at the sole
discretion of Spherion, other than (I) securities issued upon the exercise of
warrants, options or other convertible securities outstanding on the date hereof
or (II) securities issued upon the exercise of warrants, options or other
convertible securities granted by the Company after the date hereof, so long as
the purchase, or exercise, price of the securities underlying such warrants or
options on the date of grant was equal to or greater than the fair market of
such underlying securities on such date.
8. EXTRAORDINARY CORPORATE EVENTS. If there shall occur:
(a) A merger, reorganization, recapitalization, sale of assets (other
than in the ordinary course of business consistent with past practices)
involving the Company; or
(b) Any single transaction or series or related transactions in which
the shareholders of the Company immediately prior to such transaction do not own
at least a majority of the outstanding shares of capital stock following such
transaction; AND
(c) (I) A definitive agreement for such a transaction is entered into
by the Company on or before December 31, 2000 and (II) the transactions
contemplated thereby are ultimately consummated prior to Spherion ever advancing
any Loans (as such term is defined in the Revolving Credit Agreement) to the
Company,
THEN, and in any such event, Spherion will forfeit and return to the Company,
Warrants for the purchase of 3,000,000 of the 3,500,000 Shares issued pursuant
to this Agreement.
12
9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES.
Each Warrant Certificate is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of securities in such
denominations as shall be designated by the Holder thereof at the time of such
surrender. Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
10. ELIMINATION OF FRACTIONAL INTERESTS.
The Company shall not be required to issue certificates representing
fractions of Shares upon the exercise of the Warrants, nor shall it be required
to issue scrip or pay cash in lieu of fractional interests, it being the intent
of the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of Shares.
11. RESERVATION AND LISTING OF SECURITIES.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants, such number of shares of Common Stock as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Warrants and payment of the Exercise Price therefor, all Shares
issuable upon such exercise shall be duly and validly issued, fully paid,
nonassessable and not subject to the preemptive rights of any shareholder. As
long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon the exercise of the
Warrants to be listed on the Nasdaq National Market.
12. NOTICES TO WARRANT HOLDERS.
Nothing contained in this Agreement shall be construed as conferring upon
the Holder or Holders the right to vote or to consent or to receive notice as a
shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or
retained earnings, as
13
indicated by the accounting treatment of such dividend or distribution
on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor; or
(c) a voluntary dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger) or a
sale of all or substantially all of its property, assets and business
as an entirety shall be proposed;
then, in any one or more of said events, unless (a) Spherion shall then have a
designated member serving on the Board of Directors of the Company or (b) the
Company has reported any of said events on the reports filed under the Exchange
Act, the Company shall give written notice to the Holder or Holders of such
event at least fifteen (15) days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the shareholders
entitled to such dividend, distribution, convertible or exchangeable securities
or subscription rights, options or warrants, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend or distribution, or the issuance of any convertible or exchangeable
securities or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
13. NOTICES. Any notice required to be given hereunder shall be deemed to
have been given if in writing, and sent by facsimile transmission (with a
confirmatory copy sent by overnight courier), by courier service (with proof of
service) or hand delivery, addressed as follows:
(a) If to Spherion:
Spherion Corporation
2050 Spectrum Boulevard
Fort Lauderdale, Florida 33309
Attention: Lisa Iglesias
General Counsel
Telephone: (954) - 938-7600
Facsimile: (954) - 938-7780
14
With copies to (which copy shall not constitute notice):
Baker & McKenzie
1200 Brickell Avenue
Miami, Florida 33131
Attention: Andrew Hulsh
Telephone: (305) 789-8900
Facsimile: (305) 789-8953
(b) If to the Company:
Worldwide Xceed Group, Inc.
233 Broadway
New York, New York 10279
Attention: Chief Legal Officer
Telephone: (312) 360-6587
Facsimile: (312) 360-6575
with a copy to (which copy shall not constitute notice):
Katten Muchin Zavis
525 West Monroe
Chicago, Illinois 60661
Attention: Linda Wight, Esq.
Telephone: (312) 902-5563
Facsimile: (312) 577-4499
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
14. SUPPLEMENTS AND AMENDMENTS.
The Company and Spherion may from time to time supplement or amend this
Agreement without the approval of any Holders of the Warrants and/or Warrant
Securities in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and Spherion may deem necessary or
desirable and which the Company and Spherion deem not to adversely affect the
interests of the Holders of Warrant Certificates.
15
15. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit of
the Company and the Holders inure to the benefit of their respective successors
and assigns hereunder.
16. GOVERNING LAW.
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for all
purposes shall be construed in accordance with the laws of said State.
17. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and Spherion and any other registered Holder
or Holders of the Warrant Certificates or Warrant Securities any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of the Company and Spherion and any other
Holder or Holders of the Warrant Certificates or Warrant Securities.
18. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.
16
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be duly executed, as of the date first above written.
Attest: WORLDWIDE XCEED GROUP, INC.
/s/ Richard Dennerline By: /s/ Douglas C. Laux
- --------------------------------- ----------------------------------
Secretary Name: Douglas C. Laux
Title: Chief Financial Officer
Attest: SPHERION CORPORATION
/s/ Lisa Iglesias By: /s/ Roy G. Krause
- --------------------------------- ----------------------------------
Secretary Name: Roy Krause
Title: CFO
17
EXHIBIT A
1. DEFINED TERMS. The following capitalized terms, when used in this
Agreement without definition, shall have the meanings set forth in the Sections
of this Agreement indicated below:
DEFINED TERM SECTION REFERENCE
- ------------ -----------------
Act Section 4
Commission Section 6.4
Common Stock First Whereas Clause
Company Preamble
Exchange Act Section 6.5(d)
Exercise Price Section 5.2
Extraordinary Corporate Event Section 8
Holder(s) Section 3
Notice Section 6.3
Piggyback Registration Section 6.3
Registrable Security (ies) Section 6.2
Registration Statement Section 6.3
Requesting Holder Section 6.3
Revolving Credit Agreement Second Whereas Clause
S-3 Registration Request Section 6.4
Securities Act Section 6.1
Shares First Whereas Clause
Spherion Preamble
Warrant Certificates Section 2
Warrant Exercise Term Section 1
Warrant Securities Section 4
Warrants First Whereas Clause
A-1
EXHIBIT B
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), NOR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR
SOLD EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, (II) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (III) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
ISSUER, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR APPLICALBE
STATE SECURITIES LAWS IS AVAILABLE.
EXERCISABLE COMMENCING NOVEMBER 15, 2000, THROUGH
5:00 P.M., NEW YORK TIME, NOVEMBER 15, 2005
NO. W-1 3,500,000 WARRANTS
WARRANT CERTIFICATE
This Warrant Certificate certifies that Spherion Corporation, a Delaware
corporation, or its registered assigns, is the registered holder of Warrants to
purchase, at any time from November 15, 2000 until 5:00 P.M. New York City time
on November 15, 2005 ("EXPIRATION DATE"), up to 3,500,000 fully-paid and
non-assessable shares of common stock, $0.01 par value ("COMMON STOCK"), of
Worldwide Xceed Group, Inc., a Delaware corporation (the "COMPANY"), at the
initial exercise price, subject to adjustment in certain events (the "EXERCISE
PRICE"), of $1.6875 per share of Common Stock upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the Warrant
Agreement dated as of November 15, 2000 between the Company and Spherion
Corporation (the "WARRANT AGREEMENT"). Payment of the Exercise Price may be made
in cash, by certified or official bank check in New York Clearing House funds
payable to the order of the Company, or by wire transfer to an account
designated in writing by the Company, or by any combination of the foregoing.
No Warrant may be exercised after 5:00 P.M, New York City time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is
B-1
hereby incorporated by reference in and made a part of this instrument and is
hereby referred to in a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Company and the holders
(the words "holders" or "holder" meaning the registered holders or registered
holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events,
the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: November 15, 2000 WORLDWIDE XCEED GROUP, INC.
By: /s/ Douglas C. Laux
------------------------------
Name: Douglas C. Laux
Title: Chief Financial Officer
B-2
Attest:
/s/ Richard Dennerline
- ----------------------------------
B-3
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ______ shares of Common
Stock and herewith tenders in payment for such securities a wire transfer, cash
or a certified or official bank check payable in New York Clearing House Funds
to the order of Worldwide Xceed Group, Inc. in the amount of $____________, all
in accordance with the terms hereof. The undersigned requests that a certificate
for such securities be registered in the name of _____________________________,
whose address is _______________________________________________, and that such
Certificate be delivered to ____________________________________________, whose
address is ___________________________________________________________________.
Dated: Signature: _______________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
-----------------------------------------
-----------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
B-4
FORM OF ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER
DESIRES TO TRANSFER THE WARRANT CERTIFICATE.)
FOR VALUE RECEIVED ____________________________ hereby sells, assigns and
transfers unto ____________________________________________(Please print name
and address of transferee) this Warrant Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and
appoint __________________________________________________________, Attorney,
to transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Signature: ____________________________________
(Signature must conform in all respects to name
of holder as specified on the face of the
Warrant Certificate)
- ----------------------------------------
- ----------------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
B-5