EXHIBIT 99.16
THIS COMMON STOCK PURCHASE WARRANT AND THE SHARES THAT MAY BE PURCHASED
HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER THE SECURITIES LAWS OF ANY STATE. THIS COMMON STOCK PURCHASE
WARRANT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO DISTRIBUTION, AND THIS COMMON STOCK PURCHASE WARRANT AND THE SHARES
THAT MAY BE PURCHASED HEREUNDER MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT THE PROPOSED TRANSACTION DOES NOT REQUIRE REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
SECURITIES LAWS.
ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS COMMON STOCK PURCHASE
WARRANT ARE SET FORTH IN THE RESTRUCTURE AGREEMENT (AS DEFINED HEREIN),
A COPY OF WHICH WILL BE FURNISHED BY THE COMPANY TO THE HOLDER WITHOUT
CHARGE UPON REQUEST.
PERSONNEL GROUP OF AMERICA, INC.
COMMON STOCK PURCHASE WARRANT
Date of Issuance: April 14, 2003 Certificate No. W-1
THIS IS TO CERTIFY that BNP PARIBAS, and its transferees, successors
and assigns (the "Holder"), for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, is entitled to purchase from
PERSONNEL GROUP OF AMERICA, INC., a Delaware corporation (the "Company"), at the
price of $0.3121 (the "Exercise Price") per share (as such price may be adjusted
as provided herein), at any time after the date hereof (the "Commencement Date")
and expiring on April 14, 2013 (the "Expiration Date"), 1,922,492 shares (the
"Aggregate Number") of the fully paid and nonassessable Common Stock, par value
$0.01 per share ("Common Stock"), of the Company (as such number may be adjusted
as provided herein).
Capitalized terms used herein shall have the meanings ascribed to such
terms in Section 11 hereof unless otherwise defined herein.
SECTION 1. THE WARRANT; TRANSFER AND EXCHANGE.
(a) The Warrant. This Common Stock Purchase Warrant (the
"Warrant") is issued under and pursuant to the Restructure Agreement. This
Warrant and the rights and privileges of
the Holder and the Company hereunder may be exercised by the Holder in whole or
in part as provided herein; shall survive any termination of the Restructure
Agreement; and, as more fully set forth in Sections 1(b) and 8 hereof, may be
transferred by the Holder to any other Person or Persons at any time or from
time to time, in whole or in part, regardless of whether the Holder retains any
or all rights under the Restructure Agreement.
(b) Transfer and Exchanges. The Company shall initially record
this Warrant on a register to be maintained by the Company with its other stock
books and subject to Section 8 hereof, from time to time thereafter shall
reflect the transfer of this Warrant on such register when surrendered for
transfer in accordance with the terms hereof and properly endorsed, accompanied
by appropriate instructions, and further accompanied by payment in cash or by
check, bank draft or money order payable to the order of the Company, in United
States currency, of an amount equal to any stamp or other tax or governmental
charge or fee required to be paid in connection with the transfer thereof. Upon
any such transfer, a new warrant or warrants shall be issued to the transferee
and the Holder (in the event the Warrant is only partially transferred) and the
surrendered warrant shall be canceled. Each such transferee shall succeed to all
of the rights of the Holder under the Restructure Agreement; provided, that the
Holder and such transferee may, simultaneously, also hold rights under the
Restructure Agreement in proportion to their respective interests in this
Warrant. This Warrant may be exchanged at the option of the Holder, when
surrendered at the Principal Office of the Company, for another warrant or other
warrants of like tenor and representing in the aggregate the right to purchase a
like number of shares of Common Stock.
SECTION 2. EXERCISE.
(a) Right to Exercise. At any time after the Commencement Date and
on or before the Expiration Date, the Holder, in accordance with the terms
hereof, may exercise this Warrant, in whole at any time or in part from time to
time, by delivering this Warrant to the Company during normal business hours on
any Business Day at the Company's Principal Office, together with the Election
to Purchase, in the form attached hereto as Exhibit A and made a part hereof
(the "Election to Purchase"), duly executed, and payment of the Exercise Price
per share for the number of shares to be purchased (the "Exercise Amount"), as
specified in the Election to Purchase. If the Expiration Date is not a Business
Day, then this Warrant may be exercised on the next succeeding Business Day.
(b) Payment of Aggregate Exercise Price. Payment of the product of
the Exercise Price multiplied by the Exercise Amount (the "Aggregate Exercise
Price") shall be made to the Company in cash or other immediately available
funds or as provided in Section 2(c), or a combination thereof. In the case of
payment of all or a portion of the Aggregate Exercise Price pursuant to Section
2(c), the direction by the Holder to make a "Cashless Exercise" shall serve as
accompanying payment for that portion of the Aggregate Exercise Price. The
amount of the Aggregate Exercise Price to be paid shall equal the product of (i)
the Exercise Amount multiplied by (ii) the Exercise Price per share.
(c) Cashless Exercise. The Holder shall have the right to pay all
or a portion of the Aggregate Exercise Price by making a "Cashless Exercise"
pursuant to this Section 2(c), in
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which case the portion of the Aggregate Exercise Price to be so paid shall be
paid by (i) reducing the number of shares of Common Stock otherwise issuable
pursuant to the Election to Purchase or (ii) tendering shares of the Common
Stock held by the Holder as of the date of the Election to Purchase, by an
amount equal to (A) the Aggregate Exercise Price to be so paid divided by (B)
the Fair Market Value Per Share. The number of shares of Common Stock to be
issued to the Holder as a result of a Cashless Exercise will therefore be as
follows:
(Fair Market Value Per Share - Exercise Price per share) x Cashless Exercise Amount*
------------------------------------------------------
Fair Market Value Per Share
* The Cashless Exercise Amount in the above formula is that portion of
the Exercise Amount (expressed as a number of shares of Common Stock)
with respect to which the Aggregate Exercise Price is being paid by
Cashless Exercise pursuant to this Section 2(c).
(d) Issuance of Shares of Common Stock. Upon receipt by the
Company of this Warrant at its Principal Office in proper form for exercise, and
accompanied by payment of the Aggregate Exercise Price as aforesaid, the Holder
shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that certificates representing such
shares of Common Stock may not then be actually delivered. Upon such surrender
of this Warrant and payment of the Aggregate Exercise Price as aforesaid, the
Company shall issue and cause to be delivered with all reasonable dispatch to,
or upon the written order of, the Holder (and in such name or names as the
Holder may designate) a certificate or certificates for the Exercise Amount,
subject to any reduction as provided in Section 2(c) for a Cashless Exercise.
