CLEARPOINT BUSINESS RESOURCES, INC. AMENDED AND RESTATED WARRANT TO PURCHASE SHARES OF COMMON STOCK (Expires August 31, 2014)
Exhibit
4.2
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”) OR UNDER THE
SECURITIES LAWS OF ANY STATE OR JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR
SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION, IN
REASONABLY ACCEPTABLE FORM AND SCOPE, OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED
UNDER ANY SUCH LAWS.
AMENDED
AND RESTATED
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
(Expires
August 31, 2014)
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COPY
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| Warrant No. CV-1A |
Shares of Common
Stock
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FOR VALUE
RECEIVED, subject to the provisions set forth below, the undersigned, CLEARPOINT
BUSINESS RESOURCES, INC., a Delaware corporation (the “Company”), hereby certifies
that ComVest Capital, LLC,
a Delaware limited liability company, or its registered assigns (the
“Holder”), is entitled
to purchase from the Company up to two million two hundred ten thousand eight
hundred twenty-five (2,210,825) fully paid and nonassessable shares (the “Warrant Shares”) of the
Company’s common stock, $.0001 par value per share (the “Common Shares”), for cash at a
price of $.01 per share (the “Exercise Price”) at any time
and from time to time from and after the date hereof and until 5:00 p.m.
(Eastern time) on August 31, 2014 (the “Expiration Date”) upon
surrender to the Company at its principal office (or at such other location as
the Company may advise the Holder in writing) of this Warrant properly endorsed
with the Notice of Exercise attached hereto duly filled in and signed and, if
applicable, upon payment in cash or by check of the aggregate Exercise Price for
the number of shares for which this Warrant is being exercised determined in
accordance with the provisions hereof; provided, however, that at any
time when there shall be any continuing Event of Default (other than an
“Excluded Event of Default” as defined below) under the Amended and Restated
Revolving Credit Agreement dated as of August 14, 2009 by and between ComVest
Capital, LLC and the Company (as same may be amended, modified, supplemented
and/or restated from time to time, the “Loan Agreement”), and upon
five (5) Business Days’ notice to the Company, this Warrant shall then be
exercisable for, and the number of Warrant Shares shall in such circumstances be
increased to, a number of Common Shares which, when aggregated with all Warrant
Shares theretofore acquired by reason of the exercise of this Warrant (and/or
any predecessor Warrant), shall constitute fifty-one (51%) percent of the fully
diluted common stock of the Company at the time of exercise (calculated after
giving pro
forma effect to
the exercise of all outstanding options, warrants (including this Warrant for
the full increased amount hereof) or other rights to acquire common stock of the
Company and the conversion or exchange of all outstanding convertible or
exchangeable securities, and in such event the Exercise Price for such Warrant
Shares shall be $.001 per share. The Exercise Price and the number of
shares purchasable hereunder are subject to adjustment as provided in
Section 3 of this Warrant. For purposes hereof, an “Excluded
Event of Default” shall mean (i) any Event of Default arising under Section
7.01(a) of the Loan Agreement which does not constitute or result in a Material
Adverse Effect (as such term is defined in the Loan Agreement), or (ii) any
Event of Default arising under Sections 7.01(e), 7.01(m) or 7.01(n) of the Loan
Agreement.
This
Warrant is issued pursuant to the Loan Agreement, and expressly supersedes and
amends and restates in its entirety the Warrant No. CV-1 issued by the Company
to ComVest Capital, LLC pursuant to the Original Agreement (as such term is
defined in the Loan Agreement). The Warrant Shares (including the
incremental increase thereof under the preceding paragraph) are entitled to the
benefit of the Registration Rights Agreement (as such term is defined in the
Loan Agreement); provided, however, that the
Warrant Shares issuable pursuant to such incremental increase are only entitled
to the benefits of the Registration Rights Agreement upon the occurrence and
during the continuance of an Event of Default (other than an Excluded Event of
Default).
1. Exercise
of Warrant.
