Exhibit 4.11
Form 10-K 2001, Amendment No. 1
Headway Corporate Resources, Inc.
File No. 1-16025
FORM OF WARRANT
THIS COMMON STOCK PURCHASE WARRANT AND THE SHARES THAT MAY BE PURCHASED
HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS COMMON STOCK PURCHASE WARRANT
AND THE SHARES THAT MAY BE PURCHASED HEREUNDER MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL THAT THE PROPOSED TRANSACTION
DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AND APPLICABLE STATE SECURITIES
LAWS.
HEADWAY CORPORATE RESOURCES, INC.
COMMON STOCK PURCHASE WARRANT
Date of Issuance: April 17, 2002 Certificate No. [W-4]
THIS IS TO CERTIFY that _____________________, a national banking
association organized and existing under the laws of the United States, and its
transferees, successors and assigns (the "Holder"), for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, is
entitled to purchase from HEADWAY CORPORATE RESOURCES, INC., a Delaware
corporation (the "Company"), at the price of $0.25 per share (the "Exercise
Price"), at any time after the date hereof (the "Commencement Date") and
expiring on the later of (x) April 30, 2007, (y) the maturity of the Term Loan
Facility and Letter of Credit Facility pursuant to the Amended and Restated
Credit Agreement dated as of April 17, 2002 (the "Credit Agreement"), whether by
acceleration or otherwise and (z) the date on which the Term Loan shall have
been permanently repaid and all Letters of Credit shall have been permanently
cancelled, cash collateralized or otherwise supported in a manner satisfactory
to the Agent, the Issuing Bank and the requisite Lenders and all other
Obligations (as defined in the Credit Agreement) shall have been paid in full in
cash (the "Expiration Date"), [Prorata share of Two Million Four Hundred Fifty
Five Thousand Five Hundred Twenty Two (2,455,522)] of the fully paid and
nonassessable Common Stock, par value $0.0001 per share ("Common Stock"), of the
Company (the "Aggregate Number"), as such number may be adjusted as provided
herein.
Capitalized terms used herein shall have the meanings ascribed to such
terms in Section 12 hereof unless otherwise defined herein.
SECTION 1. The Warrant; Transfer and Exchange.
(a) The Warrant. This Warrant (the "Warrant") and the rights and
privileges of the Holder and the Company hereunder may be exercised by the
Holder in whole or in part as provided herein; and, as more fully set forth
in Sections 1(b) and 8 hereof, may be transferred by the Holder to any
other Person or Persons at any time or from time to time, in whole or in
part.
(b) Transfer and Exchanges. The Company shall initially record this
Warrant on a register to be maintained by the Company with its other stock
books and, subject to Section 9 hereof, from time to time thereafter shall
reflect the transfer of this Warrant on such register when surrendered for
transfer in accordance with the terms hereof and properly endorsed,
accompanied by appropriate instructions, and further accompanied by payment
in cash or by check, bank draft or money order payable to the order of the
Company, in United States currency, of an amount equal to any stamp or
other tax or governmental charge or fee required to be paid in connection
with the transfer thereof. Upon any such transfer, a new warrant or
warrants shall be issued to the transferee and the Holder (in the event the
Warrant is only partially transferred) and the surrendered warrant shall be
canceled. This Warrant may be exchanged at the option of the Holder, when
surrendered at the Principal Office of the Company, for another warrant or
other warrants of like tenor and representing in the aggregate the right to
purchase a like number of shares of Common Stock.
SECTION 2. Exercise.
(a) Right to Exercise. At any time after the Commencement Date and on
or before the Expiration Date, the Holder, in accordance with the terms
hereof, may exercise this Warrant, in whole at any time or in part from
time to time, by delivering this Warrant to the Company during normal
business hours on any Business Day at the Company's Principal Office,
together with the Election to Purchase, in the form attached hereto as
Exhibit A and made a part hereof (the "Election to Purchase"), duly
executed, and payment of the Exercise Price per share for the number of
shares to be purchased (the "Exercise Amount"), as specified in the
Election to Purchase. If the Expiration Date is not a Business Day, then
this Warrant may be exercised on the next succeeding Business Day.
(b) Payment of Exercise Price. Payment of the Exercise Price shall be
made to the Company by any of the following means (or any combination of
such means): (i) in cash or other immediately available funds, (ii)
forgiveness of a portion of the Obligations payable by Company to the
Holder pursuant to the Credit Agreement in an aggregate amount equal to the
Exercise Price (such forgiveness to be confirmed in writing by the Holder)
or (iii) as provided in Section 2(c). In the case of payment of all or a
portion of the Exercise Price pursuant to Section 2(c), the direction by
the Holder to make a "Cashless Exercise" shall serve as accompanying
payment for that portion of the Exercise Price. The amount of the Exercise
Price to be paid shall equal the product of (i) the Exercise Amount
multiplied by (ii) the Exercise Price per share.
(c) Cashless Exercise. The Holder shall have the right to pay all or a
portion of the Exercise Price by making a "Cashless Exercise" pursuant to
this Section 2(c), in which case the portion of the Exercise Price to be so
paid shall be paid by reducing the number of shares of Common Stock
otherwise issuable pursuant to the Election to Purchase (the "Exercised
Shares") by an amount (the "Cashless Exercise Shares") equal to (i) the
Exercise Price multiplied by the Exercise Shares and divided by (ii) the
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Fair Market Value Per Share. The number of shares of Common Stock to be
issued to the Holder as a result of a Cashless Exercise will therefore be
equal to the Exercised Shares minus the Cashless Exercise Shares.
(d) Issuance of Shares of Common Stock. Upon receipt by the Company of
this Warrant at its Principal Office in proper form for exercise, and
accompanied by payment of the Exercise Price as aforesaid, the Holder shall
be deemed to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that certificates representing such
shares of Common Stock may not then be actually delivered. Upon such
surrender of this Warrant and payment of the Exercise Price as aforesaid,
the Company shall issue and cause to be delivered with all reasonable
dispatch to, or upon the written order of, the Holder (and in such name or
names as the Holder may designate) a certificate or certificates for the
Exercise Amount, subject to any reduction as provided in Section 2(c) for a
Cashless Exercise.
(e) Fractional Shares. The Company shall not be required to deliver
fractions of shares of Common Stock upon exercise of this Warrant. If any
fraction of a share of Common Stock would be deliverable upon an exercise
of this Warrant, the Company may, in lieu of delivering such fraction of a
share of Common Stock, make a cash payment to the Holder in an amount equal
to the same fraction of the Fair Market Value Per Share determined as of
the Business Day immediately preceding the date of exercise of this
Warrant.
