DIVERSIFIED CORPORATE RESOURCES, INC.
COMMON STOCK WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SUCH ACT.
This certifies that, for good and valuable consideration, receipt
of which is hereby acknowledged, Cruttenden Xxxx Incorporated ("Holder") is
entitled to purchase, subject to the terms and conditions of this Warrant,
Diversified Corporate Resources, Inc., a Texas corporation (the "Company"),
75,000 fully paid and nonassessable shares of the Common Stock ("Common
Stock") of the Company, in accordance with Section 2 during the period
commencing one year from the date hereof and ending on the earlier to occur
of (i) at 5:00 p.m. California time, August ____, 2002 (the "Expiration
Date"), at which time this Warrant will expire and become void unless earlier
terminated as provided herein. The shares of Common Stock of the Company for
which this Warrant is exercisable as adjusted from time to time pursuant to
the terms hereof, are hereinafter referred to as the "Shares."
1. EXERCISE PRICE. The initial purchase price for the Shares
shall be $________ per share. Such price shall be subject to adjustment
pursuant to the terms hereof (such price, as adjusted from time to time, is
hereinafter referred to as the "Exercise Price").
2. EXERCISE AND PAYMENT.
(a) CASH EXERCISE. At any time after August ____, 1998, this
Warrant may be exercised, in whole or in part, from time to time by the
Holder, during the term hereof, by surrender of this Warrant and the Notice
of Exercise annexed hereto duly completed and executed by the Holder to the
Company at the principal executive offices of the Company, together with
payment in the amount obtained by multiplying the Exercise Price then in
effect by the number of Shares thereby purchased, as designated in the Notice
of Exercise. Payment may be in cash or by check payable to the order of the
Company.
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(b) NET ISSUANCE. In lieu of payment of the Exercise Price
described in Section 2(a), the Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares equal to the
value of this Warrant or any portion hereof by the surrender of this Warrant
or such portion to the Company, with the net issue election notice annexed
hereto (the "Net Issuance Election Notice") duly executed, at the office of
the Company. Thereupon, the Company shall issue to the Holder such number of
fully paid and nonassessable shares of Common Stock as is computed using the
following formula:
where:X = Y (A-B)
-------
A
X = the number of shares to be issued to the Holder pursuant to this
Section 2.
Y = the number of shares covered by this Warrant in respect of which the
net issuance election is made pursuant to this Section 2.
A = the fair market value of one share of Common Stock, as determined in
accordance with the provisions of this Section 2.
B = the Exercise Price in effect under this Warrant at the time the net
issuance election is made pursuant to this Section 2.
For purposes of this Section 2, the "fair market value" per share of the
Company's Common Stock shall mean:
i. If the Common Stock is traded on a national securities
exchange or admitted to unlisted trading privileges on such an exchange,
or is listed on the Nasdaq National Market (the "NNM") or other over-the-
counter quotation system, the fair market value shall be the last reported
sale price of the Common Stock on such exchange or on the NNM or other
over-the-counter quotation system on the last business day before the
effective date of exercise of the net issuance election or if no such sale
is made on such day, the mean of the closing bid and asked prices for such
day on such exchange, the NNM or over-the-counter quotation system; and
ii. If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and ask prices are not reported, the
fair market value shall be the price per share which the Company could
obtain from a willing buyer for shares sold by the Company from authorized
but unissued shares, as such price shall be determined by mutual agreement
of the Company and the Holder of this Warrant. If the Company and the
Holder cannot mutually agree on such price, the fair market value shall be
made by an appraiser of recognized standing selected by the Holder and the
Company, or, if
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they cannot agree on an appraiser, each of the Company and the Holder
shall select an appraiser of recognized standing and the two appraisers
shall designate a third appraiser of recognized standing, whose
appraisal shall be determinative of such value.
3. DELIVERY OF STOCK CERTIFICATES. Within a reasonable time
after exercise, in whole or in part, of this Warrant, the Company shall issue
in the name of and deliver to the Holder, a certificate or certificates for
the number of fully paid and nonassessable shares of Common Stock which the
Holder shall have requested in the Notice of Exercise or Net Issuance
Election Notice. If this Warrant is exercised in part, the Company shall
deliver to the Holder a new Warrant for the unexercised portion of this
Warrant at the time of delivery of such stock certificate or certificates.