1.1. Exercise. Upon
exercise of this Warrant, the Exercise Price shall be payable in cash or by
check, or at the Holder’s option, by crediting such Exercise Price to any
Obligation (as such term is defined in the Loan Agreement) then owing to the
Holder under the Loan Agreement or any of the Loan Documents described
therein. This Warrant may be exercised in whole or in part so long as
any exercise in part hereof would not involve the issuance of fractional Warrant
Shares or the payment of fractional cents, provided that this Warrant may not be
exercised in part if the exercise is pursuant to the proviso of the first
paragraph of this Warrant. If exercised in part, the Company shall
deliver to the Holder a new Warrant, identical in form to this Warrant, in the
name of the Holder, evidencing the right to purchase the number of Warrant
Shares as to which this Warrant has not been exercised, which new Warrant shall
be signed by an appropriate officer of the Company. The term
“Warrant” as used herein shall include any subsequent Warrant issued as provided
herein.
The
Company hereby covenants and agrees that it shall not, at any time prior to the
Expiration Date or (if sooner) the date on which this Warrant has been fully
exercised, without the Holder’s prior written consent in each instance, amend or
modify (or permit to be amended or modified) the Company’s Organic Documents (as
such term is defined in the Loan Agreement) as in effect on the date of this
Warrant in any manner which would, or would reasonably be expected to, (i)
constitute or give rise to a Default or Event of Default (as such terms are
defined in the Loan Agreement), (ii) impair the rights of the Lender (as such
term is defined in the Loan Agreement) under the Loan Agreement or any of the
other Loan Documents (as such term is defined in the Loan Agreement), or (iii)
impair any of the rights of the Holder under this Warrant (including, without
limitation, any amendment which would require the affirmative vote, approval or
consent of more than or other than a simple majority of the outstanding Common
Shares with respect to any matter submitted or required to be submitted to the
stockholders of the Company for approval).
1.2. Exercise Procedures; Delivery of
Certificate. Upon surrender of this Warrant with a duly
executed Notice of Exercise in the form of Annex A attached
hereto, together with payment of the Exercise Price for the Warrant Shares
purchased, at the Company’s principal executive offices (the “Designated Office”), the
Holder shall be entitled to receive a certificate or certificates for the
Warrant Shares so purchased. The Company agrees that the Warrant
Shares shall be deemed to have been issued to the Holder as of the close of
business on the date on which this Warrant shall have been surrendered together
with the Notice of Exercise and payment for such Warrant Shares.
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1.3. Cashless
Exercise. Anything elsewhere contained herein to the contrary
notwithstanding, in lieu of payment of the Exercise Price, a Holder may exercise
this Warrant, in whole or in part, by presentation and surrender of this Warrant
to the Company, together with a Cashless Exercise Form in the form attached
hereto as Annex B (or a
reasonable facsimile thereof) duly executed (a “Cashless
Exercise”). Such presentation and surrender shall be deemed a
waiver of the Holder's obligation to pay all or any portion of the Exercise
Price, as the case may be. In the event of a Cashless Exercise, the
Holder shall exchange this Warrant (or the portion thereof being exercised) for
that number of Common Shares determined by multiplying the number of Common
Shares for which this Warrant is being exercised by a fraction, (a) the
numerator of which shall be the difference between (i) the then current market
price per Common Share, and (ii) the Exercise Price, and (b) the denominator of
which shall be the then current market price per Common Share. For
purposes of any computation under this Section l.3, the then current market
price per Common Share at any date shall be deemed to be the average of the
daily trading price for the ten (10) consecutive trading days immediately prior
to the Cashless Exercise. If, during such measuring period, there
shall occur any event which gives rise to any adjustment of the Exercise Price,
then a corresponding adjustment shall be made with respect to the closing prices
of the Common Shares for the days prior to the Effective Date of such adjustment
event. As used herein, the term “trading price” on any relevant date
means (A) if the Common Shares are listed for trading on the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Market, or the NASDAQ
Global Select Market, the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of the Common Shares (regular way), (B)
if the Common Shares are not so listed but quotations for the Common Shares are
reported on the OTC Bulletin Board, the most recent closing price as reported on
the OTC Bulletin Board, or (C) if the Common Shares are not then publicly
traded, the fair market price of the Company Shares as determined, in good
faith, by the Board of Directors of the Company.
1.4. Holder’s Put
Option. The provisions of this Section 1.4 shall only be
applicable if and when (i) the Common Shares shall not be registered under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (ii) the
Company shall have ceased or suspended the filing of periodic reports under the
Exchange Act.
