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EXHIBIT 4.8
VOID AFTER 5:00 P.M., CENTRAL STANDARD
TIME ON JANUARY 31, 2012
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED
OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS
OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
Right to Purchase 492,021 Shares of
No: C-1 Common Stock, par value $.01 per share
Date: January 31, 2002
ALTERNATIVE RESOURCES CORPORATION
CONTINGENT STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Wynnchurch Capital Partners, L.P.
or its registered assigns (the "HOLDER"), is entitled to purchase from
ALTERNATIVE RESOURCES CORPORATION, a Delaware corporation (the "COMPANY"), at
any time or from time to time during the period specified in Section 2 hereof,
492,021 fully paid and nonassessable shares of the Company's Common Stock, par
value $.01 per share (the "COMMON STOCK"), at an exercise price of $0.73 per
share per share (the "EXERCISE PRICE"). This Warrant is one of a series of
Warrants being issued pursuant to that certain Securities Purchase Agreement
dated January 31, 2002 among the Company and the signatories thereto (the
"SECURITIES PURCHASE AGREEMENT," and all such warrants being issued thereunder,
the "WARRANTS"). Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Securities Purchase Agreement. The
number of shares of Common Stock purchasable hereunder (the "WARRANT SHARES")
and the Exercise Price are subject to adjustment as provided in Section 4
hereof.
This Warrant is subject to the following terms, provisions, and conditions:
1. MECHANICS OF EXERCISE. This Warrant may be exercised as follows:
(a) MANNER OF EXERCISE. This Warrant may be exercised by the Holder,
in whole or in part, by the surrender of this Warrant (or evidence of loss,
theft, destruction or
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mutilation thereof in accordance with Section 7(c) hereof), together with a
completed exercise agreement in the Form of Exercise Agreement attached hereto
as Exhibit 1 (the "EXERCISE AGREEMENT"), to the Company at the Company's
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder), and upon (i) payment to the Company in
cash, by certified or official bank check or by wire transfer for the account of
the Company, of the Exercise Price for the Warrant Shares specified in the
Exercise Agreement or (ii) if the Holder elects to effect a Cashless Exercise
(as defined in Section 11(c) below), delivery to the Company of a written notice
of an election to effect a Cashless Exercise for the Warrant Shares specified in
the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be
issued to the Holder or Holder's designees, as the record owner of such shares,
as of the date on which this Warrant shall have been surrendered, the completed
Exercise Agreement shall have been delivered, and payment (or notice of an
election to effect a Cashless Exercise) shall have been made for such shares as
set forth above.
(b) ISSUANCE OF CERTIFICATES. Certificates for the Warrant Shares
so purchased, representing the aggregate number of shares specified in the
Exercise Agreement, shall be delivered to the Holder within a reasonable time,
not exceeding three (3) business days, after this Warrant shall have been so
exercised (the "DELIVERY PERIOD"). The certificates so delivered shall be in
such denominations as may be requested by the Holder and shall be registered in
the name of Holder or such other name as shall be designated by such Holder. If
this Warrant shall have been exercised only in part, then, unless this Warrant
has expired, the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the Holder a new Warrant representing the number of
shares with respect to which this Warrant shall not then have been exercised.
(c) FRACTIONAL SHARES. No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the fair market value of a share of
Common Stock (as determined by the Board of Directors in good faith); provided
that in the event that sufficient funds are not legally available for the
payment of such cash adjustment any fractional shares of Common Stock shall be
rounded up to the next whole number.
