Document:

Exhibit 4.9

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY STATE
SECURITIES LAWS.  THIS WARRANT AND THE
SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN OR WILL BE ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM.

 

AEGIS
COMMUNICATIONS GROUP, INC.

WARRANT TO PURCHASE SHARES

OF COMMON STOCK

 

	
  Date of Issuance:
  April 21, 2004

  	
   

  	
  Certificate No. W-8

  

 

THIS CERTIFIES THAT,
for value received, Essar Global
Limited (the “Purchaser”) and its assigns are entitled to subscribe
for and purchase 230,248,285 shares (such number and such other number as shall
result, from time to time, from the adjustments specified in Section 6
hereof is herein referred to as the “Number of Warrant Shares”) of duly
authorized, validly issued, fully paid and nonassessable Common Stock (as
adjusted pursuant to Section 6 hereof, the “Shares”) of AEGIS
COMMUNICATIONS GROUP, INC., a Delaware corporation (the “Company”), at
the price of $0.01 per share (such price and such other price as shall result,
from time to time, from the adjustments specified in Section 6 hereof is
herein referred to as the “Exercise Price”), subject to the provisions
and upon the terms and conditions hereinafter set forth.  As used herein the term “Date of Grant”
shall mean November 5, 2003.  The term “Warrant” as used
herein shall be deemed to include any warrants issued upon transfer or partial
exercise of this Warrant unless the context clearly requires otherwise.  Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed to them in the Note
and Warrant Purchase Agreement dated as of November 5, 2003 between the
Company, Deutsche Bank AG-London acting
through DB Advisors, LLC as investment advisor and the Purchaser (the “Purchase Agreement”).

 

1.   Term.  The purchase right represented by this
Warrant is exercisable by the holder hereof, in whole or in part, at any time
and from time to time from the Date of Grant through November 5, 2010  (as such date may be extended as provided
below, the “Expiration Date”). 
Notwithstanding the foregoing, the Expiration Date of this Warrant may
be extended if, on the Expiration Date, (i) there is no effective Registration
Statement (as defined in the Registration Rights Agreement) covering all of the
Registrable Securities (as defined in the Registration Rights Agreement) or
(ii) a Blackout Period (as defined in the Registration Rights Agreement) is
then in effect, then in either of those events, the Expiration Date and the
Principal Payment Date shall be automatically extended until such time as a
Registration Statement covering all of the Registrable Securities has been
declared effective and/or there is no Blackout Period in effect.

 

 

2.   Method of Exercise.

 

(a)                                  Cash and Other Exercise.  Subject to Sections 1 and 5 hereof,
the purchase right represented by this Warrant may be exercised by the holder
hereof, in whole or in part and from time to time, at the election of the
holder hereof, by (i) the surrender of this Warrant (with the notice of exercise
substantially in the form attached hereto as Exhibit A-1 duly
completed and executed) at the principal office of the Company and the payment
to the Company by wire transfer to an account designated by the Company (a “Wire
Transfer”) of an amount equal to the then applicable Exercise Price
multiplied by the number of Shares then being purchased, or (ii) if in
connection with a registered public offering of the Common Stock, the surrender
of this Warrant (with the notice of exercise form attached hereto as Exhibit
A-2 duly completed and executed) at the principal office of the Company
together with notice of arrangements reasonably satisfactory to the Company for
payment to the Company by Wire Transfer from the proceeds of the sale of such
number of Shares to be sold by the holder hereof in such public offering of an
amount equal to the then applicable Exercise Price per share multiplied by the
number of Shares then being purchased, or (iii) the tender of all or a portion
of the Note issued by the Company pursuant to the Purchase Agreement in a
principal amount equal to the then applicable Exercise Price multiplied by the
number of Shares then being purchased.

 

(b)                                 Cashless Exercise.  Subject to Sections 1 and 5 hereof, in
lieu of exercising this Warrant pursuant to Section 2(a), the holder of
this Warrant may elect to receive, without the payment by the holder of any
additional consideration, Shares equal to the value of this Warrant (or the
portion hereof being canceled), together with any cash in lieu of fractional
Shares, by surrender of this Warrant at the principal office of the Company
together with an executed Notice of Exercise or Exchange in substantially the
form attached hereto as Exhibit A-1 or Exhibit A-2.  In such event, the number of Shares that the
Company shall issue to the holder hereof shall be computed using the following
formula:

 

	
   

  	
  Y
  (A - B)

  	
   

  	
   

  
	
  X
  =  

  	
  A

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
  Where:

  	
   

  	
  X =

  	
   

  	
  The adjusted number of Shares
  to be issued to the Holder as a result of the cashless exchange election
  under this Section 2(b);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y =

  	
   

  	
  The number of Shares in
  respect of which the cashless exchange election under this Section 2(b)
  is made;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A =

  	
   

  	
  The Fair Market Value of one
  Share at the time the cashless exchange election is made; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B =

  	
   

  	
  The Exercise Price.

  

 

3.   Certificates for Shares.  Within three Business Days after the exercise
of the purchase rights evidenced by this Warrant, one or more certificates for
the number of Shares so purchased shall be issued to the holder or as the
holder may direct (with appropriate restrictive legends, as applicable).  In the event of a partial exercise of this
Warrant, a new warrant or warrants (dated the date hereof) of like tenor shall
be issued to the holder or, subject to the limitations set forth herein, as

 

2

 

the holder may
direct (with appropriate restrictive legends, as applicable), for the aggregate
number of Shares equal to the number of Shares called for on the face of this
Warrant minus the number of Shares purchased by the holder hereof upon such
partial exercise.  For all purposes of
this Warrant other than Sections 2(a) and 2(b), any reference to the
exercise of this Warrant shall be deemed to include a reference to the cashless
exchange of the Warrant into Common Stock, in accordance with the terms of Section
2(b) and this Section 3.  The
Company shall pay all of its expenses associated with the issuance of any
Shares and replacement Warrants in accordance with the terms hereof, including,
without limitation, any applicable issue taxes.

 

4.   Stock Fully Paid;
Reservation of Shares.  All Shares
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance pursuant to the terms and conditions herein, be duly and
validly issued and fully paid and nonassessable, and free from all preemptive
rights, taxes, liens and charges with respect to the issuance thereof.  During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized, and reserved for the purpose of the issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of shares of
its Common Stock to provide for the exercise of the rights represented by this
Warrant.

 

5.   Hart-Scott-Rodino.  If any filing or notification becomes
necessary pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the “HSR Act”), based upon the planned exercise of this
Warrant or any portion hereof, the holder hereof shall notify the Company of
such requirement, and the holder and the Company shall file with the proper
authorities all forms and other documents necessary to be filed pursuant to the
HSR Act, as promptly as possible and shall cooperate with each other in
promptly producing such additional information as those authorities may
reasonably require to allow early termination of the notice period provided by
the HSR Act or as otherwise necessary to comply with requirements of the
Federal Trade Commission or the Department of Justice.  The holder and the Company agree to cooperate
with each other in connection with such filings and notifications, and to keep
each other informed of the status of the proceedings and communications with
the relevant authorities.  The holder
shall pay any filing fee required to be paid in connection with a filing
pursuant to the HSR Act required as a result of the exercise of Warrants.  Notwithstanding the preceding sentence, the
Company shall pay all such filing fees required to be paid in connection with
any filing pursuant to the HSR Act required as a result of the exercise of
Warrants held by the Purchaser or its Affiliates (but not other successors or
assigns of the Purchaser).  The holder
and the Company shall each bear its own expenses (other than such filing fees)
incurred in connection with any filing required pursuant to the HSR Act.  Each holder by acceptance of this Warrant or
any portion hereof agrees to comply with the provisions of this Section 5.

 

6.   Adjustment of Exercise
Price and Number of Warrant Shares. 
The Number of Warrant Shares and the Exercise Price shall be subject to
adjustment from time to time, but without duplication, upon the occurrence of
certain events, as follows:

 

(a)                                  Subdivisions, Combinations and Other Issuances.  Prior to the
exercise or expiration of this Warrant, if the Company shall:  (i) subdivide its outstanding shares of
Common Stock into a larger number of shares of Common Stock by stock split or
otherwise, (ii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock by reverse stock split or otherwise or (iii)
issue additional shares of Common Stock or other capital stock as a

 

3

 

dividend or distribution on or with
respect to its Common Stock, the Exercise Price in effect prior to such
subdivision, combination or issuance shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend or distribution, or
proportionately increased in the case of a combination and the Number of
Warrant Shares in effect prior to such subdivision, combination or issuance
shall forthwith be proportionately increased in the case of a subdivision,
stock dividend or distribution, or proportionately decreased in the case of a
combination.  Any adjustment under this Section
6(a) shall become effective at the close of business on the date the
subdivision, combination or reclassification becomes effective, or as of the
record date of such dividend or distribution (provided the Company makes such
dividend or distribution), or in the event that no record date is fixed, upon
the making of such dividend or distribution.

 

(b)                                 Reclassification, Reorganization, Consolidation, etc.  In the event
of any corporate reclassification, capital reorganization, consolidation,
spin-off, merger, transfer of all or a substantial portion of the Company’s
properties or assets or any dissolution, liquidation or winding up of the
Company (other than as a result of a subdivision, combination, dividend or
distribution provided for in Section 6(a) above) (a “Corporate
Transaction”), then, as a condition of such event, provision shall be made,
and duly executed documents evidencing the same from the Company and any surviving
or acquiring Person (the “Successor Company”) shall be delivered to the
holder hereof, so that the holder shall have the right to receive upon exercise
of this Warrant the same number of shares of Common Stock and amount of cash
and other property that such holder would have been entitled to receive upon
such Corporate Transaction had this Warrant been exercised immediately prior to
the effective date of such Corporate Transaction.  The Company shall provide that any Successor
Company in such Corporate Transaction shall enter into an agreement with the
Company confirming the holder’s rights pursuant to this Warrant, assuming the
Company’s obligations under this Warrant, jointly and severally with the
Company if the Company shall survive such Corporate Transaction, and providing
after the date of such Corporate Transaction for adjustments, which shall be as
nearly equivalent as possible to the adjustments provided for in this Section
6.  The provisions of this Section
6(b) shall apply similarly to successive Corporate Transactions involving
any Successor Company.  In the event of a
Corporate Transaction in which consideration payable to holders of Common Stock
is payable solely in cash, then the holder shall be entitled to receive in
exchange for this Warrant cash in an amount equal to the amount such holder
would have received had the holder exercised this Warrant immediately prior to
such Corporate Transaction, less the aggregate Exercise Price for this Warrant
then in effect.  In case of any Corporate
Transaction described in the immediately preceding sentence of this Section
6(b), the Company or any Successor Company, as the case may be, shall make
available any funds necessary to pay to the holder the amount to which the
holder is entitled as described above in the same manner and at the same time
as holders of Common Stock would be entitled to such funds.