(a) In
the event that and at such time as the Company or any of its stockholders enters
into a binding agreement with respect to any Sale (as such term is defined in
the Loan Agreement) or (if sooner) on that date which is thirty (30) days prior
to any payment or required payment in full of the Obligations (as such term is
defined in the Loan Agreement), the Company shall, in addition to any notice
required under the Loan Agreement, give written notice to the Holder (and/or, if
applicable, the holder of the Warrant Shares) setting forth in reasonable detail
the circumstances and material terms of the subject Sale agreement or the
pendency of such payment (as the case may be). Subject to and in
accordance with the provisions of this Section 1.4, the Holder shall have the
right and option (the “Put
Option”), exercisable effective at any time upon or after the
consummation of such Sale or payment, or upon and after the occurrence and
during the continuance of an Event of Default (as such term is defined in the
Loan Agreement) or any other event or circumstance which causes, effects or
requires any payment in full under the Loan Agreement (such Sale, payment in
full, Maturity Date or Event of Default, each a “Triggering Event”), to require
the Company to redeem and purchase, for a cash purchase price of $2,000,000 (the
“Option Purchase
Price”), 50% of this Warrant (equivalent to 50% of the Common Shares that
may be issued or have been issued upon the exercise of this Warrant, including
but not limited to the Warrant Shares) from the Holder (which term, for purposes
of this Section 1.4, shall include each holder of Warrant Shares).
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(b) The
Put Option shall be exercisable by the Holder providing a completed Put Option
exercise form in the form attached hereto as Annex C (or a
reasonable facsimile thereof) duly executed, to the Company at the Designated
Office, not less than ten (10) days prior to the Holder’s required date of
payment as set forth in such exercise form. Upon payment of the
Option Purchase Price by the Company to the Holder, the Holder shall surrender
this Warrant (and/or the certificate(s) representing the subject Warrant Shares,
as applicable) to the Company, against delivery to the Holder of a replacement
Warrant (and/or certificate(s) representing Warrant Shares, as applicable)
representing the portion of this Warrant or the Warrant Shares (as applicable)
not purchased by the Company hereunder.
(c) In
the event that any proposed Sale, refinancing or repayment which gave rise to
the exercise of the Put Option is abandoned or is not consummated, then such
exercise of the Put Option shall be null and void ab initio, and the Put
Option shall thereafter be applicable and exercisable in connection with any
subsequent proposed Sale or other Triggering Event, in accordance with this
Section 1.4.
2. Transfer; Issuance of Stock
Certificates; Restrictive Legends.
2.1. Transfer. This
Warrant may be transferred in whole (but not in part) by the Holder at any
time. Each transfer of this Warrant and all rights hereunder shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the Designated Office, together with a written
assignment of this Warrant in the form of Annex D attached
hereto duly executed by the Holder or its agent or attorney. Upon
such surrender and delivery, the Company shall execute and deliver a new Warrant
in the name of the assignee or assignees. A Warrant may be exercised
by the new Holder for the purchase of Warrant Shares without having a new
Warrant issued. Prior to due presentment for registration of transfer
thereof, the Company may deem and treat the registered Holder of this Warrant as
the absolute owner hereof (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company) for
all purposes and shall not be affected by any notice to the
contrary. All Warrants issued upon any assignment of this Warrant
shall be the valid obligations of the Company, evidencing the same rights and
entitled to the same benefits as the Warrant surrendered upon such registration
of transfer or exchange.
2.2. Stock
Certificates. Certificates for the Warrant Shares shall be
delivered to the Holder within five (5) business days after the rights
represented by this Warrant shall have been exercised pursuant to Section 1, and
a new Warrant representing the right to purchase the Common Shares, if any, with
respect to which this Warrant shall not then have been exercised shall also be
issued to the Holder within such time. The issuance of certificates
for Warrant Shares upon the exercise of this Warrant shall be made without
charge to the Holder hereof including, without limitation, any documentary,
stamp or similar tax that may be payable in respect thereof; provided, however, that the
Company shall not be required to pay any income tax to which the Holder hereof
may be subject in connection with the issuance of this Warrant or the Warrant
Shares.