(f) Partial Exercise. In the event of a partial exercise of this
Warrant, the Company shall issue to the Holder a Warrant in like form for
the unexercised portion thereof.
SECTION 3. Payment of Taxes. The Company shall pay all stamp taxes attributable
to the initial issuance of shares or other securities issuable upon the exercise
of this Warrant, or issuable pursuant to Section 6 hereof, excluding any tax or
taxes which may be payable because of the transfer involved in the issuance or
delivery of any certificates for shares or other securities in a name other than
that of the Holder in respect of which such shares or securities are issued.
SECTION 4. Replacement Warrant. In case this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue and deliver in exchange and substitution
for and upon cancellation of the mutilated Warrant, or in lieu of and in
substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
tenor and representing an equivalent right or interest, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction of such Warrant and upon receipt of indemnity reasonably
satisfactory to the Company (provided, that if the Holder is a financial
institution or other institutional investor its personal undertaking to provide
an indemnity is hereby deemed to be reasonably satisfactory to the Company;
provided, further, the form of such undertaking shall be reasonably satisfactory
to the Company).
SECTION 5. Reservation of Common Stock and Other Covenants.
(a) Reservation of Authorized Common Stock. As of the date of this
Warrant, Holder is aware that insufficient authorized shares of Common
Stock exist to allow Company to reserve for the entire Aggregate Number of
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shares of Common Stock necessary to enable the Company at any time to
fulfill all of its obligations under this Warrant. However, Company
acknowledges and represents to Holder that as of the date of this Warrant,
1,255,000 shares of Common Stock are free of preemptive rights and
available to be reserved for the exercise of this Warrant, and Company
shall at all times reserve and keep available such 1,255,000 authorized but
unissued shares, free of preemptive rights, sufficient to enable the
Company at any time to fulfill all of its obligations under this Warrant to
at least the extent of 1,255,000 shares. Company shall make reasonable
efforts to obtain the necessary shareholder approval to authorize
additional shares of Common Stock sufficient to enable Company to reserve
sufficient shares to enable Company at any time to fulfill all of its
obligations under this Warrant, and all other Warrants issued to Lenders
and dated concurrently with this Warrant. From and after the authorization
of such additional shares, the Company shall at all times reserve and keep
available out of the aggregate of its authorized but unissued shares, free
of preemptive rights, such number of its duly authorized shares of Common
Stock, or other stock or securities deliverable pursuant to this Section 5
or Section 6 hereof, as shall be sufficient to enable the Company at any
time to fulfill all of its obligations under this Warrant.
(b) Affirmative Actions to Permit Exercise and Realization of
Benefits. If any shares of Common Stock reserved or to be reserved for the
purpose of the exercise of this Warrant, or any shares or other securities
reserved or to be reserved for the purpose of issuance pursuant to Section
6 hereof, require registration with or approval of any governmental
authority under any federal or state law (other than securities laws)
before such shares or other securities may be validly delivered upon
exercise of this Warrant, then the Company covenants that it will, at its
sole expense, secure such registration or approval, as the case may be
(including but not limited to approvals or expirations of waiting periods
required under the Hart Scott Rodino Antitrust Improvements Act).
(c) Regulatory Requirements and Restrictions. In the event of any
reasonable determination by the Holder that, by reason of any existing or
future federal or state law, statute, rule, regulation, guideline, order,
court or administrative ruling, request or directive (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) (collectively, a "Regulatory Requirement"), the Holder is
effectively restricted or prohibited from holding this Warrant or the
Warrant Shares (including any shares of capital stock or other securities
distributable to the Holder in any merger, reorganization, readjustment or
other reclassification), or otherwise realizing upon or receiving the
benefits intended under this Warrant, the Company shall, and shall use its
reasonable best efforts to have its shareholders, take such action as the
Holder and the Company shall jointly agree in good faith to be reasonably
necessary to permit the Holder to comply with such Regulatory Requirement.
The reasonable costs of taking such action, whether by the Company, the
Holder or otherwise, shall be borne by the Holder.
(d) Validly Issued Shares. The Company covenants that all shares of
Common Stock that may be delivered upon exercise of this Warrant, assuming
full payment of the Exercise Price (including those issued pursuant to
Section 6 hereof), shall upon delivery by the Company be duly authorized
and validly issued, fully paid and nonassessable, free from all stamp
taxes, liens and charges with respect to the issue or delivery thereof and
otherwise free of all other security interests, encumbrances and claims of
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any nature whatsoever other than such security interests, encumbrances and
claims granted by the Holder.
(e) Issuance of Additional Warrants upon Conversion of Preferred
Stock. Immediately upon the issuance of any shares of Common Stock upon the
conversion of the Preferred Stock, Company shall issue an additional
warrant to Holder on the same terms provided in this Warrant, except the
Exercise Price of such Warrant shall equal the conversion rate applicable
to such conversion of Preferred Stock, and the Aggregate Number shall equal
the product of (i) number of shares issued upon such conversion of
Preferred Stock times (ii) 0.1765 times (iii) [fraction equal to the
Lender's pro rata share]. Company shall not enter into any agreement,
transaction or exchange with the holders of the Preferred Stock if the
effect thereof would be to circumvent the Holder's rights under the
preceding sentence by granting rights to the holders of the Preferred Stock
similar to the conversion feature of the Preferred Stock but exercisable
without triggering the preceding sentence. (The preceding sentence does not
apply to the warrants already issued to the Preferred Stock holders
pursuant to the Limited Waiver and Amendment.)
SECTION 6. Adjustments to Aggregate Number.
Under certain conditions, the Aggregate Number is subject to adjustment as
set forth in this Section 6. No adjustments shall be made under this Section 6
as a result of (a) the issuance by the Company of (1) the Warrant Shares upon
exercise of this Warrant or (2) shares of Common Stock upon exercise of the
other warrants granted to Holder and the other Lenders under the Credit
Agreement, (b), shares of Common Stock upon exercise of warrants granted to
holders of the Subordinated Notes and the Preferred Stock pursuant to the
Limited Waiver and Amendment, (c) the issuance of shares of Common Stock (or
options related thereto) upon the exercise of options granted or to be granted
under the Company's current and future stock option and incentive plans
representing in the aggregate the right to receive or purchase shares
aggregating up to 1,892,731 shares of Common Stock (subject to adjustment for
any of the circumstances described in Sections 6(a)(i)(A), (B) and (C)) and (d)
the issuance of any shares of Common Stock with respect to the liquidation
preference (but not with respect to accrued but unpaid dividends) upon the
conversion of the Preferred Stock (collectively, the "Exempt Issuances").
