Exhibit 4.2
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT.
CORRPRO COMPANIES, INC.
COMMON STOCK PURCHASE WARRANT
EXPIRING SEPTEMBER 23, 0000
XXXXXXX, XXXXXXXX
SEPTEMBER 23, 2002
CORRPRO COMPANIES, INC. (the "COMPANY"), an Ohio corporation, for value
received, hereby certifies that The Prudential Insurance Company of America or
its registered assigns is entitled to purchase from the Company 467,126 duly
authorized, validly issued, fully paid and nonassessable shares of the Company's
common stock, no par value (the "ORIGINAL COMMON STOCK"), at an initial exercise
price per share of $0.01, at any time or from time to time after July 31, 2003
and prior to 5:00 p.m., Chicago time, on September 23, 2012 (the "EXPIRATION
DATE"), all subject to the terms, conditions and adjustments set forth below in
this Warrant.
This Warrant is one of the Common Stock Purchase Warrants (the
"WARRANTS", such term to include all Warrants issued in substitution therefor)
originally issued in connection with the letter agreement, dated September 23,
2002 (the "SEPTEMBER 2002 LETTER AGREEMENT"), with respect to the Company's
Amended and Restated Senior Notes due January 15, 2008, in the original
aggregate principal amount of $30,000,000 (the "NOTES"), originally issued
pursuant to that certain Note Purchase Agreement, dated of January 21, 1998 (as
amended, the "PURCHASE AGREEMENT"), between the Company and The Prudential
Insurance Company of America ("PRUDENTIAL"). The Warrants originally so issued
evidence rights to purchase an aggregate of 467,126 shares of Original Common
Stock, subject to adjustment as provided in Section 1B hereof (as so adjusted
from time to time, the "ORIGINAL TOTAL NUMBER OF SHARES"). The term "NOTES" as
used herein shall include each Note delivered pursuant to any provision of the
Purchase Agreement and each Note delivered in substitution or exchange for any
such Note pursuant to any such provision. Certain capitalized terms used in this
Warrant are defined in Section 13.
SECTION 1. EXERCISE OF WARRANT.
1A. Manner of Exercise. This Warrant may be exercised by the holder
hereof, in whole or in part, during normal business hours on any Business Day
after July 31, 2003 to and including the Expiration Date, by surrender of this
Warrant, with the form of subscription at the end hereof (or a reasonable
facsimile thereof) duly executed by such holder, to the Company at its principal
office at 0000 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000 or such other office or
agency of the Company as the Company may designate by notice in writing to the
holder hereof at the address of such holder appearing on the books of the
Company (or, if such exercise shall be in
connection with an underwritten public offering of shares of Common Stock (or
Other Securities) subject to this Warrant, at the location at which the
underwriters shall have agreed to accept delivery thereof), accompanied by
payment, in cash, by certified or official bank check payable to the order of
the Company or by wire transfer of funds to the Company, in the amount obtained
by multiplying (a) the number of shares of Original Common Stock (without giving
effect to any adjustment therein), reduced, if applicable, to the extent
provided in Section 1G hereof, designated in such form of subscription by (b)
$0.01.
1B. Adjustment to Number of Shares of Common Stock. The number of
duly authorized, validly issued, fully paid and nonassessable shares of Common
Stock which the holder of this Warrant shall be entitled to receive upon each
exercise hereof shall be determined by multiplying the number of shares of
Common Stock which would otherwise (but for the provisions of Section 2) be
issuable upon such exercise, as designated by the holder hereof pursuant to this
Section 1B, by a fraction of which (x) the numerator is $0.01 and (y) the
denominator is the Exercise Price in effect on the date of such exercise. The
"EXERCISE PRICE" shall initially be $0.01 per share, shall be adjusted and
readjusted from time to time as provided in Section 2 and, as so adjusted and
readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by Section 2 (and the term "EXERCISE PRICE" at any time, as
used herein, shall mean such price as last adjusted or readjusted).
1C. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected and the Exercise Price shall be determined
immediately prior to the close of business on the Business Day on which this
Warrant shall have been surrendered to the Company together with the payment
provided for in Section 1A, and at such time the person or persons in whose name
or names any certificate or certificates for shares of Original Common Stock (or
Other Securities) shall be issuable upon such exercise as provided in Section 1C
shall be deemed to have become the holder or holders of record thereof.
Notwithstanding the foregoing, if an exercise of all or any portion of this
Warrant is being made in connection with a proposed public offering of any
Common Stock (or Other Securities) or in connection with any proposed
Transaction or any proposed sale of outstanding shares of Common Stock, then, at
the election of the holder of this Warrant, such exercise may be conditioned
upon the consummation of such public offering, Transaction or sale, in which
case such exercise shall be effective concurrently with the consummation of such
public offering, Transaction or sale.
1D. Delivery of Stock Certificates, etc. Promptly after the proper
exercise of this Warrant, in whole or in part, and in any event within three
Business Days thereafter (unless such exercise shall be in connection with a
public offering of shares of Common Stock (or Other Securities) or in connection
with any Transaction or sale of outstanding shares of Common Stock, in which
event, at the election of the holder of this Warrant, concurrently with the
effectiveness of such exercise, as provided in Section 1C), the Company at its
expense (including the payment of any applicable stamp or other transfer taxes)
will cause to be issued in the name of and delivered to the holder hereof or,
subject to Section 8, as such holder may direct,
(1) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such holder shall be
entitled upon such exercise, and
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(2) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, specifying the aggregate on the face or
faces thereof of the number of shares of Common Stock equal to the
number of such shares specified on the face of this Warrant minus
the number of such shares designated by the holder for such
exercise as provided in Section 1A.
1E. Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends (except as provided in Section 2B) on
the Common Stock or Other Securities issued upon such conversion. If any
fractional interest in a share of Common Stock would, except for the provisions
of the first sentence of this Section 1E, be deliverable upon the exercise of
this Warrant, the Company shall, in lieu of delivering the fractional share
therefor, pay to the holder exercising this Warrant an amount in cash equal to
the Market Price of such fractional interest.