(e) Fractional Shares. The Company shall not be required to
deliver fractions of shares of Common Stock upon exercise of this Warrant. If
any fraction of a share of Common Stock would be deliverable upon an exercise of
this Warrant, the Company may, in lieu of delivering such fraction of a share of
Common Stock, make a cash payment to the Holder in an amount equal to the same
fraction of the Fair Market Value Per Share determined as of the Business Day
immediately preceding the date of exercise of this Warrant.
(f) Partial Exercise. In the event of a partial exercise of this
Warrant, the Company shall issue to the Holder a Warrant in like form for the
unexercised portion thereof.
(g) Exercise Price. Notwithstanding anything to the contrary
contained in this Warrant, the Exercise Price per share will not be adjusted
below the amount equal to the par value per share of the Common Stock.
(h) Contingent Exercise. Notwithstanding anything to the contrary
contained in this Warrant, the Holder may exercise this Warrant in connection
with a Transaction (as defined below) or a registered offering of Common Stock,
conditioned upon the consummation of such Transaction or registered offering of
Common Stock and, in such case, such exercise shall not be deemed to be
effective until immediately prior to the consummation of such Transaction or
registered offering.
SECTION 3. PAYMENT OF TAXES. The Company shall pay all stamp taxes
attributable to the initial issuance of shares or other securities issuable upon
the exercise of this Warrant or
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issuable pursuant to Section 6 hereof, excluding any tax or taxes which may be
payable because of the transfer involved in the issuance or delivery of any
certificates for shares or other securities in a name other than that of the
Holder in respect of which such shares or securities are issued.
SECTION 4. REPLACEMENT WARRANT. In case this Warrant is mutilated,
lost, stolen or destroyed, the Company shall issue and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in lieu of
and in substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction of such Warrant and upon receipt of indemnity reasonably
satisfactory to the Company provided that if the Holder is a financial
institution or other institutional investor its own agreement shall be
satisfactory).
SECTION 5. RESERVATION OF COMMON STOCK; OTHER COVENANTS.
(a) Reservation of Authorized Common Stock. The Company shall at
all times reserve and keep available out of the aggregate of its authorized but
unissued shares, free of preemptive rights, such number of its duly authorized
shares of Common Stock, or other stock or securities deliverable pursuant to
Section 6 hereof, as shall be sufficient to enable the Company at any time to
fulfill all of its obligations under this Warrant.
(b) Affirmative Actions to Permit Exercise and Realization of
Benefits. If any shares of Common Stock reserved or to be reserved for the
purpose of the exercise of this Warrant, or any shares or other securities
reserved or to be reserved for the purpose of issuance pursuant to Section 6
hereof, require registration with or approval of any governmental authority
under any federal or state law (other than securities laws) before such shares
or other securities may be validly delivered upon exercise of this Warrant, then
the Company covenants that it will, at its sole expense, use its commercially
reasonable best efforts to secure upon and after exercise of this Warrant such
registration or approval, as the case may be (including but not limited to
approvals or expirations of waiting periods required under the Xxxx Xxxxx Xxxxxx
Antitrust Improvements Act).
(c) Regulatory Requirements and Restrictions. In the event of any
reasonable determination by the Holder that, by reason of any existing or future
federal or state law, statute, rule, regulation, guideline, order, court or
administrative ruling, request or directive (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful)
(collectively, a "Regulatory Requirement"), the Holder is effectively restricted
or prohibited from holding this Warrant or the Warrant Shares (including any
shares of capital stock or other securities distributable to the Holder in any
merger, reorganization, readjustment or other reclassification), or otherwise
realizing upon or receiving the benefits intended under this Warrant, the
Company shall use its reasonable best efforts to take such action as the Holder
and the Company shall jointly agree in good faith to be reasonably necessary to
permit the Holder to comply with such Regulatory Requirement. The reasonable
costs of taking such action, whether by the Company, the Holder or otherwise,
shall be borne by the Company.
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(d) Validly Issued Shares. The Company covenants that all shares
of Common Stock that may be delivered upon exercise of this Warrant, assuming
full payment of the Aggregate Exercise Price, (including those issued pursuant
to Section 6 hereof) shall upon delivery by the Company be duly authorized and
validly issued, fully paid and nonassessable, free from all stamp taxes, liens
and charges with respect to the issue or delivery thereof and otherwise free of
all other security interests, encumbrances and claims of any nature whatsoever.
SECTION 6. ADJUSTMENTS TO AGGREGATE NUMBER.
Under certain conditions, the Aggregate Number is subject to adjustment
as set forth in this Section 6. No adjustments shall be made under this Section
6 as a result of the issuance by the Company of (i) the Warrant Shares upon
exercise of this Warrant, (ii) Common Stock, or options therefore, issued
pursuant to the Stock Option Plans, (iii) Common Stock in connection with the
acquisition of another Person (which is not a stockholder, or an Affiliate of
any stockholder, of the Company; provided, however, that such carve-out in this
parenthetical shall not apply if such acquisition is approved unanimously by all
disinterested members of the Board of Directors) by the Company by merger,
purchase of all or substantially all of such other Person's assets or by other
reorganization whereby the Company ends up owning, directly or indirectly,
greater than 50% of the voting power of such Person, (iv) Common Stock pursuant
to a bona fide underwritten public offering by the Company or (v) Common Stock
in connection with the conversion of the Series B Convertible Participating
Preferred Stock of the Company pursuant to the Certificate of Incorporation
(collectively, the "Exempt Issuances").
(a) Adjustments. The Aggregate Number, after taking into
consideration any prior adjustments pursuant to this Section 6, shall
be subject to adjustment from time to time as follows and, thereafter,
as adjusted, shall be deemed to be the Aggregate Number hereunder.
(i) Stock Dividends. Subdivisions and Combinations. In
case at any time or from time to time the Company shall:
(A) issue to the holders of its Common Stock a
dividend payable in, or other distribution of, Common Stock (a
"Stock Dividend"),
(B) subdivide its outstanding shares of Common
Stock into a larger number of shares of Common Stock,
including without limitation by means of a stock split (a
"Stock Subdivision"), or
(C) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock (a
"Stock Combination"),
then the Aggregate Number in effect immediately prior thereto shall be (1)
proportionately increased in the case of a Stock Dividend or a Stock Subdivision
and (2) proportionately decreased in the case of a Stock Combination. In the
event the Company shall declare or pay, without consideration, any dividend on
the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a Stock
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Dividend in an amount of shares equal to the maximum number of shares issuable
upon exercise of such rights to acquire Common Stock.