(a) Adjustments. The Aggregate Number, after taking into consideration
any prior adjustments pursuant to this Section 6, shall be subject to
adjustment from time to time as follows and, thereafter, as adjusted, shall
be deemed to be the Aggregate Number hereunder.
(i) Stock Dividends; Subdivisions and Combinations. In case at
any time or from time to time the Company shall:
(A) issue to the holders of its Common Stock a dividend
payable in, or other distribution of, Common Stock (a "Stock
Dividend"),
(B) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, including without
limitation by means of a stock split (a "Stock Subdivision"), or
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(C) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock (a "Stock Combination"),
then the Aggregate Number in effect immediately prior thereto shall be (1)
proportionately increased in the case of a Stock Dividend or a Stock Subdivision
and (2) proportionately decreased in the case of a Stock Combination. In the
event the Company shall declare or pay, without consideration, any dividend on
the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a Stock Dividend in
an amount of shares equal to the maximum number of shares issuable upon exercise
of such rights to acquire Common Stock.
(ii) Other Distributions. In case at any time or from time to
time the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive any dividend or
other distribution (collectively, a "Distribution") of:
(A) cash,
(B) any evidences of its indebtedness (other than
Convertible Securities), any shares of its capital stock (other
than additional shares of Common Stock or Convertible Securities)
or any other securities or property of any nature whatsoever
(other than cash), or
(C) any options, warrants or other rights to subscribe for
or purchase any of the following: any evidences of its
indebtedness (other than Convertible Securities), any shares of
its capital stock (other than additional shares of Common Stock
or Convertible Securities) or any other securities or property of
any nature whatsoever,
then the Holder shall be entitled to elect by written notice to the Company to
receive (1) immediately and without further payment the cash, evidences of
indebtedness, stock, securities, other property, options, warrants and/or other
rights (or any portion thereof) to which the Holder would have been entitled by
way of such Distribution as if the Holder had fully exercised this Warrant
immediately prior to such Distribution or (2) upon the exercise of this Warrant
at any time on or after the taking of such record, the number of Warrant Shares
to be received upon exercise of this Warrant determined as stated herein and, in
addition and without further payment, the cash, evidences of indebtedness,
stock, securities, other property, options, warrants and/or other rights (or any
portion thereof) to which the Holder would have been entitled by way of such
Distribution and subsequent dividends and distributions through the date of
exercise as if such Holder (x) had fully exercised this Warrant immediately
prior to such Distribution and (y) had retained the Distribution in respect of
the Common Stock and all subsequent dividends and distributions of any nature
whatsoever in respect of any stock or securities paid as dividends and
distributions and originating directly or indirectly from such Common Stock.
A reclassification of the Common Stock into shares of Common Stock and
shares of any other class of stock shall be deemed a Distribution by the Company
to the holders of its Common Stock of such shares of such other class of stock
and, if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such event shall be deemed a Stock Subdivision or Stock Combination, as the case
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may be, of the outstanding shares of Common Stock within the meaning of Section
6(a)(i) hereof.
(iii) Issuance of Common Stock. If at any time or from time to
time the Company shall (except as hereinafter provided in this Section
6(a)(iii)) issue or sell any additional shares of Common Stock for a
consideration per share less than the Fair Market Value Per Share,
then, effective on the date specified below, the Aggregate Number
shall be adjusted by multiplying (A) the Aggregate Number immediately
prior thereto by (B) a fraction, the numerator of which shall be the
sum of the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares of Common Stock
(calculated on a Fully Diluted basis), the number of shares of Common
Stock issuable upon the conversion or exercise of options, warrants,
rights or other Convertible Securities (but only to the extent that
such Convertible Securities are "in the money" and then exercisable
but in any event subject to adjustment as provided in Section
6(a)(vii)(F)), and the number of such additional shares of Common
Stock so issued and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares of Common Stock (calculated on a
Fully Diluted basis), the number of shares of Common Stock issuable
upon the conversion or exercise of options, warrants, rights or other
Convertible Securities (but only to the extent that such Convertible
Securities are "in the money" and then exercisable but in any event
subject to adjustment as provided in Section 6(a)(vii)(F)), and the
number of shares of Common Stock which the aggregate consideration for
the total number of such additional shares of Common Stock so issued
would purchase at the Fair Market Value Per Share. The date as of
which the Fair Market Value Per Share shall be computed shall be the
earlier of the date on which the Company shall enter into a firm
contract or commitment for the issuance of such additional shares of
Common Stock or the date of actual issuance of such additional shares
of Common Stock.
The provisions of this Section 6(a)(iii) shall not apply to any
issuance of additional shares of Common Stock for which an adjustment
is otherwise provided under Section 6(a)(i) hereof. No adjustment of
the Aggregate Number shall be made under this Section 6(a)(iii) upon
the issuance of any additional shares of Common Stock which are issued
pursuant to (1) the exercise of this Warrant in whole or in part or
pursuant to any other Exempt Issuances, (2) the exercise of other
subscription or purchase rights or (3) the exercise of any conversion
or exchange rights in any Convertible Securities, provided that for
purposes of clauses (2) or (3) an adjustment shall previously have
been made upon the issuance of such other rights or upon the issuance
of such Convertible Securities (or upon the issuance of any warrants
or other rights therefor) pursuant to Section 6(a)(iv) or (v) hereof.
(iv) Warrants and Options. If at any time or from time to time
the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a distribution of, or shall
in any manner (whether directly, by assumption in a merger in which
the Company is the surviving corporation and in which the shareholders
of the Company immediately prior to the merger continue to own more
than 50% of the Outstanding Common Stock immediately after the merger
and for a period of 180 days thereafter, or otherwise) issue or sell
any warrants, options or other rights to subscribe for or purchase (A)
any shares of Common Stock or (B) any Convertible Securities, whether
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or not the rights to subscribe, purchase, exchange or convert
thereunder are immediately exercisable, and the consideration per
share for which additional shares of Common Stock may at any time
thereafter be issuable pursuant to such warrants, options or other
rights or pursuant to the terms of such Convertible Securities shall
be less than the Fair Market Value Per Share, then the Aggregate
Number shall be adjusted as provided in Section 6(a)(iii) hereof on
the basis that (1) the maximum number of additional shares of Common
Stock issuable pursuant to all such warrants, options or other rights
or necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the
date of the determination of the Fair Market Value Per Share as
hereinafter provided and (2) the aggregate consideration for such
maximum number of additional shares of Common Stock shall be deemed to
be the minimum consideration received and receivable by the Company
for the issuance of such additional shares of Common Stock pursuant to
the terms of such warrants, options or other rights or such
Convertible Securities. For purposes of this Section 6(a)(iv), the
effective date of such adjustment and the date as of which the Fair
Market Value Per Share shall be computed shall be the earliest of (A)
the date on which the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive any such
warrants, options or other rights, (B) the date on which the Company
shall enter into a firm contract or commitment for the issuance of
such warrants, options or other rights and (C) the date of actual
issuance of such warrants, options or other rights.