1F. Cashless Exercise. As an alternative to exercise of this
Warrant by payment in cash by wire transfer of immediately available funds (or
by certified or official bank check or wire transfer), as provided above in
Section 1A, the holder of this Warrant may exercise its right to purchase some
or all of the shares of Common Stock pursuant to this Warrant on a net basis
without the exchange of any funds (a "CASHLESS EXERCISE"), such that, upon the
exercise hereof, the holder hereof receives that number of shares of Common
Stock subscribed to pursuant to this Warrant less that number of shares of
Common Stock, valued at Market Price at the time of exercise, equal to the
aggregate Exercise Price that would otherwise have been paid by the holder of
this Warrant for such shares of Common Stock subscribed to. (For example: a
holder exercises the right-to-purchase 1,000 shares. At that time the Market
Price is $8.00 and the exercise price is $5.00. The aggregate Exercise Price for
1,000 shares would be $5,000.00. Therefore $5,000.00 / $8.00 = 625. The holder
would receive 375 shares [1,000 - 625] under a Cashless Exercise).
1G. Possible Reduction in Number of Shares of Common Stock for
Asset Sales. If at any time on or before July 31, 2003 the Company shall
consummate the sale or other disposition of any Targeted Asset Disposition and
prepay the principal of the Notes under paragraph 4B of the Purchase Agreement
and Debt outstanding under the Credit Agreement from the net cash proceeds
generated by such sale or other disposition as required by Section 1.2(m) of the
September 2002 Letter Agreement (the amount of the net cash proceeds actually
generated from any such sale or other disposition of any Targeted Asset
Disposition which is used to prepay the principal of the Notes and the Debt
outstanding under the Credit Agreement being called the "ACTUAL CASH PROCEEDS"
from such Targeted Asset Disposition), then the aggregate number of shares of
Common Stock which the holders of all the Warrants shall be entitled to receive
upon the exercise thereof shall be reduced in the aggregate by the number which
results from dividing (a) the product of (i) the Original Total Number of
Shares, as then in effect, times (ii) a fraction, numerator of which is the
Actual Cash Proceeds from such Targeted Asset Disposition, and the denominator
of which is $22,540,000, by (b) two (2); provided, however, that the aggregate
reduction of the number of shares of Common Stock which the holders of all the
Warrants shall be entitled to receive upon the exercise thereof resulting from
the application of the foregoing formula shall not exceed fifty percent (50%) of
the original total number of shares of Common Stock which the holders of all the
Warrants shall be entitled to receive upon
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the exercise thereof. If more than one Warrant is outstanding, then any such
reduction shall be allocated among all outstanding Warrants pro rata in
proportion to the respective number of shares of Common Stock which are issuable
upon the exercise thereof.
1H. Possible Termination of Warrant. If on or before February 23,
2003 the Company shall indefeasibly prepay the entire outstanding principal
amount of the Notes, together with all interest thereto, all other amounts owed
to the holders of the Notes under the Purchase Agreement and the Notes and all
amounts owed under the Credit Agreement, in full in cash, and shall terminate
the commitments of the Banks to make any further loans or other financial
accommodations under the Credit Agreement, then this Warrant shall terminate and
cease to be in force and effect.
SECTION 2. PROTECTION AGAINST DILUTION OR OTHER IMPAIRMENT OF
RIGHTS; ADJUSTMENT OF EXERCISE PRICE.
2A. Issuance of Additional Shares of Common Stock. In case the
Company, at any time or from time to time after September 23, 2002 (the "INITIAL
DATE"), shall issue or sell Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 2C or
2D) without consideration or for a consideration per share (determined pursuant
to Section 2E) less than the Market Price in effect on the date of and
immediately prior to such issue or sale, then, and in each such case, subject to
Section 2H, the Exercise Price shall be reduced, concurrently with such issue or
sale, to a price (calculated to the nearest .00001 of a cent) determined by
multiplying such Exercise Price by a fraction,
(a) the numerator of which shall be (i) the number of shares
of Common Stock outstanding immediately prior to such issue or sale
plus (ii) the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of such
Additional Shares of Common Stock so issued or sold would purchase
at such Market Price; and
(b) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale,
provided that, for the purposes of this Section 2A, (x) immediately after any
Additional Shares of Common Stock are deemed to have been issued pursuant to
Section 2C or 2D, such Additional Shares shall be deemed to be outstanding, and
(y) treasury shares shall not be deemed to be outstanding. Notwithstanding
anything in this Section 2A to the contrary, the Exercise Price shall not be
adjusted by virtue of the issuance or sale, for a consideration per share less
than the Market Price in effect on the date of and immediately prior to such
issue or sale, of Additional Shares of Common Stock to employees, directors or
officers of, or consultants to, the Company, if any, upon the exercise of
Options outstanding as of the date hereof, provided the terms of any such
Options are not amended or modified after the date hereof.
2B. Dividends and Distributions. In case the Company at any time or
from time to time after the date hereof shall declare, order, pay or make a
dividend or other distribution (including, without limitation, any distribution
of other or additional stock or other securities or property or Options by way
of dividend or spin-off, reclassification, recapitalization
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or similar corporate rearrangement and any redemption or acquisition of any such
stock or Options on the Common Stock), then, and in each such case, the Company
shall pay over to the holder of this Warrant, on the date on which such dividend
or other distribution is paid to the holders of Common Stock, the securities and
other property (including cash) which such holder would have received if such
holder had exercised this Warrant immediately prior to the record date fixed in
connection with such dividend or other distribution, (or, if a record date is
not fixed in connection with such dividend or other distribution, immediately
prior to the date as of which the holders of Common Stock of record entitled to
such dividend or other distribution are to be determined).