2. PERIOD OF EXERCISE. Subject to the last sentence of Section 4(e)
hereof, this Warrant is exercisable at any time or from time to time on or after
the Trigger Date and before 5:00 P.M., Central Standard Time on the tenth (10th)
anniversary of the date hereof (the "EXERCISE PERIOD"). As used herein, the
"TRIGGER DATE" means (a) April 30, 2003 unless prior to that date the Company
provides to the Holder (i) its Financial Statements for 2002 audited by a "Big
Five" accounting firm which show that the Company met the Revenue Target (as
defined herein) and from which it can be determined that the Company met the
EBITDA Target (as defined herein) and (ii) a certificate ("CALCULATION
CERTIFICATE") signed by the Chief Financial Officer certifying that the Company
met the Revenue Target and the EBITDA Target, together with a schedule showing
the calculation of EBITDA in reasonable detail (which calculation of EBITDA
shall be consistent with the calculation of EBITDA under the Securities Purchase
Agreement (assuming no approvals referred to in the definition therein are
given)) (collectively, the "DELIVERIES"); or (b) the consummation of a Major
Transaction on or before April 30, 2003 or earlier delivery of the Deliveries.
If the Deliveries are made on or before April 30, 2003, this
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Warrant will expire with no further action required. Notwithstanding the
foregoing, if the Company should at any time amend or restate its Financial
Statements for 2002 or otherwise determine that the Revenue Target or EBITDA
Target was not met, then upon such amendment, restatement or determination, a
Trigger Date will be deemed to have occurred and the Exercise Period will
then commence. As used herein, "REVENUE TARGET" means the projected revenues
for calendar year 2002 as set forth on those certain quarterly income
statements for the forecast period ended December 31, 2002 presented to the
Board on January 23, 2002 delivered by the Company to the initial Holder
hereof on January 25, 2002 (THE BUDGET) and the "EBITDA TARGET" means the
projected EBITDA for 2002 set forth in the BUDGET.
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and non-assessable and free from all taxes, liens, claims and
encumbrances.
(b) RESERVATION OF SHARES. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(c) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment
of its charter 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 to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such actions as may reasonably be requested by the Holder of this
Warrant in order to protect the exercise privilege of the Holder of this
Warrant, consistent with the tenor and purpose of this Warrant. Without limiting
the generality of the foregoing, the Company (i) will not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above
the Exercise Price then in effect, and (ii) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant.
4. ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Section 4. In the event that any adjustment of the
Exercise Price as required herein results in a fraction of a cent, such Exercise
Price shall be rounded up or down to the nearest cent.
(a) ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON
ISSUANCE OF COMMON STOCK. Except as otherwise provided in Section 4(c) and 4(e)
hereof, if and whenever after the initial issuance of this Warrant, the Company
issues or sells, or in accordance with Section 4(b) hereof is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share less than the Exercise Price (as herein defined) on the
date of such issuance (a "DILUTIVE ISSUANCE"), then effective immediately upon
the Dilutive Issuance, the Exercise Price will be adjusted in accordance with
the following formula:
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E' = (E) (O + (P/E)) / (CSDO)
where:
E' = the adjusted Exercise Price
E = the then current Exercise Price;
O = shall mean the number of shares of Common Stock
outstanding on a fully diluted basis (not including
shares of Common Stock held in the treasury of the
Company) including Common Stock issuable upon
exercise of the Warrants including these Warrants
and the B-1 Warrants but excluding Common Stock
issuable upon exercise of the Notes, outstanding
immediately prior to the Dilutive Issuance;
P = the aggregate consideration, calculated as set forth
in Section 4(b) hereof, received by the Company upon
such Dilutive Issuance; and
CSDO = the total number of shares of Common Stock Deemed
Outstanding (as herein defined) immediately after
the Dilutive Issuance.