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2.3. Restrictive Legend. Except as
otherwise provided in this Section 2, each certificate for Warrant Shares
initially issued upon the exercise of this Warrant and each certificate for
Warrant Shares issued to any subsequent transferee of any such certificate,
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION IN FORM AND FROM COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”
Notwithstanding
the foregoing, the legend requirements of this Section 2.3 shall terminate as to
any particular Warrant Shares when (i) such Warrant Shares are transferred
pursuant to an effective resale registration statement, as contemplated in the
Registration Rights Agreement executed by the Company for the benefit of the
Holder dated as of June 20, 2008, or (ii) the Company shall have received
from the Holder thereof an opinion of counsel in form and substance reasonably
acceptable to the Company that such legend is not required in order to ensure
compliance with the Securities Act. Whenever the restrictions imposed
by this Section 2.3 shall terminate, the Holder or subsequent transferee,
as the case may be, shall be entitled to receive from the Company without cost
to such Holder or transferee a certificate for the Warrant Shares without such
restrictive legend.
3. Adjustment
of Number of Shares; Exercise Price; Nature of Securities Issuable Upon Exercise
of Warrants.
3.1. Exercise Price; Adjustment of Number
of Shares. The Exercise Price and the number of shares
purchasable hereunder shall be subject to adjustment from time to time as
hereinafter provided; provided, however, that,
notwithstanding the below, in no case shall the Exercise Price be reduced to
below the par value per share of the class of stock for which this Warrant is
exercisable at such time.
3.2. Adjustments Upon Distribution,
Subdivision or Combination. If the Company, at any time or
from time to time after the issuance of this Warrant, shall (a) make a
dividend or distribution on its Common Shares payable in Common Shares,
(b) subdivide or reclassify the outstanding Common Shares into a greater
number of shares, or (c) combine or reclassify the outstanding Common
Shares into a smaller number of shares, the Exercise Price in effect at that
time and the number of Warrant Shares into which the Warrant is exercisable at
that time shall be proportionately adjusted effective as of the record date for
the dividend or distribution or the effective date of the subdivision,
combination or reclassification.
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3.3. Adjustment Upon Other
Distributions. If the Company, at any time or from time to
time after the issuance of this Warrant, makes a distribution to the holders of
Common Shares which is payable in cash, securities of the Company other than
Common Shares or any other property, then, in each such event, provision shall
be made so that the Holder shall receive upon exercise of this Warrant, in
addition to the number of Warrant Shares, the amount of such cash, securities or
other property which would have been received if the portion of the Warrant so
exercised had been exercised for Warrant Shares on the date of such event,
subject to adjustments subsequent to the date of such event with respect to any
such distributed securities which shall be on terms as nearly equivalent as
practicable to the adjustments provided in this Section 3 and all other
adjustments under this Section 3.
3.4. Adjustment Upon Merger, Consolidation
or Exchange. If at any time or from time to time after the
issuance of this Warrant there occurs any merger, consolidation, arrangement or
statutory share exchange of the Company with or into any other person or
company, then, in each such event, provision shall be made so that the Holder
shall receive upon exercise of this Warrant the kind and amount of shares and
other securities and property (including cash) which would have been received
upon such merger, consolidation, arrangement or statutory share exchange by the
Holder if the portion of this Warrant so exercised had been exercised for
Warrant Shares immediately prior to such merger, consolidation, arrangement or
statutory share exchange, subject to adjustments for events subsequent to the
effective date of such merger, consolidation, arrangement or statutory share
exchange with respect to such shares and other securities which shall be on
terms as nearly equivalent as practicable to the adjustments provided in this
Section 3 and all other adjustments under this Section 3.
3.5. Adjustments for Recapitalization or
Reclassification. If, at any time or from time to time after
the issuance of this Warrant, the Warrant Shares issuable upon exercise of this
Warrant are changed into the same or a different number of securities of any
class of the Company, whether by recapitalization, reclassification or otherwise
(other than a merger, consolidation, arrangement or statutory share exchange
provided for elsewhere in this Section 3), then, in each such event,
provision shall be made so that the Holder shall receive upon exercise of this
Warrant the kind and amount of securities or other property which would have
been received in connection with such recapitalization, reclassification or
other change by the Holder if the portion of this Warrant so exercised had been
exercised immediately prior to such recapitalization, reclassification or
change, subject to adjustments for events subsequent to the effective date of
such recapitalization, reclassification or other change with respect to such
securities which shall be on terms as nearly equivalent as practicable to the
adjustments provided in this Section 3 and all other adjustments under this
Section 3.