2C. Treatment of Options and Convertible Securities. In case the
Company, at any time or from time to time after the date hereof, shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable, then, and
in each such case, the maximum number of Additional Shares of Common Stock (as
set forth in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, issuable upon the conversion or exchange of such Convertible
Securities (or the exercise of such Options for Convertible Securities and
subsequent conversion or exchange of the Convertible Securities issued), shall
be deemed to be Additional Shares of Common Stock issued as of the time of such
issue, sale, grant or assumption or, in case such a record date shall have been
fixed, as of the close of business on such record date, provided, that such
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to Section 2E) of such shares
would be less than the Market Price in effect on the date of and immediately
prior to such issue, sale, grant or assumption or immediately prior to the close
of business on such record date or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading, as the case
may be, and provided, further, that in any such case in which Additional Shares
of Common Stock are deemed to be issued,
(a) if an adjustment of the Exercise Price shall be made upon
the fixing of a record date as referred to in the first sentence of
this Section 2C, no further adjustment of the Exercise Price shall
be made as a result of the subsequent issue or sale of any Options
or Convertible Securities for the purpose of which such record date
was set;
(b) no further adjustment of the Exercise Price shall be made
upon the subsequent issue or sale of Additional Shares of Common
Stock or Convertible Securities upon the exercise of such Options
or the conversion or exchange of such Convertible Securities;
(c) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any change in
the consideration payable to the Company, or change in the number
of Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise),
the Exercise Price computed upon the original issue, sale, grant or
assumption thereof (or
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upon the occurrence of the record date with respect thereto), and
any subsequent adjustments based thereon, shall, upon any such
change becoming effective, be recomputed to reflect such change
insofar as it affects such Options, or the rights of conversion or
exchange under such Convertible Securities, which are outstanding
at such time;
(d) upon the expiration of any such Options or of the rights
of conversion or exchange under any such Convertible Securities
which shall not have been exercised (or upon purchase by the
Company and cancellation or retirement of any such Options which
shall not have been exercised or of any such Convertible Securities
the rights of conversion or exchange under which shall not have
been exercised), the Exercise Price computed upon the original
issue, sale, grant or assumption thereof (or upon the occurrence of
the record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such
cancellation or retirement, as the case may be), be recomputed as
if:
(i) in the case of Options for Common Stock or in the case
of Convertible Securities, the only Additional Shares of
Common Stock issued or sold (or deemed issued or sold) were
the Additional Shares of Common Stock, if any, actually issued
or sold upon the exercise of such Options or the conversion or
exchange of such Convertible Securities and the consideration
received therefor was the lesser of (x) an amount equal to (A)
the consideration actually received by the Company for the
issue, sale, grant or assumption of all such Options, whether
or not exercised, plus (B) the consideration actually received
by the Company upon such exercise, minus (C) the consideration
paid by the Company for any purchase of such Options which
were not exercised, or (y) an amount equal to (A) the
consideration actually received by the Company for the issue,
sale, grant or assumption of all such Convertible Securities
which were actually converted or exchanged, plus (B) the
additional consideration, if any, actually received by the
Company upon such conversion or exchange, minus (C) the
excess, if any, of the consideration paid by the Company for
any purchase of such Convertible Securities, the rights of
conversion or exchange under which were not exercised, over an
amount that would be equal to the Fair Value of the
Convertible Securities so purchased if such Convertible
Securities were not convertible into or exchangeable for
Additional Shares of Common Stock, and
(ii) in the case of Options for Convertible Securities,
only the Convertible Securities, if any, actually issued or
sold upon the exercise of such Options were issued at the time
of the issue, sale, grant or assumption of such Options, and
the consideration received by the Company for the Additional
Shares of Common Stock deemed to have then been issued was an
amount equal to (x) the consideration actually received by the
Company for the issue, sale, grant or assumption of all such
Options, whether or not exercised, plus (y) the consideration
deemed to have been received by the Company (pursuant to
Section 2E) upon the issue or sale of the Convertible
Securities with respect to which such Options were actually
exercised, minus (z) the consideration paid by the Company for
any purchase of such Options which were not exercised; and
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(e) no recomputation pursuant to subsection (c) or (d) above
shall have the effect of increasing the Exercise Price then in
effect by an amount in excess of the amount of the adjustment
thereof originally made in respect of the issue, sale, grant or
assumption of such Options or Convertible Securities.
2D. Treatment of Stock Dividends, Stock Splits, Etc. In case the
Company, at any time or from time to time after the date hereof, shall declare
or pay any dividend or other distribution on any class of securities of the
Company payable in shares of Common Stock, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise) other than by payment of a dividend in
Common Stock, then, and in each such case, Additional Shares of Common Stock
shall be deemed to have been issued (a) in the case of any such dividend or
other distribution, immediately after the close of business on the record date
for the determination of holders of any class of securities entitled to receive
such dividend or other distribution (or, if a record is not taken, the date as
of which the holders of the Common Stock of record are entitled to such dividend
or other distribution are to be determined), or (b) in the case of any such
subdivision, at the close of business on the day immediately prior to the day
upon which such corporate action becomes effective.
2E. Computation of Consideration. For the purposes of this Warrant:
(a) The consideration for the issue or sale of any Additional
Shares of Common Stock or for the issue, sale, grant or assumption
of any Options or Convertible Securities, irrespective of the
accounting treatment of such consideration,
(i) insofar as it consists of cash, shall be computed
as the amount of cash received by the Company, and insofar as
it consists of securities or other property, shall be computed
as of the date immediately preceding such issue, sale, grant
or assumption as the Fair Value of such consideration (or, if
such consideration is received for the issue or sale of
Additional Shares of Common Stock and the Market Price of such
Additional Shares of Common Stock is less than the Fair Value
of such consideration, then such consideration shall be
computed as the Market Price of such Additional Shares of
Common Stock), in each case after deducting any expenses paid
or incurred by the Company, any commissions or compensation
paid or concessions or discounts allowed to underwriters,
dealers or other performing similar services and any accrued
interest or dividends in connection with such issue or sale,
and
(ii) in case Additional Shares of Common Stock are
issued or sold or Options or Convertible Securities are
issued, sold, granted or assumed together with other stock or
securities or other assets of the Company for a consideration
which covers both, shall be the proportion of such
consideration so received, computed as provided in clause (i)
above, allocable to such Additional Shares of Common Stock or
Options or Convertible Securities, as the case may be, all as
determined in good faith by the Board of Directors of the
Company.
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(b) All Additional Shares of Common Stock, Options or
Convertible Securities issued in payment of any dividend or other
distribution on any class of stock of the Company, and all
Additional Shares of Common Stock issued to effect a subdivision of
the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise) other
than by payment of a dividend in Common Stock, shall be deemed to
have been issued without consideration.