(b) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Exercise Price under Section 4(a) hereof, the following
will be applicable:
(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities directly or indirectly exercisable, convertible into or exchangeable
for Common Stock ("CONVERTIBLE SECURITIES") (such warrants, rights and options
to purchase Common Stock or Convertible Securities are hereinafter referred to
as "OPTIONS"), and the price per share for which Common Stock is issuable upon
the exercise of such Options is less than the Exercise Price on the date of
issuance ("BELOW MARKET OPTIONS"), then the maximum total number of shares of
Common Stock issuable upon the exercise of all such Below Market Options
(assuming full exercise, conversion or exchange of Convertible Securities, if
applicable) will, as of the date of the issuance or grant of such Below Market
Options, be deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For purposes of the preceding sentence, the
price per share for which Common Stock is issuable upon the exercise of such
Below Market Options is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance or
granting of such Below Market Options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise of
all such Below Market Options, plus, in the case of Convertible Securities
issuable upon the exercise of such Below Market Options, the minimum aggregate
amount of additional consideration payable upon the exercise, conversion or
exchange thereof at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise of all such Below Market
Options (assuming full conversion of Convertible Securities, if applicable). No
further adjustment to the Exercise Price will be made upon the actual issuance
of such Common Stock upon the exercise of such Below Market Options or upon the
exercise, conversion or exchange of Convertible Securities issuable upon
exercise of such Below Market Options.
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(ii) ISSUANCE OF CONVERTIBLE SECURITIES.
(A) If the Company in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options) and the price per share for
which Common Stock is issuable upon such exercise, conversion or exchange (as
determined pursuant to Section 4(b)(ii)(B) if applicable) is less than the
Exercise Price on the date of issuance, then the maximum total number of shares
of Common Stock issuable upon the exercise, conversion or exchange of all such
Convertible Securities will, as of the date of the issuance of such Convertible
Securities, be deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For the purposes of the preceding sentence,
the price per share for which Common Stock is issuable upon such exercise,
conversion or exchange is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale
of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise,
conversion or exchange thereof at the time such Convertible Securities first
become exercisable, convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of all such Convertible Securities. No further adjustment to the
Exercise Price will be made upon the actual issuances of such Common Stock upon
exercise, conversion or exchange of such Convertible Securities.
(B) If the Company in any manner issues or sells any
Convertible Securities with a fluctuating conversion or exercise price or
exchange ratio (a "VARIABLE RATE CONVERTIBLE SECURITY"), then the price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange for purposes of the calculation contemplated by Section 4(b)(ii)(A)
shall be deemed to be the lowest price per share which would be applicable
assuming that all holding periods and other conditions to any discounts
contained in such Convertible Security have been satisfied.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If there is a
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange or any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such change will be
readjusted to the Exercise Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. If, in any case, the total number of shares of Common Stock issuable
upon exercise of any Options or upon exercise, conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
option or to exercise, convert or exchange such Convertible Securities shall
have expired or terminated, the Exercise Price then in effect will be readjusted
to the Exercise Price which would have been in effect at the time of such
expiration or termination had such Options or Convertible Securities, to the
extent outstanding immediately
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prior to such expiration or termination (other than in respect of the actual
number of shares of Common Stock issued upon exercise or conversion thereof),
never been issued.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise, conversion or exchange of all such Options or
Convertible Securities at the time such Options or Convertible Securities first
become exercisable, convertible or exchangeable. In case any Common Stock,
Options or Convertible Securities are issued or sold for a consideration part or
all of which shall be other than cash, the amount of the consideration other
than cash received by the Company will be the fair market value of such
consideration except where such consideration consists of freely-tradeable
securities, in which case the amount of consideration received by the Company
will be the Market Price thereof as of the date of receipt. In case any Common
Stock, Options or Convertible Securities are issued in connection with any
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair market value of
such portion of the net assets and business of the non-surviving corporation as
is attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair market value of any consideration other than cash or
securities will be determined in the good faith reasonable business judgment of
the Board of Directors, provided, however, that in any case where the aggregate
value of such consideration exceeds Five Million Dollars ($5,000,000) such
valuation is subject to the reasonable approval of the Holders of the Warrants
holding at least a majority of the Warrant Shares then exercisable thereunder
(the "MAJORITY HOLDERS"). If the Company and the Majority Holders are unable to
agree upon the valuation set forth in the prior sentence, the valuation will be
determined by an independent, nationally recognized accounting form selected by
the Company and reasonably acceptable to the Majority Holders, the costs of
which will be borne by the Company.