4. NO FRACTIONAL SHARES. No fractional shares or scrip
representing fractional shares will be issued upon exercise of this Warrant.
If upon any exercise of this Warrant a fraction of a share results, the
Company will pay the Holder the difference between the cash value of the
fractional share and the portion of the Exercise Price allocable to the
fractional share.
5. CHARGES, TAXES AND EXPENSES. The Holder shall pay all
transfer taxes or other incidental charges, if any, in connection with the
transfer of the Shares purchased pursuant to the exercise hereof from the
Company to the Holder.
6. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to the
Company, and upon reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of like tenor and
dated as of such cancellation, in lieu of this Warrant.
7. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding weekday which is not a legal holiday.
8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number
of and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the
Company shall at any time after the date hereof but prior to the expiration
of this Warrant subdivide its outstanding securities as to which purchase
rights under this Warrant exist, by split-up or otherwise, or combine its
outstanding securities as to
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which purchase rights under this Warrant exist, the number of Shares as to
which this Warrant is exercisable as of the date of such subdivision,
split-up or combination shall forthwith be proportionately increased in the
case of a subdivision, or proportionately decreased in the case of a
combination. Appropriate adjustments shall also be made to the purchase
price payable per share, but the aggregate purchase price payable for the
total number of Shares purchasable under this Warrant as of such date shall
remain the same.
(b) STOCK DIVIDEND. If at any time after the date hereof the
Company declares a dividend or other distribution on Common Stock payable in
Common Stock or other securities or rights convertible into Common Stock
("Common Stock Equivalents") without payment of any consideration by such
holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
exercise or conversion thereof), then the number of shares of Common Stock
for which this Warrant may be exercised shall be increased as of the record
date (or the date of such dividend distribution if no record date is set) for
determining which holders of Common Stock shall be entitled to receive such
dividend, in proportion to the increase in the number of outstanding shares
(and shares of Common Stock issuable upon conversion of all such securities
convertible into Common Stock) of Common Stock as a result of such dividend,
and the Exercise Price shall be adjusted so that the aggregate amount payable
for the purchase of all the Shares issuable hereunder immediately after the
record date (or on the date of such distribution, if applicable), for such
dividend shall equal the aggregate amount so payable immediately before such
record date (or on the date of such distribution, if applicable).
(c) OTHER DISTRIBUTIONS. If at any time after the date
hereof the Company distributes to holders of its Common Stock, other than as
part of its dissolution or liquidation or the winding up of its affairs, any
shares of its capital stock, any evidence of indebtedness or any of its
assets (other than cash, Common Stock or securities convertible into Common
Stock), then the Company may, at its option, either (i) decrease the per
share Exercise Price of this Warrant by an appropriate amount based upon the
value distributed on each share of Common Stock as determined in good faith
by the Company's Board of Directors or (ii) provide by resolution of the
Company's Board of Directors that on exercise of this Warrant, the Holder
hereof shall thereafter be entitled to receive, in addition to the shares of
Common Stock otherwise receivable on exercise hereof, the number of shares or
other securities or property which would have been received had this Warrant
at the time been exercised.
(d) MERGER. If at any time after the date hereof there shall
be a merger or consolidation of the Company with or into another corporation
when the Company is not the surviving corporation then the Holder shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the aggregate Exercise Price then
in effect, the number of shares or other
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securities or property of the successor corporation resulting from such
merger or consolidation, which would have been received by Holder for the
shares of stock subject to this Warrant had this Warrant at such time been
exercised.
(e) RECLASSIFICATION, ETC. If at any time after the date
hereof there shall be a change or reclassification of the securities as to
which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Holder shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Exercise Price then in
effect, the number of shares or other securities or property resulting from
such change or reclassification, which would have been received by Holder for
the shares of stock subject to this Warrant had this Warrant at such time
been exercised.
9. NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price
or number of Shares purchasable hereunder shall be adjusted pursuant to
Section 8 hereof, the Company shall execute and deliver to the Holder a
certificate setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Exercise Price and number of shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of
such certificate to be mailed (by first class mail, postage prepaid) to the
Holder.
10. RIGHTS AS SHAREHOLDER. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights as a shareholder of the Company
with respect to the Shares, including (without limitation) the right to vote
such Shares, receive dividends or other distributions thereon, or be notified
of shareholder meetings, and the Holder shall not be entitled to any notice
or other communication concerning the business or affairs of the Company.
However, in the event of any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, the Company shall mail to each Holder of this
Warrant, at least 10 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
11. RESTRICTED SECURITIES. The Holder understands that this
Warrant and the Shares purchasable hereunder constitute "restricted
securities" under the federal securities laws inasmuch as they are, or will
be, acquired from the Company in transactions not involving a public offering
and accordingly may not, under such laws and applicable regulations, be
resold or transferred without registration under the Securities Act of 1933,
as amended (the "1933 Act") or an applicable exemption from such
registration. In this connection, the Holder acknowledges that Rule 144 of
the Securities and Exchange Commission (the "SEC") is not now, and may not in
the
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future be, available for resales of the Warrant and the Shares purchasable
hereunder. Unless the Shares are subsequently registered pursuant to Section
14, the Holder further acknowledges that the securities legend on Exhibit A
to the Notice of Exercise attached hereto shall be placed on any Shares
issued to the Holder upon exercise of this Warrant.
12. CERTIFICATION OF INVESTMENT PURPOSE. Unless a current
registration statement under the 1933 Act shall be in effect with respect to
the securities to be issued upon exercise of this Warrant, the Holder
covenants and agrees that, at the time of exercise hereof, it will deliver to
the Company a written certification executed by the Holder that the
securities acquired by him upon exercise hereof are for the account of such
Holder and acquired for investment purposes only and that such securities are
not acquired with a view to, or for sale in connection with, any distribution
thereof.
13. DISPOSITION OF SHARES. Xxxxxx hereby agrees not to make any
disposition of any Xxxxxx purchased hereunder unless and until:
(a) Holder shall have notified the Company of the proposed
disposition and provided a written summary of the terms and conditions of the
proposed disposition;
(b) Holder shall have complied with all requirements of this
Warrant applicable to the disposition of the Shares; and
(c) Holder shall have provided the Company with written
assurances, in form and substance satisfactory to legal counsel of the
Company, that (i) the proposed disposition does not require registration of
the Shares under the 1933 Act or (ii) all appropriate action necessary for
compliance with the registration requirements of the 1933 Act or of any
exemption from registration available under the 1933 Act has been taken.
. The Company shall NOT be required (i) to transfer on its books
any Shares which have been sold or transferred in violation of the provisions
of this Section 13 or (ii) to treat as the owner of the Shares, or otherwise
to accord voting or dividend rights to, any transferee to whom the Shares
have been transferred in contravention of the terms of this Warrant.
14. REGISTRATION RIGHTS.
(a) PIGGYBACK REGISTRATION. If at any time during the
four-year period commencing August ____, 1997 and ending on August ____,
2002, the Company shall determine to register for its own account or the
account of others under the 1933 Act any of its equity securities, other than
on Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any
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acquisition of any entity or business, or equity securities issuable in
connection with stock option or other employee benefit plans, the Company
shall send to each Holder of Warrants or Shares, who is entitled to
registration rights under this Section 14(a) written notice of such
determination and, if within twenty (20) days after receipt of such notice,
such Holder shall so request in writing (hereafter a "Selling Holder"), the
Company shall include in such Registration Statement all or any part of the
Shares issuable upon exercise of the Warrants (the "Registrable Securities")
such Selling Holder requests to be registered. The obligations of the
Company under this Section 14(a) may be waived by Holders holding a majority
in interest of the Registrable Securities. In the event that the managing
underwriter for said offering advises the Company in writing that the
inclusion of such Registrable Securities in the offering would be materially
detrimental to the offering, then the Company shall be required to include in
the offering only that number of Registrable Securities which the managing
underwriter determines in its sole discretion will not jeopardize the success
of the offering (the Registrable Securities so included to be apportioned pro
rata among all Selling Holders according to the total amount of Registrable
Securities entitled to be included therein owned by each selling holder or in
such other proportions as shall mutually be agreed to by such selling
holders); PROVIDED HOWEVER, that in no event shall any Holder of Registrable
Securities have the number of shares of such securities reduced in such offer
unless and until any holders of non-Registrable Securities intending to
participate in such offering (which selling holders' registration rights, if
any, were granted by the Company from and after the date hereof) first shall
have had the number of their shares of such securities reduced up to the
amount of securities the managing underwriter has determined in its sole
discretion shall be excluded from the offering; and PROVIDED FURTHER, that in
no event shall any Shares being sold by a Holder properly exercising a demand
registration granted in Section 14(b) be excluded from such offering.