No adjustment of the Aggregate Number shall be made under this
Section 6(a)(iv) upon the issuance of any warrants, options or other
rights which are issued pursuant to the exercise of any Convertible
Securities if an adjustment shall have been made or is
contemporaneously made or if no such adjustment shall have been
required upon the issuance of such Convertible Securities, pursuant to
Section 6(a)(v) hereof.
(v) Convertible Securities. If at any time or from time to time
the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a distribution of or shall in
any manner (whether directly, by assumption in a merger in which the
Company is the surviving corporation and in which the shareholders of
the Company immediately prior to the merger continue to own more than
50% of the Outstanding Common Stock immediately after the merger and
for a period of 180 days thereafter, or otherwise) issue or sell
Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the consideration
per share for the additional shares of Common Stock which may at any
time thereafter be issuable pursuant to the terms of such Convertible
Securities shall be less than the Fair Market Value Per Share, then
the Aggregate Number shall be adjusted as provided in Section
6(a)(iii) hereof on the basis that (A) the maximum number of
additional shares of Common Stock necessary to effect the conversion
or exchange of all such Convertible Securities shall be deemed to have
been issued as of the date of the determination of the Fair Market
Value Per Share as herein provided and (B) the aggregate consideration
for such maximum number of additional shares of Common Stock shall be
deemed to be the minimum consideration received and receivable by the
Company for the issuance of such additional shares of Common Stock
pursuant to the terms of such Convertible Securities. For purposes of
this Section 6(a)(v), the effective date of such adjustment and the
date as of which the Fair Market Value Per Share shall be computed
shall be the earliest of (1) the date on which the Company shall take
a record of the holders of its Common Stock for the purpose of
entitling them to receive any such Convertible Securities, (2) the
date on which the Company shall enter into a firm contract or
commitment for the issuance of such Convertible Securities and (3) the
date of actual issuance of such Convertible Securities.
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No adjustment of the Aggregate Number shall be made under this
Section 6(a)(v) upon the issuance of any Convertible Securities which
are issued pursuant to the exercise of any warrants, options or other
subscription or purchase rights if an adjustment shall previously have
been made or is contemporaneously made or if no such adjustment shall
have been required upon the issuance of such warrants, options or
other rights pursuant to Section 6(a)(iv) hereof.
(vi) Subsequent Adjustments. If at any time after any adjustment
of the Aggregate Number shall have been made pursuant to Section 6(a)
(iv) or (v) hereof on the basis of the issuance of warrants, options
or other rights or the issuance of Convertible Securities, or after
any new adjustments of the Aggregate Number shall have been made
pursuant to this Section 6(a)(vi), then:
(A) such warrants, options or rights or the right of
conversion or exchange in such Convertible Securities shall
expire, and a portion of such warrants, options or rights, or the
right of conversion or exchange in respect of a portion of such
Convertible Securities, as the case may be, shall not have been
exercised prior to such expiration, and
(B) in the case of adjustments made pursuant to Section
6(a)(iv) or (v), the consideration per share for which shares of
Common Stock are issuable pursuant to such warrants, options or
rights per the terms of such Convertible Securities shall be
irrevocably increased (provided, no remuneration was paid
therefor), and such previous adjustment shall be rescinded and
annulled and the additional shares of Common Stock which were
deemed to have been issued by virtue of the computation made in
connection with such adjustment shall no longer be deemed to have
been issued by virtue of such computation. Simultaneously
therewith, a recomputation shall be made of the effect of such
warrants, options or rights or Convertible Securities on the
determination of the Aggregate Number, which shall be made on the
basis of:
(1) treating the number of additional shares of Common
Stock, if any, theretofore actually issued pursuant to the
previous exercise of such warrants, options or rights or
such right of conversion or exchange as having been issued
on the date or dates of such exercise and, in the case of a
recomputation of a calculation originally made pursuant to
Section 6(a)(iv) or (v), for the consideration actually
received and receivable therefor, and
(2) in the case of a recomputation of a calculation
originally made pursuant to Section 6(a)(iv) or (v),
treating any such warrants, options or rights or any such
Convertible Securities which then remain outstanding as
having been granted or issued immediately after the time of
such irrevocable increase of the consideration per share for
which shares of Common Stock are issuable under such
warrants, options or rights or Convertible Securities;
and, if and to the extent called for by the foregoing provisions
of Section 6(a)(vi) on the basis aforesaid, a new adjustment of
the Aggregate Number shall be made, such new adjustment shall
supersede the previous adjustment so rescinded and annulled.
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(vii) Miscellaneous. The following provisions shall be applicable
to the making of adjustments of the Aggregate Number provided above in
this Section 6(a):
(A) The sale or other disposition of any issued shares of
Common Stock owned or held by or for the account of the Company
or any of its Subsidiaries shall be deemed an issuance thereof
for the purposes of this Section 6(a).
(B) To the extent that any additional shares of Common Stock
or any Convertible Securities or any warrants, options or other
rights to subscribe for or purchase any additional shares of
Common Stock or any Convertible Securities (1) are issued solely
for cash consideration, the consideration received by the Company
therefor shall be deemed to be the amount of the cash received by
the Company therefor, (2) are offered by the Company for
subscription, the consideration received by the Company shall be
deemed to be the subscription price or (3) are sold to
underwriters or dealers for public offering, the aggregate
consideration received by the Company shall be deemed to be the
consideration received by the Company therefor, in any such case
excluding any amounts paid or receivable for accrued interest or
accrued dividends. To the extent that such issuance shall be for
a consideration other than cash, or partially for cash and
partially for other consideration, then, except as otherwise
expressly provided herein, the amount of such consideration shall
be deemed to be the fair market value of such other consideration
plus, if applicable, the amount of such cash at the time of such
issuance, determined in the manner set forth in Section 6(d)(ii).
In case any additional shares of Common Stock or any Convertible
Securities or any warrants, options or other rights to subscribe
for or purchase such additional shares of Common Stock or
Convertible Securities shall be issued in connection with any
merger in which the Company is the survivor and issues any
securities, the amount of consideration therefor shall be deemed
to be the fair market value of such additional shares of Common
Stock, Convertible Securities, warrants, options or other rights,
as the case may be, determined in the manner set forth in Section
6(d)(ii).