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3.6 Adjustment
Upon Certain Issuances of Common Stock.
(a) If
the Company, at any time or from time to time, issues or sells any Additional
Shares of Common Stock (as defined below), other than as provided in the
foregoing subsections of this Section 3, for a price per share (which, in
the case of options, warrants, convertible securities or other rights, includes
the amounts paid therefor plus the exercise price, conversion price or other
such amounts payable thereunder) that is less than the
Exercise Price then in effect, then and in each such case, the then applicable
Exercise Price shall automatically be reduced as of the opening of business on
the date of such issue or sale, to a price determined by multiplying the
Exercise Price then in effect by a fraction (i) the numerator of
which shall be (A) the number of Common Shares deemed outstanding (as
determined below) immediately prior to such issue or sale, plus (B) the
number of Common Shares which the aggregate consideration received by the
Company for the total number of Additional Shares of Common Stock so issued
would purchase at such Exercise Price, and (ii) the denominator of which
shall be the number of Common Shares deemed outstanding (as defined below)
immediately prior to such issue or sale plus the total number of Additional
Shares of Common Stock so issued; provided, however, that upon
the expiration or other termination of options, warrants or other rights to
purchase or acquire Common Shares which triggered any adjustment under this
Section 3.6, and upon the expiration or termination of the right to convert or
exchange convertible or exchangeable securities (whether by reason of redemption
or otherwise) which triggered any adjustment under this Section 3.6, if any
thereof shall not have been exercised, converted or exchanged, as applicable,
the number of Common Shares deemed to be outstanding pursuant to this
Section 3.6(a) shall be reduced by the number of shares as to which
options, warrants, and rights to purchase or acquire Common Shares shall have
expired or terminated unexercised, and as to which conversion or exchange rights
shall have expired or terminated unexercised, and such number of shares shall no
longer be deemed to be outstanding; and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price that it would have been had
adjustment been made on the basis of the issuance only of the Common Shares
actually issued. For purposes of the preceding sentence, the number
of Common Shares deemed to be outstanding as of a given date shall be the sum of
(x) the number of Common Shares actually outstanding, (y) the number
of Common Shares for which this Warrant could be exercised on the day
immediately preceding the given date, and (z) the number of Common Shares
which could be obtained through the exercise or conversion of all other rights,
options and convertible securities outstanding on the day immediately preceding
the given date. “Additional Shares of Common
Stock” shall mean all Common Shares, and all options, warrants,
convertible securities or other rights to purchase or acquire Common Shares,
issued by the Company other than (i) Common Shares issued pursuant to the
exercise of options, warrants or convertible securities outstanding on June 20,
2008 (including, without limitation, this Warrant), or hereafter issued from
time to time pursuant to and in accordance with the Company’s 2006 Long-Term
Incentive Plan and any other stock purchase or stock option plans or other
compensatory arrangement approved by the Company’s Board of Directors in each
case as in effect on June 20, 2008, and (ii) Common Shares and/or options,
warrants or other Common Share purchase rights for up to an aggregate of 150,000
Common Shares (such number to be subject to adjustment in accordance with
Section 3.2 above), where such options, warrants or other rights are issued both
(A) with exercise prices per Common Share at or above the then-current fair
market value of a Common Share, as determined in good faith by the Board of
Directors of the Company or the Compensation Committee thereof, and (B) to
employees, officers or directors of, or consultants to, the Company or any
subsidiary pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Company’s Board of Directors or the
Compensation Committee thereof, and by the Company’s
stockholders.
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(b) In
the event that the exercise price, conversion price, purchase price or other
price at which Common Shares are purchasable pursuant to any options, warrants,
convertible securities or other rights to purchase or acquire Common Shares is
reduced at any time or from time to time (other than under or by reason of
provisions designed to protect against dilution), then, upon such reduction
becoming effective, the Exercise Price then in effect hereunder shall forthwith
be decreased to such Exercise Price as would have been obtained had the
adjustments made and required under this Section 3.6 upon the issuance of such
options, warrants, convertible securities or other rights been made upon the
basis of (and the total consideration received therefor) (i) the issuance of the
number of Common Shares theretofore actually delivered upon the exercise,
conversion or exchange of such options, warrants, convertible securities or
other rights, (ii) the issuance of all of the Common Shares and all other
options, warrants, convertible securities and other rights to purchase or
acquire Common Shares issued after the issuance of the modified options,
warrants, convertible securities or other rights, and (iii) the original
issuance at the time of the reduction of any such options, warrants, convertible
securities or other rights then still outstanding.
