Document:

exv4w3

 

Exhibit 4.3

WARRANT AGREEMENT

Dated as of

June 9, 2003

between

Superior Consultant Holdings Corporation

as Issuer,

and

the Warrantholders Party Hereto

Common Stock Warrants

of

Superior Consultant Holdings Corporation

 

 

WARRANT AGREEMENT

          WARRANT AGREEMENT dated as of June 9, 2003, between, Superior Consultant
Holdings Corporation, a Delaware corporation (the “Company”), and each of the
warrantholders party hereto (collectively, with their successors and assigns,
the “Warrantholders”).

W I T N E S S E T H:

          WHEREAS, the Company proposes, among other things, to issue and sell
pursuant to a Securities Purchase Agreement, dated the date hereof, among the
Company, Camden Partners Strategic Fund II-A, L.P., a Delaware limited
partnership, and Camden Partners Strategic Fund II-B, L.P., a Delaware limited
partnership (the “Securities Purchase Agreement”), Senior Subordinated
Debentures due 2006 in the aggregate principal amount of $7,500,000 (the
“Debentures”);

          WHEREAS, the Company may sell the Debentures to additional purchasers
pursuant to the Securities Purchase Agreement;

          WHEREAS, in connection with the issuance of the Debentures, the Company
agrees to issue to each of the Warrantholders warrants to purchase shares of
the common stock, par value $.01 of the Company (the “Common Stock”) pursuant
to the terms and conditions set forth herein (the “Warrants”); and

          WHEREAS, the execution and delivery of this Agreement is a condition to
the consummation of the transactions contemplated by the Securities Purchase
Agreement.

          NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Company hereby agrees as follows for the equal and ratable benefit
of the Warrantholders:

ARTICLE I

Definitions

          Section 1.01. Definitions.

          “Affiliate” means, with respect to (i) the Company, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, the Company; and (ii) the Warrantholders, any current or
former members of or any general or limited partners or retired partners of any
of the Purchasers, or any Person or entity that directly or indirectly, through
one or more intermediaries, controls, with the general partner of
Warrantholders, the Warrantholders. For the purposes of this definition,
“control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

 

          “Agreement” means this Warrant Agreement as amended or supplemented from
time to time.

          “Board of Directors” or “Board” means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such
Board.

          “Business Day” means each day that is not a Saturday, Sunday or other day
on which banking institutions in New York, New York are authorized or required
by law to close.

          “Cashless Exercise Ratio” means a fraction, the numerator of which is the
excess of the Current Market Value per share of Common Stock on the Exercise
Date over the Exercise Price per share as of the Exercise Date and the
denominator of which is the Current Market Value per share of the Common Stock
on the Exercise Date.

          “Capital Stock” means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock and (ii) with respect to
any other Person, any and all partnership or other equity interests of such
Person.

          “Commission” means the United States Securities and Exchange Commission.

          “Current Market Value” per share of Common Stock or any other security at
any date means (i) if the security is not registered under the Exchange Act,
the value of the security, determined in good faith by the Board of Directors
and certified in a board resolution, or (ii) if the security is registered
under the Exchange Act, the average of the daily closing bid prices (or the
equivalent in an over-the-counter market) for each Business Day during the
period commencing 30 Business Days before such date and ending on the date one
day prior to such date, or if the security has been registered under the
Exchange Act for less than 30 consecutive Business Days before such date, the
average of the daily closing bid prices (or such equivalent) for all of the
Business Days before such date for which daily closing bid prices are
available; provided, however, that if the closing bid price is not determinable
for at least five Business Days in such period, the “Current Market Value” of
the security shall be determined as if the security were not registered under
the Exchange Act.

          “Exchange Act” means, as of any date, the Securities Exchange Act of 1934,
as amended through such date, and the rules and regulations promulgated
thereunder in effect on such date.

          “Exercise Date” means, for a given Warrant, the day on which such Warrant
is exercised pursuant to Section 3.04.

          “Financing Documents” means this Agreement, the Securities Purchase
Agreement, the Investor Rights Agreement, the Guaranty, the Warrants and any
document or agreement delivered pursuant to any of the foregoing.

          “GAAP” means as of any date, United States generally accepted accounting
principles, consistently applied, as in effect on such date.

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          “Indebtedness” means all of the amounts owed under the Debentures,
including, without limitation, all accrued and unpaid interest and all other
obligations arising thereunder.

          “Investor Rights Agreement” means the Investor Rights Agreement, dated as
of the date hereof, to be entered into by and between the Company and the
parties thereto.

          “Issue Date” means the date on which the Warrants are initially issued.

          “Officer” means the Chairman of the Board of Directors, the Chief
Executive Officer, the Chief Financial Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company.

          “Person” means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

          “Preferred Stock”, as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred
as to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person.

          “Securities” means the Warrants and the Warrant Shares.

          “Securities Act” means, as of any date, the Securities Act of 1933, as
amended as of such date and the rules and regulations of the Commission
promulgated thereunder in effect as of such date.

          “Securities Purchase Agreement” has the meaning assigned to it in the
recitals hereto.

          “Subsidiary” means, with respect to any Person (i) a corporation a
majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by a subsidiary of such Person, or by such Person and one or
more subsidiaries of such Person, (ii) a partnership in which such Person or a
subsidiary of such Person is, at the date of determination, a general partner
of such partnership and has the power to direct the policies and management of
such partnership or (iii) any other Person (other than a corporation) in which
such Person, a subsidiary of such Person or such Person and one or more
subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (A) at least a majority ownership interest or (B)
the power to elect or direct the election of a majority of the directors or
other governing body of such Person.

          “Uniform Commercial Code” shall mean the Delaware Uniform Commercial Code,
as in effect from time to time.

          “Warrant Certificates” mean the registered certificates issued by the
Company under this Agreement representing the Warrants.

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          “Warrant Percentage” shall mean, with respect to a Warrantholder, the
percentage of Warrants held by such Warrantholder when compared to the number
of Warrants held by all Warrantholders. The Warrant Percentage for each
Warrantholder is set forth on Schedule A next to the name of such
Warrantholder.

          “Warrant Shares” mean the shares of Common Stock (and any other
securities) for which the Warrants are exercisable or which have been issued
upon exercise of Warrants.

          Section 1.02. Other Definitions.

	 	 	 	 	 
	Term	 	Defined in Section
	
	 	

	“Cashless Exercise”
	 	 	3.04	 
	“Common Stock”
	 	Third Recital
	“Common Stock Record Date”
	 	 	4.07	 
	“Company”
	 	Preamble
	“control”
	 	 	2.07	 
	“Debentures”
	 	First Recital
	“Default”
	 	 	2.11	 
	“Exercise Price”
	 	 	3.01	 
	“Exercise Rate”
	 	 	4.01	 
	“Nasdaq National Market”
	 	 	3.09	 
	“non-electing share”
	 	 	4.05	 
	“protected purchaser”
	 	 	2.08	 
	“Required Exercise Notice”
	 	 	3.09	 
	“Stock Registrar”
	 	 	3.07	 
	“Stock Transfer Agent”
	 	 	3.05	 
	“30-Day Average Price”
	 	 	3.09	 
	“Transfer Notice”
	 	 	2.07	 
	“Warrant”
	 	Third Recital
	“Warrantholder”
	 	Preamble
	“Warrant Expiration Date
	 	 	3.02	(b)
	“Warrant Registrar”
	 	 	2.06	 

          Section 1.03. Rules of Construction. Unless the context otherwise requires:

		
	 	     (i)     a defined term has the meaning assigned to it;
	 
	 	     (ii)    an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect as of the date
hereof;
	 
	 	     (iii)   “or” is not exclusive;
	 
	 	     (iv)    “including” means including without limitation; and
	 
	 	     (v)     words in the singular include the plural and words in the plural
include the singular.

