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Exhibit 4.4
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS WARRANT MAY BE OFFERED, SOLD OR
OTHERWISE DISPOSED OF ONLY (1) TO THE COMPANY, (2) SO LONG AS THIS WARRANT IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT IS PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE SALE OR OTHER DISPOSITION IS BEING MADE IN RELIANCE ON RULE 144A,
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (4) TO AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501 UNDER THE SECURITIES ACT ("ACCREDITED INVESTOR"), THAT IS ACQUIRING
THIS WARRANT FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER ACCREDITED
INVESTOR FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, IF A SIGNED CERTIFICATION LETTER (A FORM OF WHICH MAY BE
OBTAINED FROM THE COMPANY) IS DELIVERED BY THE TRANSFEREE TO THE COMPANY, (5) AS
OTHERWISE PROVIDED IN THE UNIT PURCHASE AGREEMENT (AS DEFINED BELOW) OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. BY PURCHASING THIS WARRANT, THE HOLDER HEREOF AGREES AND
REPRESENTS FOR THE BENEFIT OF THE COMPANY THAT (A) IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN ACCREDITED
INVESTOR ACQUIRING THIS WARRANT FOR INVESTMENT PURPOSES FOR ITS OWN ACCOUNT OR
THE ACCOUNT OF ANOTHER ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND (B) IT WILL NOTIFY ANY
PURCHASER OF THIS WARRANT FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN ADDITIONAL
RESTRICTIONS ON TRANSFER CONTAINED IN SECTION 3.2 OF THE UNIT PURCHASE AGREEMENT
DATED AS OF OCTOBER 10, 1995 AMONG THE COMPANY AND THE OTHER PARTIES NAMED ON
THE SIGNATURE PAGES THEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
ANY SALE OR TRANSFER NOT IN COMPLIANCE WITH SUCH UNIT PURCHASE AGREEMENT SHALL
BE NULL AND VOID.
VOID AFTER 5:00 P.M., PACIFIC TIME,
ON DECEMBER __, 2005
No. ___
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HAWTHORNE FINANCIAL CORPORATION
WARRANT TO PURCHASE _______ SHARES OF COMMON STOCK
(SUBJECT TO ADJUSTMENT)
THIS CERTIFIES THAT, FOR VALUE RECEIVED, _______ or its registered
assigns (the "Holder"), is entitled to purchase from Hawthorne Financial
Corporation (the "Company"), subject to the terms and conditions set forth
hereinafter, _______ fully paid and nonassessable shares of the Common Stock,
$.01 par value, of the Company (the "Common Stock") at an exercise price of
$2.25 per share upon surrender of this Warrant to the Company at the Company's
principal office in El Segundo, California with the form of election to purchase
attached to this Warrant duly completed and signed, together with payment of the
exercise price by wire transfer or other payment of immediately available funds.
The exercise price and the number of shares of Common Stock for which this
Warrant is exercisable are subject to change or adjustment upon the occurrence
of certain events as set forth below.
SECTION 1. DURATION AND EXERCISE OF WARRANTS.
1.1 (a) This Warrant may be exercised on or after December __, 1998 and
will expire at 5:00 p.m., Pacific Time, on December __, 2005 (the "Expiration
Date"), provided that, notwithstanding anything to the contrary contained
herein, this Warrant may be exercised in whole or in part prior to December __,
1998 in connection with or following a Change in Control. On the Expiration
Date, all rights evidenced by this Warrant shall cease and this Warrant shall
become void. For purposes of this Warrant, a "Change in Control" means the
occurrence of any of the following events after the date of issuance of this
Warrant: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of more than 50% of the
aggregate voting power of all classes of capital stock of the Company entitled
to vote generally in an election of directors; (ii) the Company is merged with
or into another corporation or another corporation is merged with or into the
Company with the effect that immediately after such transaction the stockholders
of the Company immediately prior to such transaction hold less than a majority
in interest of the total voting power entitled to vote in the election of
directors, managers or trustees of the entity surviving the transaction; (iii)
all or substantially all of the assets of the Company or Hawthorne Savings,
F.S.B., or any successor thereto, are sold to any person or persons (as an
entirety in one transaction or a series of related transactions); or (iv) the
voluntary or involuntary dissolution, liquidation or winding up of the Company.