(b) DEMAND REGISTRATION. In addition to any Registration
Statement pursuant to subparagraph (a) above, during the four-year period
beginning on August ____, 1998 and ending on August ____, 2002, the Company
will, as promptly as practicable (but in any event within 60 days), after
written request (the "REQUEST") by the Holder, or by a person or persons
holding (or having the right to acquire by virtue of holding the Warrants) at
least 50% of the Shares which have been (or may be) issued upon exercise of
the Warrants (such Holder or Holders to be included in the definition of
"Selling Holder" for the purposes of Section 14(c) hereof), prepare and file
at its own expense a Registration Statement with the SEC and appropriate
"blue sky" authorities sufficient to permit the public offering of the
Registrable Securities and will use its best efforts at its own expense
through its officers, directors, auditors and counsel, in all matters
necessary or advisable, to cause such Registration Statement to become
effective as promptly as practicable and to maintain such effectiveness so as
to permit resale of the Shares covered by the Request until the earlier of
the time that all such Shares have been sold or the expiration of 120 days
from the effective date of the Registration Statement; PROVIDED, HOWEVER,
that the
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Company shall only be obligated to file one such Registration Statement under
this Section 14(b).
(c) OBLIGATIONS OF THE HOLDERS. In connection with the
registration of the Registrable Securities pursuant to either Sections 14(a)
or (b), the Selling Holders shall have the following obligations:
i. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Agreement with respect to
each Selling Holder that such Selling Holder shall furnish to the Company
such information regarding itself, the Registrable Securities held by it and
the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect the registration of the Registrable
Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least fifteen (15)
days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Selling Holder of the information
the Company requires from each such Selling Holder (the "Requested
Information") in the case of a Registration Statement being prepared pursuant
to Section 14(b) or if such Selling Holder elects to have any of such Selling
Holder's Registrable Securities included in the Registration Statement in the
case of a Registration Statement being prepared pursuant to Section 14(a).
ii. Each Selling Holder by such Xxxxxxx Xxxxxx's
acceptance of the Registrable Securities agrees to cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of the Registration Statement hereunder, unless such Xxxxxxx Xxxxxx
has notified the Company in writing of such Selling Holder's election to
exclude all of such Selling Holder's Registrable Securities from the
Registration Statement; and
iii. No Selling Holder may participate in any
underwritten registration hereunder unless such Xxxxxxx Xxxxxx (i) agrees to
sell such Selling Holder's Registrable Securities on the basis provided in
any underwriting arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and other fees and expenses of investment bankers
and any manager or managers of such underwriting, except as provided in
Section 14(d) below.
(d) EXPENSES OF REGISTRATION. All expenses, other than
underwriting discounts and commissions and other fees and expenses of
investment bankers and other than brokerage commissions, incurred in
connection with registrations, filings or qualifications pursuant to Section
14(a) or 14(b), including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees and the fees and
disbursements of counsel for the Company and the
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Selling Holders, shall be borne by the Company; PROVIDED, HOWEVER, that the
Company shall only be required to bear the fees and out-of-pocket expenses
(up to $25,000) of one legal counsel selected by the Selling Holders in
connection with each such registration.