 

(c)                                  Issuance of Additional Shares of Common Stock.  In the event
the Company at any time or from time to time shall, or shall be deemed to,
issue or sell Additional Shares of Common Stock, other than Excluded Stock, for
consideration per share received by the Company of less than the Current Market
Price, then, and in each such case, the Exercise Price for any Warrant shall be
decreased to an amount determined by dividing the previously applicable
Exercise Price by a fraction, (A) the numerator of which shall be
the sum of (i) the number of shares of Common Stock outstanding
immediately prior to such issuance or sale, plus (ii) the number
of Additional Shares of Common Stock issued or sold or deemed to be issued or
sold, and (B) the denominator of which shall be the sum of
(x) the number of shares of Common Stock outstanding immediately prior
to

 

4

 

such issuance or sale, plus (y)
the number of shares of Common Stock which the aggregate consideration received
by the Company for the Additional Shares of Common Stock so issued or sold or
deemed to be issued or sold would purchase at the Current Market Price; provided,
however, that if at such time or as a result of such adjustment the
Exercise Price for any Warrant is or would be, as the case may be, equal to or
less than $0.01 per share, then in lieu of the adjustment of the Exercise Price
the Number of Warrant Shares purchasable upon exercise of this Warrant shall be
increased to a number determined by multiplying the previously applicable
number of Shares purchasable upon exercise of this Warrant by a fraction, (A)
the numerator of which shall be the sum of (i) the number
of shares of Common Stock outstanding immediately prior to such issuance or
sale, plus (ii) the number of Additional Shares of Common Stock
issued or sold or deemed to be issued or sold, and (B) the denominator
of which shall be the sum of (x) the number of shares of Common
Stock outstanding immediately prior to such issuance or sale, plus (y)
the number of shares of Common Stock which the aggregate consideration received
by the Company for the Additional Shares of Common Stock so issued or sold or
deemed to be issued or sold would purchase at the Current Market Price.

 

(d)                                 Options and Convertible Securities.

 

(i)                                     In the event that the Company at any time or from time
to time issues, sells, grants or assumes, or fixes a record date for the determination
of holders of any class of securities entitled to receive, any Options or
Convertible Securities, other than Excluded Stock, then, and in each such case,
the number of shares of Common Stock at any time issuable upon the exercise of
such Options and/or the conversion or exchange of such Convertible Securities,
as the case may be, shall be deemed to be Additional Shares of Common Stock
issued as of the close of business on the date of the earliest of such
issuance, sale, grant, assumption or record date.

 

(ii)                                  If any Options or Convertible Securities provide, with
the passage of time or otherwise, for any decrease or increase, as the case may
be, in (A) the consideration payable to the Company or for which such Options
or Convertible Securities are exercisable, convertible or exchangeable, or (B)
the number of Additional Shares of Common Stock issuable upon the exercise
and/or conversion or exchange thereof, then the Exercise Price for this Warrant
shall be adjusted upon any such decrease or increase becoming effective to
reflect such decrease or increase insofar as it affects any such Options or
Convertible Securities which are outstanding at such time, as if such Options
or Convertible Securities included such terms as adjusted upon their original issuance,
sale, grant, assumption or record date, as the case may be; provided, however,
that no adjustments relating to any Options or Convertible Securities pursuant
to this subsection, individually or in the aggregate, shall increase the
Exercise Price for this Warrant by more than all previous reductions in the
Exercise Price for such Warrant relating to the same Options or Convertible
Securities.

 

(iii)                               In any case in which Additional Shares of Common Stock
are deemed to be issued, sold, granted or assumed, no further adjustment of the
Exercise Price shall be made upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the consequent issue
or sale of Convertible Securities or shares of Common Stock.

 

(iv)                              Upon (x) the expiration, or the repurchase and
cancellation or retirement by the Company, of any Options which have not been
exercised, or (y) the expiration of any rights of conversion or exchange under
any Convertible Securities which have not been

 

5

 

exercised, or the repurchase and
cancellation or retirement by the Company of any such Convertible Securities
the rights of conversion or exchange of which have not been exercised, any
adjustments to the Exercise Price computed upon the original issuance, sale,
grant, assumption or record date, and upon any subsequent adjustments to such
Options or Convertible Securities, shall, effective as of such expiration,
cancellation or retirement, as the case may be, be recomputed as if:  (i) the only Additional Shares of Common
Stock (including, without limitation, pursuant to the issuance or sale of
Options or Convertible Securities) issued or sold were the Additional Shares of
Common Stock (including, without limitation, pursuant to the issuance or sale
of Options or Convertible Securities), if any, actually issued or sold upon the
exercise of such Options or upon the conversion or exchange of such Convertible
Securities; (ii) in the case of Options, the consideration received therefor
was the consideration actually received by the Company for the issuance, sale,
grant or assumption of such Options, whether or not exercised, plus the
consideration actually received by the Company upon such exercise, plus, in the
case of Options for Convertible Securities, any additional consideration deemed
to be received by the Company upon the issuance and upon any conversion or
exchange of such Convertible Securities for which Options were exercised; and
(iii) in the case of Convertible Securities, the consideration received
therefor was the consideration actually received by the Company for the
issuance, sale, grant or assumption of such Convertible Securities which were
actually converted or exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or exchange; provided,
however, that no adjustments relating to any Options or Convertible
Securities pursuant to this subsection, individually or in the aggregate, shall
increase the Exercise Price by more than all previous reductions in the
Exercise Price relating to the same Options or Convertible Securities.

 

(e)                                  Consideration.

 

(i)                                     For purposes of this Section 6, the
consideration for the issuance, sale, grant or assumption of any Additional Shares
of Common Stock, irrespective of the accounting treatment of such
consideration, shall equal:

 

(1)                                  insofar as it consists of cash, the amount of cash
paid in consideration for the issuance, sale, grant or assumption of such
Additional Shares of Common Stock, without giving effect to customary expenses,
commissions or other compensation paid by the Company and customary concessions
or discounts allowed by the Company to underwriters, dealers or others
performing similar services in connection with any such issuance, sale, grant
or assumption;

 

(2)                                  insofar as it consists of property (including, without
limitation, securities) other than cash actually received by the Company as
direct consideration for the issuance, sale, grant or assumption or such Additional
Shares of Common Stock, the Fair Market Value thereof at the time of such
issuance, sale, grant or assumption;

 

(3)                                  insofar as it consists of other property or
consideration, including the provision of services to the Company,  the
Fair Market Value of such other property or consideration; and

 

6

 

(4)                                  in the event Additional Shares of Common Stock are
issued or sold together with other securities or property for a consideration
which covers both, the portion of such consideration so received, computed as
provided in clauses (1), (2) and (3) above, allocable to such Additional Shares
of Common Stock (as reasonably determined by the Board of Directors of the
Company in good faith, as evidenced by a written board resolution delivered to
the holder hereof).

 

(ii)                                  Additional Shares of Common Stock deemed to have been
issued, sold, granted or assumed pursuant to Section 6(d) hereof shall
be deemed to have been issued, sold, granted or assumed for consideration per
share equal to the quotient of:  (A) the
total amount of cash and other property, if any, received by the Company as
direct consideration for the issuance, sale, grant or assumption of the Options
or Convertible Securities in question, plus the aggregate amount of
additional consideration (as set forth in the instruments relating thereto)
payable to the Company upon the exercise of such Options or the conversion or
exchange of such Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options and the conversion or
exchange of such Convertible Securities, divided by (B) the number of
shares of Common Stock (as set forth in the instruments relating thereto)
issuable upon the exercise of such Options and the conversion or exchange of
such Convertible Securities.

 

(f)                                    Dividends and Distributions.  In the event
that the Company at any time or from time to time declares, orders, pays or
makes any dividend or other distribution on the Common Stock, including,
without limitation, distributions of cash, evidence of its indebtedness,
Options, Convertible Securities, other securities or property or rights to
subscribe for or purchase any of the forgoing, and whether by way of dividend,
spin-off, reclassification, recapitalization, similar corporate reorganization
or otherwise, other than a dividend or distribution payable in Additional
Shares of Common Stock that gives rise to an adjustment pursuant to Section
6(a) hereof, then, and in each such case, the Exercise Price of this
Warrant shall be reduced to a number determined by dividing the previously
applicable Exercise Price by a fraction (which must be less than 1, otherwise
no adjustment is to be made pursuant to this Section 6(f)) (A) the numerator
of which shall be the Fair Market Value per share of Common Stock on the record
date for such dividend or other distribution, and (B) the denominator of
which shall be the excess, if any, of (x) such Fair Market Value per
share of Common Stock, over (y) the sum of the amount of any cash distributed
per share of Common Stock plus the positive Fair Market Value, if any, per
share of Common Stock of any such evidences of indebtedness, Options,
Convertible Securities, other securities or property or rights to be so
distributed.  Such adjustments shall be
made whenever any such dividend or other distribution is made and shall become
effective as of the date of such distribution, retroactive to the record date
therefor.

 

(g)                                 Other Events.  If any event occurs as to which the provisions
of this Section 6 are not strictly applicable or if strictly applicable
would not fairly protect the purchase rights of the holder hereof in accordance
with such provisions, then the Board of Directors of the Company shall make an
adjustment in the number of Shares available under this Warrant, the Exercise
Price, or the applicability of such provisions so as to protect such purchase
rights.  The adjustment shall be such as
will give the holder hereof upon exercise for the same aggregate Exercise Price
the total number of shares of Common Stock as the holder would have owned had
this Warrant been exercised prior to the event and had the holder continued to
hold such Common Stock until after the event requiring

 

7

 

the adjustment, but in no event shall
any such adjustment have the effect of increasing the Exercise Price.