The consideration for any shares of Common Stock issuable
pursuant to the terms of any Convertible Securities shall be equal to
(x) the consideration received by the Company for issuing any
warrants, options or other rights to subscribe for or purchase such
Convertible Securities, plus (y) the consideration paid or payable to
the Company in respect of the subscription for or purchase of such
Convertible Securities, plus (z) the consideration, if any, payable to
the Company upon the exercise of the right of conversion or exchange
of such Convertible Securities.
In case of the issuance at any time of any additional shares of
Common Stock or Convertible Securities in payment or satisfaction of
any dividends upon any class of stock other than Common Stock, the
Company shall, be deemed to have received for such additional shares
of Common Stock or Convertible Securities a consideration equal to the
amount of such dividend so paid or satisfied.
(C) The adjustments required by the preceding paragraphs of
this Section 6(a) shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that
no adjustment of the Aggregate Number that would otherwise be
required shall be made (except in the case of a Stock Subdivision
or Stock Combination, as provided for in Section 6(a)(i) hereof)
10
unless and until such adjustment either by itself or with other
adjustments not previously made adds or subtracts at least one
one-hundredth of one share to or from the Aggregate Number
immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount
(except as aforesaid) shall be carried forward and made as soon
as such adjustment, together with other adjustments required by
this Section 6(a) and not previously made, would result in a
minimum adjustment. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
(D) In computing adjustments under this Section 6(a),
fractional interests in Common Stock shall be taken into
account to the nearest one-thousandth of a share.
(E) If the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or
purchase rights and shall, thereafter and before the
distribution to shareholders thereof, legally abandon its
plan to pay or deliver such dividend, distribution,
subscription or purchase rights, then no adjustment shall be
required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be
rescinded and annulled.
(F) In making any adjustment, at the time of actual
exercise of the Warrant, to the extent not already taken
into account, securities convertible into capital stock
which were not exercisable or in-the-money that are so
exercisable and in the money or previously have been
exercised shall be taken into account, at the time of the
exercise of the Warrant, in the calculation of Fully Diluted
shares of Common Stock.
(b) Changes in Common Stock. In case at any time the Company shall
initiate any transaction or be a party to any transaction (including,
without limitation, a merger, consolidation, share exchange, sale, lease or
other disposition of all or substantially all of the Company's assets,
liquidation, recapitalization or reclassification of the Common Stock) in
connection with which the previous Outstanding Common Stock shall be
changed into or exchanged for different securities of the Company or
capital stock or other securities of another corporation or interests in a
non-corporate entity or other property (including cash) or any combination
of the foregoing (each such transaction being herein called a
"Transaction"), then, as a condition of the consummation of the
Transaction, lawful, enforceable and adequate provision shall be made so
that the Holder shall be entitled to elect, by written notice to the
Company, to receive (i) a new warrant in form and substance similar to, and
in exchange for, this Warrant to purchase all or a portion of such
securities or other property or (ii) upon exercise of this Warrant at any
time on or after the consummation of the Transaction, in lieu of the
Warrant Shares issuable upon such exercise prior to such consummation, the
securities or other property (including cash) to which such Holder would
have been entitled upon consummation of the Transaction if such Holder had
exercised this Warrant immediately prior thereto (subject to adjustments
from and after the consummation date as nearly equivalent as possible to
the adjustments provided for in this Section 6). The Company will not
effect any Transaction unless prior to the consummation thereof each
corporation or other entity (other than the Company) which may be required
11
to deliver any new warrant, securities or other property as provided herein
shall assume, by written instrument delivered to the Holder, the obligation
to deliver to such Holder such new warrant, securities or other property as
in accordance with the foregoing provisions such Holder may be entitled to
receive and such corporation or entity shall have similarly delivered to
the Holder an opinion of counsel for such corporation or entity,
satisfactory to the Holder, which opinion shall state that all of the terms
of the new warrant or this Warrant shall be enforceable against the Company
and such corporation or entity in accordance with the terms hereof and
thereof, together with such other matters as the Holder may reasonably
request. The foregoing provisions of this Section 6(b) shall similarly
apply to successive Transactions.
(c) Other Action Affecting Common Stock.
(i) Other Action. In case at any time or from time to time the
Company shall take any action of the type contemplated in Section 6(a)
or (b) hereof but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features)
other than cash bonuses, then, unless in the opinion of the Company's
board of directors such action will not have a material adverse effect
upon the rights of the Holder (taking into consideration, if
necessary, any prior actions which the Board of Directors deemed not
to materially adversely affect the rights of the Holder), the
Aggregate Number shall be adjusted in such manner and at such time as
the Board of Directors of the Company may in good faith determine to
be equitable in the circumstances.
(ii) Stock Option and Incentive Plans. Upon the exercise of the
Warrants hereunder, if the actual number of shares of stock or options
(the "Actual Number") granted, and not cancelled (without the payment
for any such cancellation), or outstanding under the Company's stock
option and incentive plans is more than 1,892,731 shares (or options
for such shares (subject to adjustment for stock splits, stock
dividends and similar events) the ("Assumed Number"), then the
Aggregate Number shall be proportionally increased so that the
Aggregate Number is equal to the number of shares of Common Stock that
would have been issued under the Warrant had the Actual Number been
used to calculate the Aggregate Number instead of the Assumed Number.
(d) Notices.
(i) Notice of Proposed Actions. In case the Company shall propose
(A) to pay any dividend payable in stock of any class to the holders
of its Common Stock or to make any other distribution to the holders
of its Common Stock, (B) to offer to the holders of its Common Stock
rights to subscribe for or to purchase any Convertible Securities or
additional shares of Common Stock or shares of stock of any class or
any other securities, warrants, rights or options (other than the
exercise of pre-emptive rights by a Holder), (C) to effect any
reclassification of its Common Stock, (D) to effect any
recapitalization, stock subdivision, stock combination or other
capital reorganization, (E) to effect any consolidation or merger,
share exchange, or sale, lease or other disposition of all or
substantially all of its property, assets or business, (F) to effect
12
the liquidation, dissolution or winding up of the Company or (G) to
effect any other action which would require an adjustment under this
Section 6, then in each such case the Company shall give to the Holder
written notice of such proposed action, which shall specify the date
on which a record is to be taken for the purposes of such stock
dividend, stock subdivision, stock combination, distribution or
rights, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, share exchange, sale, lease,
transfer, disposition, liquidation, dissolution, winding up or other
transaction is to take place and the date of participation therein by
the holders of Common Stock, if any such date is to be fixed, or the
date on which the transfer of Common Stock is to occur, and shall also
set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action on the Common Stock
and on the Aggregate Number after giving effect to any adjustment
which will be required as a result of such action. Such notice shall
be so given in the case of any action covered by clause (A) or (B)
above at least 30 days prior to the record date for determining
holders of the Common Stock for purposes of such action and, in the
case of any other such action, at least 30 days prior to the earlier
of the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock.