(vi) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No adjustment
to the Exercise Price will be made (i) upon the exercise of any warrants,
options or convertible securities issued and outstanding on the date hereof in
accordance with the terms of such securities as of such date; (ii) upon the
issuance of Notes in accordance with terms of the Securities Purchase Agreement;
(iii) upon the exercise of the Warrants; or (iv) upon conversion of the Notes.
(c) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company, at
any time after the initial issuance of this Warrant, subdivides (by any stock
split, stock dividend, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a greater number of shares, then,
after the date of record for effecting such subdivision, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced. If
the Company, at any time after the initial issuance of this Warrant, combines
(by reverse stock split, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a smaller number of shares, then,
after the date of record for effecting such combination, the Exercise Price in
effect immediately prior to such combination will be proportionately increased.
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(d) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
(e) MAJOR TRANSACTIONS. If the Company shall consolidate or merge
with any other corporation or entity (other than a merger in which the Company
is the surviving or continuing entity and its capital stock is unchanged and
unissued in such transaction which does not result in a Change of Control (as
defined in the Note)) or there shall occur any share exchange pursuant to which
all of the outstanding shares of Common Stock are converted into other
securities or property or any reclassification or change of the outstanding
shares of Common Stock or the Company shall sell all or substantially all of its
assets (each of the foregoing being a "MAJOR TRANSACTION"), then the holder of
this Warrant may, at its option, either (a) in the event that the Common Stock
remains outstanding and continues to be held immediately following the
transactions by those persons holding Common Stock immediately prior to such
transactions, or holders of Common Stock receive any common stock or
substantially similar equity interest, and the Common Stock of the Purchaser or
the resulting company, as the case may be, is registered pursuant to the
Securities Act and the Exchange Act, retain this Warrant and this Warrant shall
continue to apply to such Common Stock or shall apply, as nearly as practicable,
to such other common stock or equity interest, as the case may be (with such
equitable adjustments to the Exercise Price as may be appropriate), or (b)
regardless of whether (a) applies, receive consideration, in exchange for this
Warrant, the number of shares of stock or securities or property of the Company,
or of the entity resulting from such Major Transaction (the "MAJOR TRANSACTION
CONSIDERATION"), to which a holder of the number of shares of Common Stock
delivered upon the exercise of this Warrant (pursuant to the cashless exercise
feature hereof) would have been entitled upon such Major Transaction had such
holder so exercised this Warrant on the trading date immediately preceding the
public announcement of the transaction resulting in such Major Transaction and
had such Common Stock been issued and outstanding and had such Holder been the
holder of record of such Common Stock at the time of the consummation of such
Major Transaction, and the Company shall make lawful provision for the foregoing
as a part of such Major Transaction and to the extent that any replacement
shares for the Common Stock are not able to be sold immediately and in full by
Holder without registration of such shares under the Securities Act, shall cause
the issuer of any security in such transaction which constitutes Registrable
Securities under that certain Registration Rights Agreement of even date
herewith among the Company and the signatories thereto (the "REGISTRATION RIGHTS
AGREEMENT") to assume all of the Company's obligations under the Registration
Rights Agreement. No later than ten (10) days prior to the consummation of the
Major Transaction but not prior to the public announcement of such Major
Transaction, the Company shall deliver written notice ("NOTICE OF TRANSACTION")
to each holder of a Warrant, which Notice of Transaction shall be deemed to have
been delivered one (1) business day after the Company's sending such notice by
telecopy (provided that the Company sends a confirming copy of such notice on
the same day by overnight courier) of such Notice of Transaction. Such Notice of
Transaction shall indicate the amount and type of the transaction consideration,
which such holder of a Warrant would receive under this section ("TRANSACTION
CONSIDERATION"). If the Transaction Consideration is cash and does not consist
entirely of United States currency, such
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holder may elect to receive United States currency in an amount equal to the
value of the Transaction Consideration in lieu of the Transaction Consideration
by delivering notice of such election to the Company within ten (10) days of
such holder's receipt of the Notice of Transaction which notice shall also set
forth whether Holder chooses to avail itself of any of the options under this
Section 4(e). If neither (a) nor (b) of this Section 4(e) is elected by Holder,
or this Warrant is not otherwise exercised, this Warrant shall expire on the
consummation of a Major Transaction. Notwithstanding the foregoing, the Company
will cooperate with Holder to permit the exercise of this Warrant or the
exercise of the options under (a) and (b) above in connection with a Major
Transaction occurring prior to April 30, 2003.