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ARTICLE II

WARRANT CERTIFICATES

          Section 2.01. Issuance of Warrants. At the Initial Closing (as defined in the
Securities Purchase Agreement), upon the satisfaction of the conditions set
forth in the Securities Purchase Agreement, the Company shall issue to the
Warrantholders Warrants to purchase an aggregate of 269,000 shares of Common
Stock. Each Warrantholder shall receive a Warrant for the number of shares of
Common Stock indicated on Schedule A attached hereto.

          At the Second Closing (as defined in the Securities Purchase Agreement),
upon the satisfaction of the conditions set forth in the Securities Purchase
Agreement, the Company shall issue to the Warrantholders Warrants to purchase
an aggregate of 538,000 shares of Common Stock. Each Warrantholder shall
receive a Warrant for the number of shares of Common Stock indicated on
Schedule A attached hereto.

          At each Subsequent Closing (as defined in the Securities Purchase
Agreement), upon the satisfaction of the conditions set forth in the Securities
Purchase Agreement, the Company shall issue to each Purchaser (as defined in
the Securities Purchase Agreement) participating in such Subsequent Closing
Warrants to purchase a number of shares of Common Stock equal to 107,600
multiplied by a fraction, the numerator of which equals the principal amount of
the Debentures purchased from the Company by such Purchaser in the Subsequent
Closing and the denominator of which is $1,000,000.

          Section 2.02. Reduction of Warrants Upon Repayment in Full. Subject to Section
2.11, if the Company repays all of the Indebtedness before the second
anniversary of the Issue Date, the amount of shares for which the Warrants are
exercisable shall be reduced by seventeen percent (17%). If the Company repays
all of the Indebtedness after the second anniversary and before the third
anniversary of the Issue Date, the amount of shares for which the Warrants are
exercisable shall be reduced by multiplying [15,250] shares by the number of
full months between the date of the repayment in full and the third anniversary
of the Issue Date. There shall be no reduction in the amount of shares for
which the Warrants are exercisable for any partial repayment of Indebtedness.

          Section 2.03. Multiple Warrantholders. All Warrants issued by the Company
shall be issued separately to the Warrantholders in accordance with each
Warrantholder’s Warrant Percentage set forth on Schedule A.

          Section 2.04. Form and Dating. The Warrant Certificates shall each be
substantially in the form of Exhibit A hereto, which is hereby incorporated in
and expressly made a part of this Agreement. The Warrant Certificates
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage. Each
Warrant Certificate shall be dated the date that it is executed by the Company.

          Section 2.05. Execution and Countersignature. Two Officers shall sign the
Warrant Certificates for the Company by manual or facsimile signature. If an
Officer whose

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signature is on a Warrant Certificate no longer holds that office
at the time the Company issues the Warrant Certificate, the Warrant Certificate
shall be valid nevertheless.

          Section 2.06. Warrant Registrar. The Company shall maintain an office or
agency where Warrants may be presented for registration of transfer, exchange
or exercise (the “Warrant Registrar”). The Warrant Registrar shall keep a
register of the Warrants and of their transfer, exchange or exercise. The
Company may have one or more co-registrars. The Company may act as Warrant
Registrar. The term Warrant Registrar includes any co-registrars. The Company
shall initially serve as Warrant Registrar in connection with the Warrants.

          The Company shall enter into an appropriate agency agreement with any
Warrant Registrar not a party to this Agreement. The agreement shall implement
the provisions of this Agreement that relate to such agent. The Company shall
notify the Warrantholders of the name and address of any such agent. If the
Company fails to maintain a Warrant Registrar, the Company shall act as such.

          The Company may remove any Warrant Registrar upon written notice to such
Warrant Registrar and to the Warrantholders; provided, however, that no such
removal shall become effective until (1) acceptance of an appointment by a
successor as evidenced by an appropriate agreement entered into by the Company
and such successor Warrant Registrar and delivered to the Warrantholders or (2)
notification to the Warrantholders that the Company shall serve as Warrant
Registrar until the appointment of a successor in accordance with clause (1)
above. The Warrant Registrar may resign at any time upon written notice. The
Company and the Warrant Registrar may deem and treat the Person in whose name a
Warrant Certificate is registered as the absolute owner of such Warrant
Certificate for all purposes whatsoever and neither the Company and the Warrant
Registrar shall be affected by notice to the contrary.

          Section 2.07. Transfer and Exchange. The Warrants shall be issued in
registered form and shall be transferable only upon the surrender of a Warrant
Certificate for registration of transfer and in compliance with the provisions
of this Agreement. When a Warrant is presented to the Warrant Registrar with a
request to register a transfer, the Warrant Registrar shall register the
transfer as requested if the requirements of Section 8-401(a) of the Uniform
Commercial Code are met. When Warrants are presented to the Warrant Registrar
with a request to exchange them for an equal number of Warrants of other
denominations, the Warrant Registrar shall make the exchange as requested if
the requirements of Section 8-401(a)(1) and (2) of the Uniform Commercial Code
are met. To permit registration of transfers and exchanges, the Company shall
execute Warrant Certificates at
the Warrant Registrar’s request. The Company may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer, exchange or exercise pursuant to this Section
2.07.

          Each Warrantholder may not assign any of its rights and obligations
hereunder; provided that Warrantholder may transfer this Warrant in whole or in
part with all corresponding rights and obligations hereunder to any one or more
of its Associates (as defined below). Upon such assignment, the assignee(s)
shall be deemed the Warrantholder(s) for all purposes under this Warrant
Agreement. “Associate” means any current or former members of, or any general
or limited partners or retired partners of, the Warrantholder, or any Person or
entity that directly or indirectly, through one or more intermediaries,
controls, with the general partner of the

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Warrantholder, the Warrantholder.
For the purposes of this definition, “control” when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing. Any attempted assignment in violation
of this Section 2.07 shall be void ab initio and shall not be recognized by the
party sought to be bound thereby. No Warrant has been, and the Warrant Shares
at the time of their issuance may not be, registered under the Securities Act,
and, except as provided in any separate agreement providing for registration
rights, nothing herein contained shall be deemed to require the Company to so
register any Securities. The Securities are issued or issuable subject to the
provisions and conditions contained herein, and every holder of the Securities
by accepting such Securities agrees with the Company to such provisions and
conditions, and represents to the Company that such Warrant has been acquired
and the Warrant Shares will be acquired for the account of such holder of the
Securities for investment and not with a view to or for sale in connection with
any distribution thereof.

          Except as otherwise permitted by this Section 2.07, each Warrant
(including each Warrant issued upon the transfer of any Warrant) and all
Warrant Shares shall be stamped or otherwise imprinted with legends in
substantially the following form:

		
	 	     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.

		
	 	     THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THAT
CERTAIN WARRANT AGREEMENT (THE “WARRANT AGREEMENT”) DATED AS OF JUNE 9,
2003. PURSUANT TO SECTION 2 OF THE WARRANT AGREEMENT THE NUMBER OF
SHARES MAY BE SUBJECT TO REDUCTION FOR WHICH THIS WARRANT MAY BE
EXERCISED AS PROVIDED THEREIN. A COPY OF SUCH WARRANT AGREEMENT HAS BEEN
FILED IN THE OFFICE OF THE COMPANY LOCATED AT 17570 WEST TWELVE MILE
ROAD, SOUTHFIELD, MICHIGAN 48076, WHERE THE SAME MAY BE INSPECTED DAILY
DURING BUSINESS HOURS. TRANSFERS OF THIS
WARRANT (AND THE SHARES OBTAINABLE HEREUNDER) ARE RESTRICTED AS SET
FORTH IN SECTION 2.07 OF THE WARRANT AGREEMENT.