 

(h)                                 Minimum Adjustment.  The adjustments required by
the preceding subsections of this Section 6 shall be made whenever and
as often as any specified event requiring an adjustment shall occur, except
that no adjustment of the Exercise Price or the number of Shares purchasable
upon exercise of this Warrant that would otherwise be required shall be made
unless and until such adjustment either by itself or with other adjustments not
previously made decreases the Exercise Price immediately prior to the making of
such adjustment by at least $0.01 or increases or decreases the number of
Shares purchasable upon exercise of this Warrant immediately prior to the
making of such adjustment by at least one Share.  Any adjustment representing a change of less
than such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 6
and not previously made, would result in the requisite minimum adjustment.

 

(i)                                     Accountants’ Report as to Adjustments.  In the case
of any adjustment in the number of Shares purchasable upon exercise of this
Warrant or the Exercise Price, the Company, at its sole expense, shall promptly
(i) compute such adjustment in accordance with the terms of this Warrant and,
if the holder hereof so requests in writing from the Company within 30 days of
receipt of such computations from the Company, cause independent certified
public accountants of recognized national standing to verify such computation
(other than any determination of the Fair Market Value of Common Stock or the
fair market value of any other property); (ii) prepare a report setting forth
such adjustment and showing in reasonable detail the method of calculation
thereof and the facts upon which such adjustment is based, including, without
limitation, (a) the event or events giving rise to such adjustment; (b) the
consideration received by the Company for any Additional Shares of Common Stock
issued or sold or deemed to have been issued or sold; (c) the number of shares
of Common Stock outstanding or deemed to be outstanding prior and subsequent to
any such transaction; (d) the method by which any such adjustment was
calculated (including a description of the basis on which the Board of
Directors of the Company made any determination of Fair Market Value or fair
market value required thereby); and (e) the number of Shares purchasable upon
exercise of this Warrant and the Exercise Price in effect immediately prior to
such event or events and as adjusted; (iii) mail a copy of each such report to
the holder hereof and, upon the request at any time of the holder hereof,
furnish to the holder a like report setting forth the number of Shares
purchasable upon exercise of this Warrant and the Exercise Price at the time in
effect and showing in reasonable detail how they were calculated; and (iv) keep
copies of all such reports available at the principal office of the Company for
inspection during normal business hours by the holder or any prospective
purchaser of this Warrant designated by the holder hereof.

 

(j)                                     No Dilution or Impairment.  The Company
shall not, by amendment of its certificate of incorporation or other organizational
document or through any sale or other issuance of securities, capital
reorganization, reclassification, recapitalization, consolidation, merger,
transfer of assets, dissolution, liquidation, winding-up, any similar
transaction or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all terms hereunder and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder hereof against dilution or other
impairment.  Without limiting the
generality of the foregoing, the Company (a) will not permit the par value of
any shares of Common Stock receivable upon the exercise of this

 

8

 

Warrant to exceed the Exercise Price
and (b) will take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant by the holder
hereof.  Without limiting the generality
of the foregoing, before taking any action that would cause a reduction of the
Exercise Price pursuant to Section 6 hereof below the then par value (if
any) of the Common Stock, the Company shall take any and all corporate action
(including, without limitation, a reduction in par value) which shall be
necessary to validly and legally issue fully paid and nonassessable shares of
Common Stock, as the case may be, at the Exercise Price as so reduced.

 

(k)                                  Contest and Appraisal Rights.  If the holder
hereof shall, in good faith, disagree with any determination by the Board of
Directors of the Company of the Fair Market Value made pursuant to this
Warrant, and such disagreement is in respect of securities not traded on a
national securities exchange or quoted on an automated quotation system or
other property valued by the Board of Directors of the Company at more than
$100,000 then the holder may by notice to the Company (an “Appraisal Notice”),
given within 30 days after notice to the holder hereof following such
determination, elect to contest such determination; provided, however,
that the holder hereof may not seek appraisal of any determination of Fair Market
Value to the extent that the Company has received a fairness opinion or other
appraisal from an Appraiser in connection with the transaction giving rise to
such determination.  Within 20 days after
an Appraisal Notice, the Company shall engage an Appraiser to make an
independent determination of such Fair Market Value (the “Appraiser’s
Determination”), and to deliver to the Company and the holder hereof a
report describing its methodology and results in reasonable detail within 30
days of such engagement.  In arriving at
its determination, the Appraiser shall base any valuation upon:  (i) in the case of the Fair Market Value of
shares of Common Stock, the fair market value of the Company and its
Subsidiaries on the basis of an arm’s length sale of a going concern between an
informed and willing buyer and an informed and willing seller, under no
compulsion to buy or sell, taking into account all the relevant facts and
circumstances then prevailing, and without consideration of (x) the lack of an
actively trading public market for the Common Stock, (y) any restrictions on
the transfer of shares of Common Stock, or (z) any control premium or minority
discount, and (ii) in the case of the Fair Market Value of any other property,
the fair market value of such other property assuming that such other property
was sold in an arm’s length transaction between an informed and willing buyer
and an informed and willing seller, under no compulsion to buy or sell, taking
into account all the relevant facts and circumstances then prevailing.  The holder hereof shall be afforded
reasonable opportunities to discuss the appraisal with the Appraiser.  The Appraiser’s Determination shall be final
and binding on the Company and the holders hereof, absent manifest error.  The costs of conducting an appraisal shall be
borne by the Company.

 

7.                                       Notice of Corporate Action.  In the
event the Company proposes to:  (i) pay,
distribute, or take a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of capital stock or any other securities or
property; or (ii) consummate any capital reorganization, reclassification,
recapitalization, consolidation, merger, transfer of all or substantially all
of its assets, dissolution, liquidation or winding-up, or any similar
transaction; then, at least 10 days prior to the earlier of any applicable
record date or such event, as the case may be, the Company shall deliver to the
holder hereof a notice specifying:  (a)
the date or expected date on which any such payment or distribution is to be
made or record is to be taken and the amount and character of any such
dividend, distribution or

 

9

 

right; (b) the
date or expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation,
winding-up or similar transaction is to take effect and any record date
therefor; (c) the time as of which any holders of record of shares of Common
Stock and/or any other class of securities shall be entitled to exchange their
shares of Common Stock and/or other securities for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation,
winding-up or similar transaction and a description in reasonable detail of
such transaction; and (d) in each case, the expected effect on the number of
Shares purchasable upon exercise of this Warrant and the Exercise Price of each
such transaction or event.  The Company
shall update any such notice to reflect any change in the foregoing information.

 

8.   No Fractional Shares.  No fractional shares of Common Stock shall be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor based on the
Fair Market Value thereof.

 

9.   Other Antidilution
Provisions.  The Company covenants not to
issue, sell, grant or assume any securities (including, without limitation, any
Additional Shares of Common Stock or rights to acquire Additional Shares of
Common Stock) to any Person (other than the Purchaser, Deutsche Bank AG-London
acting through DB Advisors, LLC as investment advisor or any of their
transferees), which, in the aggregate, provide for greater or more favorable
antidilution protection than the antidilution protection provided for in Section
6 hereof.  For the avoidance of
doubt, a different exercise price or trigger price for the application of such
rights (including any such price based on fair market value) shall not by
itself be considered more favorable; provided, however, that a
trigger price for antidilution protection that is 120% or more of the Fair
Market Value of shares of Common Stock at the time of issuance of such
securities shall be considered more favorable in the aggregate.

 

10.   Compliance with Securities
Act; Disposition of Warrant or Shares of Common Stock.

 

(a)                                  Compliance with
Securities Act.  The Holder, by
acceptance hereof, agrees that this Warrant, and the Shares issuable upon
exercise of this Warrant, are being acquired for investment and that such Holder
will not offer, sell or otherwise dispose of this Warrant, or any Shares
issuable upon exercise of this Warrant, except under circumstances which will
not result in a violation of the Securities Act or any applicable state
securities laws.  This Warrant and all
Shares issued upon exercise of this Warrant (unless registered under the
Securities Act and any applicable state securities laws) shall be stamped or
imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS.  THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.”

 

10

 

Whenever the foregoing legend is
no longer required in the opinion of counsel to the holder hereof, upon request
of the holder hereof, the Company, at its sole expense (including, without
limitation, the payment of any applicable issue taxes), shall issue or cause to
be issued in the name of and delivered to the holder hereof or as the holder
hereof may direct new Warrant Certificates of like tenor, dated the date
hereof, and/or new certificates for shares of Common Stock.

 

(b)                                 Transferability.  Subject to compliance with applicable federal
and state securities laws, the holder hereof may, without the prior written
consent of the Company, transfer this Warrant and all rights hereunder are
transferable, in whole or in part, at any time by the holder hereof to any
Person.  Any transfer of this Warrant or
any portion hereof shall be recorded on the books of the Company upon the
surrender of this Warrant, properly endorsed for transfer by delivery of an
Assignment Form in substantially the form attached hereto as Exhibit B,
to the Company at the address set forth in Section 16 hereof.  In the event of a partial transfer of this
Warrant, the Company shall issue to the holder one or more appropriate new
Warrants.

 

11.   No Stockholder Rights or
Liabilities.  Prior to the exercise
of this Warrant, the holder hereof shall not be entitled to any rights of a
stockholder with respect to the Shares, including (without limitation) the
right to vote such Shares or receive dividends or other distributions thereon,
and the holder hereof shall not be entitled to any notice or other
communication concerning the business or affairs of the Company, other than as
specifically required by this Warrant. 
Nothing contained in this Warrant shall be construed as imposing any
obligation on any holder to purchase any securities or as imposing any
liabilities on such holder as a stockholder of the Company, whether such
obligation or liabilities are asserted by the Company or by creditors of the
Company or otherwise.

 

12.   Replacement of Warrants.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant held by any Person other than the initial holder hereof or any
institutional investor, upon delivery of an indemnity reasonably satisfactory
to the Company or, in the case of any such mutilation, upon surrender of this
Warrant for cancellation at the principal office of the Company, the Company,
at the expense of the holder (including, without limitation, the payment of any
applicable issue taxes), shall execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated the date hereof.

 

13.   Remedies.  The Company stipulates that the remedies at
law available to the holder hereof in the event of any default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.  No failure or delay on the part of the holder
hereof, in exercising any right, power or remedy hereunder, shall operate as a
suspension or waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder.  The remedies herein provided are in addition
to and not exclusive of any other remedies provided at law or in equity.