(ii) Other Distributions. In case at any time or from time
to time the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive any dividend or other distribution
(collectively, a "Distribution") of:
(A) cash,
(B) any evidences of its indebtedness (other
than Convertible Securities), any shares of its capital stock
(other than additional shares of Common Stock or Convertible
Securities) or any other securities or property of any nature
whatsoever (other than cash), or
(C) any options, warrants or other rights to
subscribe for or purchase any of the following: any evidences
of its indebtedness (other than Convertible Securities), any
shares of its capital stock (other than additional shares of
Common Stock or Convertible Securities) or any other
securities or property of any nature whatsoever,
then the Holder shall be entitled to elect by written notice to the Company to
receive (1) immediately and without further payment the cash, evidences of
indebtedness, stock, securities, other property, options, warrants and/or other
rights (or any portion thereof) to which the Holder would have been entitled by
way of such Distribution as if the Holder had exercised this Warrant immediately
prior to such Distribution or (2) upon the exercise of this Warrant at any time
on or after the taking of such record, the number of Warrant Shares to be
received upon exercise of this Warrant determined as stated herein and, in
addition and without further payment, the cash, evidences of indebtedness,
stock, securities, other property, options, warrants and/or other rights (or any
portion thereof) to which the Holder would have been entitled by way of such
Distribution and subsequent dividends and distributions through the date of
exercise as if such Holder (x) had exercised this Warrant immediately prior to
such Distribution and (y) had retained the Distribution in respect of the Common
Stock and all subsequent dividends and distributions of any nature whatsoever in
respect of any stock or securities paid as dividends and distributions and
originating directly or indirectly from such Common Stock.
A reclassification of the Common Stock into shares of Common Stock and
shares of any other class of stock shall be deemed a Distribution by the Company
to the holders of its Common Stock of such shares of such other class of stock
and, if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such event shall be deemed a Stock Subdivision or Stock Combination, as the case
may be, of the outstanding' shares of Common Stock within the meaning of Section
6(a)(i) hereof.
(iii) Issuance of Common Stock. If at any time or from time
to time the Company shall (except as hereinafter provided in this Section
6(a)(iii)) issue or sell any additional shares of Common Stock for a
consideration per share less than the Fair Market Value
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Per Share, then, effective on the date specified below, the Aggregate Number
shall be adjusted by multiplying (A) the Aggregate Number immediately prior
thereto by (B) a fraction, the numerator of which shall be the sum of the number
of shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock, the number of shares of Common Stock issuable
upon the conversion or exercise of options, warrants, rights or convertible
securities (whether or not then exercisable), and the number of such additional
shares of Common Stock so issued and the denominator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares of Common Stock, the number of shares of
Common Stock issuable upon the conversion or exercise of options, warrants,
rights or convertible securities (whether or not then exercisable), and the
number of shares of Common Stock which the aggregate consideration for the total
number of such additional shares of Common Stock so issued would purchase at the
Fair Market Value Per Share. The date as of which the Fair Market Value Per
Share shall be computed shall be the earlier of the date on which the Company
shall enter into a firm contract or commitment for the issuance of such
additional shares of Common Stock or the date of actual issuance of such
additional shares of Common Stock.
The provisions of this Section 6(a)(iii) shall not apply to any
issuance of additional shares of Common Stock for which an adjustment is
otherwise provided under Section 6(a)(i) hereof. No adjustment of the Aggregate
Number shall be made under this Section 6(a)(iii) upon the issuance of any
additional shares of Common Stock which are issued pursuant to (1) the exercise
of this Warrant in whole or in part or pursuant to any other Exempt Issuances,
(2) the exercise of other subscription or purchase rights or (3) the exercise of
any conversion or exchange rights in any Convertible Securities; provided that
for purposes of clauses (2) or (3) an adjustment shall previously have been made
upon the issuance of such other rights or upon the issuance of such Convertible
Securities (or upon the issuance of any warrants or other rights therefor)
pursuant to Section 6(a)(iv) or (v) hereof.
(iv) Warrants and Options. If at any time or from time to
time the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a distribution of, or shall in any manner
(whether directly, by assumption in a merger in which the Company is the
surviving corporation and in which the shareholders of the Company immediately
prior to the merger continue to own more than 50% of the Outstanding Common
Stock immediately after the merger and for a period of 180 days thereafter, or
otherwise) issue or sell any warrants, options or other rights to subscribe for
or purchase (A) any shares of Common Stock or (B) any Convertible Securities,
whether or not the rights to subscribe, purchase, exchange or convert thereunder
are immediately exercisable, and the consideration per share for which
additional shares of Common Stock may at any time thereafter be issuable
pursuant to such warrants, options or other rights or pursuant to the terms of
such Convertible Securities shall be less than the Fair Market Value Per Share,
then the Aggregate Number shall be adjusted as provided in Section 6(a)(iii)
hereof on the basis that (1) the maximum number of additional shares of Common
Stock issuable pursuant to all such warrants, options or other rights or
necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued as of the date of the
determination of the Fair Market Value Per Share as hereinafter provided and (2)
the aggregate consideration for such maximum number of additional shares of
Common Stock shall be deemed to be the minimum consideration received and
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receivable by the Company for the issuance of such additional shares of Common
Stock pursuant to the terms of such warrants, options or other rights or such
Convertible Securities. For purposes of this Section 6(a)(iv), the effective
date of such adjustment and the date as of which the Fair Market Value Per Share
shall be computed shall be the earliest of (A) the date on which the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive any such warrants, options or other rights, (B) the
date on which the Company shall enter into a firm contract or commitment for the
issuance of such warrants, options or other rights and (C) the date of actual
issuance of such warrants, options or other rights.
This subsection (iv) does not apply to a distribution of rights
pursuant to the Amended and Restated Rights Agreement, dated as of April 14,
2003, as in effect on the date hereof, between the Company and Wachovia Bank
National Association, as Rights Agent, (or successor plan of similar purpose and
effect).