(e) INDEMNIFICATION. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
i. To the extent permitted by law, the Company will
indemnify and hold harmless each Selling Holder who holds such Registrable
Securities, the directors, if any, of such Selling Holder, the officers, if
any, of such Selling Holder, each person, if any, who controls any Selling
Holder within the meaning of the 1933 Act, any underwriter (as defined in the
1933 Act) for the Selling Holders, the directors, if any, of such underwriter
and the officers, if any, of such underwriter, and each person, if any, who
controls any such underwriter within the meaning of the 1933 Act (each, an
"Indemnified Person"), against any losses, claims, damages, expenses or
liabilities (joint or several) (collectively, "Claims") to which any of them
may become subject under the 1933 Act or otherwise, insofar as such Claims
(or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
when it first became effective, or any related final prospectus, amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which the statements
therein were made, not misleading (a "Violation"). The Company shall
reimburse the Selling Holders and each such underwriter or controlling
person, promptly as such expenses are incurred and are due and payable, for
any legal fees or other reasonable expenses incurred by them in connection
with investigating or defending any such Claim. Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in
this Section 14(e)(i) shall not apply in such case to the extent any such
Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by any
Indemnified Person or underwriter for such Indemnified Person expressly for
use in connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto, and shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld.
ii. In connection with any Registration Statement in
which a Selling Holder is participating, each such Selling Holder agrees to
indemnify and hold harmless, to the same extent and in the same manner set
forth in Section 14(e)(i), the Company, each of its directors, each of its
officers who signs the Registration Statement, each person, if any, who
controls the Company within the meaning of the 1933 Act, any underwriter and
any other shareholder selling securities pursuant to the Registration
Statement or any of its directors or officers or any person
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who controls such shareholder or underwriter within the meaning of the 1933
Act (collectively and together with an Indemnified Person, an "Indemnified
Party"), against any Claim to which any of them may become subject, under the
1933 Act or otherwise, insofar as such Claim arises out of or is based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Selling Holder expressly for use in
connection with such Registration Statement, and such Selling Holder will
reimburse any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 14(e)(ii) shall not
apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Selling Holder, which
consent shall not be unreasonably withheld.
iii. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution to the same extent
as provided above, with respect to information furnished in writing by such
persons expressly for inclusion in the Registration Statement.
iv. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 14(e) of notice of the commencement of
any action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is made against any
indemnifying party under this Section 14(e), deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume control of the defense thereof with counsel mutually
satisfactory to the indemnifying parties; PROVIDED, HOWEVER, that an
Indemnified Person or Indemnified Party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party,
the representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such proceeding.
The Indemnifying Party shall pay for only one separate legal counsel for the
Indemnified Parties; such legal counsel shall be selected by the Indemnified
Parties holding a majority in interest of the Registrable Securities. The
failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 14(e), except to the extent that the indemnifying
party is prejudiced in its ability to defend such action. The
indemnification required by this Section 14(e) shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due
and payable.
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v. Notwithstanding any of the foregoing, if, in connection
with an underwritten public offering of Registrable Securities, the Company,
the Selling Holders and the underwriter(s) enter into an underwriting or
purchase agreement relating to such offering which contains provisions covering
indemnification and contribution among the parties, the indemnification and
contribution provisions of this Section 14(e) shall be deemed inoperative for
purposes of such offering.
(e) CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which
it would otherwise be liable under Section 14(e) to the fullest extent
permitted by law; PROVIDED, HOWEVER, that (i) no contribution shall be made
under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 14(e), (ii) no
seller of Registrable Securities guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any seller of Registrable Securities who was not guilty of such fraudulent
misrepresentation, and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.
(f) REPORTS UNDER EXCHANGE ACT. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the 1933
Act or any other similar rule or regulation of the SEC that may at any time
permit the Holders to sell securities of the Company to the public without
registration ("Rule 144"), the Company agrees to:
i. use its best efforts to make and keep public
information available, as those terms are understood and defined in Rule 144;
and
ii. use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the 1933
Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act");
and
iii. furnish to each Holder so long as such Holder owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company with respect to its compliance with the reporting requirements of Rule
144, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested to permit the Holders to sell
such securities without registration pursuant to Rule 144.