 

11

 

14.   Successors and Assigns.  The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the holder
hereof from time to time of this Warrant and the Shares issuable upon exercise
of this Warrant.

 

15.   Amendments and Waivers.  Any term of this Warrant may be amended,
altered or modified and the observance of any term of this Warrant may be
waived (either generally or in a particular instance and either retroactively
or prospectively) upon the written consent of the Company and the holder
hereof.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

 

16.   Notices.  All notices required under this Warrant shall
be deemed to have been given or made for all purposes (i) upon personal
delivery, (ii) upon confirmation receipt that the communication was successfully
sent to the applicable number if sent by facsimile, or (iii) one day after
being sent, when sent by professional overnight courier service.  Notices to the Company shall be sent to the
address of the Company set forth below (or at such other place as the Company
shall notify the Holders hereof in writing) and notices to the Holder shall be
sent to the address of the Holder set forth on the signature page hereto (or at
such other place as the Holder shall notify the Company in writing):

 

	
  To the Company:

  	
   

  	
  Aegis Communications Group,
  Inc.

  
	
   

  	
   

  	
  7880 Bent Branch Drive

  
	
   

  	
   

  	
  Suite 150

  
	
   

  	
   

  	
  Irving, Texas  75063

  
	
   

  	
   

  	
  Facsimile:  (972) 868-0267

  
	
   

  	
   

  	
  Attention:

  	
  John Scot Brunke

  
	
   

  	
   

  	
   

  	
  President

  

 

 

17.   Headings.  The section and subsection headings of this
Warrant are inserted for convenience only and shall not constitute a part of
this Warrant in construing or interpreting any provision hereof.

 

18.   Governing Law.  This Warrant and the rights and duties of the
parties hereto hereunder and (unless otherwise provided) all amendments and
supplements to, and all consents and waivers pursuant to, this Warrant shall in
all respects be governed by, and construed and enforced in accordance with, the
laws of the State of New York without giving effect to its conflict of laws principles
or rules.

 

19.   Severability.  If any provision of this Warrant is held to
be invalid or unenforceable for any reason, it shall be adjusted rather than
voided, if possible, to achieve the intent of the parties hereto to the maximum
extent possible.  Any provision of this
Warrant which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

12

 

20.   Defined Terms.  The following terms have the meanings indicated
below, unless the context otherwise requires:

 

“Additional Shares
of Common Stock” means all shares, including treasury shares, of Common
Stock, issued, sold or granted, or deemed to be issued, sold or granted
pursuant to the terms hereof, by the Company after the date hereof, whether or
not subsequently reacquired or retired by the Company, other than the shares of
Common Stock issued upon the exercise of this Warrant.

 

“Affiliate”
means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person.

 

“Appraiser”
means an independent nationally recognized investment bank or other qualified
financial institution acceptable to the Company and the holder hereof.

 

“Business Day”
means any day other than a Saturday or a Sunday or a day on which commercial
banking institutions in New York City are authorized or required to be closed.

 

 “Common Stock” means the common stock
of the Company, par value $0.01  per share, any capital stock into which
such Common Stock shall have been changed or converted, any capital stock
resulting from any reclassification of such Common Stock, and all other capital
stock of any class or classes of the Company, other than preference stock, the
holders of which share equally with the Common Stock in current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference.

 

“Convertible Securities”
means any evidences of indebtedness, shares of capital stock or any other
securities convertible into or exchangeable for, directly or indirectly, shares
of Common Stock.

 

 “Current Market Price” means the
average of the closing prices of the Common Stock during the five-day trading
period ending immediately prior to the date of determination as quoted on the
Nasdaq Small Cap Market or any United States automated quotation system or
national securities exchange or national market system on which the Common
Stock is then quoted or traded, as applicable

 

“Excluded Stock”
means securities issued, or deemed issued, to directors, officers, employees or
consultants of the Company or a subsidiary of the Company in connection with
their service as directors of the Company or a subsidiary of the Company, their
employment by the Company or a subsidiary of the Company or their retention as
consultants by the Company or a subsidiary of the Company under the Company’s
employee benefit plans approved by the Company’s board of directors, as such
plans may be amended from time to time with the approval of the Company’s board
of directors, or under other plans, adopted or assumed by the Company with the
approval of the Company’s board of directors.

 

“Fair Market Value”
means (i) with respect to any share of Common Stock, including with respect to
a Share for purposes of Section 2(b), the Current Market Price; provided
that, if the Common Stock is not then quoted on the Nasdaq Small Cap Market or
any United States automated quotation system or national securities exchange or
national market system or the OTC Bulletin Board or Pink Sheets, the fair
market value shall be:  (A) the
value based on the most recently completed arm’s

 

13

 

length transaction between
the Company and a Person other than an affiliate of the Company within the
three-month period prior to the date of determination with respect to such
security, or (B) if (A) does not apply, the fair market value as most recently
determined by an Appraiser within such prior three-month period, provided,
that, any such appraisal was made within the two-month period following the
date of the financial statements on which such appraisal is based, or (C) if
neither (A) nor (B) applies, the fair market value as reasonably determined by
the Board of Directors of the Company in good faith, as evidenced by a written
board resolution delivered to the holder hereof and (ii) with respect to any
other property other than cash or Common Stock, 
(A) the value based on the most recently completed arm’s length
transaction between the Company and a Person other than an affiliate of the
Company within the three-month period prior to the date of determination with
respect to such property, or (B) if (A) does not apply, the fair
market value as most recently determined by an Appraiser within such prior
three-month period, provided that, any such appraisal was made within
the two-month period following the date of the financial statements on which
such appraisal is based, or (C) if neither (A) nor (B) applies, the fair market
value as reasonably determined by the Board of Directors of the Company in good
faith, as evidenced by a written board resolution delivered to the holder
hereof.  Any determination pursuant to
subsections (i)(B) or (C) or (ii)(B) or (C) shall be made on the basis of an
arm’s length sale of a going concern between an informed and willing buyer and
an informed and willing seller, under no compulsion to buy or sell, taking into
account all the relevant facts and circumstances then prevailing and without
consideration of (x) the lack of an actively trading public market for the
Common Stock, (y) any restrictions on the transfer of shares of Common
Stock or (z) any control premium or minority discount.  For the avoidance of doubt, any determination
pursuant to subsections (i)(C) or (ii)(C) shall be subject to Section 6(k).

 

“Note” means the
secured promissory note issued to the Purchaser on the date hereof pursuant to
the Purchase Agreement.

 

“Options” means
rights, options or warrants to subscribe for, purchase or otherwise acquire,
directly or indirectly, shares of Common Stock, including, without limitation,
Convertible Securities.

 

“Person” means
any individual, partnership, limited liability company, unlimited liability
company, corporation, association, joint stock company, trust, joint venture,
unincorporated organization or any federal, state, county or municipal
governmental or quasi-governmental agency, department, commission, board,
bureau, instrumentality or similar entity.

 

“Registration Rights
Agreement” means the Registration Rights Agreement entered into by the
Company and the Purchaser on the date hereof.

 

“Securities Act”
means the Securities Act of 1933 and all rules and regulations of the
Securities and Exchange Commission thereunder, as amended from time to time.

 

14

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed in its corporate name by its duly
authorized officer and to be dated as of the Date of Grant set forth on the
first page to this Warrant.

 

AEGIS COMMUNICATIONS GROUP, INC.

 

 

	
  By:

  	
  /s/ John Scot Brunke

  	
   

  
	
   

  
	
  Name:  John Scot Brunke

  
	
  Title:  President

  

 

 

EXHIBIT A-1

NOTICE OF EXERCISE

To:  AEGIS COMMUNICATIONS GROUP,
INC. (the “Company”)

 

1.                                       The
undersigned hereby:

elects to
purchase     shares of Common Stock of the Company pursuant
to the terms of the attached Warrant, and tenders herewith payment of the
purchase price of such shares in full, or elects to exercise its net issuance
rights pursuant to Section 2(b) of the attached Warrant with
respect to     shares of Common Stock.

 

2.                                       Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name or names as are specified below:

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Address)

  

 

3.                                       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, all except as in
compliance with applicable securities laws.

 

	
   

  	
   

  
	
  (Signature)

  
	
   

  	
   

  
	
  (Date)

  
			

 

B-1

 

EXHIBIT A-2

NOTICE OF EXERCISE

To:  AEGIS COMMUNICATIONS GROUP,
INC. (the “Company”)

 

1.                                       Contingent
upon and effective immediately prior to the closing (the “Closing”) of
the Company’s public offering contemplated by the Registration Statement on
Form S-      (File No.
                        ),
which was filed with the Securities and Exchange Commission on
                      ,
20     , the undersigned hereby:

 

elects to purchase
      shares of Common Stock of the Company (or such
lesser number of shares as may be sold on behalf of the undersigned at the
Closing) pursuant to the terms of the attached Warrant, or elects to exercise
its net issuance rights pursuant to Section 2(b) of the attached
Warrant with respect to        Shares of Common
Stock.

 

2.                                       Please
deliver to the custodian for the selling shareholders a stock certificate
representing
such                shares.

 

3.                                       The
undersigned has instructed the custodian for the selling shareholders to
deliver to the Company
$                  or,
if less, the net proceeds due the undersigned from the sale of shares in the
aforesaid public offering.  If such net
proceeds are less than the purchase price for such shares, the undersigned
agrees to deliver the difference to the Company prior to the Closing.

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Address)

  	
   

  
	
   

  	
   

  
	
  (Date)

  
			

 

B-1

 

EXHIBIT B

ASSIGNMENT FORM

To:   AEGIS COMMUNICATIONS GROUP, INC. (the
“Company”)

 

The undersigned hereby assigns
and transfers unto                                                     
                                    
                              
                                                                                             (Please
typewrite or print in block letters) the right to purchase
                       
Shares (as defined in the Warrant) of Aegis Communications Group, Inc., subject
to the Warrant, dated as of
                                             ,
granted to the undersigned (the “Warrant”).

 

This assignment complies with
the provisions of Section 10 of the Warrant.