(c) Additional Shares of Common Stock deemed to have been
issued for consideration pursuant to Section 2C, relating to
Options and Convertible Securities, shall be deemed to have been
issued for a consideration per share determined by dividing
(i) the total amount, if any, received and receivable
by the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration) payable to the
Company upon the exercise in full of such Options or the
conversion or exchange of such Convertible Securities or, in
the case of Options for Convertible Securities, the exercise
of such Options for Convertible Securities and the conversion
or exchange of such Convertible Securities, in each case
computing such consideration as provided in the foregoing
subsection (a),
by
(ii) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment
of such number) issuable upon the exercise of such Options or
the conversion or exchange of such Convertible Securities.
2F. Adjustments for Combinations, Etc. In case the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Exercise Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2G. Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in Section 2I) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis to which the standards established in the other
provisions of this Warrant do not apply, the exercise rights granted by this
Warrant, then, and in each such case, the computations, adjustments and
readjustments provided for in this Warrant with respect to the Exercise Price
shall be made as nearly as possible in the manner so provided and applied to
determine the amount of Other Securities from time to time receivable upon the
exercise of this Warrant, so as to protect the holder of this Warrant against
the effect of such dilution.
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2H. Minimum Adjustment of Exercise Price. If the amount of any
adjustment of the Exercise Price required hereunder would be less than one
percent of the Exercise Price in effect at the time such adjustment is otherwise
so required to be made, such amount shall be carried forward and adjustment with
respect thereto made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate at least one percent of such Exercise Price; provided,
that upon the exercise of this Warrant, all adjustments carried forward and not
theretofor made up to and including the date of such exercise shall be made to
the nearest .00001 of a cent.
2I. Changes in Common Stock. In case at any time the Company shall
be a party to any transaction (including, without limitation, a merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation or recapitalization of the Common Stock) in which the previously
outstanding Common Stock shall be changed into or exchanged for different
securities of the Company or common stock or other securities of another
corporation or interests in a noncorporate entity or other property (including
cash) or any combination of any of the foregoing or in which the Common Stock
ceases to be a publicly traded security either listed on the New York Stock
Exchange or the American Stock Exchange or quoted by the Nasdaq National Market
or Nasdaq SmallCap Market or any successor thereto or quoted or published in the
over-the-counter market, or any comparable system (each such transaction being
herein called the "TRANSACTION", the date on which the Transaction is first
announced to the shareholders of the Company being herein called the
"ANNOUNCEMENT DATE", the date of consummation of the Transaction being herein
called the "CONSUMMATION DATE", the Company (in the case of a recapitalization
of the Common Stock or any other such transaction in which the Company retains
substantially all of its assets and survives as a corporation) or such other
corporation or entity (in each other case) being herein called the "ACQUIRING
COMPANY", and the common stock (or equivalent equity interest) of the Acquiring
Company being herein called the "ACQUIRER'S COMMON STOCK", except that if the
Acquiring Company shall not meet the requirements set forth in subsections (d),
(e) and (f) below and a corporation which directly or indirectly controls the
Acquiring Company (a "PARENT") meets such requirements, "Acquiring Company"
shall refer to such Parent and "Acquirer's Common Stock" shall refer to such
Parent's common stock (or equivalent equity interests)) then, as a condition of
the consummation of the Transaction, lawful and adequate provisions (in form
satisfactory to the Required Holders) shall be made so that the holder of this
Warrant, upon the exercise thereof at any time on or after the Consummation Date
(but subject, in the case of an election pursuant to subsection (b) or (c)
below, to the time limitation hereinafter provided for such election),
(a) shall be entitled to receive, and this Warrant shall
thereafter represent the right to receive, in lieu of the Common
Stock issuable upon such exercise prior to the Consummation Date,
shares of the Acquirer's Common Stock at an Exercise Price per
share equal to the lesser of (i) the Exercise Price in effect
immediately prior to the Consummation Date multiplied by a fraction
the numerator of which is the Market Price per share of the
Acquirer's Common Stock determined as of the Consummation Date and
the denominator of which is the Market Price per share of the
Common Stock determined as of the Consummation Date, or (ii) the
Market Price per share of the Acquirer's Common Stock determined as
of the Consummation Date (subject in each case to adjustments from
and after the Consummation Date as nearly equivalent as possible to
the adjustments provided for in this Warrant),
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or at the election of the holder of this Warrant pursuant to notice
given to the Company within 30 days after the Consummation Date,
(b) shall be entitled to receive, and this Warrant shall
thereafter represent the right to receive, in lieu of each share of
Common Stock issuable upon such exercise prior to the Consummation
Date, either (i) the greatest amount of cash, securities or other
property given to any shareholder in consideration for any share of
Common Stock at any time during the period from and after the
Announcement Date to and including the Consummation Date by the
Acquiring Company, the Company or any Affiliate of either thereof,
or (ii) an amount in cash equal to the product obtained by
multiplying (x) the number of shares of the Acquirer's Common Stock
purchasable upon the exercise or conversion of such Warrant as
shall result from adjustments thereto that would have been required
pursuant to subsection (a) above times (y) the Market Price per
share for the Acquirer's Common Stock, determined as of the day
within the period from and after the Announcement Date to and
including the Consummation Date for which the amount determined as
provided in the definition of Market Price shall have been the
greatest, or, if neither the Acquiring Company nor the Parent meets
the requirements set forth in subsections (d), (e) and (f) below,
(c) shall be entitled to receive, within 30 days after such
election, in full satisfaction of the exercise rights afforded
under this Warrant to the holder thereof, an amount equal to the
fair market value of such exercise rights as determined by an
independent investment banker (with an established national
reputation as a valuer of equity securities) selected by the
Required Holders and reasonably acceptable to the Company, such
fair market value to be determined with regard to all material
relevant factors but without regard to any negative effects on such
value of the Transaction.
The Company agrees to obtain, and deliver to each holder of Warrants a copy of
the determination of an independent investment banker (selected by the Required
Holders necessary) to permit elections under subsection (c) above within 15 days
after the Consummation Date of any Transaction to which subsection (c) is
applicable.