(ii) Adjustment Notice. Whenever the Aggregate Number is to be
adjusted pursuant to this Section 6, unless otherwise agreed by the
Holder, the Company shall promptly (and in any event within 10
Business Days after the event requiring the adjustment) prepare a
certificate signed by the chief financial officer of the Company,
setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment is to be
calculated. The certificate shall set forth, if applicable, a
description of the basis on which the Board of Directors in good faith
determined, as applicable, the Fair Market Value Per Share, the fair
market value of any evidences of indebtedness, shares of stock, other
securities, warrants, other subscription or purchase rights, or other
property or the equitable nature of any adjustment under Section 6(b)
or (c) hereof, the new Aggregate Number and, if applicable, any new
securities or property to which the Holder is entitled. The Company
shall promptly cause a copy of such certificate to be delivered to the
Holder. The Company shall keep at its Principal Office copies of all
such certificates and cause the same to be available for inspection at
said office during normal business hours by the Holder or any
prospective purchaser of the Warrant (in whole or in part) if so
designated by the Holder.
SECTION 7. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, share exchange, dissolution or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, including without limitation the adjustments
required under Section 6 hereof, and will at all times in good faith assist in
the carrying out of all such terms and in taking of all such action as may be
necessary or appropriate to protect the rights of the Holder against dilution or
other impairment. Without limiting the generality of the foregoing and
notwithstanding any other provision of this Warrant to the contrary (including
by way of implication), the Company (a) will not increase the par value of any
shares of Common Stock receivable on the exercise of this Warrant above the
amount payable therefor on such exercise or (b) will take all such action as may
be necessary or appropriate so that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock on the exercise of this
Warrant.
SECTION 8. Registration Rights. This Warrant and the Warrant Shares shall be
considered "Registrable Securities" under the terms of, and as defined in, the
Registration Rights Agreement, and the Holder shall be considered a "Holder"
under the terms of, and as defined in, the Registration Rights Agreement.
13
SECTION 9. Transfers of the Warrant.
(a) Generally. Subject to the restrictions set forth in this Section
9, the Holder may at any time and from time to time freely transfer this
Warrant and the Warrant Shares in whole or in part. Every Holder hereof by
accepting the same agrees with the Company to such provisions and
conditions, and represents to the Company that this Warrant has been
acquired and the Warrant Shares will be acquired for the account of the
Holder for investment and not with a view to or for sale in connection with
any distribution thereof.
(b) Compliance with Securities Laws. The Holder agrees that the
Warrant and the Warrant Shares may not be sold or otherwise disposed of
except pursuant to an effective registration statement under the Securities
Act and applicable state securities laws or pursuant to an applicable
exemption from the registration requirements of the Securities Act and such
state securities laws. In the event that the Holder transfers this Warrant
or the Warrant Shares pursuant to an applicable exemption from
registration, the Company may request, at its expense, an opinion of
counsel that the proposed transfer does not violate the Securities Act and
applicable state securities laws.
(c) Restrictive Securities Legend. For so long as the Warrant Shares
have not been registered under the Securities Act pursuant to the
Registration Rights Agreement, the certificate representing the shares of
Common Stock issued upon the exercise of the Warrant shall bear the
restrictive legends set forth below:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws
of any State and may not be sold or otherwise disposed of except
pursuant to an effective registration statement under such Act and
applicable State securities laws or pursuant to an applicable
exemption from the registration requirements of such Act and such
laws."
SECTION 10. Representations, Warranties and Covenants.
The Company hereby represents, warrants and covenants to the Holder that so
long as Holder holds the Warrant or any Warrant Shares:
(a) Securities Filings and Other Information. The Company shall
deliver to the Holder, promptly upon their becoming available, copies of:
(i) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by the Company or any of its Subsidiaries with
any securities exchange or with the Securities and Exchange Commission and
(ii) all press releases and other statements made available by the Company
or any of its Subsidiaries to the public concerning developments in the
business of any such Person.
(b) Reservation of Shares. The Company shall at all times reserve and
keep available out of the aggregate of its authorized but unissued shares,
14
free of preemptive rights, such number of its duly authorized shares of
Common Stock as shall be sufficient to enable the Company to issue Common
Stock upon exercise of the Warrant.
(c) Certain Amendments. The Company will not, and will not permit or
cause any of its Subsidiaries (to the extent the Company has any
Subsidiaries after the Closing Date) to amend, modify or change any
provision of its articles or certificate of incorporation, bylaws or the
terms of any class or series of its Capital Stock to the extent such
amendment, modification or change would have a disproportionate adverse
effect on the Holder as compared to any other holder of the Common Stock of
the Company and directly or indirectly, create or otherwise cause or suffer
to exist or become effective any restriction or encumbrance on the ability
of the Company and any such Subsidiaries to perform and comply with their
respective obligations under the Warrant.
(d) Limitation on Certain Restrictions. The Company will not, and will
not permit or cause any of its Subsidiaries (to the extent the Company has
any Subsidiaries after the Closing Date) to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any restriction
or encumbrance on the ability of the Company and any such Subsidiaries to
perform and comply with their respective obligations under this Warrant.
SECTION 11. Events of Non-Compliance and Remedies.
(a) Events of Non-Compliance. If the Company fails to keep and fully
and promptly perform and observe in all material respects any of the terms,
covenants or representations contained or referenced herein within 30 days
from the earlier to occur of (A) written notice from the Holder specifying
what failure has occurred, or requesting that a specified failure be
remedied or (B) an executive officer of the Company becoming aware of such
failure, other than failure to deliver the financial statements required
under Section 10(a)(i) and (ii) (an "Event of Non-Compliance"), the Holder
shall be entitled to the remedies set forth in subsection (b) hereof.
(b) Remedies. On the occurrence of an Event of Non-Compliance, in
addition to any remedies the Holder may have under applicable law the
Holder may bring any action for injunctive relief or specific performance
of any term or covenant contained herein, the Company hereby acknowledging
that an action for money damages may not be adequate to protect the
interests of the Holder hereunder.
SECTION 12. Definitions.
As used herein, in addition to the terms defined elsewhere herein, the
following terms shall have the following meanings. Capitalized terms not
appearing below and not otherwise defined herein shall have the meaning ascribed
to them in the Credit Agreement.
"Aggregate Number" has the meaning set forth in the Preamble.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law
or executive order to close.