(f) DISTRIBUTION OF ASSETS. In case the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a partial liquidating dividend, by way of return of capital
or otherwise (including any dividend or distribution to the Company's
stockholders of cash or shares (or rights to acquire shares) of capital stock of
a subsidiary) (a "DISTRIBUTION"), at any time after the initial issuance of this
Warrant, then the Holder shall be entitled upon exercise of this Warrant for the
purchase of any or all of the shares of Common Stock subject hereto, to receive
the amount of such assets (or rights) which would have been payable to the
Holder had such Holder been the holder of such shares of Common Stock on the
record date for the determination of stockholders entitled to such Distribution.
(g) NOTICES OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the Holder, which notice shall state the
Exercise Price resulting from such adjustment and the increase or decrease in
the number of Warrant Shares purchasable at such price upon exercise, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. Such calculation shall be certified by the Chief
Financial Officer of the Company.
(h) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price. Other than pursuant to Sections 4(b)(iii) and 4(b)(iv) hereof,
no adjustment under Section 4(a) shall have the effect of increasing the
Exercise Price.
(i) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution to
the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
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(iii) there shall be any capital reorganization of the Company,
or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the Holder (x) notice of the
date on which the books of the Company shall close or a record shall be taken
for determining the holders of Common Stock entitled to receive any such
dividend, distribution, or subscription rights or for determining the holders of
Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (y) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto, but in no event earlier than public announcement of such
proposed transaction or event.
(j) CERTAIN DEFINITIONS.
(i) "COMMON STOCK DEEMED OUTSTANDING" shall mean the number of
shares of Common Stock outstanding on a fully diluted basis (not including
shares of Common Stock held in the treasury of the Company) including Common
Stock issuable upon exercise of the Warrants (including these Warrants and the
B-1 Warrants) but excluding Common Stock issuable upon conversion of the Notes,
plus (x) in case of any adjustment required by Section 4(a) resulting from the
issuance of any Options, the maximum total number of shares of Common Stock
issuable upon the exercise of the Options for which the adjustment is required
(including any Common Stock issuable upon the conversion of Convertible
Securities issuable upon the exercise of such Options), and (y) in the case of
any adjustment required by Section 4(a) resulting from the issuance of any
Convertible Securities, the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of the Convertible Securities
for which the adjustment is required, as of the date of issuance of such
Convertible Securities, if any.
(ii) "MARKET PRICE," means, as of any date, the average of the
Closing Bid prices for the Common Stock during the ten (10) consecutive trading
days immediately preceding, but not including, such determination date;
provided, however, that in the case of a calculation of Market Price made in
connection with a public offering of securities for purposes of Section 4, the
Market Price shall be the closing bid price on the day of pricing of such public
offering.
(iii) "COMMON STOCK," for purposes of this Section 4, includes
the Common Stock and any additional class of stock of the Company having no
preference as to
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dividends or distributions on liquidation, provided that the shares purchasable
pursuant to this Warrant shall include only Common Stock in respect of which
this Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Section 4(e) hereof, the stock or other securities or property provided for in
such Section.