(v) Convertible Securities. If at any time or from time
to time the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a distribution of or shall in any
manner (whether directly, by assumption in a merger in which the Company is the
surviving corporation and in which the shareholders of the Company immediately
prior to the merger continue to own more than 50% of the Outstanding Common
Stock immediately after the merger and for a period of 180 days thereafter, or
otherwise) issue or sell Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the
consideration per share for the additional shares of Common Stock which may at
any time thereafter be issuable pursuant to the terms of such Convertible
Securities shall be less than the Fair Market Value Per Share, then the
Aggregate Number shall be adjusted as provided in Section 6(a)(iii) hereof on
the basis that (A) the maximum number of additional shares of Common Stock
necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued as of the date of the
determination of the Fair Market Value Per Share as herein provided and (B) the
aggregate consideration for such maximum number of additional shares of Common
Stock shall be deemed to be the minimum consideration received and receivable by
the Company for the issuance of such additional shares of Common Stock pursuant
to the terms of such Convertible Securities. For purposes of this Section
6(a)(v), the effective date of such adjustment and the date as of which the Fair
Market Value Per Share shall be computed shall be the earliest of (1) the date
on which the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive any such Convertible Securities, (2)
the date on which the Company shall enter into a firm contract or commitment for
the issuance of such Convertible Securities and (3) the date of actual issuance
of such Convertible Securities.
No adjustment of the Aggregate Number shall be made under this Section
6(a)(v) upon the issuance of any Convertible Securities which are issued
pursuant to the exercise of any warrants, options or other subscription or
purchase rights if an adjustment shall previously have been made or if no such
adjustment shall have been required upon the issuance of such warrants, options
or other rights pursuant to Section 6(a)(iv) hereof.
(vi) Subsequent Adjustments. If at any time after any
adjustment of the Aggregate Number shall have been made pursuant to Section
6(a)(iv) or (v) hereof on the basis
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of the issuance of warrants, options or other rights or the issuance of
Convertible Securities, or after any new adjustments of the Aggregate Number
shall have been made pursuant to this Section 6(a)(vi),
(A) such warrants, options or rights or the
right of conversion or exchange in such Convertible Securities shall
expire, and a portion of such warrants, options or rights, or the right
of conversion or exchange in respect of a portion of such Convertible
Securities, as the case may be, shall not have been exercised prior to
such expiration, and/or
(B) in the case of adjustments made pursuant to
Section 6(a)(iv) or (v), the consideration per share for which shares
of Common Stock are issuable pursuant to such warrants, options or
rights per the terms of such Convertible Securities shall be
irrevocably increased solely by virtue of provisions therein contained
for an automatic increase in such consideration per share upon the
arrival of a specified date or the happening of a specified event,
such previous adjustment shall be rescinded and annulled and the additional
shares of Common Stock which were deemed to have been issued by virtue of the
computation made in connection with such adjustment shall no longer be deemed to
have been issued by virtue of such computation. Simultaneously therewith, a
recomputation shall be made of the effect of such warrants, options or rights or
Convertible Securities on the determination of the Aggregate Number, which shall
be made on the basis of:
(1) treating the number of additional shares of
Common Stock, if any, theretofore actually issued pursuant to
the previous exercise of such warrants, options or rights or
such right of conversion or exchange as having been issued on
the date or dates of such exercise and, in the case of a
recomputation of a calculation originally made pursuant to
Section 6(a)(iv) or (v), for the consideration actually
received and receivable therefor, and
(2) in the case of a recomputation of a
calculation originally made pursuant to Section 6(a)(iv) or
(v), treating any such warrants, options or rights or any such
Convertible Securities which then remain outstanding as having
been granted or issued immediately after the time of such
irrevocable increase of the consideration per share for which
shares of Common Stock are issuable under such warrants,
options or rights or Convertible Securities;
and, if and to the extent called for by the foregoing provisions of
Section 6(a)(vi) on the basis aforesaid, a new adjustment of the
Aggregate Number shall be made, such new adjustment shall supersede the
previous adjustment so rescinded and annulled.
(vii) Issuer Tender Offers. In case a tender offer (a
"Tender Offer") made by the Company or any of its subsidiaries for all or any
portion of the Common Stock shall expire (the "Expiration Time") and the Tender
Offer (as amended upon the expiration thereof) shall require the payment to
stockholders based on the acceptance (up to any maximum specified in
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the terms of the Tender Offer) of Purchased Shares (as defined below) of an
aggregate of the cash plus other consideration having a fair market value as of
the Expiration Time of such Tender Offer, that combined with the aggregate of
the cash plus the fair market value of consideration payable in respect of any
other tender offer (determined as of the Expiration Time of such other tender
offer) by the Company or any of its subsidiaries for all or any portion of the
Common Stock expiring within the 12 months preceding the expiration of the
Tender Offer and in respect of which no adjustment pursuant to this subsection
(vii) has been made, exceeds 10% of the product of the fair market value of
Common Stock as of the Expiration Time of the Tender Offer multiplied by the
number of shares of Common Stock outstanding (including any tendered shares) at
the Expiration Time of the Tender Offer, then, and in each such case,
immediately prior to the opening of business on the next trading day after the
date of the Expiration Time of the Tender Offer, the Exercise Price per share
shall be adjusted in accordance with this formula:
(M x O) - P
E(1) = E x -----------
M x D
where:
E(1) = the adjusted Exercise Price per share.
E = the Exercise Price per share immediately prior to
close of business on the date of the Expiration Time
of the Tender Offer.
O = the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration
Time of the Tender Offer.
P = the amount of cash plus the fair market value of the
aggregate consideration payable to stockholders based
on the acceptance (up to any maximum specified in the
terms of the Tender Offer) of Purchased Shares (as
defined below). For purposes of this subsection (ii),
the term "Purchased Shares" shall mean such shares as
are deemed so accepted up to any such maximum
M = the fair market value of Common Stock as of the
Expiration Time of the Tender Offer.
D = the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration
Time of the Tender Offer less the number of all
shares validly tendered and not withdrawn as of the
Expiration Time of the Tender Offer, and accepted for
purchase up to any maximum.
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(viii) Miscellaneous. The following provisions shall be
applicable to the making of adjustments of the Aggregate Number provided above
in this Section 6(a):
(A) The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account of the
Company or any of its Subsidiaries shall be deemed an issuance thereof
for the purposes of this Section 6(a).