The requirements referred to above in the case of the Acquiring
Company or its Parent are that immediately after the Consummation Date:
(d) it is a solvent corporation organized under the laws of
any State of the United States of America having its common stock
listed on the New York Stock Exchange or the American Stock
Exchange or quoted by the Nasdaq National Market or any successor
thereto or comparable system or quoted or published in the
over-the-counter market, and such common stock continues to meet
such requirements for such listing or quotation,
(e) it is required to file, and in each of its three fiscal
years immediately preceding the Consummation Date has filed,
reports with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act, and
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(f) in the case of the Parent, such Parent is required to
include the Acquiring Company in the consolidated financial
statements contained in the Parent's Annual Report on Form 10-K as
filed with the Commission and is not itself included in the
consolidated financial statements of any other Person (other than
its consolidated subsidiaries).
Notwithstanding anything contained herein to the contrary, the
Company shall not effect any Transaction unless prior to the consummation
thereof each corporation or entity (other than the Company) which may be
required to deliver any securities or other property upon the exercise of
Warrants shall assume, by written instrument delivered to each holder of
Warrants, the obligation to deliver to such holder such securities or other
property as to which, in accordance with the foregoing provisions, such holder
may be entitled, and such corporation or entity shall have similarly delivered
to each holder of Warrants an opinion of counsel for such corporation or entity,
reasonably satisfactory to each holder of Warrants, which opinion shall state
that all the outstanding Warrants shall thereafter continue in full force and
effect and shall be enforceable against such corporation or entity of the
Warrants in accordance with the terms hereof and thereof, together with such
other matters as such holders may reasonably request.
2J. Certain Issues Excepted. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any adjustment of the
Exercise Price in the case of the issuance of the Warrants and the issuance of
shares of Common Stock issuable upon exercise of the Warrants or the warrants
issued to the Banks under the Sixth Amendment to the Credit Agreement.
2K. Notice of Adjustment. Upon the occurrence of any event
requiring an adjustment of the Exercise Price, then and in each such case the
Company shall promptly deliver to the holder of this Warrant an Officer's
Certificate stating the Exercise Price resulting from such adjustment and the
increase or decrease, if any, in the number of shares of Common Stock issuable
upon the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based. Within 90
days after each fiscal year in which any such adjustment shall have occurred, or
within 30 days after any request therefor by the holder of this Warrant stating
that such holder contemplates the exercise of such Warrant, the Company will
obtain and deliver to the holder of this Warrant the opinion of its regular
independent auditors or another firm of independent public accountants of
recognized national standing selected by the Company's Board of Directors, which
opinion shall confirm the statements in the most recent Officer's Certificate
delivered under this Section 2K.
2L. Other Notices. In case at any time:
(a) the Company shall declare or pay to the holders of Common
Stock any dividend;
(b) the Company shall offer for subscription pro rata to the
holders of Common Stock any additional shares of stock of any class
or other rights;
11
(c) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or
consolidation or merger of the Company with, or sale of all or
substantially all of its assets to, another corporation or other
entity;
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
(e) there shall be made any tender offer for any shares of
capital stock of the Company; or
(f) there shall be any other Transaction;
then, in any one or more of such cases, the Company shall give to the holder of
this Warrant (i) at least 15 days prior to any event referred to in subsection
(a) or (b) above, at least 30 days prior to any event referred to in subsection
(c) or (d) above, and within five days after it has knowledge of any pending
tender offer referred to in subsection (e) above or other Transaction, written
notice of the date on which the books of the Company shall close or a record
shall be taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or Transaction or the date by which shareholders must tender shares
in any tender offer and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or tender offer or Transaction known to the Company, at least 30 days
prior written notice of the date (or, if not then known, a reasonable
approximation thereof by the Company) when the same shall take place. Such
notice in accordance with the foregoing clause (i) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto, and such notice in
accordance with the foregoing clause (ii) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up, tender offer or Transaction, as the case may be. Such notice shall
also state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act or to a
favorable vote of security holders, if either is required.
2M. Certain Events. If any event occurs as to which, in the good
faith judgment of the Board of Directors of the Company, the other provisions of
this Warrant are not strictly applicable or if strictly applicable would not
fairly protect the exercise rights of the holders of the Warrants in accordance
with the essential intent and principles of such provisions, then the Board of
Directors of the Company shall appoint its regular independent auditors or
another firm of independent public accountants of recognized national standing
which shall give their opinion upon the adjustment, if any, on a basis
consistent with such essential intent and principles, necessary to preserve,
without dilution, the rights of the holders of the Warrants. Upon receipt of
such opinion, the Board of Directors of the Company shall forthwith make the
adjustments described therein; provided, that no such adjustment shall have the
effect of increasing the Exercise Price as otherwise determined pursuant to this
Warrant. The Company may make such reductions in the Exercise Price as it deems
advisable, including any reductions
12
necessary to ensure that any event treated for Federal income tax purposes as a
distribution of stock or stock rights not be taxable to recipients.
2N. Prohibition of Certain Actions. The Company will not, by
amendment of its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the holder of this Warrant in order to protect the
exercise privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (a) will not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, (b) will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of all Warrants from time to time outstanding, (c) will not take any
action which results in any adjustment of the Exercise Price if the total number
of shares of Common Stock or Other Securities issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock or Other Securities then authorized by the Company's certificate of
incorporation and available for the purpose of issue upon such conversion, and
(d) will not issue any capital stock of any class which has the right to more
than one vote per share or any capital stock of any class which is preferred as
to dividends or as to the distribution of assets upon voluntary or involuntary
dissolution, liquidation or winding-up, unless the rights of the holders thereof
shall be limited to a fixed sum or percentage (or floating rate related to
market yields) of par value or stated value in respect of participation in
dividends and a fixed sum or percentage of par value or stated value in any such
distribution of assets.
2O. Rights Offering. In the event the Company shall effect an
offering of the Common Stock, Options or Convertible Securities pro rata to the
holders of the Common Stock, the holder of this Warrant shall be entitled, at
its option, to elect to participate in each and every such offering as if this
Warrant had been exercised and such holder were, at the time of any such rights
offering, then a holder of that number of shares of the Common Stock to which
such holder is then entitled on the exercise hereof.