15
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests or equivalents in capital stock (whether voting or
nonvoting, and whether common or preferred) of such corporation, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership, limited liability company or other equity interests of such Person
that confer on a Person the right to receive a share of the profits and losses
of, or the distribution of assets of, the issuing Person; and in each case, any
and all warrants, rights or options to purchase any of the foregoing.
"Certificate of Incorporation" means, as to a Person, unless the context in
which it is used shall otherwise require, the Certificate of Incorporation (or
equivalent or similar organizational documents) of such Person as in effect on
the Closing Date.
"Commencement Date" has the meaning set forth in the Preamble.
"Commission" means the Securities and Exchange Commission or any similar
agency then having jurisdiction to enforce the Securities Act.
"Common Stock" has the meaning set forth in the Preamble.
"Company" has the meaning set forth in the Preamble.
"Convertible Securities" means evidences of indebtedness, shares of stock
or other securities (including, but not limited to options and warrants) which
are directly or indirectly convertible, exercisable or exchangeable, with or
without payment of additional consideration in cash or property, for shares of
Common Stock, either immediately or upon the onset of a specified date or the
happening of a specified event.
"Credit Agreement" means that certain Credit Agreement dated as of April
17, 2002 by and among the Company, Bank of America, N.A., as Lender and Issuing
Bank, and Bank of America, N.A., as agent for the Lenders, as the same may be
amended, supplemented or otherwise modified from time to time.
"Distribution" has the meaning set forth in Section 6(a)(ii).
"Election to Purchase" has the meaning set forth in Section 2(a).
"Event of Non-Compliance" has the meaning set forth in Section 11(a).
"Exempt Issuances" has the meaning set forth in Section 6.
"Exercise Amount" has the meaning set forth in Section 2(a).
"Exercise Price" has the meaning set forth in the Preamble.
"Expiration Date" has the meaning set forth in the Preamble.
16
"Fair Market Value" means, with respect to the shares of Common Stock, (a)
if the shares are listed or admitted for trading on any national securities
exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market,
the last reported sales price as reported on such exchange or Market; (b) if the
shares are not listed or admitted for trading on any national securities
exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market,
the average of the last reported closing bid and asked quotation for the shares
as reported on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or a similar service if NASDAQ is not reporting such
information; (c) if the shares are not listed or admitted for trading on any
national securities exchange or included in The Nasdaq National Market or Nasdaq
SmallCap Market or quoted by NASDAQ or a similar service, the average of the
last reported bid and asked quotation for the shares as quoted by a market maker
in the shares (or if there is more than one market maker, the bid and asked
quotation shall be obtained from two market makers and the average of the lowest
bid and highest asked quotation). In the absence of any available public
quotations for the Common Stock, the Board of Directors shall determine in good
faith the Fair Market Value of the Common Stock, which determination shall be
set forth in a certificate by the Secretary of the Company.
"Fully Diluted" means, with respect to the Common Stock as of a particular
time (taking into account the transaction in respect of which the "Fully
Diluted" basis is being calculated at such time), the total number of
outstanding shares of Common Stock as of such time as determined by treating all
outstanding in-the-money and then exercisable options, warrants and other rights
for the purchase or other acquisition of Common Stock as having been exercised
and by treating all outstanding in-the-money Convertible Securities which at the
time of such calculation may be converted as having been so converted.
"Governmental Authority" means the government of any nation, state, city,
locality or other political subdivision of any thereof, any entity or person
exercising executive, legislative, judicial, arbitral, regulatory or
administrative functions of or pertaining to government, regulation or
compliance.
"Holder" or "Holders" means any holder of an interest in the Warrant or the
outstanding Warrant Shares.
"Limited Waiver and Amendment" means that certain Limited Waiver and
Amendment dated as of August 24, 2001 by and among the Company, the Trustee and
the holders of the Subordinated Notes and the Preferred Stock, as the same may
be amended, supplemented or otherwise modified from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
assets, business, properties, operations, condition (financial or otherwise) or
prospects of the Company, individually, or the Company and its Subsidiaries,
taken as a whole, (ii) the ability of the Company to perform its obligations
under this Warrant or the Credit Agreement or (iii) the legality, binding
effect, validity or enforceability of any of this Warrant.
17
"Outstanding Common Stock" of the Company means, as of the date of
determination, the sum (without duplication) of the following: (a) the number of
shares of Common Stock then outstanding at the date of determination, (b) the
number of shares of Common Stock then issuable upon the exercise of the Warrant
(as such number of shares may be adjusted pursuant to the terms hereof) and (c)
the number of shares of Common Stock then issuable upon the exercise or
conversion of Convertible Securities and any warrants, options or other rights
to subscribe for or purchase Common Stock or Convertible Securities (but
excluding any unvested options and securities not then exercisable for or
convertible into Common Stock).
"Person" means any individual, firm, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, Governmental Authority, or other entity of any kind, and
shall include any successor (by merger or otherwise) of such entity.
"Preferred Stock" means the Company's Series G Preferred Stock, $0.0001 par
value per share, or any other class of preferred stock for which such preferred
stock is exchanged.
"Principal Office" means the Company's principal office as set forth in
Section 20 hereof or such other principal office of the Company in the United
States of America the address of which first shall have been set forth in a
notice to the Holder.
"Registration Rights Agreement" means that certain Registration Rights
Agreement of even date herewith, by and among the Company and the Lenders.
"Regulatory Requirement" has the meaning set forth in Section 5(c).
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations thereunder as the same
shall be in effect at the time.
"Stock Combination" has the meaning set forth in Section 6(a)(i)(C).
"Stock Dividend" has the meaning set forth in Section 6(a)(i)(A).
"Stock Subdivision" has the meaning set forth in Section 6(a)(i)(B).
"Subordinated Notes" means the Increasing Rate Senior Subordinated Notes
Due 2006 of the Company issued pursuant to that certain Indenture, dated March
19, 1998, by and among the Company, State Street Bank and Trust Company, N.A., a
national banking association, as trustee, and the holders of such notes.
"Subsidiary(ies)" means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
18
managers of such corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person.
"Warrant" has the meaning set forth in Section 1(a).
"Warrant Shares" means (a) the shares of Common Stock issued or issuable
upon exercise of this Warrant in accordance with its terms and (b) all other
shares of the Company's capital stock issued with respect to such shares by way
of stock dividend, stock split or other reclassification or in connection with
any merger, consolidation, recapitalization or other reorganization affecting
the Company's capital stock.
SECTION 13. Survival of Provisions. Notwithstanding the full exercise by the
Holder of its rights to purchase Common Stock hereunder, the provisions of
Sections 5(c), 5(d) and 11 through 24 of this Warrant shall survive such
exercise and the Expiration Date.