(c) In
no event shall an adjustment under this Section 3.6 (other than pursuant to
the proviso in
Section 3.6(a)) be made if it would result in an increase in the then applicable
Exercise Price.
3.7. Certificate of
Adjustment. Whenever the Exercise Price and/or the number of
Warrant Shares receivable upon exercise of this Warrant is adjusted, the Company
shall promptly deliver to the Holder a certificate of adjustment, setting forth
the Exercise Price and/or Warrant Shares issuable after adjustment, a brief
statement of the facts requiring the adjustment and the computation by which the
adjustment was made. The certificate of adjustment shall be prima
facie evidence of the correctness of the adjustment.
3.8. Successive
Adjustments. The provisions of this Section 3 shall be
applicable successively to each event described herein which may occur
subsequent to the issuance of this Warrant and prior to the exercise in full of
this Warrant.
3.9. No Impairment. The Company will not, by
amendment of its incorporation documents 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. Without
limitation of the foregoing, the Company shall not take any action which would
cause the par value of the Common Shares to exceed the then-effective Exercise
Price.
4. Registration; Exchange and
Replacement of Warrant; Reservation of Shares. The Company
shall keep at the Designated Office a register in which the Company shall
provide for the registration, transfer and exchange of this
Warrant. The Company shall not at any time, except upon the
dissolution, liquidation or winding-up of the Company, close such register so as
to result in preventing or delaying the exercise or transfer of this
Warrant.
The
Company may deem and treat the person in whose name this Warrant is registered
as the Holder and owner hereof for all purposes and shall not be affected by any
notice to the contrary, until presentation of this Warrant for registration or
transfer as provided in this Section 4.
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Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant and (in case of loss, theft or
destruction) of the Holder’s indemnity in form satisfactory to the Company, and
(in the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will (in the absence of notice to the Company that the Warrant has been
acquired by a bona fide purchaser) make and deliver a new Warrant of like tenor
in lieu of this Warrant, without requiring the posting of any bond or the giving
of any security.
The
Company shall at all times reserve and keep available out of its authorized
shares of capital stock, solely for the purpose of issuance upon the exercise of
this Warrant, such number of Common Shares as shall be issuable upon the
exercise hereof. The Company covenants and agrees that, upon exercise
of this Warrant and payment of the Exercise Price therefor, if applicable, all
Warrant Shares issuable upon such exercise shall be duly and validly authorized
and issued, fully paid and nonassessable.
5. Investment
Representations. The Holder, by accepting this Warrant,
covenants and agrees that, at the time of exercise of this Warrant, if the
Warrant Shares shall not then be the subject of an effective registration
statement under the Act, the securities acquired by the Holder upon exercise
hereof are for the account of the Holder or are being acquired for its own
account for investment and are not acquired with a view to, or for sale in
connection with, any distribution thereof (or any portion thereof) and with no
present intention (at such time) of offering and distributing such securities
(or any portion thereof), except in compliance with applicable federal and state
securities laws.
6. Fractional Warrants and Fractional
Shares. If the number of Warrant Shares purchasable upon the
exercise of this Warrant is adjusted pursuant to Section 3 hereof, the Company
shall nevertheless not be required to issue fractions of shares upon exercise of
this Warrant or otherwise, or to distribute certificates that evidence
fractional shares. With respect to any fraction of a share called for
upon any exercise hereof, the Company shall pay to the Holder an amount in cash
equal to such fraction multiplied by the current market value of a Common Share
(determined in accordance with the last sentence of Section 1.3
above).
7. Warrant Holders Not Deemed
Stockholders. No Holder of this Warrant shall, as such, be
entitled to vote or to receive dividends (except to the extent provided in
Section 3.2 above) or be deemed the holder of Warrant Shares that may at any
time be issuable upon exercise of this Warrant, nor shall anything contained
herein be construed to confer upon the Holder of this Warrant, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether upon
any recapitalization, issue or reclassification of stock, change of par value or
change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or subscription rights, until such
Holder shall have exercised this Warrant and been issued Warrant Shares or
deemed to have been issued Warrant Shares in accordance with the provisions
hereof. No provision hereof, in the absence of affirmative action by
the Holder to purchase Common Shares or other securities hereunder, and no mere
enumeration herein of the rights of the rights or privileges of the Holder
hereunder, shall give rise to any liability of such Holder for the Exercise
Price or as a stockholder of the Company, whether such liability is asserted by
the Company or by any creditors of the Company.