SECTION 3. STOCK TO BE RESERVED. The Company will at all times reserve
and keep available out of the authorized Common Stock, solely for the purpose of
issue upon the exercise of the Warrants as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants and the Company will maintain at all times all other rights
and privileges sufficient to enable it to fulfill all its obligations hereunder.
The Company covenants that all shares of Common Stock which shall be so issuable
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, free from preemptive or similar rights on the part of the holders
of any shares of capital stock or securities of the Company or any other Person,
and free from all taxes, liens and charges with respect to the issue thereof
(not including any income taxes payable by the holders of Warrants being
exercised in respect of gains thereon), and the Exercise Price will be credited
to the capital and surplus of the Company. The Company will take all such action
as may be necessary to assure that such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of
13
any applicable requirements of the National Association of Securities Dealers,
Inc. and of any domestic securities exchange upon which the Common Stock may be
listed.
SECTION 4. REGISTRATION OF COMMON STOCK. If any shares of Common Stock
required to be reserved for purposes of the exercise of Warrants require
registration with or approval of any governmental authority under any Federal or
State law (other than the Securities Act, registration under which is governed
by the Registration Rights Agreement), before such shares may be issued upon the
exercise thereof, the Company will, at its expense and as expeditiously as
possible, use its best efforts to cause such shares to be duly registered or
approved, as the case may be. Shares of Common Stock issuable upon exercise of
the Warrants shall be registered by the Company under the Securities Act or
similar statute then in force if required by the Registration Rights Agreement
and subject to the conditions stated in such agreement. At any such time as the
Common Stock is listed on any national securities exchange or quoted by the
Nasdaq National Market or Nasdaq SmallCap Market or any successor thereto or any
comparable system, the Company will, at its expense, obtain promptly and
maintain the approval for listing on each such exchange or quoting by the Nasdaq
National Market or Nasdaq SmallCap Market or such successor thereto or
comparable system, upon official notice of issuance, the shares of Common Stock
issuable upon exercise of the then outstanding Warrants and maintain the listing
or quoting of such shares after their issuance so long as the Common Stock is so
listed or quoted; and the Company will also cause to be so listed or quoted,
will register under the Exchange Act and will maintain such listing or quoting
of, any Other Securities that at any time are issuable upon exercise of the
Warrants, if and at the time that any securities of the same class shall be
listed on such national securities exchange by the Company.
SECTION 5. ISSUE TAX. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the holders
hereof for any issuance tax in respect thereto.
SECTION 6. CLOSING OF BOOKS. The Company will at no time close its
transfer books against the transfer of any Warrant or of any share of Common
Stock issued or issuable upon the exercise of any Warrant in any manner which
interferes with the timely exercise of such Warrant.
SECTION 7. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall
not entitle the holder thereof to any of the rights of a stockholder of the
Company, except as expressly contemplated herein. No provision of this Warrant,
in the absence of the actual exercise of such Warrant and receipt by the holder
thereof of Common Stock issuable upon such conversion, shall give rise to any
liability on the part of such holder as a stockholder of the Company, whether
such liability shall be asserted by the Company or by creditors of the Company.
SECTION 8. TRANSFER TO COMPLY WITH SECURITIES LAWS; RESTRICTIVE
LEGENDS. The holder of this Warrant, by its acceptance hereof, represents and
warrants that it is acquiring this Warrant and any Original Common Stock for
investment purposes, for its own account and not in conjunction with any other
Person, directly or indirectly, and not with an intent to sell or distribute
this Warrant or any Original Common Stock, or any interest therein, except in
compliance with applicable United States federal and state securities law.
Except as otherwise permitted by this Section 8, each Warrant originally issued
and each Warrant issued upon direct
14
or indirect transfer or in substitution for any Warrant pursuant to this Section
8 shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"This Warrant and any shares acquired upon the exercise of this Warrant
have not been registered under the Securities Act of 1933 and may not
be transferred in the absence of such registration or an exemption
therefrom under such Act."
Except as otherwise permitted by this Section 8, (a) each certificate for
Original Common Stock (or Other Securities) issued upon the exercise of any
Warrant, and (b) each certificate issued upon the direct or indirect transfer of
any such Original Common Stock (or Other Securities) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be transferred in the
absence of such registration or an exemption therefrom under such Act."
The holder of any Restricted Securities shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing the
applicable legend set forth above in this Section 8 when such securities shall
have been (a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering such Restricted Securities,
(b) sold to the public pursuant to Rule 144 or any comparable rule under the
Securities Act, or (c) when, in the written opinion of independent counsel for
the holder thereof experienced in Securities Act matters addressed to the
Company, such restrictions are no longer required in order to insure compliance
with the Securities Act. The Company will pay the reasonable fees and
disbursements of counsel for any holder of Restricted Securities in connection
with all opinions rendered pursuant to this Section 8.
SECTION 9. AVAILABILITY OF INFORMATION. The Company will cooperate with
each holder of any Restricted Securities in supplying such information as may be
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company covenants that it will deliver to each holder
of this Warrant and each holder of Common Stock issued upon the exercise of this
Warrant, by first-class mail, postage prepaid, addressed to the address of such
holder as shown on the books of the Company, promptly upon transmission thereof,
copies of all such financial statements, proxy statements, notices and reports
as it shall send or make generally available to its stockholders and copies of
all registration statements (without exhibits) and all periodic or other reports
(including reports on Form 8-K) which it files with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions of
the Securities and Exchange Commission).
SECTION 10. INFORMATION REQUIRED BY RULE 144A. The Company will, upon
the request of the holder of this Warrant or of any shares of Common Stock
issued upon the exercise of this Warrant, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in order to
permit compliance with the information requirements of Rule 144A under the
Securities Act in connection with the resale of Warrants or shares of Common
Stock, except
15
at such times as the Company is subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act. For the purpose of this Section 10, the term
"qualified institutional buyer" shall have the meaning specified in Rule 144A
under the Securities Act.
SECTION 11. REGISTRATION RIGHTS AGREEMENT. The holder of this Warrant
and the holders of any securities issued or issuable upon the exercise hereof
are each entitled to the benefits of the Registration Rights Agreement.