          Prior to any transfer or attempted transfer of any Warrants, the
Warrantholder shall give five (5) days’ prior written notice (a “Transfer
Notice”) to the Company of such Warrantholder’s intention to effect such
transfer, describing the manner and circumstances of the proposed transfer,
and, if requested by the Company, obtain from counsel to such Warrantholder
(which counsel shall be reasonably satisfactory to the Company), an opinion
that the proposed transfer of such Warrants may be effected without
registration under the Securities Act. After receipt of the Transfer Notice
and opinion, the Company shall, within five (5) days thereof, so notify the
Warrantholder and such Warrantholder shall thereupon be entitled to transfer
such

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Warrants, in accordance with the terms of the Transfer Notice. Each
Warrant issued upon such transfer shall bear the restrictive legend set forth
above, unless, in the opinion of such counsel such legend is not required in
order to ensure compliance with the Securities Act. The Warrantholder giving
the Transfer Notice shall not be entitled to transfer such Warrants until
receipt of notice from the Company under this Section 2.07.

          Section 2.08. Replacement Certificate. If a mutilated Warrant is surrendered
to the Company or if a Warrantholder claims that the Warrant Certificate has
been lost, destroyed or wrongfully taken, the Company shall use all reasonable
efforts to execute a replacement Warrant Certificate if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the
Warrantholder (i) notifies the Company within a reasonable time after he has
notice of such loss, destruction or wrongful taking and the Company does not
register a transfer prior to receiving such notification, (ii) makes such
request to the Company prior to the Warrant being acquired by a protected
purchaser as defined in Section 8-303 of the Uniform Commercial Code (a
“protected purchaser”) and (iii) satisfies any other reasonable requirements of
the Company. If required by the Company, such Warrantholder shall furnish an
indemnity bond sufficient in the reasonable judgment of the Company to protect
the Company from any loss that it may suffer if a Warrant is replaced. The
Company may charge the Warrantholder for its expenses in replacing a Warrant
Certificate. Every replacement Warrant is an additional obligation of the
Company.

          The provisions of this Section 2.08 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement of mutilated, lost, destroyed or wrongfully taken Warrants.

          Section 2.09. Outstanding Warrants. Warrants outstanding at any time are all
Warrant Certificates executed by the Company except for those canceled by it,
those delivered to it for cancellation and those described in this Section 2.09
as not outstanding. A Warrant does not cease to be outstanding because an
Affiliate of the Company holds the Warrant. A Warrant ceases to be outstanding
if the Company holds the Warrant.

          If a Warrant Certificate is replaced pursuant to Section 2.08, it ceases
to be outstanding unless the Company receives proof satisfactory to it that the
replaced Warrant Certificate is held by a protected purchaser.

          Section 2.10. Cancellation. The Company at any time may cancel Warrant
Certificates which have been surrendered for registration of transfer,
exchange, exercise or cancellation. The Company and no one else shall cancel
all Warrant Certificates surrendered for registration of transfer, exchange,
exercise or cancellation. The Company may not issue new Warrant Certificates
to replace Warrants Certificates that have been exercised or Warrants which the
Company has purchased or otherwise acquired.

          Section 2.11. Default. Notwithstanding anything to the contrary contained
herein, immediately upon the first to occur of (i) a Default (as defined in the
Debenture); (ii) an Event of Default (as defined in the Debenture) or (iii)
approval by the Board of a Change of Control (as defined in the Debenture) all
Warrants will no longer be subject to reduction as set forth in Section 2.02 or
to Mandatory Exercise as set forth in Section 3.09.

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ARTICLE III

EXERCISE TERMS

          Section 3.01. Exercise. Each Warrant shall initially entitle the Warrantholder
thereof, subject to adjustment pursuant to the terms of this Agreement, to
purchase one (1) share of Common Stock.

          The exercise price per share (the “Exercise Price”) of each Warrant shall
be equal to the average closing price of the Common Stock for the 10 trading
days immediately prior to the Initial Closing (as defined in the Securities
Purchase Agreement); provided, however, that if any Subsequent Closing occurs
and the average closing price of the Common Stock for the 10 trading days
immediately prior to such Subsequent Closing (as defined in the Securities
Purchase Agreement) is less than the then-applicable Exercise Price, the
Exercise Price of each Warrant shall thereafter equal the average closing price
of the Common Stock for the 10 trading days immediately prior to such
Subsequent Closing.

          Whenever the Exercise Price is adjusted as provided above, the Company
shall promptly file with the Warrant Registrar an officers’ certificate setting
forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Concurrently with the
delivery of such certificate, the Company shall deliver a notice of such
adjustment of the Exercise Price setting forth the Exercise Price as adjusted
and the date on which such adjustment became effective to each Warrantholder at
such Warrantholder’s last address appearing on the register of Warrantholders
maintained by the Warrant Registrar for that purpose within 10 days of the
effective date of such adjustment. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.

          Notwithstanding any reduction of the Exercise Price pursuant to this
Section 3.01, the Exercise Price shall be also subject to adjustment pursuant
to Article IV hereof.

          Section 3.02. Time of Exercise; Separability

		
	 	     (a)     Subject to the terms and conditions set forth herein, the
Warrants shall be exercisable at any time and from time to time on any
Business Day on or after the Issue Date.
	 
	 	     (b)     No Warrant shall be exercisable after the earlier of (i) five
(5) years from the Issue Date and (ii) two (2) years from the date on
which the Debentures are paid in full (the “Warrant Expiration Date”).
	 
	 	     (c)     Each Warrant will be separately transferable, subject to
compliance with applicable securities laws, on and after the Issue Date.

          Section 3.03. Expiration. Each Warrant shall terminate and become void as of
the earlier of (i) the close of business on the Warrant Expiration Date or (ii)
the date such Warrant is exercised. The Company shall give notice not less
than ninety (90), and not more than one hundred twenty (120), days prior to the
Warrant Expiration Date to the Warrantholders of all then outstanding Warrants
to the effect that the Warrants will terminate and become void as of the close
of business on the Warrant Expiration Date.

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          Section 3.04. Manner of Exercise. Warrants may be exercised upon surrender to
the Warrant Registrar at its office of the related Warrant Certificate,
together with the form of election attached thereto to purchase Common Stock
duly filled in and signed by the Warrantholder thereof and (a) payment to the
Company of the Exercise Price for each Warrant Share or other security issuable
upon the exercise of such Warrants then exercised; or (b) by the election of
Cashless Exercise set forth below. Such payment shall be made (i) in cash or
by certified or official bank check payable to the order of the Company or by
wire transfer of funds to an account designated by the Company for such purpose
or (ii) without the payment of cash, by reducing the number of shares of Common
Stock obtainable upon the exercise of a Warrant and payment of the Exercise
Price in cash so as to yield a number of shares of Common Stock upon the
exercise of such Warrant equal to the product of (a) the number of shares of
Common Stock issuable as of the Exercise Date upon the exercise of such Warrant
(if payment of the Exercise Price were being made in cash) and (b) the Cashless
Exercise Ratio. An exercise of a Warrant in accordance with the immediately
preceding clause (ii) is herein called a “Cashless Exercise”. Upon surrender
of a Warrant Certificate representing more than one Warrant in connection with
the Warrantholder’s option to elect a Cashless Exercise, the number of shares
of Common Stock deliverable upon a Cashless Exercise shall be equal to the
number of shares of Common Stock issuable upon the exercise of Warrants that
the Warrantholder specifies are to be exercised pursuant to a Cashless Exercise
multiplied by the Cashless Exercise Ratio. All provisions of this Agreement
shall be applicable with respect to a surrender of a Warrant Certificate
pursuant to a Cashless Exercise for less than the full number of Warrants
represented thereby. Subject to Section 3.02, the rights represented
by the Warrants shall be exercisable at the election of the Warrantholders
thereof either in full at any time or from time to time in part and in the
event that a Warrant Certificate is surrendered for exercise of less than all
the Warrants represented by such Warrant Certificate at any time prior to the
Initial Warrant Expiration Date in the case of the Initial Warrants and the
additional Warrant Expiration Date in the case of additional Warrants, a new
Warrant Certificate representing the remaining Warrants shall be issued.