 

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  (Print Name of Signatory)

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Title of Signatory)

  
					

 

B-1Exhibit 4.10

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY STATE
SECURITIES LAWS.  THIS WARRANT AND THE
SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN OR WILL BE ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM.

 

AEGIS
COMMUNICATIONS GROUP, INC.

WARRANT TO PURCHASE SHARES

OF COMMON STOCK

 

	
  Date of Issuance:
  April 21, 2004

  	
   

  	
  Certificate No. W-7

  

 

THIS CERTIFIES THAT,
for value received, Deutsche Bank
AG-London acting through DB Advisors, LLC as investment advisor (the “Purchaser”)
and its assigns are entitled to subscribe for and purchase 229,329,130 shares
(such number and such other number as shall result, from time to time, from the
adjustments specified in Section 6 hereof is herein referred to as the “Number
of Warrant Shares”) of duly authorized, validly issued, fully paid and
nonassessable Common Stock (as adjusted pursuant to Section 6 hereof,
the “Shares”) of AEGIS COMMUNICATIONS GROUP, INC., a Delaware
corporation (the “Company”), at the price of $0.01 per share (such price
and such other price as shall result, from time to time, from the adjustments
specified in Section 6 hereof is herein referred to as the “Exercise
Price”), subject to the provisions and upon the terms and conditions
hereinafter set forth.  As used herein
the term “Date of Grant” shall mean November
5, 2003.  The term “Warrant”
as used herein shall be deemed to include any warrants issued upon transfer or
partial exercise of this Warrant unless the context clearly requires
otherwise.  Capitalized terms used but
not otherwise defined herein shall have the respective meanings ascribed to
them in the Note and Warrant Purchase Agreement dated as of November 5, 2003
between the Company, Essar Global Limited and the
Purchaser (the “Purchase Agreement”).

 

1.   Term.  The purchase right represented by this
Warrant is exercisable by the holder hereof, in whole or in part, at any time
and from time to time from the Date of Grant through November ­­5, 2010  (as such date may be extended as provided below,
the “Expiration Date”). 
Notwithstanding the foregoing, the Expiration Date of this Warrant may
be extended if, on the Expiration Date, (i) there is no effective Registration
Statement (as defined in the Registration Rights Agreement) covering all of the
Registrable Securities (as defined in the Registration Rights Agreement) or
(ii) a Blackout Period (as defined in the Registration Rights Agreement) is
then in effect, then in either of those events, the Expiration Date and the
Principal Payment Date shall be automatically extended until such time as a
Registration Statement covering all of the Registrable Securities has been
declared effective and/or there is no Blackout Period
in effect.

 

 

2.   Method of Exercise.

 

(a)                                  Cash and Other Exercise.  Subject to Sections 1 and 5 hereof,
the purchase right represented by this Warrant may be exercised by the holder
hereof, in whole or in part and from time to time, at the election of the
holder hereof, by (i) the surrender of this Warrant (with the notice of
exercise substantially in the form attached hereto as Exhibit A-1
duly completed and executed) at the principal office of the Company and the
payment to the Company by wire transfer to an account designated by the Company
(a “Wire Transfer”) of an amount equal to the then applicable Exercise
Price multiplied by the number of Shares then being purchased, or (ii) if
in connection with a registered public offering of the Common Stock, the
surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit
A-2 duly completed and executed) at the principal office of the Company
together with notice of arrangements reasonably satisfactory to the Company for
payment to the Company by Wire Transfer from the proceeds of the sale of such
number of Shares to be sold by the holder hereof in such public offering of an
amount equal to the then applicable Exercise Price per share multiplied by the
number of Shares then being purchased, or (iii) the tender of all or a portion
of the Note issued by the Company pursuant to the Purchase Agreement in a
principal amount equal to the then applicable Exercise Price multiplied by the
number of Shares then being purchased.

 

(b)                                 Cashless Exercise.  Subject to Sections 1 and 5 hereof, in
lieu of exercising this Warrant pursuant to Section 2(a), the holder of
this Warrant may elect to receive, without the payment by the holder of any
additional consideration, Shares equal to the value of this Warrant (or the
portion hereof being canceled), together with any cash in lieu of fractional
Shares, by surrender of this Warrant at the principal office of the Company
together with an executed Notice of Exercise or Exchange in substantially the
form attached hereto as Exhibit A-1 or Exhibit A-2.  In such event, the number of Shares that the
Company shall issue to the holder hereof shall be computed using the following
formula:

 

	
   

  	
  Y
  (A - B)

  	
   

  	
   

  
	
  X
  =  

  	
  A

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
  Where:

  	
   

  	
  X =

  	
   

  	
  The adjusted number of Shares
  to be issued to the Holder as a result of the cashless exchange election
  under this Section 2(b);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y =

  	
   

  	
  The number of Shares in
  respect of which the cashless exchange election under this Section 2(b)
  is made;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A =

  	
   

  	
  The Fair Market Value of one
  Share at the time the cashless exchange election is made; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B =

  	
   

  	
  The Exercise Price.

  

 

3.   Certificates for Shares.  Within three Business Days after the exercise
of the purchase rights evidenced by this Warrant, one or more certificates for
the number of Shares so purchased shall be issued to the holder or as the holder
may direct (with appropriate restrictive legends, as applicable).  In the event of a partial exercise of this
Warrant, a new warrant or warrants (dated the date hereof) of like tenor shall
be issued to the holder or, subject to the limitations set forth herein, as

 

2

 

the holder may
direct (with appropriate restrictive legends, as applicable), for the aggregate
number of Shares equal to the number of Shares called for on the face of this
Warrant minus the number of Shares purchased by the holder hereof upon such
partial exercise.  For all purposes of
this Warrant other than Sections 2(a) and 2(b), any reference to the
exercise of this Warrant shall be deemed to include a reference to the cashless
exchange of the Warrant into Common Stock, in accordance with the terms of Section
2(b) and this Section 3.  The
Company shall pay all of its expenses associated with the issuance of any
Shares and replacement Warrants in accordance with the terms hereof, including,
without limitation, any applicable issue taxes.

 

4.   Stock Fully Paid;
Reservation of Shares.  All Shares
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance pursuant to the terms and conditions herein, be duly and
validly issued and fully paid and nonassessable, and free from all preemptive
rights, taxes, liens and charges with respect to the issuance thereof.  During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized, and reserved for the purpose of the issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of shares of
its Common Stock to provide for the exercise of the rights represented by this
Warrant.

 

5.   Hart-Scott-Rodino.  If any filing or notification becomes
necessary pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the “HSR Act”), based upon the planned exercise of this
Warrant or any portion hereof, the holder hereof shall notify the Company of
such requirement, and the holder and the Company shall file with the proper
authorities all forms and other documents necessary to be filed pursuant to the
HSR Act, as promptly as possible and shall cooperate with each other in
promptly producing such additional information as those authorities may
reasonably require to allow early termination of the notice period provided by
the HSR Act or as otherwise necessary to comply with requirements of the
Federal Trade Commission or the Department of Justice.  The holder and the Company agree to cooperate
with each other in connection with such filings and notifications, and to keep
each other informed of the status of the proceedings and communications with
the relevant authorities.  The holder
shall pay any filing fee required to be paid in connection with a filing
pursuant to the HSR Act required as a result of the exercise of Warrants.  Notwithstanding the preceding sentence, the
Company shall pay all such filing fees required to be paid in connection with
any filing pursuant to the HSR Act required as a result of the exercise of
Warrants held by the Purchaser or its Affiliates (but not other successors or
assigns of the Purchaser).  The holder
and the Company shall each bear its own expenses (other than such filing fees)
incurred in connection with any filing required pursuant to the HSR Act.  Each holder by acceptance of this Warrant or
any portion hereof agrees to comply with the provisions of this Section 5.

 

6.   Adjustment of Exercise
Price and Number of Warrant Shares. 
The Number of Warrant Shares and the Exercise Price shall be subject to
adjustment from time to time, but without duplication, upon the occurrence of
certain events, as follows:

 

(a)                                  Subdivisions, Combinations and Other Issuances.  Prior to the
exercise or expiration of this Warrant, if the Company shall:  (i) subdivide its outstanding shares of
Common Stock into a larger number of shares of Common Stock by stock split or
otherwise, (ii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock by reverse stock split or otherwise or (iii)
issue additional shares of Common Stock or other capital stock as a

 

3

 

dividend or distribution on or with
respect to its Common Stock, the Exercise Price in effect prior to such
subdivision, combination or issuance shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend or distribution, or proportionately
increased in the case of a combination and the Number of Warrant Shares in
effect prior to such subdivision, combination or issuance shall forthwith be
proportionately increased in the case of a subdivision, stock dividend or
distribution, or proportionately decreased in the case of a combination.  Any adjustment under this Section 6(a)
shall become effective at the close of business on the date the subdivision,
combination or reclassification becomes effective, or as of the record date of
such dividend or distribution (provided the Company makes such dividend or
distribution), or in the event that no record date is fixed, upon the making of
such dividend or distribution.

 

(b)                                 Reclassification, Reorganization, Consolidation, etc.  In the event
of any corporate reclassification, capital reorganization, consolidation,
spin-off, merger, transfer of all or a substantial portion of the Company’s
properties or assets or any dissolution, liquidation or winding up of the
Company (other than as a result of a subdivision, combination, dividend or
distribution provided for in Section 6(a) above) (a “Corporate
Transaction”), then, as a condition of such event, provision shall be made,
and duly executed documents evidencing the same from the Company and any surviving
or acquiring Person (the “Successor Company”) shall be delivered to the
holder hereof, so that the holder shall have the right to receive upon exercise
of this Warrant the same number of shares of Common Stock and amount of cash
and other property that such holder would have been entitled to receive upon
such Corporate Transaction had this Warrant been exercised immediately prior to
the effective date of such Corporate Transaction.  The Company shall provide that any Successor
Company in such Corporate Transaction shall enter into an agreement with the
Company confirming the holder’s rights pursuant to this Warrant, assuming the
Company’s obligations under this Warrant, jointly and severally with the
Company if the Company shall survive such Corporate Transaction, and providing
after the date of such Corporate Transaction for adjustments, which shall be as
nearly equivalent as possible to the adjustments provided for in this Section
6.  The provisions of this Section
6(b) shall apply similarly to successive Corporate Transactions involving
any Successor Company.  In the event of a
Corporate Transaction in which consideration payable to holders of Common Stock
is payable solely in cash, then the holder shall be entitled to receive in
exchange for this Warrant cash in an amount equal to the amount such holder
would have received had the holder exercised this Warrant immediately prior to
such Corporate Transaction, less the aggregate Exercise Price for this Warrant
then in effect.  In case of any Corporate
Transaction described in the immediately preceding sentence of this Section
6(b), the Company or any Successor Company, as the case may be, shall make
available any funds necessary to pay to the holder the amount to which the
holder is entitled as described above in the same manner and at the same time
as holders of Common Stock would be entitled to such funds.