(B) To the extent that any additional shares of
Common Stock or any Convertible Securities or any warrants, options or
other rights to subscribe for or purchase any additional shares of
Common Stock or any Convertible Securities (1) are issued solely for
cash consideration, the consideration received by the Company therefor
shall be deemed to be the amount of the cash received by the Company
therefor, (2) are offered by the Company for subscription, the
consideration received by the Company shall be deemed to be the
subscription price or (3) are sold to underwriters or dealers for
public offering, the net consideration (after giving effect to
underwriting discounts) received by the Company shall be deemed to be
the consideration received by the Company therefor, in any such case
excluding any amounts paid or receivable for accrued interest or
accrued dividends. To the extent that such issuance shall be for a
consideration other than cash, or partially for cash and partially for
other consideration, then, except as otherwise expressly provided
herein, the amount of such consideration shall be deemed to be the fair
market value of such consideration plus, if applicable, the amount of
such cash) at the time of such issuance, determined in the manner set
forth in Section 6(d)(ii). In case any additional shares of Common
Stock or any Convertible Securities or any warrants, options or other
rights to subscribe for or purchase such additional shares of Common
Stock or Convertible Securities shall be issued in connection with any
merger in which the Company is the survivor and issues any securities,
the amount of consideration therefor shall be deemed to be the fair
market value of such additional shares of Common Stock, Convertible
Securities, warrants, options or other rights, as the case may be,
determined in the manner set forth in Section 6(d)(ii).
The consideration for any shares of Common Stock
issuable pursuant to the terms of any Convertible Securities shall be
equal to (x) the consideration received by the Company for issuing any
warrants, options or other rights to subscribe for or purchase such
Convertible Securities, plus (y) the consideration paid or payable to
the Company in respect of the subscription for or purchase of such
Convertible Securities, plus (z) the consideration, if any, payable to
the Company upon the exercise of the right of conversion or exchange of
such Convertible Securities.
In case of the issuance at any time of any additional
shares of Common Stock or Convertible Securities in payment or
satisfaction of any dividends upon any class of stock other than Common
Stock, the Company shall, be deemed to have received for such
additional shares of Common Stock or Convertible Securities a
consideration equal to the amount of such dividend so paid or
satisfied.
11
(C) The adjustments required by the preceding
paragraphs of this Section 6(a) shall be made whenever and as often as
any specified event requiring an adjustment shall occur, except that no
adjustment of the Aggregate Number that would otherwise be required
shall be made (except in the case of a Stock Subdivision or Stock
Combination, as provided for in Section 6(a)(i) hereof) unless and
until such adjustment either by itself or with other adjustments not
previously made adds or subtracts at least one one-hundredth of one
share to or from the Aggregate Number immediately prior to the making
of such adjustment. Any adjustment representing a change of less than
such minimum amount (except as aforesaid) shall be carried forward and
made as soon as such adjustment, together with other adjustments
required by this Section 6(a) and not previously made, would result in
a minimum adjustment. For the purpose of any adjustment, any specified
event shall be deemed to have occurred at the close of business on the
date of its occurrence.
(D) In computing adjustments under this Section
6(a), fractional interests in Common Stock shall be taken into account
to the nearest one-thousandth of a share.
(E) If the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights
and shall, thereafter and before the distribution to shareholders
thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then no adjustment shall
be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.
(b) Changes in Common Stock. In case at any time the Company shall
initiate any transaction or be a party to any transaction (including, without
limitation, a merger, consolidation, share exchange, sale, lease or other
disposition of all or substantially all of the Company's assets, liquidation,
recapitalization or reclassification of the Common Stock) in connection with
which the previous Outstanding Common Stock shall be changed into or exchanged
for different securities of the Company or capital stock or other securities of
another corporation or interests in a non-corporate entity or other property
(including cash) or any combination of the foregoing (each such transaction
being herein called a "Transaction"), then, as a condition of the consummation
of the Transaction, lawful, enforceable and adequate provision shall be made so
that the Holder shall be entitled to elect by written notice to the Company to
receive (i) a new warrant in form and substance similar to, and in exchange for,
this Warrant to purchase all or a portion of such securities or other property
or (ii) upon exercise of this Warrant at any time on or after the consummation
of the Transaction, in lieu of the Warrant Shares issuable upon such exercise
prior to such consummation, the securities or other property (including cash) to
which such Holder would have been entitled upon consummation of the Transaction
if such Holder had exercised this Warrant immediately prior thereto (subject to
adjustments from and after the consummation date as nearly equivalent as
possible to the adjustments provided for in this Section 6). The Company will
not effect any Transaction unless prior to the consummation thereof each
corporation or other entity (other than the Company) which may be required to
deliver any new warrant, securities or other property as provided
12
herein shall assume, by written instrument delivered to the Holder, the
obligation to deliver to such Holder such new warrant, securities or other
property as in accordance with the foregoing provisions such Holder may be
entitled to receive and such corporation or entity shall have similarly
delivered to the Holder an opinion of counsel for such corporation or entity,
satisfactory to the Holder, which opinion shall state that all of the terms of
the new warrant or this Warrant shall be enforceable against the Company and
such corporation or entity in accordance with the terms hereof and thereof,
together with such other matters as the Holder may reasonably request. The
foregoing provisions of this Section 6(b) shall similarly apply to successive
Transactions.
(c) Other Action Affecting Common Stock. In case at any time or
from time to time the Company shall take any action of the type contemplated in
Section 6(a) or (b) hereof but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then, unless in the
opinion of the Company's board of directors such action will not have a Material
Adverse Effect upon the rights of the Holder (taking into consideration, if
necessary, any prior actions which the Board of Directors deemed not to
materially adversely affect the rights of the Holder), the Aggregate Number
shall be adjusted in such manner and at such time as the Board of Directors of
the Company may in good faith determine to be equitable in the circumstances.
(d) Notices.