          Section 3.05. Issuance of Warrant Shares. Subject to Section 2.07, upon the
surrender of Warrant Certificates and payment of the Exercise Price or election
of a Cashless Exercise, as set forth in Section 3.04, the Company shall issue
and cause the transfer agent for the Common Stock (“Stock Transfer Agent”) to
countersign and deliver to or upon the written order of the Warrantholder and
in such name or names as such Warrantholder may designate, a certificate or
certificates for the number of full Warrant Shares so purchased upon the
exercise of such Warrants or other securities or property to which it is
entitled, registered or otherwise, to the Person or Persons entitled to receive
the same (including any depositary institution so designated by a
Warrantholder), together with cash as provided in Section 3.06 in respect of
any fractional Warrant Shares otherwise issuable upon such exercise. Such
certificate or certificates shall be deemed to have been issued and any Person
so designated therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrant Certificates and
payment of the Exercise Price or election of a Cashless Exercise, as aforesaid;
provided, however, that if, at such date, the transfer books for the Warrant
Shares shall be closed, the certificates for the Warrant Shares in respect of
which such Warrants are then exercised shall be issuable as of the date on
which such books shall next be opened and until such date the Company shall be
under no duty to deliver any certificates for such Warrant Shares; provided

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further, however, that such transfer books, unless otherwise required by law,
shall not be closed at any one time for a period longer than ninety (90)
calendar days.

          Section 3.06. Fractional Warrant Shares. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be exercised in full at the same time by the same Warrantholder,
the number of full Warrant Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Warrant Shares which
may be purchasable pursuant thereto. If any fraction of a Warrant Share would,
except for the provisions of this Section 3.06, be issuable upon the exercise
of any Warrant (or specified portion thereof), the Company shall pay an amount
in cash equal to the Current Market Value per Warrant Share, as determined on
the day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction, computed to the nearest whole cent.

          Section 3.07. Reservation of Warrant Shares. The Company shall at all times
keep reserved out of its authorized shares of Common Stock a number of shares
of Common Stock sufficient to provide for the exercise of all outstanding
Warrants. The registrar for the Common Stock (the “Stock Registrar”) shall at
all times until the Warrant Expiration Date reserve such number of authorized
shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the Stock
Transfer Agent. The Company will supply such Stock Transfer Agent with duly
executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be payable as provided in Section
3.06. The Company will furnish to such Stock Transfer Agent a copy of all
notices of adjustments (and certificates related thereto) transmitted to each
Warrantholder.

          The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants shall, upon issue, be fully paid, nonassessable, free from
all taxes and free from all liens, charges and security interests with respect
to the issue thereof.

          Section 3.08. No Dilution or Impairment. The Company (a) will not permit the
par or nominal value of any Warrant Shares issuable upon the exercise of
Warrants to exceed the amount payable therefor upon such exercise, (b) will
take all reasonable action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of the Warrants from time to time outstanding and (c)
will not take any action which results in any adjustment of the Exercise Rate
(as such term is defined in Section 4.01 below) if the total number of shares
of Common Stock (or other securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or other securities) then authorized by the Company’s Certificate
of Incorporation and available for the issuance of shares of Common Stock (or
other securities) upon such exercise.

          Section 3.09. Mandatory Exercise. Subject to Section 2.11, the Company may, at
its option, require all Holders to exercise its Warrant at any time after the
first anniversary of the date hereof by delivering a written notice to each
Holder (“Required Exercise Notice”), and if so required, each Holder shall
exercise this Warrant within sixty (60) days from the date on which such Holder
received the Required Exercise Notice, if at any time after the first
anniversary of the Issuance Date: (i) (A) the average of the high and low sale
prices for the

11

 

Common Stock during normal trading hours over the thirty (30)
consecutive trading days (exclusive of “ex-dividend” and similar dates)
immediately prior to the date of the Required Exercise Notice on the Nasdaq
national market quotation system (“Nasdaq National Market”) as confirmed by
Bloomberg Financial Market News (“30-Day Average Price”), is greater than 250%
of the Exercise Price (as adjusted from time to time under Article IV, other
than under Section 4.03) and (B) the Indebtedness has been paid in full; or
(ii) the 30-Day Average Price is greater than 300% of the initial Exercise
Price (as adjusted from time to time under Article IV, other than under Section
4.03). Notwithstanding the foregoing, no Warrantholder shall be required to
exercise Warrants hereunder unless at the time of exercise (i) the Company
shall have an effective registration statement covering the resale of all of
the Warrant Shares, which shall be deemed to be the Demand Registration under
the Investor Rights Agreement or (ii) the Warrant Shares are eligible for sale
by such holder under Rule 144(k).

ARTICLE IV

ANTIDILUTION PROVISIONS

          Section 4.01. General. The number of shares of Common Stock issuable upon the
exercise of each Warrant (the “Exercise Rate”) is subject to adjustment from
time to time upon the occurrence of the events enumerated in this Article IV.
The Exercise Rate shall initially be 1.0000.

          Section 4.02. Adjustment for Common Stock Dividends. If the Company shall
hereafter pay a dividend or make a distribution to holders of any of its
securities in shares of Common Stock, the Exercise Rate in effect at the
opening of business on the date following the date fixed for the determination
of shareholders entitled to receive such dividend or other distribution shall
be increased by multiplying such Exercise Rate by a fraction of which the
numerator shall be the sum of the number of shares of Common Stock outstanding
at the close of business on the Common Stock Record Date (as defined in Section
4.07) plus the total number of shares constituting such dividend or other
distribution and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the Common Stock Record Date fixed for
such determination, such increase to become effective immediately after the
opening of business on the day following the Common Stock Record Date. If any
dividend or distribution of the type described in this Section 4.02 is declared
but not so paid or made, the Exercise Rate shall again be adjusted to the
Exercise Rate which would then be in effect if such dividend or distribution
had not been declared.

          Section 4.03. Adjustment for Issuances of Common Stock, Options, Warrants,
Rights and Convertible or Exchangeable Securities. If the Company shall issue,
sell or distribute any shares of Common Stock or offer or issue, sell or
distribute options, rights or warrants to any Person entitling them to
subscribe for or purchase shares of Common Stock or issue, sell or distribute
convertible or exchangeable securities which are convertible or exchangeable
for shares of Common Stock, in each case, at a price per share less than the
Exercise Price, the Exercise Rate shall be adjusted so that the same shall
equal the rate determined by multiplying the Exercise Rate in effect at the
opening of business on the date immediately prior to such sale, issuance or
distribution of shares, options, rights, warrants or exchangeable or
convertible securities by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on such date
plus the total number of additional shares of

12

 

Common Stock to be issued, sold
or distributed or subject to such options, rights, warrants or exchangeable or
convertible securities for subscription or purchase and of which the
denominator shall be the number of shares of Common Stock outstanding at the
close of business on such date plus the number of shares of Common Stock which
the aggregate offering price of the total number of shares of Common Stock to
be issued, sold or distributed or subject to such options, rights, warrants or
exchangeable or convertible securities would purchase at the Exercise Price.
Such adjustment shall become effective immediately after the opening of
business on the day following the issuance, sale or distribution of such
shares, options, rights, warrants or exchangeable or convertible securities.
To the extent that shares of Common Stock are not delivered pursuant to such
options, rights, warrants or exchangeable or
convertible securities, upon the expiration or termination of such options,
rights, warrants or exchangeable or convertible securities the Exercise Rate
shall again be adjusted to be the Exercise Rate which would then be in effect
had the adjustments made upon the issuance, sale or distributions of such
options, rights, warrants or exchangeable or convertible securities been made
on the basis of delivery of only the number of shares of Common Stock actually
delivered. If such shares, options, rights, warrants or exchangeable or
convertible securities are not so issued, the Exercise Rate shall again be
adjusted to be the Exercise Rate which would then be in effect if such date
fixed for the determination of shareholders entitled to receive such shares,
options, rights, warrants or exchangeable or convertible securities had not
been fixed. In determining whether any shares, options, rights, warrants or
exchangeable or convertible securities entitle the holders to subscribe for or
purchase shares of Common Stock at less than the Exercise Price per share, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received for such options,
rights, warrants or exchangeable or convertible securities, with the value of
such consideration, if other than cash, to be determined in good faith by the
Board of Directors and the amount of any exercise price or subscription price
required to be paid upon exercise of such options, rights, warrants or
exchangeable or convertible securities. No adjustment of the Exercise Rate
shall be made if such adjustment would result in a decrease of the number of
shares issuable upon application of the adjusted Exercise Rate.