 

(c)                                  Issuance of Additional Shares of Common Stock.  In the event
the Company at any time or from time to time shall, or shall be deemed to,
issue or sell Additional Shares of Common Stock, other than Excluded Stock, for
consideration per share received by the Company of less than the Current Market
Price, then, and in each such case, the Exercise Price for any Warrant shall be
decreased to an amount determined by dividing the previously applicable
Exercise Price by a fraction, (A) the numerator of which shall be
the sum of (i) the number of shares of Common Stock outstanding
immediately prior to such issuance or sale, plus (ii) the number
of Additional Shares of Common Stock issued or sold or deemed to be issued or
sold, and (B) the denominator of which shall be the sum of
(x) the number of shares of Common Stock outstanding immediately prior
to

 

4

 

such issuance or sale, plus (y)
the number of shares of Common Stock which the aggregate consideration received
by the Company for the Additional Shares of Common Stock so issued or sold or
deemed to be issued or sold would purchase at the Current Market Price; provided,
however, that if at such time or as a result of such adjustment the
Exercise Price for any Warrant is or would be, as the case may be, equal to or
less than $0.01 per share, then in lieu of the adjustment of the Exercise Price
the Number of Warrant Shares purchasable upon exercise of this Warrant shall be
increased to a number determined by multiplying the previously applicable
number of Shares purchasable upon exercise of this Warrant by a fraction, (A)
the numerator of which shall be the sum of (i) the number
of shares of Common Stock outstanding immediately prior to such issuance or
sale, plus (ii) the number of Additional Shares of Common Stock
issued or sold or deemed to be issued or sold, and (B) the denominator
of which shall be the sum of (x) the number of shares of Common
Stock outstanding immediately prior to such issuance or sale, plus (y)
the number of shares of Common Stock which the aggregate consideration received
by the Company for the Additional Shares of Common Stock so issued or sold or
deemed to be issued or sold would purchase at the Current Market Price.

 

(d)                                 Options and Convertible Securities.

 

(i)                                     In the event that the Company at any time or from time
to time issues, sells, grants or assumes, or fixes a record date for the determination
of holders of any class of securities entitled to receive, any Options or
Convertible Securities, other than Excluded Stock, then, and in each such case,
the number of shares of Common Stock at any time issuable upon the exercise of
such Options and/or the conversion or exchange of such Convertible Securities,
as the case may be, shall be deemed to be Additional Shares of Common Stock
issued as of the close of business on the date of the earliest of such
issuance, sale, grant, assumption or record date.

 

(ii)                                  If any Options or Convertible Securities provide, with
the passage of time or otherwise, for any decrease or increase, as the case may
be, in (A) the consideration payable to the Company or for which such Options
or Convertible Securities are exercisable, convertible or exchangeable, or (B)
the number of Additional Shares of Common Stock issuable upon the exercise
and/or conversion or exchange thereof, then the Exercise Price for this Warrant
shall be adjusted upon any such decrease or increase becoming effective to
reflect such decrease or increase insofar as it affects any such Options or
Convertible Securities which are outstanding at such time, as if such Options
or Convertible Securities included such terms as adjusted upon their original
issuance, sale, grant, assumption or record date, as the case may be; provided,
however, that no adjustments relating to any Options or Convertible
Securities pursuant to this subsection, individually or in the aggregate, shall
increase the Exercise Price for this Warrant by more than all previous
reductions in the Exercise Price for such Warrant relating to the same Options
or Convertible Securities.

 

(iii)                               In any case in which Additional Shares of Common Stock
are deemed to be issued, sold, granted or assumed, no further adjustment of the
Exercise Price shall be made upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the consequent issue
or sale of Convertible Securities or shares of Common Stock.

 

(iv)                              Upon (x) the expiration, or the repurchase and
cancellation or retirement by the Company, of any Options which have not been
exercised, or (y) the expiration of any rights of conversion or exchange under
any Convertible Securities which have not been

 

5

 

exercised, or the repurchase and
cancellation or retirement by the Company of any such Convertible Securities
the rights of conversion or exchange of which have not been exercised, any
adjustments to the Exercise Price computed upon the original issuance, sale,
grant, assumption or record date, and upon any subsequent adjustments to such
Options or Convertible Securities, shall, effective as of such expiration,
cancellation or retirement, as the case may be, be recomputed as if:  (i) the only Additional Shares of Common
Stock (including, without limitation, pursuant to the issuance or sale of
Options or Convertible Securities) issued or sold were the Additional Shares of
Common Stock (including, without limitation, pursuant to the issuance or sale
of Options or Convertible Securities), if any, actually issued or sold upon the
exercise of such Options or upon the conversion or exchange of such Convertible
Securities; (ii) in the case of Options, the consideration received therefor
was the consideration actually received by the Company for the issuance, sale,
grant or assumption of such Options, whether or not exercised, plus the
consideration actually received by the Company upon such exercise, plus, in the
case of Options for Convertible Securities, any additional consideration deemed
to be received by the Company upon the issuance and upon any conversion or
exchange of such Convertible Securities for which Options were exercised; and
(iii) in the case of Convertible Securities, the consideration received
therefor was the consideration actually received by the Company for the
issuance, sale, grant or assumption of such Convertible Securities which were
actually converted or exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or exchange; provided,
however, that no adjustments relating to any Options or Convertible
Securities pursuant to this subsection, individually or in the aggregate, shall
increase the Exercise Price by more than all previous reductions in the
Exercise Price relating to the same Options or Convertible Securities.

 

(e)                                  Consideration.

 

(i)                                     For purposes of this Section 6, the
consideration for the issuance, sale, grant or assumption of any Additional
Shares of Common Stock, irrespective of the accounting treatment of such
consideration, shall equal:

 

(1)                                  insofar as it consists of cash, the amount of cash
paid in consideration for the issuance, sale, grant or assumption of such
Additional Shares of Common Stock, without giving effect to customary expenses,
commissions or other compensation paid by the Company and customary concessions
or discounts allowed by the Company to underwriters, dealers or others
performing similar services in connection with any such issuance, sale, grant
or assumption;

 

(2)                                  insofar as it consists of property (including, without
limitation, securities) other than cash actually received by the Company as
direct consideration for the issuance, sale, grant or assumption or such Additional
Shares of Common Stock, the Fair Market Value thereof at the time of such
issuance, sale, grant or assumption;

 

(3)                                  insofar as it consists of other property or consideration,
including the provision of services to the Company,  the Fair Market Value
of such other property or consideration; and

 

6

 

(4)                                  in the event Additional Shares of Common Stock are
issued or sold together with other securities or property for a consideration
which covers both, the portion of such consideration so received, computed as
provided in clauses (1), (2) and (3) above, allocable to such Additional Shares
of Common Stock (as reasonably determined by the Board of Directors of the
Company in good faith, as evidenced by a written board resolution delivered to
the holder hereof).

 

(ii)                                  Additional Shares of Common Stock deemed to have been
issued, sold, granted or assumed pursuant to Section 6(d) hereof shall
be deemed to have been issued, sold, granted or assumed for consideration per
share equal to the quotient of:  (A) the
total amount of cash and other property, if any, received by the Company as
direct consideration for the issuance, sale, grant or assumption of the Options
or Convertible Securities in question, plus the aggregate amount of
additional consideration (as set forth in the instruments relating thereto)
payable to the Company upon the exercise of such Options or the conversion or
exchange of such Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options and the conversion or
exchange of such Convertible Securities, divided by (B) the number of
shares of Common Stock (as set forth in the instruments relating thereto)
issuable upon the exercise of such Options and the conversion or exchange of
such Convertible Securities.

 

(f)                                    Dividends and Distributions.  In the event
that the Company at any time or from time to time declares, orders, pays or
makes any dividend or other distribution on the Common Stock, including, without
limitation, distributions of cash, evidence of its indebtedness, Options,
Convertible Securities, other securities or property or rights to subscribe for
or purchase any of the forgoing, and whether by way of dividend, spin-off,
reclassification, recapitalization, similar corporate reorganization or
otherwise, other than a dividend or distribution payable in Additional Shares
of Common Stock that gives rise to an adjustment pursuant to Section 6(a)
hereof, then, and in each such case, the Exercise Price of this Warrant shall
be reduced to a number determined by dividing the previously applicable
Exercise Price by a fraction (which must be less than 1, otherwise no
adjustment is to be made pursuant to this Section 6(f)) (A) the numerator
of which shall be the Fair Market Value per share of Common Stock on the record
date for such dividend or other distribution, and (B) the denominator of
which shall be the excess, if any, of (x) such Fair Market Value per
share of Common Stock, over (y) the sum of the amount of any cash distributed
per share of Common Stock plus the positive Fair Market Value, if any, per
share of Common Stock of any such evidences of indebtedness, Options,
Convertible Securities, other securities or property or rights to be so
distributed.  Such adjustments shall be
made whenever any such dividend or other distribution is made and shall become
effective as of the date of such distribution, retroactive to the record date
therefor.

 

(g)                                 Other Events.  If any event occurs as to which the provisions
of this Section 6 are not strictly applicable or if strictly applicable
would not fairly protect the purchase rights of the holder hereof in accordance
with such provisions, then the Board of Directors of the Company shall make an
adjustment in the number of Shares available under this Warrant, the Exercise
Price, or the applicability of such provisions so as to protect such purchase
rights.  The adjustment shall be such as
will give the holder hereof upon exercise for the same aggregate Exercise Price
the total number of shares of Common Stock as the holder would have owned had
this Warrant been exercised prior to the event and had the holder continued to
hold such Common Stock until after the event requiring

 

7

 

the adjustment, but in no event shall any such adjustment
have the effect of increasing the Exercise Price.