(g) ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have
the Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Holders to transferees or assignees of all or any
portion of such securities only if: (i) the Holder agrees in writing with the
transferee or
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assignee to assign such rights, (ii) the Company is, within a reasonable time
after such transfer or assignment, furnished with written notice of the name
and address of such transferee or assignee (iii) such assignment is in
accordance with and permitted by law and all other agreements between the
transferor or assignor and the Company, including without limitation,
shareholder's agreements, warrants and subscription agreements, and the
transferor or assignor otherwise is not in material default of any obligation
to the Company under any such other agreement, and (iv) at or before the time
the Company received the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein.
(h) TERMINATION OF REGISTRATION RIGHTS. No Holder of Warrants
or Shares shall be entitled to exercise any right provided for in this Section
14 at such time as such Holder would be able to dispose of all of its
Registrable Securities in any three (3) month period under SEC Rule 144 or any
successor rule thereto.
15. TRANSFERABILITY.
(a) GENERAL. This Warrant shall be transferable only on the
books of the Company maintained at its principal office in Dallas, Texas or
wherever its principal office may then be located, upon delivery thereof duly
endorsed by the Holder or by its duly authorized attorney or representative,
accompanied by proper evidence of succession, assignment or authority to
transfer. Upon any registration of transfer, the Company shall execute and
deliver new Warrants to the person entitled thereto.
(b) LIMITATIONS ON TRANSFER. This Warrant shall not be sold,
transferred, assigned or hypothecated by the Holder except to (i) one or more
persons, each of whom on the date of transfer is an officer of the Holder; (ii)
a general partnership or general partnerships, the general partners of which
are the Holder and one or more persons, each of whom on the date of transfer is
an officer of the Holder; (iii) a successor to the Holder in any merger or
consolidation; (iv) a purchaser of all or substantially all of the Holder's
assets; or (v) any person receiving this Warrant from one or more of the
persons listed in this Section 15(b) at such person's or persons' death
pursuant to will, trust or the laws of intestate succession. This Warrant may
be divided or combined, upon request to the Company by the Holder, into a
certificate or certificates representing the right to purchase the same
aggregate number of Shares.
16. MISCELLANEOUS.
(a) CONSTRUCTION. Unless the context indicates otherwise, the
term "Holder" shall include any transferee or transferees of this Warrant
pursuant to Section 15(b), and the term "Warrant" shall include any and all
warrants outstanding
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pursuant to this Agreement, including those evidenced by a certificate or
certificates issued upon division, exchange, substitution or transfer
pursuant to Section 15(b).
(b) RESTRICTIONS. By receipt of this Warrant, the Holder makes
the same representations with respect to the acquisition of this Warrant as the
Holder is required to make upon the exercise of this Warrant and acquisition of
the Shares purchasable hereunder as set forth in the Form of Investment Letter
attached as Exhibit A to the Notice of Exercise attached hereto.
(c) NOTICES. Unless otherwise provided, any notice required or
permitted under this Warrant shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or three
(3) days following deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified (or
one (1) day following timely deposit with a reputable overnight courier with
next day delivery instructions), or upon confirmation of receipt by the sender
of any notice by facsimile transmission, at the address indicated below or at
such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
To Holder: Cruttenden Xxxx Incorporated
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, III
To the Company: Diversified Corporate Resources, Inc.
00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
(d) GOVERNING LAW. This Warrant shall be governed by and
construed under the laws of the State of Texas as applied to agreements among
Texas residents entered into and to be performed entirely within Texas.
(e) ENTIRE AGREEMENT. This Warrant, the exhibits and schedules
hereto, and the documents referred to herein, constitute the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, whether oral or written, between the parties hereto with
respect to the subject matter hereof.
(f) BINDING EFFECT. This Warrant and the various rights and
obligations arising hereunder shall inure to the benefit of and be binding upon
the Company and its successors and assigns, and Xxxxxx and its successors and
assigns.