          Section 4.04. Adjustment upon Subdivision, Reclassification or Combination of
Common Stock. If the outstanding shares of Common Stock shall be subdivided or
reclassified into a greater number of shares of Common Stock, the Exercise Rate
in effect at the opening of business on the day following the day upon which
such subdivision or reclassification becomes effective shall be proportionately
increased, and, conversely, if the outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the Exercise Rate in
effect at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision or
combination becomes effective.

          Section 4.05. Adjustments for Mergers, Consolidations, etc. In case of any
consolidation of the Company with, or merger of the Company into, any other
corporation, or in case of any merger of another corporation into the Company
(other than a merger that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the Common Stock), or in case
of any sale, conveyance or transfer of all or substantially all the assets of
the Company, each Warrantholder shall have the right thereafter, during the
period such

13

 

Warrants shall be exercisable in accordance with its terms, to
exercise such Warrants for the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer by
a holder of the number of shares of shares of the Common Stock into which such
Warrant might have been exercised immediately prior to such consolidation,
merger, conveyance or transfer, assuming such holder of shares of the Common
Stock failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance or
transfer (provided that, if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer is
not the same for each share of the Common Stock in respect of which such rights
of election shall not have been exercised (“non-electing share”), then for the
purpose of this Section 4.05 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer by
each non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares). Such securities shall
provide for adjustments which, for events subsequent to the effective date of
the triggering event, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article IV. The above provisions of this
Section 4.05 shall similarly apply to successive consolidations, mergers,
conveyances or transfers. The Company shall deliver written notice at least
five (5) Business Days prior to any consummation of the events enumerated in
the first sentence of this Section 4.05.

          Section 4.06. Other Events. If any event occurs as to which the foregoing
provisions of this Article IV are not strictly applicable or, if strictly
applicable, would not, in the good faith judgment of the Board of Directors,
fairly and adequately protect the purchase rights of the Warrants in accordance
with the essential intent and principles of such provisions, then such Board of
Directors shall make such adjustments in the application of such provisions, in
accordance with such essential intent and principles, as shall be reasonably
necessary, in the good faith opinion of such Board of Directors, to protect
such purchase rights as aforesaid, but in no event shall any such adjustment
have the effect of decreasing the Exercise Rate or decreasing the number of
Warrant Shares issuable upon exercise of the Warrants.

          Section 4.07. Certain Definitions. For purposes of this Article IV, the
following term shall have the meaning indicated:

          “Common Stock Record Date” shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which
the Common Stock (or other applicable security) is exchanged for or converted
into any combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).

          Section 4.08. Deferral of Certain Adjustments. No adjustment in the Exercise
Rate shall be required unless such adjustment would require an increase or
decrease of at least 1% in such rate; provided, however, that any adjustments
which by reason of this Section 4.08 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article IV shall be made by the Company and shall be

14

 

rounded to fourth decimal place. No adjustment need be made for a change in
the par value or no par value of the Common Stock.

          Section 4.09. Officers Certificate; Notice of Adjustment. Whenever the
Exercise Rate is adjusted as herein provided, the Company shall promptly file
with the Warrant Registrar an officers’ certificate setting forth the Exercise
Rate after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Exercise Rate setting
forth the adjusted Exercise Rate and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Exercise Rate to
each Warrantholder at such Warrantholder’s last address appearing on the
register of Warrantholders maintained by the Warrant Registrar for that purpose
within 20 days of the effective date of such adjustment. Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.

          Section 4.10. Right to Delay Issuance of Incremental Common Stock. In any case
in which this Article IV provides that an adjustment shall become effective
immediately after a Common Stock Record Date for an event, the Company may
defer until the occurrence of such event issuing to any holder of Warrants
exercised after such Common Stock Record Date and before the occurrence of such
event the additional shares of Common Stock issuable upon such exercise by
reason of the adjustment required by such event over and above the shares of
Common Stock issuable upon such exercise before giving effect to such
adjustment.

          Section 4.11. Treasury Shares Disregarded. For purposes of this Article IV,
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

          Section 4.12. No Adjustment for Certain Issuances. Notwithstanding anything to
the contrary set forth herein, Section 4.03 shall not apply, and no adjustment
to the Exercise Rate shall be made with respect to shares of Common Stock (or
any security convertible or exchangeable into Common Stock) sold or issued by
the Company after the date of this Agreement in connection with any of the
following:

		
	 	     (i)     Warrants issued pursuant to the Securities Purchase Agreement;
	 
	 	     (ii)    to officers, directors or employees of, or consultants or
contractors to, the Company, pursuant to a stock grant, stock option,
restricted stock purchase agreement, stock appreciation right, option
plan, purchase plan or other employee stock incentive program or
agreement, in each case, where such grant, plan or program is approved by
the Board of Directors and where the shares are issued or granted at then
Current Market Value (which value may for this purpose be established by
reference to up to a 15 trading day average);
	 
	 	     (ii)    upon the exercise of the Warrants, or under other warrants,
options or convertible securities outstanding on the date hereof
(including, in either case, shares issued as a result of the operation of
anti-dilution provisions contained therein);
	 
	 	     (iii)   pursuant to an underwritten public offering;

15

 

		
	 	     (iv)    to clients, customers, vendors or suppliers of the Company,
provided that such issuance is approved by a majority of the Board of
Directors, and provided that such issuances in the aggregate (together
with all issuances pursuant to clauses (v) and (vi)) shall not exceed ten
percent (10%) of the Company’s common stock on a fully-diluted basis;
	 
	 	     (v)     to institutional financing sources in connection with such
entities providing debt financing to the Company or one of its
Subsidiaries, provided that such arrangements are approved by a majority
of the Board of Directors, and provided that such issuances in the
aggregate (together with all issuances pursuant to clauses (iv) and (vi))
shall not exceed ten percent (10%) of the Company’s common stock on a
fully-diluted basis;
	 
	 	     (vi)    issued or issuable in consideration of the acquisition by the
Company of the assets, capital stock or other equity interests of, or in
connection with a joint venture with, another entity (including, without
limitation, shares issued to key employees of such sellers), provided
that such issuance is approved by the Board of Directors, and provided
that such issuances (together will all issuances under clauses (iv) and
(v)) shall not exceed ten percent (10%) of the Company’s common stock on
a fully diluted basis; or
	 
	 	     (vii)   in any stock split, stock dividend, or similar
recapitalization that affects all security holders of like Class or
Series proportionately.

          Section 4.13. Notice of Certain Adjustments. If the Company shall take any
action requiring an adjustment to the Exercise Rate pursuant to this Article
IV, then the Company shall cause to be filed with the Warrant Registrar, and
shall cause to be mailed to all Warrantholders at their last addresses as they
shall appear in the Warrant Register, at least twenty (20) Business Days (or 10
Business Days in any case specified in clause 4.02 or 4.03 above) prior to the
applicable date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of shares of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined or (y) the date on which
a reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective, and the date as of
which it is expected that holders of shares of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give the notice
required by this Section 4.13 or any defect therein shall not affect the
legality or validity of any dividend, distribution, right, warrant,
reclassification, consolidation, merger, sale transfer, dissolution,
liquidation or winding-up, or the vote upon any such action.