SECTION 14. Delays, Omissions and Indulgences. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to the Holder upon any
breach or default of the Company under this Warrant shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on the Holder's part of any breach or default under this
Warrant, or any waiver on the Holder's part of any provisions or conditions of
this Warrant must be in writing and that all remedies, either under this
Warrant, or by law or otherwise afforded to the Holder, shall be cumulative and
not alternative.
SECTION 15. Rights of Transferees. Subject to Section 8, the rights granted to
the Holder hereunder of this Warrant shall pass to and inure to the benefit of
all subsequent transferees of all or any portion of the Warrant (provided that
the Holder and any transferee shall hold such rights in proportion to their
respective ownership of the Warrant and Warrant Shares) until extinguished
pursuant to the terms hereof.
SECTION 16. Captions. The titles and captions of the Sections and other
provisions of this Warrant are for convenience of reference only and are not to
be considered in construing this Warrant.
SECTION 17. Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopy, overnight
courier service or personal delivery:
19
(a) if to the Company:
Headway Corporate Resources, Inc.
317 Madison Avenue, 3rd Floor
New York, New York 10017
Attention: Ms. Philicia G. Levinson, Senior Vice President
and Chief Financial Officer
Telephone: (212) 672-6661
Telefacsimile: (212) 672-6699
with a copy to:
Salans Hertzfeld Heilbronn Christy & Viener
Rockefeller Center
620 Fifth Avenue
New York, New York 10020-2457
Attention: Richard B. Salomon, Esq.
Telephone: (212) 632-5500
Telefacsimile: (212) 632-5555
(b) if to the Holder:
Bank of America, N.A.
Bank of America Agency Services
901 Main St.
Dallas, Texas 75202-3714
Attention: Diana Lopez
Telephone: (214) 209-2138
Telefacsimile: (214) 209-2515
with copies to:
Banc of America Strategic Solutions, Inc.
1101 Wootton Parkway
Third Floor
Rockville, Maryland 20852-1059
Attention: Michael Heredia
Telephone: (301) 517-3234
Telefacsimile: (301) 517-3236
and:
O'Melveny & Myers LLP
153 East 53rd Street, 54th Floor
New York, New York 10022-4611
Attention: Sandeep Qusba and David Kitchen
Telephone: (212) 326-2117
Telefacsimile: (213) 326-2061
20
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
SECTION 18. Successors and Assigns. This Warrant shall be binding upon and inure
to the benefit of the parties hereto and their respective successors or heirs
and personal representatives and permitted assigns; provided, that the Company
shall have no right to assign its rights, or to delegate its obligations,
hereunder without the prior written consent of the Holder.
SECTION 19. Governing Law. THIS WARRANT IS TO BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
SECTION 20. Jurisdiction, Jury Trial Waiver, Etc.
(a) THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY AGREE THAT ANY LEGAL
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND EACH HEREBY EXPRESSLY
SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE
PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY
CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. THE COMPANY AND THE
HOLDER EACH HEREBY IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO ITS ADDRESS SET FORTH IN THIS AGREEMENT, SUCH SERVICE TO BECOME
EFFECTIVE 10 DAYS AFTER SUCH MAILING.
(b) THE COMPANY AND THE HOLDER EACH HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS WARRANT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE COMPANY (I) CERTIFIES THAT
NO HOLDER OR ATTORNEY OR OTHER REPRESENTATIVE OF THE HOLDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE HOLDER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II)
ACKNOWLEDGES THAT THE HOLDER HAS BEEN INDUCED TO PURCHASE THIS WARRANT BY,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
(c) FINAL JUDGMENT AGAINST THE COMPANY, IN ANY ACTION, SUIT OR
PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN OTHER JURISDICTIONS
(I) BY SUIT, ACTION, OR PROCEEDING ON THE CONCLUSIVE EVIDENCE OF THE FACT
21
AND OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF THE COMPANY THEREIN
DESCRIBED OR (II) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS
OF SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT ANY STOCKHOLDER MAY AT
ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDING, AGAINST THE
COMPANY OR ANY OF ITS PROPERTIES IN THE STATE OR FEDERAL COURTS OF THE
UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE COMPANY OR ITS
PROPERTIES MAY BE FOUND.
SECTION 21. Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof. The parties hereto further agree to replace such
invalid, illegal or unenforceable provision of this Agreement with a valid,
legal and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid, illegal or unenforceable
provision.
SECTION 22. Entire Agreement. This Warrant, together with the Registration
Rights Agreement and the Credit Agreement, contains the entire agreement among
the parties with respect to the subject matter hereof and thereby supercedes all
prior and contemporaneous agreements or understandings with respect thereto.
SECTION 23. Headings. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 24. No Strict Construction. The Company and the Holder each acknowledge
that they have been represented by counsel in connection with this Warrant and
the Credit Agreement. The Company and the Holder have participated jointly in
the negotiation and drafting of this Warrant. In the event an ambiguity or
question of intent or interpretation arises under any provision of this Warrant
or the Credit Agreement, this Warrant shall be construed as if drafted jointly
by the parties thereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Warrant.
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22
IN WITNESS WHEREOF, the Company has caused this Warrant to be issued and
executed in its corporate name by its duly authorized officers as of the date
below written.
DATED: HEADWAY CORPORATE RESOURCES, INC.
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By:
---------------------------------
Name:
Title:
ATTEST:
By:
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Name:
-------------------------
Title:
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23
EXHIBIT A
NOTICE OF EXERCISE
To:
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1. The undersigned, pursuant to the provisions of the attached Warrant,
hereby elects to exercise this Warrant with respect to ________ shares of Common
Stock (the "Exercise Amount"). Capitalized terms used but not otherwise defined
herein have the meanings ascribed thereto in the attached Warrant.
2. The undersigned herewith tenders payment for such shares in the
following manner (please check type, or types, of payment and indicate the
portion of the Exercise Price to be paid by each type of payment):
_____ Exercise for Cash
_____ Forgiveness of Obligations owing to
Holder in the amount of the Exercise Price
_____ Cashless Exercise
3. Please issue a certificate or certificates representing the shares
issuable in respect hereof under the terms of the attached Warrant, as follows:
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(Name of Record Holder/Transferee)
and deliver such certificate or certificates to the following address:
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(Address of Record Holder/Transferee)
4. The undersigned represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares.
5. If the Exercise Amount is less than all of the shares of Common Stock
purchasable hereunder, please issue a new warrant representing the remaining
balance of such shares, as follows:
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(Name of Record Holder/Transferee)
and deliver such warrant to the following address:
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(Address of Record Holder/Transferee)
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(Signature)
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(Date)
2