(i) Notice of Proposed Actions. In case the Company shall
propose (A) to pay any dividend payable in stock of any class to the holders of
its Common Stock or to make any other distribution to the holders of its Common
Stock, (B) to offer to the holders of its Common Stock rights to subscribe for
or to purchase any Convertible Securities or additional shares of Common Stock
or shares of stock of any class or any other securities, warrants, rights or
options, (C) to effect any reclassification of its Common Stock, (D) to effect
any recapitalization, stock subdivision, stock combination or other capital
reorganization, (E) to effect any consolidation or merger, share exchange, or
sale, lease or other disposition of all or substantially all of its property,
assets or business, (F) to effect the liquidation, dissolution or winding up of
the Company or (G) to effect any other action which would require an adjustment
under this Section 6, then in each such case the Company shall give to the
Holder written notice of such proposed action, which shall specify the date on
which a record is to be taken for the purposes of such stock dividend,
distribution or rights, or the date on which such reclassification,
reorganization, consolidation, merger, share exchange, sale, transfer,
disposition, liquidation, dissolution, winding up or other transaction is to
take place and the date of participation therein by the holders of Common Stock,
if any such date is to be fixed, or the date on which the transfer of Common
Stock is to occur, and shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action on the
Common Stock and on the Aggregate Number after giving effect to any adjustment
which will be required as a result of such action. Such notice shall be so given
in the case of any action covered by clause (A) or (B) above at least 30 days
prior to the record date for determining holders of the Common Stock for
purposes of such action and, in the case of any other such action, at least 30
days prior to the earlier of the date of the taking of such proposed action or
the date of participation therein by the holders of Common Stock.
13
(ii) Adjustment Notice. Whenever the Aggregate Number is
to be adjusted pursuant to this Section 6, unless otherwise agreed by the
Holder, the Company shall promptly (and in any event within 10 Business Days
after the event requiring the adjustment) prepare a certificate signed by the
chief financial officer of the Company, setting forth, in reasonable detail, the
event requiring the adjustment and the method by which such adjustment is to be
calculated. The certificate shall set forth, if applicable, a description of the
basis on which the Board of Directors in good faith determined, as applicable,
the Fair Market Value Per Share, the fair market value of any evidences of
indebtedness, shares of stock, other securities, warrants, other subscription or
purchase rights, or other property or the equitable nature of any adjustment
under Section 6(b) or (c) hereof, the new Aggregate Number and, if applicable,
any new securities or property to which the Holder is entitled. The Company
shall promptly cause a copy of such certificate to be delivered to the Holder.
In the case of any determination of Fair Market Value Per Share, such
certificate shall be delivered to the Holder within the time period set forth in
the definition of Fair Market Value Per Share and the Holder may object thereto
as provided therein. Any other determination of fair market value shall first be
determined in good faith by the Board of Directors and be based upon an arm's
length sale of such indebtedness, shares of stock, other securities, warrants,
other subscription or purchase rights or other property, such sale being between
a willing buyer and a willing seller. In the case of any such determination of
fair market value, the Holder may object to the determination in such
certificate by giving written notice within 10 Business Days of the receipt of
such certificate and, if the Holder and the Company cannot agree to the fair
market value within 10 Business Days of the date of the Holder's objection, the
fair market value shall be determined by a national or regional investment bank
or a national accounting firm mutually selected by the Holder and the Company,
the fees and expenses of which shall be paid 50% by the Company and 50% by the
Holder unless such determination results in a fair market value more than 110%
of the fair market value determined by the Company in which case such fees and
expenses shall be paid by the Company. The Company shall keep at its Principal
Office copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by the Holder or any
prospective purchaser of the Warrant (in whole or in part) if so designated by
the Holder.
SECTION 7. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, share exchange,
dissolution or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, including without limitation
the adjustments required under Section 6 hereof, and will at all times in good
faith assist in the carrying out of all such terms and in taking of all such
action as may be necessary or appropriate to protect the rights of the Holder
against dilution or other impairment. Without limiting the generality of the
foregoing and notwithstanding any other provision of this Warrant to the
contrary (including by way of implication), the Company (a) will not increase
the par value of any shares of Common Stock receivable on the exercise of this
Warrant above the amount payable therefor on such exercise or (b) will take all
such action as may be necessary or appropriate so that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock on the
exercise of this Warrant.
14
SECTION 8. TRANSFERS OF THE WARRANT.
(a) Generally. Subject to the restrictions set forth in this
Section 8, the Restructure Agreement, and the legend set forth on the face of
this Warrant, the Holder may at any time and from time to time freely transfer
this Warrant and the Warrant Shares in whole or in part. This Warrant has not
been, and the Warrant Shares at the time of their issuance may not be,
registered under the Securities Act and except as provided in the Registration
Rights Agreement, nothing herein contained shall be deemed to require the
Company to so register this Warrant and the Warrant Shares. This Warrant and the
Warrant Shares are issued or issuable subject to the provisions and conditions
contained herein, and every Holder hereof by accepting the same agrees with the
Company to such provisions and conditions, and represents to the Company that
this Warrant has been acquired and the Warrant Shares will be acquired for the
account of the Holder for investment and not with a view to or for sale in
connection with any distribution thereof.
(b) Compliance with Securities Laws. The Holder agrees that the
Warrant and the Warrant Shares may not be sold or otherwise disposed of except
pursuant to an effective registration statement under the Securities Act and
applicable state securities laws or pursuant to an applicable exemption from the
registration requirements of the Securities Act and such state securities laws.
Notwithstanding the legend set forth on the face of this Warrant, in the event
that the Holder transfers this Warrant or the Warrant Shares pursuant to an
applicable exemption from registration, the Company may request (other than with
respect to a transfer from lender or its affiliates to another lender or its
affiliates pursuant to the Restructure Agreement), at its expense, an opinion of
counsel reasonably satisfactory to the Company that the proposed transfer does
not require registration or qualification under the Securities Act or applicable
state securities laws.
(c) Restrictive Securities Legend. The certificate representing
the shares of Common Stock issued upon the exercise of the Warrant shall bear
the restrictive legends set forth below:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, or the securities laws of any State
and may not be sold or otherwise disposed of in the absence of an
effective registration statement under such Act and applicable State
securities laws or an opinion of counsel reasonably satisfactory to the
issuer that the proposed transaction does not require registration or
qualification under such Act and such laws."
SECTION 9. COVENANTS.
The Company hereby represents, warrants and covenants to the Holder
that so long as Holder holds the Warrant or any Warrant Shares:
(a) Certain Amendments. The Company will not, and will not permit
or cause any of its Subsidiaries to, amend, modify or change any provision of
its articles or certificate of incorporation, bylaws, or the terms of any class
or series of its Capital Stock to the extent such amendment, modification or
change would have an adverse effect on the Holder, other than the
15
amendments to the certificate of incorporation and bylaws expressly contemplated
by the Restructuring Agreement.