          Section 4.14. Adjustment to Warrant Certificate. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to this
Article IV or Section 3.01, and Warrant Certificates issued after such
adjustment may
state the same Exercise Price (unless adjusted pursuant to Section 3.01) and
the same number of shares of Common Stock issuable upon exercise of the
Warrants as are stated in the Warrant Certificates initially issued pursuant to
this Agreement. The Company, however, may at any time in its sole

16

 

discretion
make any change in the form of Warrant Certificate that it may deem appropriate
to give effect to such adjustments and that does not affect the substance of
the Warrant Certificate, and any Warrant Certificate thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.

ARTICLE V

MISCELLANEOUS

          Section 5.01. Persons Benefiting. Nothing in this Agreement is intended or
shall be construed to confer upon any Person other than the Company and the
Warrantholders any right, remedy or claim under or by reason of this Agreement
or any part hereof.

          Section 5.02. Rights of Warrantholders. Unless otherwise provided in the
Financing Documents, Warrantholders with unexercised Warrants are not entitled
to (i) receive dividends or other distributions, (ii) receive notice of or vote
at any meeting of the stockholders, (iii) consent to any action of the
stockholders, (iv) receive notice of any other proceedings of the Company, (v)
exercise any preemptive right or (vi) exercise any other rights whatsoever as
stockholders of the Company with respect to the unexercised Warrants, but if
such Warrantholder is a stockholder, nothing in this Agreement shall be
construed as diminishing the rights of conferred upon such Warrantholder in its
capacity as a stockholder.

          Section 5.03. Amendment. Any amendment or supplement to this Agreement shall
require the written consent of the Warrantholders of a majority of the then
outstanding Warrants; provided, that any amendment or supplement that adversely
affects any Warrantholder disproportionately from the other Warrantholders
shall require the written consent of the Warrantholder so affected. In
determining whether the Warrantholders of the required number of Warrants have
concurred in any direction, waiver or consent, Warrants owned by the Company or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding. Also, subject to the foregoing, only Warrants
outstanding at the time shall be considered in any such determination. All
Warrants held by affiliated Persons or Persons under common management or
control, including, without limitation, Camden Partners Strategic Fund II-A and
Camden Partners Strategic Fund II-A, shall be aggregated for the purpose of
determining the availability of any rights under this Agreement.

          Section 5.04. Notices. Any notice or communication shall be in writing and
delivered in person or delivered by a nationally recognized air courier
addressed as follows:

		
	 	Superior Consultant Holdings Corporation

17570 West Twelve Mile Road

Southfield, Michigan 48076

Attn: Chief Executive Officer

          with a copy to (which shall not constitute notice hereunder):

		
	 	Sachnoff & Weaver, Ltd.

17

 

		
	 	30 S. Wacker Dr.

29th Floor

Chicago, IL 60606

Attn: William E. Doran, Esq.

Telephone: (312) 207-6412

Fax: (312) 207-6400

          The Company by notice to the Warrantholders may designate additional or
different addresses for subsequent notices or communications.

          Any notice or communication mailed to a Warrantholder shall be mailed to
the Warrantholder at the Warrantholder’s address as it appears on the Company’s
records and shall be sufficiently given if so mailed within the time
prescribed.

          With a copy to (which shall not constitute notice hereunder):

		
	 	Wilmer, Cutler & Pickering

1600 Tysons Boulevard

Tysons Corner, Virginia 22102

Attn: Greg Ewald, Esq.

Telephone: (703) 251-9715

Fax: (703) 251-9797

          Section 5.05. Governing Law. THIS AGREEMENT AND THE WARRANTS SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

          Section 5.06. Successors. All agreements of the Company in this Agreement and
the Warrant Certificates shall bind its successors and assigns.

          Section 5.07. Multiple Originals; Fax Signatures. The parties may sign any
number of copies of this Agreement. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough
to prove this Agreement. Any signature page delivered by a fax machine or
telecopy machine shall be binding to the same extent as an original signature
page, with regard to any agreement subject to the terms hereof or any amendment
thereto. Any party who delivers such a signature page agrees to later deliver
an original counterpart to any party which requests it.

          Section 5.08. Table of Contents. The table of contents and headings of the
Articles and Sections of this Agreement have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.

18

 

          Section 5.09. Severability. The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.

Signatures on following page.

19

 

          IN WITNESS WHEREOF, the parties have caused
this Agreement to be duly executed as of the date first written above.

	 	SUPERIOR CONSULTANT HOLDINGS CORPORATION

	 	By:	 
	 	 	

	 	Name:
	 	Title:

 

 

WARRANTHOLDERS:

CAMDEN PARTNERS STRATEGIC FUND II-A, L.P.

	By:	 	Camden Partners Strategic II, LLC,	 
	 	 	its General Partner	 

	By:	 	
	 
	 	 	Name: David L. Warnock

Title: Managing Member	 

CAMDEN PARTNERS STRATEGIC FUND II-B, L.P.

	By:	 	Camden Partners Strategic II, LLC,	 
	 	 	its General Partner	 

	By:	 	
	 
	 	 	Name: David L. Warnock

Title: Managing Member	 

 

 

EXHIBIT A

FORM OF FACE OF

COMMON STOCK WARRANT

OF

SUPERIOR CONSULTANT HOLDINGS CORPORATION

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THAT CERTAIN
WARRANT AGREEMENT (THE “WARRANT AGREEMENT”) DATED AS OF JUNE 9, 2003. PURSUANT
TO SECTION 2 OF THE WARRANT AGREEMENT THE NUMBER OF SHARES MAY BE SUBJECT TO
REDUCTION FOR WHICH THIS WARRANT MAY BE EXERCISED AS PROVIDED THEREIN. A COPY
OF SUCH WARRANT AGREEMENT HAS BEEN FILED IN THE OFFICE OF THE COMPANY LOCATED
AT 17570 WEST TWELVE MILE ROAD, SOUTHFIELD, MICHIGAN 48076, WHERE THE SAME MAY
BE INSPECTED DAILY DURING BUSINESS HOURS. TRANSFERS OF THIS WARRANT (AND THE
SHARES OBTAINABLE HEREUNDER) ARE RESTRICTED AS SET FORTH IN SECTION 2.07 OF THE
WARRANT AGREEMENT.

 

 

No. [  ]

COMMON STOCK WARRANT

OF

SUPERIOR CONSULTANT HOLDINGS CORPORATION

          THIS CERTIFIES THAT [        ], or its registered assigns,
is the registered holder of a Common Stock Warrant (the “Warrant”). The
Warrant entitles the Warrantholder at its option and subject to the provisions
contained herein and in the Warrant Agreement referred to below, to purchase
from Superior Consultant Holdings Corporation, a Delaware corporation (“the
Company”), [        ] shares of Common Stock, par value of $.01 per share, of the
Company, subject to adjustment from time to time pursuant to Article IV of the
Warrant Agreement (the “Common Stock”) at the per share exercise price of
$[        ] (the “Exercise Price”) or by Cashless Exercise referred to below. This
Warrant shall terminate and become void as of the close of business on the
Warrant Expiration Date or upon the exercise hereof as to all the shares of
Common Stock subject hereto. The number of shares issuable upon exercise of
the Warrants and the Exercise Price per share shall be subject to adjustment
from time to time as set forth in the Warrant Agreement (as defined below).

          This Warrant Certificate is issued under and in accordance with a Warrant
Agreement dated as of June 9, 2003 (the “Warrant Agreement”), between the
Company and various Warrantholders party thereto (the “Warrantholders”), and is
subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Warrantholder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is hereby incorporated
herein by reference and made a part hereof. Reference is hereby made to the
Warrant Agreement for a full statement of the respective rights, limitations of
rights, duties and obligations of the Company and the Warrantholders.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Warrant Agreement. A copy of the Warrant Agreement may be
obtained for inspection by the Warrantholder hereof upon written request to the
Company at 17570 West Twelve Mile Road, Southfield, Michigan 48076, Attention:
Chief Executive Officer.

          Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part (i) by presentation of this Warrant Certificate
with the Election to Purchase attached hereto duly executed and with the
simultaneous payment of the Exercise Price in cash (subject to adjustment) to
the Company for the account of the Company or (ii) by Cashless Exercise.
Payment of the Exercise Price in cash shall be made by certified or official
bank check payable to the order of the Company or by wire transfer of funds to
an account designated by the Company for such purpose. Payment by Cashless
Exercise shall be made without the payment of cash by reducing the amount of
Common Stock that would be obtainable upon the exercise of a Warrant and
payment of the Exercise Price in cash so as to yield a number of shares of
Common Stock upon the exercise of such Warrant equal to the product of (1) the
number of shares of Common Stock for which such Warrant is exercisable as of
the Exercise Date (if the Exercise Price were being paid in cash) and (2) a
fraction, the numerator of which is the excess of the Current Market Value per
share of Common Stock on the Exercise Date over the Exercise Price per share as
of the Exercise Date and the denominator of which is the Current Market Value
per share of the Common Stock on the Exercise Date.

 

 

          As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time and
from time to time on any Business Day after the Issue Date; provided, however,
that no Warrant shall be exercisable after the Expiration Date.

          As provided in the Warrant Agreement, the Exercise Rate and the Exercise
Price are subject to adjustment upon the happening of certain events.

          The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with the transfer or
exchange of the Warrant Certificates pursuant to the terms of the Warrant
Agreement, but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.

          Upon any partial exercise of the Warrants, there shall be countersigned
and issued to the Warrantholder hereof a new Warrant Certificate representing
those Warrants which were not exercised. This Warrant Certificate may be
exchanged at the office of the Company by presenting this Warrant Certificate
properly endorsed with a request to exchange this Warrant Certificate for other
Warrant Certificates evidencing an equal number of Warrants. No fractional
Warrant Shares will be issued upon the exercise of the Warrants, but the
Company shall pay an amount in cash equal to the Current Market Value per
Warrant Share on the day immediately preceding the date the Warrant is
exercised, multiplied by the fraction of a Warrant Share that would be issuable
on the exercise of any Warrant.

          All shares of Common Stock issuable by the Company upon the exercise of
the Warrants shall, upon such issue, be duly and validly issued and fully paid
and non-assessable.

          The Warrantholder in whose name the Warrant Certificate is registered may
be deemed and treated by the Company as the absolute owner of the Warrant
Certificate for all purposes whatsoever and the Company shall not be affected
by notice to the contrary.

          The Warrants do not entitle any Warrantholder hereof to any of the rights
of a stockholder of the Company.

(Signature page follows)

 

 

          This Warrant Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Company.

	 	SUPERIOR CONSULTANT HOLDINGS CORPORATION

	 	By:	

	 	 	Name:
	 	 	Title:

Attest:

Name:

Title:

DATED:

 

 

FORM OF ELECTION TO PURCHASE WARRANT SHARES

(to be executed only upon exercise of Warrants)

SUPERIOR CONSULTANT HOLDINGS CORPORATION

          The undersigned hereby irrevocably elects to exercise            Warrants
to acquire shares of Common Stock, par value $.001 per share, of
Superior Consultant Holdings Corporation (the “Company”), (i) at an exercise
price per share of Common Stock of $[        ] (subject to adjustment as provided in
the Warrant Agreement) or (ii) through Cashless Exercise and otherwise on the
terms and conditions specified in the Warrant Certificate and the Warrant
Agreement, surrenders this Warrant Certificate and all right, title and
interest therein to the Company and directs that the shares of Common Stock
deliverable upon the exercise of such Warrants be registered or placed in the
name and at the address specified below and delivered thereto.

          Check method of exercise:

          Exercise at $[        ] per share of Common Stock (subject to adjustment as
provided in the Warrant Agreement):

          Cashless Exercise:

Date:         ,

                                
                                                
                        
1

(Signature of Owner)

(Street Address)

(City)   (State)   (Zip Code)

Signature Guaranteed by:

Securities and/or check to be issued to:

Please insert social security or identifying number:

                1            The signature must correspond with the name as written upon the face of the Warrant
Certificate in every particular, without alteration or enlargement or any change whatever.

 

 

Name:

Street Address:

City, State and Zip Code:

A new Warrant Certificate evidencing any unexercised Warrants evidenced by the
within Warrant Certificate is to be issued to:

Please insert social security or identifying number:

Name:

Street Address:

City, State and Zip Code:

 

 

Schedule A

	 	 	 	 	 	 	 	 	 
	 	 	Committed Investment	 	 	 	 
	Purchaser	 	Amounts	 	Warrant Percentage
	
	 	
	 	

	Camden Partners Strategic

Fund II-A, L.P.

One South Street, Suite 2150

Baltimore, Maryland 21202

Attn: Mr. David L. Warnock	 	$	
 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Camden Partners Strategic

Fund II-B, L.P.

One South Street, Suite 2150

Baltimore, Maryland 21202

Attn: Mr. David L. Warnock	 	$	 
	 	 	 	 	 
	 	 	 	 	 
	TOTAL:	 	
$_____________	 	 	 	 	 

 

 

ASSIGNMENT FORM

To assign this Warrant, fill in the form below:

I or we assign and transfer this Warrant to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                      agent to transfer this Warrant on the books
of the Company. The agent may substitute another to act for him.

     

Date:        Your Signature:             

The signature must correspond with the name as written upon the face of the
Warrant Certificate in every particular, without alteration or enlargement or
any change whatever.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	ARTICLE I Definitions
	 	 	1	 
	 	 	
Section 1.01.
	 	Definitions
	 	 	1	 
	 	 	
Section 1.02.
	 	Other Definitions
	 	 	4	 
	 	 	
Section 1.03.
	 	Rules of Construction
	 	 	4	 
	 	 	
(i)
	 	a defined term has the meaning assigned to it;
	 	 	4	 
	 	 	
(ii)
	 	an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect as of the date
hereof;
	 	4	 
	 	 	
(iii)
	 	“or” is not exclusive;
	 	 	4	 
	 	 	
(iv)
	 	“including” means including without limitation; and
	 	 	4	 
	 	 	
(v)
	 	words in the singular include the plural and words in the
plural include the singular
	 	 	4	 
	ARTICLE II WARRANT CERTIFICATES
	 	 	5	 
	 	 	
Section 2.01.
	 	Issuance of Warrants
	 	 	5	 
	 	 	
Section 2.02.
	 	Reduction of Warrants Upon Repayment in Full
	 	 	5	 
	 	 	
Section 2.03.
	 	Multiple Warrantholders
	 	 	5	 
	 	 	
Section 2.04.
	 	Form and Dating
	 	 	5	 
	 	 	
Section 2.05.
	 	Execution and Countersignature
	 	 	5	 
	 	 	
Section 2.06.
	 	Warrant Registrar
	 	 	6	 
	 	 	
Section 2.07.
	 	Transfer and Exchange
	 	 	6	 
	 	 	
Section 2.08.
	 	Replacement Certificate
	 	 	8	 
	 	 	
Section 2.09.
	 	Outstanding Warrants
	 	 	8	 
	 	 	
Section 2.10.
	 	Cancellation
	 	 	8	 
	 	 	
Section 2.11.
	 	Default
	 	 	8	 
	ARTICLE III EXERCISE TERMS
	 	 	9	 
	 	 	
Section 3.01.
	 	Exercise
	 	 	9	 
	 	 	
Section 3.02.
	 	Time of Exercise; Separability
	 	 	9	 
	 	 	
Section 3.03.
	 	Expiration
	 	 	9	 
	 	 	
Section 3.04.
	 	Manner of Exercise
	 	 	10	 
	 	 	
Section 3.05.
	 	Issuance of Warrant Shares
	 	 	10	 
	 	 	
Section 3.06.
	 	Fractional Warrant Shares
	 	 	11	 
	 	 	
Section 3.07.
	 	Reservation of Warrant Shares
	 	 	11	 
	 	 	
Section 3.08.
	 	No Dilution or Impairment
	 	 	11	 
	 	 	
Section 3.09.
	 	Mandatory Exercise
	 	 	11	 
	ARTICLE IV ANTIDILUTION PROVISIONS
	 	 	12	 
	 	 	