(g) WAIVER; CONSENT. This Warrant may not be changed, amended,
terminated, augmented, rescinded or discharged (other than by performance),
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in whole or in part, except by a writing executed by the parties hereto, and
no waiver of any of the provisions or conditions of this Warrant or any of
the rights of a party hereto shall be effective or binding unless such waiver
shall be in writing and signed by the party claimed to have given or
consented thereto.
(h) SEVERABILITY. If one or more provisions of this Warrant
are held to be unenforceable under applicable law, such provision shall be
excluded from this Warrant and the balance of the Warrant shall be interpreted
as if such provision were so excluded and the balance shall be enforceable in
accordance with its terms.
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IN WITNESS WHEREOF, the parties hereto have executed this Common
Stock Warrant effective as of the date hereof.
DATED: ___________, 1997 THE COMPANY:
Diversified Corporate Resources, Inc.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
HOLDER:
Cruttenden Xxxx Incorporated
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
15
NOTICE OF EXERCISE
To: DIVERSIFIED CORPORATE RESOURCES, INC.
The undersigned hereby elects to purchase _____________ shares
of Common Stock ("STOCK") of Diversified Corporate Resources, Inc., a Texas
corporation (the "COMPANY") pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price pursuant to the terms of the
Warrant.
Attached as Exhibit A is an investment representation letter
addressed to the Company and executed by the undersigned as required by Section
12 of the Warrant.
Please issue certificates representing the shares of Stock
purchased hereunder in the names and in the denominations indicated on
Exhibit A attached hereto.
Please issue a new Warrant for the unexercised portion of the
attached Warrant, if any, in the name of the undersigned.
Dated:
----------------------- -------------------------------------
Name:
--------------------------------
Title:
-------------------------------
16
NET ISSUANCE ELECTION NOTICE
To: DIVERSIFIED CORPORATE RESOURCES, INC.
Date:
-------------
The undersigned hereby elects under Section 2 of the attached
Warrant to surrender the right to purchase ___________ shares of Common Stock
pursuant to the attached Warrant. The Certificate(s) for the shares issuable
upon such net issuance election shall be issued in the name of the undersigned
or as otherwise indicated below.
Attached as Exhibit A is an investment representation letter
addressed to the Company and executed by the undersigned as required by Section
12 of the Warrant.
Please issue certificates representing the shares of Stock
purchased hereunder in the names and in the denominations indicated on
Exhibit A attached hereto.
Please issue a new Warrant for the unexercised portion of the
attached Warrant, if any, in the name of the undersigned.
---------------------------------------
Signature
---------------------------------------
Name for Registration
---------------------------------------
Mailing Address
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EXHIBIT A
To: DIVERSIFIED CORPORATE RESOURCES, INC.
In connection with the purchase by the undersigned of ___________
shares of the Common Stock (the "STOCK") of Diversified Corporate Resources,
Inc., a Texas corporation (the "COMPANY"), upon exercise of that certain Common
Stock Warrant dated as of_______, the undersigned hereby represents and
warrants as follows:
The shares of Stock to be received by the undersigned upon
exercise of the Warrant are being acquired for its own account, not as a
nominee or agent, and not with a view to resale or distribution of any part
thereof, and the undersigned has no present intention of selling, granting any
participation in, or otherwise distributing the same. The undersigned further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to the Stock. The undersigned
believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Stock.
The undersigned understands that the shares of Stock are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in transactions not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act of
1933, as amended (the "ACT"), only in certain limited circumstances. In this
connection, the undersigned represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.
Without in any way limiting the representations set forth above,
the undersigned agrees not to make any disposition of all or any portion of the
Stock unless and until:
There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
(i) The undersigned shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and
(ii) if requested, the undersigned shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such
disposition will not require
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registration of such shares under the Act. The Company will not require an
opinion of counsel for sales made pursuant to Rule 144 except in unusual
circumstances.
The undersigned understands the instruments evidencing the Stock
may bear the following legend:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS THERE
IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR THE COMPANY RECEIVES
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Dated:
----------------------- -------------------------------------
Name:
--------------------------------
Title:
-------------------------------
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