(b) Limitation on Certain Restrictions. The Company will not, and
will not permit or cause any of its Subsidiaries (to the extent the Company has
any Subsidiaries after the Closing Date) to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any restriction or
encumbrance on the ability of the Company and any such Subsidiaries to perform
and comply with their respective obligations under this Warrant.
SECTION 10. EVENTS OF NON-COMPLIANCE AND REMEDIES.
(a) Events of Non-Compliance. If the Company fails to keep and
fully and promptly perform and observe in all material respects any of the
terms, covenants or representations contained or referenced herein within 30
days from the earlier to occur of (A) written notice from the Holder specifying
what failure has occurred, or requesting that a specified failure be remedied or
(B) an executive officer of the Company becoming aware of such failure (an
"Event of Non-Compliance"), the Holder shall be entitled to the remedies set
forth in subsection (b) hereof.
(b) Remedies. On the occurrence of an Event of Non-Compliance, in
addition to any remedies the Holder may have under applicable law, the Holder
may bring any action for injunctive relief or specific performance of any term
or covenant contained herein or in the Restructure Agreement, the Company hereby
acknowledging that an action for money damages may not be adequate to protect
the interests of the Holder hereunder.
SECTION 11. DEFINITIONS.
As used herein, in addition to the terms defined elsewhere herein, the
following terms shall have the following meanings. Capitalized terms not
appearing below and not otherwise defined herein shall have the meaning ascribed
to them in the Restructure Agreement.
"Affiliate" means, with respect to a Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such Person. The term "control" means (a) the power to vote more than 50% of the
securities or other equity interests of a Person having ordinary voting power
(on a fully diluted basis), or (b) the possession, directly or indirectly, of
any other power to direct or cause the direction of the management and policies
of a Person, whether through ownership of voting securities, by contract or
otherwise.
"Aggregate Number" has the meaning set forth in the Preamble.
"Business Day" means any day other than a Saturday, Sunday or a day on
which commercial banking institutions in Charlotte, North Carolina or New York,
New York are authorized or required by law or executive order to be closed.
16
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as in effect on the date hereof.
"Commencement Date" has the meaning set forth in the Preamble.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act or the
Exchange Act.
"Common Stock" means, collectively, the Common Stock and any other
class of capital stock of the Company hereafter authorized having the right to
share in distributions either of earnings or assets without limit as to amount
or percentage.
"Company" has the meaning set forth in the Preamble.
"Convertible Securities" means evidences of indebtedness, shares of
stock or other securities (including, but not limited to options and warrants)
which are directly or indirectly convertible, exercisable or exchangeable, with
or without payment of additional consideration in cash or property, for shares
of Common Stock, either immediately or upon the onset of a specified date or the
happening of a specified event.
"Distribution" has the meaning set forth in Section 6(a)(i).
"Election to Purchase" has the meaning set forth in Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Exempt Issuances" has the meaning set forth in Section 6.
"Exercise Amount" has the meaning set forth in Section 2(a).
"Exercise Price" has the meaning set forth in the Preamble.
"Expiration Date" has the meaning set forth in the Preamble.
"Fair Market Value Per Share" means as of a particular date the average
(weighted by daily trading volume) of the closing prices of the Common Stock on
all securities exchanges on which such security may be listed at the time, or,
if there has been no sales on any such exchange on any day, or, if on any day
such security is not so listed, the average of the representative bid and asked
prices quoted in the NASDAQ System as of 4:00 P.M., New York Time, or, if on any
day such security is not quoted in the NASDAQ System, the average of the highest
bid and lowest asked prices on such day in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated or any similar
successor organization, in each such case averaged over a period of 20 days
consisting of the day as of which the "Fair Market Value Per Share" is being
determined and the 19 consecutive Business Days prior to such day. If at any
time the Common Stock is not listed on any securities exchange or quoted in the
NASDAQ
17
System or the over-the-counter market, the "Fair Market Value Per Share"
shall be (a) the fair market value of the Outstanding Common Stock based upon an
arm's length sale of the Company on such date (including its ownership interest
in all Persons) as an entirety, such sale being between a willing buyer and a
willing seller and determined without reference to any discount for minority
interest, restrictions on transfer, disparate voting rights among classes of
capital stock or lack of marketability with respect to capital stock divided by
(b) the aggregate number of shares of Outstanding Common Stock; provided,
however, that in no event shall "Fair Market Value Per Share be deemed to be
less than the applicable Exercise Price per share subject to proportional
adjustment upon the occurrence of an event specified in Section 6(a)(i). The
Fair Market Value Per Share shall be determined by members of the Board of
Directors of the Company in good faith within 10 days of any event for which
such determination is required and such determination (including the basis
therefor) shall be promptly provided to the Holder. Such determination shall be
binding on the Holder unless the Holder objects thereto in writing within 10
Business Days of receipt. In the event the Company and the Holder cannot agree
on the Fair Market Value Per Share within 10 Business Days of the date of the
Holder's objection, the Fair Market Value Per Share shall be determined by a
disinterested appraiser (which may be a national or regional investment bank or
national accounting firm) mutually selected by the Company and the Holder, the
fees and expenses of which shall be paid 50% by the Company and 50% by the
Holder unless such determination results in a Fair Market Value Per Share more
than 110% of the Fair Market Value Per Share initially determined by the Company
in which case such fees and expenses shall be borne by the Company. Any
selection of a disinterested appraiser shall be made in good faith within seven
Business Days after the end of the last 10 Business Day period referred to above
and any determination of Fair Market Value Per Share by a disinterested
appraiser shall be made within 30 days of the date of selection.
"Fully Diluted" means, with respect to the Common Stock, as of a
particular time the total outstanding shares of Common Stock as of such time,
determined by treating all warrants and options for Common Stock as having been
exercised and by treating all outstanding Convertible Securities as having been
so converted.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Holder" means BNP Paribas and its successors and assigns.
"Material Adverse Effect" means a material adverse effect upon the
business, assets or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
"Outstanding Common Stock" of the Company means, as of the date of
determination, the sum (without duplication) of the following: (a) the number of
shares of Common Stock then outstanding at the date of determination, (b) the
number of shares of Common Stock then issuable upon the exercise of the Warrant
(as such number of shares may be adjusted pursuant to the terms hereof) and (c)
the number of shares of Common Stock then issuable upon the exercise
18
or conversion of Convertible Securities and any warrants, options or other
rights to subscribe for or purchase Common Stock or Convertible Securities (but
excluding any unvested options and securities not then exercisable for or
convertible into Common Stock).