Section 4.01.
	 	General
	 	 	12	 
	 	 	
Section 4.02.
	 	Adjustment for Common Stock Dividends
	 	 	12	 
	 	 	
Section 4.03.
	 	Adjustment for Issuances of Common Stock, Options,
Warrants, Rights and Convertible or Exchangeable Securities
	 	 	12	 
	 	 	
Section 4.04.
	 	Adjustment upon Subdivision, Reclassification or
Combination of Common Stock
	 	 	13	 
	 	 	
Section 4.05.
	 	Adjustments for Mergers, Consolidations, etc.
	 	 	13	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	 	 	
Section 4.06.
	 	Other Events
	 	 	14	 
	 	 	
Section 4.07.
	 	Certain Definitions
	 	 	14	 
	 	 	
Section 4.08.
	 	Deferral of Certain Adjustments
	 	 	14	 
	 	 	
Section 4.09.
	 	Officers Certificate; Notice of Adjustment
	 	 	15	 
	 	 	
Section 4.10.
	 	Right to Delay Issuance of Incremental Common Stock
	 	 	15	 
	 	 	
Section 4.11.
	 	Treasury Shares Disregarded
	 	 	15	 
	 	 	
Section 4.12.
	 	No Adjustment for Certain Issuances
	 	 	15	 
	 	 	
Section 4.13.
	 	Notice of Certain Adjustments
	 	 	16	 
	 	 	
Section 4.14.
	 	Adjustment to Warrant Certificate
	 	 	16	 
	ARTICLE V MISCELLANEOUS
	 	 	17	 
	 	 	
Section 5.01.
	 	Persons Benefiting
	 	 	17	 
	 	 	
Section 5.02.
	 	Rights of Warrantholders
	 	 	17	 
	 	 	
Section 5.03.
	 	Amendment
	 	 	17	 
	 	 	
Section 5.04.
	 	Notices
	 	 	17	 
	 	 	
Section 5.05.
	 	Governing Law
	 	 	18	 
	 	 	
Section 5.06.
	 	Successors
	 	 	18	 
	 	 	
Section 5.07.
	 	Multiple Originals; Fax Signatures
	 	 	18	 
	 	 	
Section 5.08.
	 	Table of Contents
	 	 	18	 
	 	 	
Section 5.09.
	 	Severability
	 	 	19Ex-4.2 Addendum to French Residents Stock Plan

 

Exhibit 4.2

JABIL CIRCUIT, INC.

ADDENDUM TO THE TERMS AND CONDITIONS OF

THE JABIL CIRCUIT, INC. 2002 STOCK INCENTIVE PLAN

FOR GRANTEES RESIDENT IN FRANCE

Scope of Addendum: By way of this addendum, the Board of Directors amends the
Jabil Circuit, Inc. 2002 Stock Incentive Plan (Plan) for Participants resident
of France, in order to qualify the stock option agreement under the French law
of 70-1322 of December 31, 1970, codified in articles L225-177 to L225-187-1 of
the “Code de Commerce"(French Commercial Code).

The following provisions shall apply to all Options currently outstanding under
the Plan that are held by Grantees resident of France.

1.     Eligibility: Eligible Grantees under this Addendum shall be limited to
Employees selected by the Committee or the Board of Directors to receive
options. Employees are further defined in the Plan to be regular employees of
Jabil Circuit, Inc. and its subsidiary, “the Company”, for whom income tax is
withheld by the Company or social security contributions are made by the
Company.

Notwithstanding any other provision of the Plan, options granted to any Grantee
not employed by the Company at the date of the grant will not be deemed to have
been granted pursuant to this Addendum.

2.     Shares subject to the Plan: Notwithstanding any other provision of the
Plan, the total number of options granted but not yet exercised cannot give the
right to subscribe to a number of shares in excess of one third (1/3) of the
share capital of the Company. Options granted giving the right to subscribe to
a number of shares in excess of 1/3 of the share capital of the Company will
not be deemed to have been granted pursuant to this Addendum.

3. Grant:

	•	 	Notwithstanding any other provision of the Plan, no Options shall be
granted to any Grantee holding shares of Common Stock representing 10%
or more of the Company’s share capital. Options granted to any
Grantee holding shares of Common Stock representing 10% or more of the
Company’s capital will not be deemed to have been granted pursuant to
this Addendum.
	 
	•	 	Time limit for granting Options: Options on shares of Common Stock
shall not be granted beyond March 24, 2005, being 38 months from the
date the Plan received shareholder approval. Should Options relating
to shares of Common Stock be granted more than 38 months after the
date the Plan received shareholder approval, then such grants shall
not be deemed to have occurred pursuant to this Addendum.

4. Option Price:

	•	 	For Options granted while the Company is quoted on a recognized exchange: Notwithstanding any other
provision of the Plan, the option price shall not be less than 80% of the average of the market
value of Common Stock on the 20 trading days preceding the date of grant or 80% of the average
purchase price of the Common Stock. Any option issued under the plan having an Option Price less
than 80% of the average of the market price of a share of Common Stock on the 20 trading days
preceding the date of grant or 80% of the average purchase price of these shares shall not be
deemed to have been granted under this Addendum.

 

 

	•	 	Modification of the Option price: Notwithstanding any other provision of the Plan, the option price
is not subject to modification and shall be adjusted only upon:

	 	•	 	the following circumstances:

	 
	 	–	 	Certain capital increases
	 
	 	–	 	Issuance of convertible securities
	 
	 	–	 	Distributions of retained earnings in cash or shares held by the company
	 
	 	–	 	Capital reductions due to losses
	 

	 	•	 	OR with the express consent of the option holder.

Should the option price for any option grant be modified under conditions
other than those stated above, such modifications shall not be deemed to
have occurred. Furthermore, notwithstanding any other provision of the
Plan, the Committee or Board of Directors shall not have the right to
prescribe, amend or rescind the terms of any existing stock option grant
previously granted to a Grantee without the express written consent of the
Grantee. Modifications made by the Committee or the Board of Directors
including the prescription, amendment or rescinding of the terms of any
existing stock option grant previous granted to a Grantee without the
express written consent of the Grantee shall be deemed not to have occurred.

5. Transferability: Notwithstanding any other provision of the Plan:

	•	 	Options issued pursuant to this Addendum are not transferable.
	 
	•	 	Upon the death of a Grantee, to the extent Options were exercisable by
the Grantee at the date of death, all such Options shall remain
exercisable for a period of six months from the date of the Grantee’s
death. To the extent that any Options are exercised under the above
conditions after a period of six months from the date of the Grantee’s
death, such exercise will be deemed not to have occurred pursuant to
this Addendum.

6.     Restriction on Sale: Notwithstanding any other provision of the Plan, the
Company reserves the right to restrict the sale of any Common Stock acquired
through the exercise of an Option for a period not to exceed three years from
the date the Option is exercised. However, this restriction shall not apply in
the case of retirement or termination, if the Grantee exercises the option at
least 3 months prior to the date of retirement or termination.

7.     Lock-Up Period for Grant: Notwithstanding any other provision of the Plan,
no options shall be granted during the period commencing ten (10) business days
before and ending ten (10) business days after (1) the publication of the
Annual Financial Report, or (2) the release of Company information that may
impact share value.

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