 

(h)                                 Minimum Adjustment.  The adjustments required by
the preceding subsections of this Section 6 shall be made whenever and
as often as any specified event requiring an adjustment shall occur, except
that no adjustment of the Exercise Price or the number of Shares purchasable
upon exercise of this Warrant that would otherwise be required shall be made
unless and until such adjustment either by itself or with other adjustments not
previously made decreases the Exercise Price immediately prior to the making of
such adjustment by at least $0.01 or increases or decreases the number of
Shares purchasable upon exercise of this Warrant immediately prior to the
making of such adjustment by at least one Share.  Any adjustment representing a change of less
than such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 6
and not previously made, would result in the requisite minimum adjustment.

 

(i)                                     Accountants’ Report as to Adjustments.  In the case
of any adjustment in the number of Shares purchasable upon exercise of this
Warrant or the Exercise Price, the Company, at its sole expense, shall promptly
(i) compute such adjustment in accordance with the terms of this Warrant and,
if the holder hereof so requests in writing from the Company within 30 days of
receipt of such computations from the Company, cause independent certified
public accountants of recognized national standing to verify such computation
(other than any determination of the Fair Market Value of Common Stock or the
fair market value of any other property); (ii) prepare a report setting forth
such adjustment and showing in reasonable detail the method of calculation
thereof and the facts upon which such adjustment is based, including, without
limitation, (a) the event or events giving rise to such adjustment; (b) the
consideration received by the Company for any Additional Shares of Common Stock
issued or sold or deemed to have been issued or sold; (c) the number of shares
of Common Stock outstanding or deemed to be outstanding prior and subsequent to
any such transaction; (d) the method by which any such adjustment was
calculated (including a description of the basis on which the Board of
Directors of the Company made any determination of Fair Market Value or fair
market value required thereby); and (e) the number of Shares purchasable upon
exercise of this Warrant and the Exercise Price in effect immediately prior to
such event or events and as adjusted; (iii) mail a copy of each such report to
the holder hereof and, upon the request at any time of the holder hereof,
furnish to the holder a like report setting forth the number of Shares
purchasable upon exercise of this Warrant and the Exercise Price at the time in
effect and showing in reasonable detail how they were calculated; and (iv) keep
copies of all such reports available at the principal office of the Company for
inspection during normal business hours by the holder or any prospective
purchaser of this Warrant designated by the holder hereof.

 

(j)                                     No Dilution or Impairment.  The Company
shall not, by amendment of its certificate of incorporation or other
organizational document or through any sale or other issuance of securities,
capital reorganization, reclassification, recapitalization, consolidation,
merger, transfer of assets, dissolution, liquidation, winding-up, any similar
transaction or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all terms hereunder and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder hereof against dilution or other
impairment.  Without limiting the
generality of the foregoing, the Company (a) will not permit the par value of
any shares of Common Stock receivable upon the exercise of this

 

8

 

Warrant to exceed the Exercise Price
and (b) will take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant by the holder
hereof.  Without limiting the generality
of the foregoing, before taking any action that would cause a reduction of the
Exercise Price pursuant to Section 6 hereof below the then par value (if
any) of the Common Stock, the Company shall take any and all corporate action
(including, without limitation, a reduction in par value) which shall be
necessary to validly and legally issue fully paid and nonassessable shares of
Common Stock, as the case may be, at the Exercise Price as so reduced.

 

(k)                                  Contest and Appraisal Rights.  If the holder
hereof shall, in good faith, disagree with any determination by the Board of
Directors of the Company of the Fair Market Value made pursuant to this
Warrant, and such disagreement is in respect of securities not traded on a
national securities exchange or quoted on an automated quotation system or
other property valued by the Board of Directors of the Company at more than
$100,000 then the holder may by notice to the Company (an “Appraisal Notice”),
given within 30 days after notice to the holder hereof following such
determination, elect to contest such determination; provided, however,
that the holder hereof may not seek appraisal of any determination of Fair Market
Value to the extent that the Company has received a fairness opinion or other
appraisal from an Appraiser in connection with the transaction giving rise to
such determination.  Within 20 days after
an Appraisal Notice, the Company shall engage an Appraiser to make an
independent determination of such Fair Market Value (the “Appraiser’s
Determination”), and to deliver to the Company and the holder hereof a
report describing its methodology and results in reasonable detail within 30
days of such engagement.  In arriving at
its determination, the Appraiser shall base any valuation upon:  (i) in the case of the Fair Market Value of
shares of Common Stock, the fair market value of the Company and its
Subsidiaries on the basis of an arm’s length sale of a going concern between an
informed and willing buyer and an informed and willing seller, under no
compulsion to buy or sell, taking into account all the relevant facts and
circumstances then prevailing, and without consideration of (x) the lack of an
actively trading public market for the Common Stock, (y) any restrictions on
the transfer of shares of Common Stock, or (z) any control premium or minority
discount, and (ii) in the case of the Fair Market Value of any other property,
the fair market value of such other property assuming that such other property
was sold in an arm’s length transaction between an informed and willing buyer
and an informed and willing seller, under no compulsion to buy or sell, taking
into account all the relevant facts and circumstances then prevailing.  The holder hereof shall be afforded
reasonable opportunities to discuss the appraisal with the Appraiser.  The Appraiser’s Determination shall be final
and binding on the Company and the holders hereof, absent manifest error.  The costs of conducting an appraisal shall be
borne by the Company.

 

7.                                       Notice of Corporate Action.  In the
event the Company proposes to:  (i) pay,
distribute, or take a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of capital stock or any other securities or
property; or (ii) consummate any capital reorganization, reclassification,
recapitalization, consolidation, merger, transfer of all or substantially all
of its assets, dissolution, liquidation or winding-up, or any similar
transaction; then, at least 10 days prior to the earlier of any applicable
record date or such event, as the case may be, the Company shall deliver to the
holder hereof a notice specifying:  (a)
the date or expected date on which any such payment or distribution is to be
made or record is to be taken and the amount and character of any such
dividend, distribution or

 

9

 

right; (b) the
date or expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation,
winding-up or similar transaction is to take effect and any record date
therefor; (c) the time as of which any holders of record of shares of Common
Stock and/or any other class of securities shall be entitled to exchange their
shares of Common Stock and/or other securities for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation,
winding-up or similar transaction and a description in reasonable detail of
such transaction; and (d) in each case, the expected effect on the number of
Shares purchasable upon exercise of this Warrant and the Exercise Price of each
such transaction or event.  The Company
shall update any such notice to reflect any change in the foregoing information.

 

8.   No Fractional Shares.  No fractional shares of Common Stock shall be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor based on the
Fair Market Value thereof.

 

9.   Other Antidilution
Provisions.  The Company covenants not to
issue, sell, grant or assume any securities (including, without limitation, any
Additional Shares of Common Stock or rights to acquire Additional Shares of
Common Stock) to any Person (other than the Purchaser, Essar Global Limited or any of their
transferees), which, in the aggregate, provide for greater or more favorable
antidilution protection than the antidilution protection provided for in Section
6 hereof.  For the avoidance of doubt,
a different exercise price or trigger price for the application of such rights
(including any such price based on fair market value) shall not by itself be
considered more favorable; provided, however, that a trigger
price for antidilution protection that is 120% or more of the Fair Market Value
of shares of Common Stock at the time of issuance of such securities shall be
considered more favorable in the aggregate.

 

10.   Compliance with Securities
Act; Disposition of Warrant or Shares of Common Stock.

 

(a)                                  Compliance with
Securities Act.  The Holder, by
acceptance hereof, agrees that this Warrant, and the Shares issuable upon
exercise of this Warrant, are being acquired for investment and that such
Holder will not offer, sell or otherwise dispose of this Warrant, or any Shares
issuable upon exercise of this Warrant, except under circumstances which will
not result in a violation of the Securities Act or any applicable state
securities laws.  This Warrant and all
Shares issued upon exercise of this Warrant (unless registered under the
Securities Act and any applicable state securities laws) shall be stamped or
imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE 
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS.  THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE
REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.”

 

Whenever the foregoing legend is
no longer required in the opinion of counsel to the holder hereof, upon request
of the holder hereof, the Company, at its sole expense (including, without
limitation,

 

10

 

the payment of any applicable
issue taxes), shall issue or cause to be issued in the name of and delivered to
the holder hereof or as the holder hereof may direct new Warrant Certificates
of like tenor, dated the date hereof, and/or new certificates for shares of
Common Stock.

 

(b)                                 Transferability.  Subject to compliance with applicable federal
and state securities laws, the holder hereof may, without the prior written
consent of the Company, transfer this Warrant and all rights hereunder are
transferable, in whole or in part, at any time by the holder hereof to any
Person.  Any transfer of this Warrant or any
portion hereof shall be recorded on the books of the Company upon the surrender
of this Warrant, properly endorsed for transfer by delivery of an Assignment
Form in substantially the form attached hereto as Exhibit B, to the
Company at the address set forth in Section 16 hereof.  In the event of a partial transfer of this
Warrant, the Company shall issue to the holder one or more appropriate new
Warrants.

 

11.   No Stockholder Rights or
Liabilities.  Prior to the exercise
of this Warrant, the holder hereof shall not be entitled to any rights of a
stockholder with respect to the Shares, including (without limitation) the
right to vote such Shares or receive dividends or other distributions thereon,
and the holder hereof shall not be entitled to any notice or other
communication concerning the business or affairs of the Company, other than as
specifically required by this Warrant. 
Nothing contained in this Warrant shall be construed as imposing any
obligation on any holder to purchase any securities or as imposing any
liabilities on such holder as a stockholder of the Company, whether such
obligation or liabilities are asserted by the Company or by creditors of the
Company or otherwise.

 

12.   Replacement of Warrants.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant held by any Person other than the initial holder hereof or any
institutional investor, upon delivery of an indemnity reasonably satisfactory
to the Company or, in the case of any such mutilation, upon surrender of this
Warrant for cancellation at the principal office of the Company, the Company,
at the expense of the holder (including, without limitation, the payment of any
applicable issue taxes), shall execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated the date hereof.

 

13.   Remedies.  The Company stipulates that the remedies at
law available to the holder hereof in the event of any default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.  No failure or delay on the part of the holder
hereof, in exercising any right, power or remedy hereunder, shall operate as a suspension
or waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. 
The remedies herein provided are in addition to and not exclusive of any
other remedies provided at law or in equity.

