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EXHIBIT 4.9
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 507,979 Shares of
No: C-2 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
Canada, 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, 507,979 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.
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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 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
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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 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
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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:
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
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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.
(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
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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 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
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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.
(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,
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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 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:
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(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;
(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
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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 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
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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 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
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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:
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
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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 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:
-------------------------- -------------------------------
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.