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8. Notices. Any notice
which is required to be given by this Warrant must be in writing, and shall be
given or served, unless otherwise expressly provided herein, by depositing the
same in the United States Mail, postpaid and certified and addressed to the
party to be notified, with return receipt requested, or by delivering the same
by courier or in person to such party (or, if the party or parties to be
notified be incorporated, to an officer of such party). Notice
deposited in the mail, postpaid and certified with return receipt requested,
shall be deemed received and effective upon the deposit in a proper United
States depository. Notice given in any other manner shall be
effective only if and when received by the party to be notified. For
the purposes of notice, the addresses of the parties for the receipt of notice
hereunder are:
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If to the Company:
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0000
Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxxxxxx 18914
Attention:
Chief Executive Officer
Telephone:
(000) 000-0000
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with
a copy to:
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0000
Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxxxxxx 18914
Attention:
General Counsel
Telephone:
(000) 000-0000
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If to the Holder:
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ComVest
Capital, LLC
CityPlace
Center
000
Xxxxxxxxxx Xxxx., Xxxxx 0000 Xxxx Xxxx Xxxxx,
Xxxxxxx 00000
Attention:
Chief Financial Officer
Telephone: (000)
000-0000
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Any party
shall have the right from time to time, and at any time, to change its address
for the receipt of notice by giving at least five (5) days’ prior written notice
of the change of its address to the other parties in the manner specified
herein.
9. Successors. All the
covenants, agreements, representations and warranties contained in this Warrant
shall bind the parties hereto and their respective heirs, executors,
administrators, distributees, successors, assigns and transferees.
10
10. Law Governing. THIS
WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF (OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).
11. Entire Agreement; Amendments and
Waivers. This Warrant, together with the Registration Rights
Agreement of even date herewith executed by the Company for the benefit of the
Holder, sets forth the entire understanding of the parties with respect to the
subject matter hereof. The failure of any party to seek redress for
the violation or to insist upon the strict performance of any term of this
Warrant shall not constitute a waiver of such term and such party shall be
entitled to enforce such term without regard to such
forbearance. This Warrant may be amended, and any breach of or
compliance with any covenant, agreement, warranty or representation may be
waived, only if the Company has obtained the written consent or written waiver
of the Holder, and then such consent or waiver shall be effective only in the
specific instance and for the specific purpose for which given.
12. Severability;
Headings. If any term of this Warrant as applied to any person
or to any circumstance is prohibited, void, invalid or unenforceable in any
jurisdiction, such term shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or invalidity without in any way affecting any other
term of this Warrant or affecting the validity or enforceability of this Warrant
or of such provision in any other jurisdiction. The Section headings
in this Warrant have been inserted for purposes of convenience only and shall
have no substantive effect.
13. Tag-Along
Rights. In the event that, at any time or from time to time
(whether before or after the exercise or expiration of this Warrant), there
shall be proposed any sale of a majority of the outstanding Company Shares
(counting any convertible stock on an “as converted” basis into common stock),
the Company shall or shall cause the subject stockholders of the Company to give
written notice of such proposed transaction not less than twenty-five (25) days
prior to the proposed closing date of such sale, which notice shall set forth
the name, address, telephone number and principal line of business of the
proposed transferee(s), the material terms and conditions of the proposed sale,
and a copy of any relevant writings between the proposed purchaser(s) and the
selling stockholder(s). In addition to the Put Option (if not
previously exercised), the Holder shall have the right, exercisable upon written
notice to the selling stockholder(s) given not less than ten (10) days prior to
the proposed date for consummation of the sale (as set forth in the notice to
the Holder described in this Section 13), to elect to participate in such
transaction and sell to the proposed purchaser(s) a portion of the Warrant
Shares equal, on a percentage basis, to the percentage of the selling
stockholder(s)’ Company Shares included in the proposed transaction, provided
that the Holder shall not be required to make any representations or warranties
or provide any indemnification to the purchaser(s) other than with respect to
the Holder’s unencumbered ownership of the Warrant Shares); and otherwise, the
terms and conditions of the Holder’s sale of Warrant Shares shall be equivalent,
on a per share basis, to the terms and conditions under which the selling
stockholder(s) sells its or their Company Shares. In the event of any
material modification of the terms and conditions of any proposed sale described
in this Section 13, the Company shall or shall cause the subject stockholder(s)
to give written notice thereof to the Holder, and the Holder shall have ten (10)
days after receipt of such notice to determine whether to participate in or
withdraw from the modified sale.