SECTION 12. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
12A. Ownership of Warrants. Except as otherwise required by
law, the Company may treat the Person in whose name any Warrant is registered on
the register kept at the principal office of the Company as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary except
that, if and when any Warrant is properly assigned in blank, the Company, in its
discretion, may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes, notwithstanding any notice to the
Company to the contrary. Subject to Section 8, a Warrant, if properly assigned,
may be exercised by a new holder without first having a new Warrant issued.
12B. Transfer and Exchange of Warrants. Upon the surrender of
any Warrant, properly endorsed, for registration of transfer or for exchange at
the principal office of the Company, the Company at its expense will (subject to
compliance with Section 8, if applicable) execute and deliver to or upon the
order of the holder thereof a new Warrant or Warrants of like tenor, in the name
of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Original Common Stock called for on the face
or faces of the Warrant or Warrants so surrendered.
12C. Replacement of Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant held by a Person other than a Purchaser or any
institutional investor, upon delivery of its unsecured indemnity or, in the case
of any such mutilation, upon surrender of such Warrant for cancellation at the
principal office of the Company, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
SECTION 13. DEFINITIONS. Capitalized terms which are used herein and as
defined in the Purchase Agreement and are not otherwise defined herein shall
have the meanings given in the Purchase Agreement. As used herein, unless the
context otherwise requires, the following terms have the following respective
meanings:
"ACQUIRING COMPANY" shall have the meaning specified in Section 2I.
"ACQUIRER'S COMMON STOCK" shall have the meaning specified in
Section 2I.
"ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares
(including treasury shares) of Common Stock issued or sold (or, pursuant to
Section 2C or 2D deemed to be issued) by the Company after the date hereof,
whether or not subsequently reacquired or retired by
16
the Company, other than shares of Common Stock issued upon the exercise or
partial exercise of the Warrants.
"AFFILIATE" shall have the meaning specified in the Purchase
Agreement.
"ANNOUNCEMENT DATE" shall have the meaning specified in Section 2I.
"BUSINESS DAY" shall mean any day on which banks are open for
business in New York City (other than a Saturday, Sunday or legal holiday in the
States of New York or New Jersey), provided, that any reference to "days"
(unless Business Days are specified) shall mean calendar days.
"CASHLESS EXERCISE" shall have the meaning specified in Section 1F.
"COMMISSION" shall mean the Securities and Exchange Commission or
any successor federal agency having similar powers.
"COMMON STOCK" shall mean the Original Common Stock, any stock into
which such stock shall have been converted or changed or any stock resulting
from any reclassification of such stock and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.
"COMPANY" shall mean Corrpro Companies, Inc., an Ohio corporation.
"CONSUMMATION DATE" shall have the meaning specified in Section 2I.
"CONVERTIBLE SECURITIES" shall mean any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of 1934,
as amended.
"EXERCISE PRICE" shall have the meaning specified in Section 1B.
"EXPIRATION DATE" shall have the meaning specified in the opening
paragraphs of this Warrant.
"FAIR VALUE" shall mean with respect to any securities or other
property, the fair value thereof as of a date which is within 15 days of the
date as of which the determination is to be made (a) determined by agreement
between the Company and the Required Holders, or (b) if the Company and the
Required Holders fail to agree, determined jointly by an independent investment
banking firm retained by the Company and by an independent investment banking
firm retained by the Required Holders, either of which firms may be an
independent investment banking firm regularly retained by the Company, or (c) if
the Company or the Required Holders shall fail so to retain an independent
investment banking firm within 10 Business Days of the
17
retention of such a firm by the Required Holders or the Company, as the case may
be, determined solely by the firm so retained, or (d) if the firms so retained
by the Company and by such holders shall be unable to reach a joint
determination within 15 Business Days of the retention of the last firm so
retained, determined by another independent investment banking firm which is not
a regular investment banking firm of the Company chosen by the first two such
firms. The Company shall be responsible for the fees and expenses of all such
investment banking firms.
"INITIAL DATE" shall have the meaning specified in Section 2A.
"MARKET PRICE" shall mean on any date specified herein, (a) with
respect to Common Stock or to common stock (or equivalent equity interests) of
an Acquiring Company or its Parent, the amount per share equal to (i) the last
sale price of shares of Common Stock or of shares of such common stock (or
equivalent equity interests), regular way, on such date or, if no such sale
takes place on such date, the average of the closing bid and asked prices
thereof on such date, in each case as officially reported on the principal
national securities exchange on which the same are then listed or admitted to
trading, or (ii) if no shares of Common Stock or no shares of such common stock
(or equivalent equity interests), as the case may be, are then listed or
admitted to trading on any national securities exchange, the last sale price of
shares of Common Stock or of shares of such common stock (or equivalent equity
interests), regular way, on such date, or, if no such sale takes place on such
date, the average of the reported closing bid and asked prices thereof on such
date, as quoted in the Nasdaq National Market or Nasdaq SmallCap Market, as
published by the National Quotation Bureau, Incorporated or any similar
organization, or, if no shares of Common Stock or no shares of such common stock
(or equivalent equity interest), as the case may be, are then quoted in the
Nasdaq National Market or Nasdaq SmallCap Market, as published by the National
Quotation Bureau, Incorporated or any similar successor organization, as
reported by any member firm of the New York Stock Exchange selected by the
Company, or (iii) if no shares of Common Stock or no shares of such common stock
(or equivalent equity interests), as the case may be, are then listed or
admitted to trading on any national securities exchange or quoted or published
in the over-the-counter market, the higher of (x) the book value thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company, as of the last day of any
month ending within 60 days preceding the date as of which the determination is
to be made or (y) the Fair Value thereof; and (b) with respect to any other
securities, the Fair Value thereof.
"NOTES" shall have the meaning specified in the opening paragraphs
of this Warrant.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name
of the Company by its President, one of its Vice Presidents or its Treasurer.
"OPTIONS" shall mean rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"ORIGINAL COMMON STOCK" shall have the meaning specified in the
opening paragraphs of this Warrant.
18
"OTHER SECURITIES" shall mean any stock (other than Common Stock)
and any other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 2I or otherwise.
"PARENT" shall have the meaning specified in Section 2I.
"PERSON" shall mean and include an individual, a partnership, an
association, a joint venture, a corporation, a trust, a limited liability
company, an unincorporated organization and a government or any department or
agency thereof.