(iv) "CLOSING BID PRICE" means, for any security as of any
date, the closing bid price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported
by Bloomberg Financial Markets or a comparable reporting service of national
reputation selected by the Company and reasonably acceptable to Holders of a
majority of the aggregate principal amount represented by the then outstanding
Notes (with the consent of the Holder so long as the Holder continues to own
Notes) ("MAJORITY HOLDERS") if Bloomberg Financial Markets is not then reporting
closing bid prices of such security (collectively, "BLOOMBERG"), or if the
foregoing does not apply, the last reported sale price of such security in the
over-the-counter market on the electronic bulletin board of such security as
reported by Bloomberg, or, if no sale price is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security
as reported in the "pink sheets" by the National Quotation Bureau, Inc. If the
Closing Bid Price cannot be calculated for such security on such date on any of
the foregoing bases, the Closing Bid Price of such security on such date shall
be the fair market value as reasonably determined by an investment banking firm
selected by the Company and reasonably acceptable to the Holder, with the costs
of such determination to be borne by the Company.
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon
the exercise of this Warrant shall be made without charge to the Holder or such
shares for any issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than the Holder.
6. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall
not entitle the Holder to any voting rights or other rights as a stockholder of
the Company. No provision of this Warrant, in the absence of affirmative action
by the Holder to purchase Warrant Shares, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of the
Holder for the Exercise Price or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
7. TRANSFER, EXCHANGE, REDEMPTION AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the rights granted
to the Holder are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the Form of Assignment
attached hereto as Exhibit 2, at the office or agency of the Company referred to
in Section 7(e) below. Until due presentment for registration of transfer on the
books of the Company, the Company may treat the registered holder hereof as the
owner and holder hereof for all purposes, and the Company shall not be affected
by any notice to the contrary. Notwithstanding anything to the contrary
contained herein, the registration rights described in Section 8 hereof are
assignable only in accordance with the provisions of the Registration Rights
Agreement. Until this Warrant or the shares represented by
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this Warrant are registered under the Securities Act, the Company may require,
as a condition of transfer of this Warrant or the shares represented by this
Warrant, that the transferee (who may be the Holder in the case of an exchange)
represent that the securities being transferred are being acquired for
investment purposes and for the transferee's own account and not with a view to
or for sale in connection with any distribution of the security. The Company may
also require that the transferee provide written information adequate to
establish that the transferee is an "accredited investor" within the meaning of
Regulation D issued under the Securities Act, or otherwise meets all
qualifications necessary to comply with exemptions to the Securities Act, all as
determined by counsel to the Company.
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This
Warrant is exchangeable, upon the surrender hereof by the Holder at the office
or agency of the Company referred to in Section 7(e) below, for new Warrants, in
the form hereof, of different denominations representing in the aggregate the
right to purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares as shall be designated by the Holder of at the time of such
surrender.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant or, in the case of any such loss, theft, or
destruction, upon delivery, of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant, in the form hereof, in such
denominations as Holder may request.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Section 8, this Warrant shall be promptly canceled by the
Company. The Company shall pay all issuance taxes (other than securities
transfer taxes) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Section 7.
(e) WARRANT REGISTER. The Company shall maintain, at its
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
8. REGISTRATION. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in the Registration Rights
Agreement between the company and the initial holder of this Warrant.
9. NOTICES. Any notice herein required or permitted to be given
shall be in writing and may be personally served or delivered by courier or by
telecopy (confirmed by sending a copy by first class mail or courier within one
day of sending by telecopy), and shall be deemed delivered at the time and date
of receipt (which shall include facsimile transmission). The addresses for such
communications shall be:
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If to the Company:
Alternative Resources Corporation
600 Hart Road, Suite 300
Barrington, Illinois 60010
Telecopy: 847-381-6604
Attention: Steven Purcell, Chief Financial Officer
with a copy to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Telecopy: 312-984-7700
Attention: Neal J. White
and if to the Holder, at such address as Holder shall have provided in writing
to the Company, or at such other address as each such party furnishes by notice
given in accordance with this Section 9.