11
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remainder of this page is intentionally blank]
12
IN WITNESS WHEREOF, the Company has
caused this Warrant to be duly executed as of the ____ day of August,
2009.
ANNEX A
NOTICE
OF EXERCISE
(To
be executed upon partial or full
exercise
of the within Warrant)
The
undersigned hereby irrevocably elects to exercise the right to purchase
[__________ Common Shares of ClearPoint Business Resources, Inc. covered by the
within Warrant] [a number of Common Shares which, when aggregated with all
Common Shares previously acquired by reason of the exercise of the within
Warrant and all predecessor warrants, constitute 51% of the fully
diluted common stock of the Company] according to the conditions hereof and
herewith makes payment of the Exercise Price of such shares in full in the
amount of $______________.
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By:
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||
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(Signature
of Registered Holder)
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| Dated: |
ANNEX B
CASHLESS
EXERCISE FORM
(To
be executed upon partial or full
exercise
of Warrants pursuant to Section 1.3 of the Warrant)
The
undersigned hereby irrevocably elects to surrender ____________ Common Shares of
ClearPoint Business Resources, Inc. purchasable under the Warrant for _________
Common Shares issuable in exchange therefor pursuant to the Cashless Exercise
provisions of the within Warrant, as provided for in Section 1.3 of such
Warrant.
Please
issue a certificate or certificates for such Common Shares in the name of, and
pay cash for fractional shares in the name of:
(Please
print name, address, and social security number/tax identification
number:)
and, if
said number of Common Shares shall not be all the Common Shares purchasable
thereunder, that a new Warrant for the balance remaining of the Common Shares
purchasable under the within Warrant be registered in the name of the
undersigned Holder or its transferee as below indicated and delivered to the
address stated below.
| Dated: |
Name of Warrant Holder
| or transferee: | |
|
(Please
print)
|
|
| Address: | |
| Signature: |
|
NOTICE:
|
The
signature on this form must correspond with the name as written upon the
face of this Warrant in every particular, without alteration or
enlargement or any change
whatsoever.
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ANNEX C
PUT
OPTION EXERCISE FORM
(To
be executed upon exercise of a Put Option
pursuant
to Section 1.4 of the Warrant)
The
undersigned hereby irrevocably elects to require ClearPoint Business Resources,
Inc. to purchase 50% of the Warrant No. CV-1A for a cash price of $2,000,000
pursuant to the Put Option provisions of the within Warrant, as provided for in
Section 1.4 of such Warrant.
Not later
than ____________, please send cash in the amount of the applicable Option
Purchase Price by wire transfer of immediately available funds to:
(Please
print name, address, and social security number/tax identification
number:)
Wire
transfer instructions:
(insert
wire instructions)
| Dated: |
Name of Warrant Holder
| or transferee: | |
|
(Please
print)
|
|
| Address: | |
| Signature: |
|
NOTICE:
|
The
signature on this form must correspond with the name as written upon the
face of this Warrant in every particular, without alteration or
enlargement or any change
whatsoever.
|
ANNEX D
ASSIGNMENT
FORM
FOR VALUE
RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of Common Shares set forth
below:
|
Name and Address of
Assignee
|
No. of Common Shares
|
|
and does
hereby irrevocably constitute and appoint _______________________
attorney-in-fact to register such transfer onto the books of ClearPoint Business
Resources, Inc. maintained for the purpose, with full power of substitution in
the premises.
| Dated: | Print Name: | |||
| Signature: | ||||
| Witness: |
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NOTICE:
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The
signature on this assignment must correspond with the name as written upon
the face of this Warrant in every particular, without alteration or
enlargement or any change
whatsoever.
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