 

14.   Successors and Assigns.  The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the holder
hereof from time to time of this Warrant and the Shares issuable upon exercise
of this Warrant.

 

11

 

15.   Amendments and Waivers.  Any term of this Warrant may be amended,
altered or modified and the observance of any term of this Warrant may be
waived (either generally or in a particular instance and either retroactively
or prospectively) upon the written consent of the Company and the holder
hereof.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

 

16.   Notices.  All notices required under this Warrant shall
be deemed to have been given or made for all purposes (i) upon personal
delivery, (ii) upon confirmation receipt that the communication was
successfully sent to the applicable number if sent by facsimile, or (iii) one
day after being sent, when sent by professional overnight courier service.  Notices to the Company shall be sent to the
address of the Company set forth below (or at such other place as the Company
shall notify the Holders hereof in writing) and notices to the Holder shall be
sent to the address of the Holder set forth on the signature page hereto (or at
such other place as the Holder shall notify the Company in writing):

 

	
  To the Company:

  	
   

  	
  Aegis Communications Group,
  Inc.

  
	
   

  	
   

  	
  7880 Bent Branch Drive

  
	
   

  	
   

  	
  Suite 150

  
	
   

  	
   

  	
  Irving, Texas  75063

  
	
   

  	
   

  	
  Facsimile:  (972) 868-0267

  
	
   

  	
   

  	
  Attention:

  	
  John Scot Brunke

  
	
   

  	
   

  	
   

  	
  President

  

 

 

17.   Headings.  The section and subsection headings of this
Warrant are inserted for convenience only and shall not constitute a part of
this Warrant in construing or interpreting any provision hereof.

 

18.   Governing Law.  This Warrant and the rights and duties of the
parties hereto hereunder and (unless otherwise provided) all amendments and
supplements to, and all consents and waivers pursuant to, this Warrant shall in
all respects be governed by, and construed and enforced in accordance with, the
laws of the State of New York without giving effect to its conflict of laws
principles or rules.

 

19.   Severability.  If any provision of this Warrant is held to
be invalid or unenforceable for any reason, it shall be adjusted rather than
voided, if possible, to achieve the intent of the parties hereto to the maximum
extent possible.  Any provision of this
Warrant which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

20.   Defined Terms.  The following terms have the meanings
indicated below, unless the context otherwise requires:

 

“Additional Shares
of Common Stock” means all shares, including treasury shares, of Common
Stock, issued, sold or granted, or deemed to be issued, sold or granted
pursuant to the terms hereof,

 

12

 

by
the Company after the date hereof, whether or not subsequently reacquired or
retired by the Company, other than the shares of Common Stock issued upon the
exercise of this Warrant.

 

“Affiliate”
means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person.

 

“Appraiser”
means an independent nationally recognized investment bank or other qualified
financial institution acceptable to the Company and the holder hereof.

 

“Business Day”
means any day other than a Saturday or a Sunday or a day on which commercial
banking institutions in New York City are authorized or required to be closed.

 

“Common Stock”
means the common stock of the Company, par value $0.01  per share, any capital
stock into which such Common Stock shall have been changed or converted, any
capital stock resulting from any reclassification of such Common Stock, and all
other capital stock of any class or classes of the Company, other than
preference stock, the holders of which share equally with the Common Stock in
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.

 

“Convertible
Securities” means any evidences of indebtedness, shares of capital stock or
any other securities convertible into or exchangeable for, directly or
indirectly, shares of Common Stock.

 

 “Current Market Price” means the
average of the closing prices of the Common Stock during the five-day trading
period ending immediately prior to the date of determination as quoted on the
Nasdaq Small Cap Market or any United States automated quotation system or
national securities exchange or national market system on which the Common
Stock is then quoted or traded, as applicable

 

“Excluded Stock”
means securities issued, or deemed issued, to directors, officers, employees or
consultants of the Company or a subsidiary of the Company in connection with
their service as directors of the Company or a subsidiary of the Company, their
employment by the Company or a subsidiary of the Company or their retention as
consultants by the Company or a subsidiary of the Company under the Company’s
employee benefit plans approved by the Company’s board of directors, as such
plans may be amended from time to time with the approval of the Company’s board
of directors, or under other plans, adopted or assumed by the Company with the
approval of the Company’s board of directors.

 

“Fair Market Value”
means (i) with respect to any share of Common Stock, including with respect to
a Share for purposes of Section 2(b), the Current Market Price; provided
that, if the Common Stock is not then quoted on the Nasdaq Small Cap Market or
any United States automated quotation system or national securities exchange or
national market system or the OTC Bulletin Board or Pink Sheets, the fair
market value shall be:  (A) the
value based on the most recently completed arm’s length transaction between the
Company and a Person other than an affiliate of the Company within the
three-month period prior to the date of determination with respect to such
security, or (B) if (A) does not apply, the fair market value as most recently
determined by an Appraiser within such prior three-month period, provided,
that, any such appraisal was made within the two-month period following the
date of the financial statements on which such appraisal is based, or (C) if
neither (A)

 

13

 

nor (B) applies, the fair market value as
reasonably determined by the Board of Directors of the Company in good faith,
as evidenced by a written board resolution delivered to the holder hereof and
(ii) with respect to any other property other than cash or Common Stock,  (A) the value based on the most recently
completed arm’s length transaction between the Company and a Person other than
an affiliate of the Company within the three-month period prior to the date of
determination with respect to such property, or (B) if (A) does not
apply, the fair market value as most recently determined by an Appraiser within
such prior three-month period, provided that, any such appraisal was
made within the two-month period following the date of the financial statements
on which such appraisal is based, or (C) if neither (A) nor (B) applies, the
fair market value as reasonably determined by the Board of Directors of the
Company in good faith, as evidenced by a written board resolution delivered to
the holder hereof.  Any determination pursuant
to subsections (i)(B) or (C) or (ii)(B) or (C) shall be made on the basis of an
arm’s length sale of a going concern between an informed and willing buyer and
an informed and willing seller, under no compulsion to buy or sell, taking into
account all the relevant facts and circumstances then prevailing and without
consideration of (x) the lack of an actively trading public market for the
Common Stock, (y) any restrictions on the transfer of shares of Common
Stock or (z) any control premium or minority discount.  For the avoidance of doubt, any determination
pursuant to subsections (i)(C) or (ii)(C) shall be
subject to Section 6(k).

 

“Note” means the
secured promissory note issued to the Purchaser on the date hereof pursuant to
the Purchase Agreement.

 

“Options” means
rights, options or warrants to subscribe for, purchase or otherwise acquire,
directly or indirectly, shares of Common Stock, including, without limitation,
Convertible Securities.

 

“Person” means
any individual, partnership, limited liability company, unlimited liability
company, corporation, association, joint stock company, trust, joint venture,
unincorporated organization or any federal, state, county or municipal
governmental or quasi-governmental agency, department, commission, board,
bureau, instrumentality or similar entity.

 

“Registration Rights
Agreement” means the Registration Rights Agreement entered into by the
Company and the Purchaser on the date hereof.

 

“Securities Act”
means the Securities Act of 1933 and all rules and regulations of the
Securities and Exchange Commission thereunder, as amended from time to time.

 

14

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed in its corporate name by its duly
authorized officer and to be dated as of the Date of Grant set forth on the
first page to this Warrant.

 

AEGIS COMMUNICATIONS GROUP, INC.

 

 

	
  By:

  	
  /s/ John Scot Brunke

  	
   

  
	
   

  
	
  Name:  John Scot Brunke

  
	
  Title:  President

  

 

 

EXHIBIT A-1

NOTICE OF EXERCISE

To:  AEGIS COMMUNICATIONS GROUP,
INC. (the “Company”)

 

1.                                       The
undersigned hereby:

elects
to purchase     shares of Common Stock of the Company
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the purchase price of such shares in full, or elects to exercise its net
issuance rights pursuant to Section 2(b) of the attached Warrant
with respect to     shares of Common Stock.

 

2.                                       Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name or names as are specified below:

 

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Address)

  

 

3.                                       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, all except as in
compliance with applicable securities laws.

 

 

	
   

  	
   

  
	
  (Signature)

  
	
   

  
	
   

  	
   

  
	
  (Date)

  
			

 

B-1

 

EXHIBIT A-2

NOTICE OF EXERCISE

To:  AEGIS COMMUNICATIONS GROUP,
INC. (the “Company”)

 

1.                                       Contingent
upon and effective immediately prior to the closing (the “Closing”) of
the Company’s public offering contemplated by the Registration Statement on
Form S-      (File No.
                        ),
which was filed with the Securities and Exchange Commission on
                              ,
20     , the undersigned hereby:

 

elects to purchase
       shares of Common Stock of the Company (or
such lesser number of shares as may be sold on behalf of the undersigned at the
Closing) pursuant to the terms of the attached Warrant, or elects to exercise
its net issuance rights pursuant to Section 2(b) of the attached
Warrant with respect to        Shares of Common
Stock.

 

2.                                       Please
deliver to the custodian for the selling shareholders a stock certificate
representing such
                shares.

 

3.                                       The
undersigned has instructed the custodian for the selling shareholders to
deliver to the Company
$                  
or, if less, the net proceeds due the undersigned from the sale of shares in
the aforesaid public offering.  If such
net proceeds are less than the purchase price for such shares, the undersigned
agrees to deliver the difference to the Company prior to the Closing.

 

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Address)

  	
   

  
	
   

  	
   

  
	
  (Date)

  
			

 

B-1

 

EXHIBIT B

ASSIGNMENT FORM

To:                              AEGIS COMMUNICATIONS GROUP, INC. (the “Company”)

 

 

The undersigned hereby assigns
and transfers unto
                                               
                                    
                  
                                                                                                   (Please
typewrite or print in block letters) the right to purchase
                         
Shares (as defined in the Warrant) of Aegis Communications Group, Inc., subject
to the Warrant, dated as of
                                                                    ,
granted to the undersigned (the “Warrant”).

 

This assignment complies with
the provisions of Section 10 of the Warrant.

 

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  (Print Name of Signatory)

  
	
   

  
	
   

  	
   

  
	
  (Title of Signatory)

  
					

 

B-1

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