10. GOVERNING LAW; JURISDICTION. This Warrant shall be governed by
and construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be performed in the State of Illinois. The Company
irrevocably consents to the jurisdiction of the United States federal courts
located in the State of Illinois and the state courts located in the County of
Cook in the State of Illinois in any suit or proceeding based on or arising
under this Warrant and irrevocably agrees that all claims in respect of such
suit or proceeding may be determined in such courts. The Company irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company agrees that a final nonappealable judgment in any such
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner. The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holders of the Warrants and that the remedy at law for
any such breach or threatened breach, the Holders shall be entitled, in addition
to all other available remedies, to specific performance or an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required. TO THE EXTENT NOT PROHIBITED
BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE COMPANY AND HOLDER HEREBY
WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
WARRANT OR THE SUBJECT MATTER HEREOF OR ANY OBLIGATION HEREUNDER OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE HOLDERS OR THE
COMPANY OR ANY OF THEM IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE. EACH OF HOLDER AND THE COMPANY ACKNOWLEDGES THAT THE PROVISIONS OF
THIS SECTION 10 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH EACH OF
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HOLDER AND THE COMPANY HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO
THIS AGREEMENT, AND EACH OF THE RELATED AGREEMENTS. Holder or the Company may
file an original counterpart or a copy of this Section 10 with any court as
written evidence of the consent of the parties hereto to the waiver of their
respective right to trial by jury.
11. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may only
be amended by an instrument in writing signed by the Company and the Holder.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the
several Sections of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.
(c) CASHLESS EXERCISE. Notwithstanding anything to the
contrary contained in this Warrant, this Warrant may be exercised by
presentation and surrender of this Warrant to the Company at its principal
executive offices with a written notice of the Holder's intention to effect a
cashless exercise, including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
"CASHLESS EXERCISE"). In the event of a Cashless Exercise, in lieu of paying the
Exercise Price in cash, the Holder shall surrender this Warrant for the number
of shares of Common Stock determined by multiplying the number of Warrant Shares
to which it would otherwise be entitled by a fraction, the numerator of which
shall be the difference between the then current Market Price per share of the
Common Stock and the Exercise Price, and the denominator of which shall be such
then current Market Price per share of Common Stock.
(d) ASSIGNABILITY. This Warrant shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of Holder
and its successors and assigns. The Holder shall notify the Company upon the
assignment of this Warrant.
* * *
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IN WITNESS WHEREOF, the Company has caused this Contingent Warrant to
be signed by its duly authorized officer.
ALTERNATIVE RESOURCES CORPORATION
By: /s/ Steven Purcell
----------------------------
Name: Steven Purcell
Title: Senior Vice President
and Chief Financial
Officer
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FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
The undersigned hereby irrevocably exercises the right to purchase ____________
of the shares of common stock of Alternative Resources Corporation, a Delaware
corporation (the "COMPANY"), evidenced by the attached Warrant, and [HEREWITH
MAKES PAYMENT OF THE EXERCISE PRICE WITH RESPECT TO SUCH SHARES IN FULL] [ELECTS
TO EFFECT A CASHLESS EXERCISE PURSUANT TO THE TERMS OF THE WARRANT], all in
accordance with the conditions and provisions of said Warrant.
(i) The undersigned agrees not to offer, sell, transfer or otherwise
dispose of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.
(ii) The undersigned requests that stock certificates for such shares
be issued, and a Warrant representing any unexercised portion hereof be issued,
pursuant to the Warrant in the name of the Holder (or such other person or
persons indicated below) and delivered to the undersigned (or designee(s) at the
address (or addresses) set forth below:
Date:
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Signature of Holder
----------------------------------------
Name of Holder (Print)
Address:
----------------------------------------
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all rights of the undersigned under the within Warrant, with respect
to the number of shares of Common Stock covered thereby set forth hereinbelow,
to:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
, and hereby irrevocably constitutes and appoints ______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Date:
------------, -----,
In the presence of
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Name:
--------------------------------------
Signature:
---------------------------------
Title of Signing Officer or Agent
(if any):
-----------------------------
Address:
---------------------
---------------------
Note: The above signature
should correspond
exactly with the name
on the face of the
within Warrant.