"PRUDENTIAL" shall have the meaning specified in the opening
paragraphs of this Warrant.
"PURCHASE AGREEMENT" shall have the meaning specified in the
opening paragraphs of this Warrant.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement dated of even date herewith by and between the Company and the
Prudential.
"REQUIRED HOLDERS" shall mean the holders of at least 66 2/3% of
all the Warrants at the time outstanding, determined on the basis of the number
of shares of Common Stock then purchasable upon the exercise of all Warrants
then outstanding.
"RESTRICTED SECURITIES" shall mean (a) any Warrants bearing the
applicable legend set forth in Section 8 and (b) any shares of Original Common
Stock (or Other Securities) which have been issued upon the exercise of Warrants
and which are evidenced by a certificate or certificates bearing the applicable
legend set forth in such section, and (c) unless the context otherwise requires,
any shares of Original Common Stock (or Other Securities) which are at the time
issuable upon the exercise of Warrants and which, when so issued, will be
evidenced by a certificate or certificates bearing the applicable legend set
forth in such section.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SEPTEMBER 2002 LETTER AGREEMENT" shall have the meaning specified
in the opening paragraphs of this Warrant.
"TARGETED ASSET CASH PROCEEDS" shall have the meaning specified in
Section 1.2(m) of the September 2002 Letter Agreement.
"TARGETED ASSET DISPOSITION" shall have the meaning specified in
Section 1.2(m) of the September 2002 Letter Agreement.
"TRANSACTION" shall have the meaning specified in Section 2I.
19
"WARRANT" shall have the meaning specified in the opening
paragraphs of this Warrant.
SECTION 14. REMEDIES. The Company stipulates that the remedies at law
of the holder of this Warrant in the event of any default or threatened default
by the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate and that such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise.
SECTION 15. NOTICES. All notices and other communications under this
Warrant shall be in writing and shall be sent (a) by registered or certified
mail, return receipt requested, or (b) by a recognized overnight delivery
service, addressed (i) if to any holder of any Warrant or any holder of any
Common stock (or Other Securities), at the registered address of such holder as
set forth in the applicable register kept at the principal office of the
Company, or (ii) if to the Company, to the attention of the Chief Executive
Officer and President, with a copy to the General Counsel, at the Company's
principal office, provided that the exercise of any Warrant shall be effected in
the manner provided in Section 1.
SECTION 16. MISCELLANEOUS.
(a) This Warrant and any term hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
(b) The agreements of the Company contained in this Warrant other than
those applicable solely to the Warrants and the holders thereof shall inure to
the benefit of and be enforceable by any holder or holders at the time of any
Common Stock (or Other Securities) issued upon the exercise of Warrants, whether
so expressed or not, and shall survive the exercise of this Warrant.
(c) This Warrant shall be construed and enforced in accordance with
and governed by the laws of the State of New York.
(d) The section headings in this Warrant are for purposes of
convenience only and shall not constitute a part hereof.
CORRPRO COMPANIES, INC.
By: /s/ Xxxxxx X. Xxx
----------------------------------
Name:
Title: President, CEO,
Chairman of the Board
20
FORM OF SUBSCRIPTION
(To be executed only upon exercise of Warrant)
To Corrpro Companies, Inc.
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder, _____
shares(1) of Original Common Stock of Corrpro Companies, Inc., [AND HEREWITH
MAKES PAYMENT OF $_______________ THEREFOR](2) [IN A CASHLESS EXERCISE PURSUANT
TO SECTION 1F OF THE WITHIN WARRANT](3), AND REQUESTS THAT THE CERTIFICATES FOR
SUCH SHARES BE ISSUED IN THE NAME OF, AND DELIVERED TO _________________________
WHOSE ADDRESS IS _________________________.
DATED: _________________________
--------------------------------------------
(SIGNATURE MUST CONFORM IN ALL RESPECTS TO
NAME OF HOLDER AS SPECIFIED ON THE FACE OF
THIS WARRANT)
--------------------------------------------
(STREET ADDRESS)
--------------------------------------------
(CITY) (STATE) (ZIP CODE)
--------
(1) Insert here the number of shares called for on the face of this
Warrant (or, in the case of a partial exercise, the portion thereof as to which
this Warrant is being exercised), in either case without making any adjustment
for additional Common Stock or any other stock or other securities or property
or cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise, but after giving effect to any reduction under Section
1G of the Warrant. In the case of a partial exercise, a new Warrant or Warrants
will be issued and delivered, representing the unexercised portion of this
Warrant, to the holder surrendering the same.
(2) Use in connection with an exercise involving a delivery of funds to
the Company.
(3) Use in connection with a Cashless Exercise.
FORM OF ASSIGNMENT
(To be executed only upon transfer of Warrant)
FOR VALUE RECEIVED, THE UNDERSIGNED REGISTERED HOLDER OF THE WITHIN
WARRANT HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO _________________________ THE
RIGHT REPRESENTED BY SUCH WARRANT TO PURCHASE _________________________(1)
SHARES OF ORIGINAL COMMON STOCK OF CORRPRO COMPANIES, INC., TO WHICH SUCH
WARRANT RELATES, AND APPOINTS _________________________ ATTORNEY TO MAKE SUCH
TRANSFER ON THE BOOKS OF CORRPRO COMPANIES, INC., MAINTAINED FOR SUCH PURPOSE,
WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED: _________________________
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(SIGNATURE MUST CONFORM IN ALL RESPECTS TO
NAME OF HOLDER AS SPECIFIED ON THE FACE OF
THIS WARRANT)
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(STREET ADDRESS)
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(CITY) (STATE) (ZIP CODE)
SIGNED IN THE PRESENCE OF:
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(1) Insert here the number of shares called for on the face of the within
Warrant(or, in the case of a partial assignment, the portion thereof as to which
this Warrant is being assigned), in either case without making any adjustment
for additional Common Stock or any other stock or other securities or property
or cash which, pursuant to the adjustment provisions of the within Warrant, may
be delivered upon exercise, but after giving effective to any reduction under
Section 1G of the Warrant. In the case of a partial assignment, a new Warrant or
Warrants will be issued and delivered, representing the portion of the within
Warrant not being assigned, to the holder assigning the same.