"Person" means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or other entity of any kind and includes any successor (by merger or
otherwise) of such entity.
"Principal Office" means the Company's principal office as set forth in
Section 16 hereof or such other principal office of the Company in the United
States of America the address of which first shall have been set forth in a
notice to the Holder.
"Registration Rights Agreement" means the Registration Rights Agreement
of even date between the Company, the Holder and the other investors listed on
the signature pages thereto, as amended, modified or supplemented from time to
time.
"Regulatory Requirement" has the meaning set forth in Section 5(c).
"Required Holders" means the holders of at least 51% of the Warrant
Securities then outstanding determined on a Fully Diluted basis.
"Restructure Agreement" means the Restructure Agreement dated as of
April 14, 2003 between the Company as borrower, certain subsidiaries as
guarantors, Bank of America, N.A. as agent and the lenders listed on the
signature pages thereto, and as amended, modified or supplemented from time to
time.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Stock Combination" has the meaning set forth in Section 6(a)(i)(C).
"Stock Dividend" has the meaning set forth in Section 6(a)(i)(A).
"Stock Option Plans" means, collectively, the 1995 Equity Participation
Plan of the Company, as in effect on the date hereof, and the 2003 Equity
Incentive Plan of the Company, as in effect (although subject to stockholder
approval) on the date hereof, and any and all stock options issued pursuant
thereto.
"Stock Subdivision" has the meaning set forth in Section 6(a)(i)(B).
"Subsidiary" means, as to a Person, any corporation, partnership or
other entity of which more than 50% of the outstanding capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such corporation, partnership or other
entity is at the time, directly or indirectly, owned by or otherwise controlled
by such Person.
19
"Transaction" has the meaning set forth in Section 6(b).
"Warrant" has the meaning set forth in Section 1(a).
"Warrant Securities" means the Warrant and the Warrant Shares,
collectively.
"Warrant Shares" means (a) the shares of Common Stock issued or
issuable upon exercise of this Warrant in accordance with its terms and (b) all
other shares of the Company's capital stock issued with respect to such shares
by way of stock dividend, stock split or other reclassification or in connection
with any merger, consolidation, recapitalization or other reorganization
affecting the Company's capital stock.
SECTION 12. SURVIVAL OF PROVISIONS. Notwithstanding the full exercise
by the Holder of its rights to purchase Common Stock hereunder, the provisions
of Sections 5(c), 5(d) and 9 through 21 of this Warrant shall survive such
exercise and the Expiration Date until such time as the rights of the Required
Holders to have the Company redeem all Warrant Securities held by the Holder
have expired or been fully exercised.
SECTION 13. DELAYS, OMISSIONS AND INDULGENCES. It is agreed that no
delay or omission to exercise any right, power or remedy accruing to the Holder
upon any breach or default of the Company under this Warrant shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach or default, or any acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character on the Holder's part of any breach or
default under this Warrant, or any waiver on the Holder's part of any provisions
or conditions of this Warrant must be in writing and that all remedies, either
under this Warrant, or by law or otherwise afforded to the Holder, shall be
cumulative and not alternative.
SECTION 14. RIGHTS OF TRANSFEREES. Subject to Section 8, the rights
granted to the Holder hereunder of this Warrant shall pass to and inure to the
benefit of all subsequent transferees of all or any portion of the Warrant
(provided that the Holder and any transferee shall hold such rights in
proportion to their respective ownership of the Warrant and Warrant Shares)
until extinguished pursuant to the terms hereof.
SECTION 15. CAPTIONS. The titles and captions of the Sections and
other provisions of this Warrant are for convenience of reference only and are
not to be considered in construing this Warrant.
SECTION 16. NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopy,
overnight courier service or personal delivery:
20
(a) if to the Company:
Personnel Group of America, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Holder:
BNP Paribas
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxx-Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
BNP Paribas
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
SECTION 17. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that the Company shall have no right to assign its rights,
or to delegate its obligations, hereunder without the prior written consent of
the Holder.
SECTION 18. SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any
21
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof shall
not be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
SECTION 19. GOVERNING LAW. This Warrant is to be construed and enforced
in accordance with and governed by the laws of the State of Delaware and without
regard to the principles of conflicts of law of such state.
SECTION 20. ENTIRE AGREEMENT. This Warrant, the Registration Rights
Agreement and the Restructure Agreement are intended by the parties as a final
expression of their agreement and are intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein.
SECTION 21. RULES OF CONSTRUCTION. Unless the context otherwise
requires "or" is not exclusive, and references to sections or subsections refer
to sections or subsections of this Warrant. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
[Remainder of Page Intentionally Omitted.]
22
IN WITNESS WHEREOF, the Company has caused this Warrant to be issued
and executed in its corporate name by its duly authorized officers and its
corporate seal to be affixed hereto as of the date below written.
DATED: April 14, 2003 PERSONNEL GROUP OF AMERICA, INC.
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Xxxxx X. Xxxx, President and
Chief Financial Officer
23
EXHIBIT A
NOTICE OF EXERCISE
To:
-----------------------------------
-----------------------------------
-----------------------------------
1. The undersigned, pursuant to the provisions of the attached
Warrant, hereby elects to exercise this Warrant with respect to ________ shares
of Common Stock (the "Exercise Amount"). Capitalized terms used but not
otherwise defined herein have the meanings ascribed thereto in the attached
Warrant.
2. The undersigned herewith tenders payment for such shares in
the following manner (please check type, or types, of payment and indicate the
portion of the Aggregate Exercise Price to be paid by each type of payment):
Exercise for Cash
------
Exercise for Common Stock
------
Cashless Exercise
-------
3. Please issue a certificate or certificates representing the
shares issuable in respect hereof under the terms of the attached Warrant, as
follows:
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(Name of Record Holder/Transferee)
and deliver such certificate or certificates to the following address:
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(Address of Record Holder/Transferee)
4. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
5. If the Exercise Amount is less than all of the shares of
Common Stock purchasable hereunder, please issue a new warrant representing the
remaining balance of such shares, as follows:
------------------------------------------------------
(Name of Record Holder/Transferee)
and deliver such warrant to the following address:
--------------------------------------------------------
(Address of Record Holder/Transferee)
--------------------------------------------------------
(Signature)
-------------------------------------
(Date)
25