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(b) Subject to the provisions of this Warrant, the registered holder of
this Warrant shall have the right to purchase from the Company (and the Company
shall issue and sell to such registered holder) the number of fully paid and
nonassessable shares of Common Stock set forth on the face of this Warrant (or
such number of shares of Common Stock as may result from adjustments made from
time to time as provided herein), at the price of $2.25 per share in lawful
money of the United States of America (such exercise price per share, as
adjusted from time to time as provided herein, being referred to herein as the
"Exercise Price"), upon (i) surrender of this Warrant to the Company at the
Company's principal office in El Segundo, California with the exercise form
attached hereto duly completed and signed by the registered holder or holders
thereof, and (ii) payment by wire transfer or other payment of immediately
available funds, in lawful money of the United States of America, of the
Exercise Price for the shares of Common Stock in respect of which this Warrant
is then exercised (and any applicable transfer taxes pursuant to Section 2
hereof). Upon surrender of this Warrant, and payment of the Exercise Price as
provided above, the Company shall promptly issue and cause to be delivered to or
upon the written order of the registered holder of this Warrant and in such name
or names as such registered holder may designate, a certificate or certificates
for the number of shares of Common Stock so purchased upon the exercise of this
Warrant, together with payment in respect of any fraction of a share of Common
Stock issuable upon such surrender pursuant to Section 11 hereof.
(c) The exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the Business Day (as defined in
Section 17 hereof) on which the holder surrenders this Warrant to the Company
and payment of the Exercise Price (and any applicable transfer taxes pursuant to
Section 2 hereof) is made, and at such time the person in whose name any
certificate for shares of Common Stock shall be issuable upon such exercise
shall be deemed to be the record holder of such shares of Common Stock for all
purposes.
1.2 In the event that less than all of the shares of Common Stock
represented by this Warrant are exercised on or prior to the Expiration Date, a
new Warrant, duly executed by the Company, will be issued for the remaining
number of shares of Common Stock exercisable pursuant to the Warrant so
surrendered, and the Company shall deliver the required new Warrant pursuant to
the provisions of this Section 1.
1.3 The number of shares of Common Stock to be received upon the exercise
of this Warrant and the Exercise Price are subject to adjustment from time to
time as hereinafter set forth.
SECTION 2. PAYMENT OF TAXES.
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The Company will pay all stamp transfer and other similar taxes payable
in connection with the original issuance of this Warrant and the shares of
Common Stock issuable upon exercise thereof, provided, however, that the Company
shall not be required to (i) pay any such tax which may be payable in respect of
any transfer involving the transfer and delivery of this Warrant or the issuance
or delivery of certificates for shares of Common Stock issuable upon exercise
thereof in a name other than that of the registered holder of this Warrant or
(ii) issue or deliver any certificate for shares of Common Stock upon the
exercise of this Warrant until any such tax required to be paid under clause (i)
shall have been paid, all such tax being payable by the holder of this Warrant
at the time of surrender.
SECTION 3. MUTILATED OR MISSING WARRANTS.
In case this Warrant shall be mutilated, lost, stolen or destroyed, the
Company will issue and deliver in exchange and substitution for and upon
cancellation of, the mutilated Warrant, or in substitution for the lost, stolen
or destroyed Warrant, a new Warrant of like tenor evidencing the number of
shares of Common Stock purchasable upon exercise of the Warrant so mutilated,
lost, stolen or destroyed, but only upon receipt of evidence satisfactory to the
Company of such loss, theft or destruction of such Warrant and an indemnity, if
requested, reasonably satisfactory to it. Any such new Warrant shall constitute
an original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
SECTION 4. RESERVATION OF WARRANT SHARES.
The Company shall at all times reserve for issuance and delivery upon
exercise of this Warrant such number of shares of Common Stock or other shares
of capital stock of the Company as from time to time shall be issuable upon
exercise of this Warrant. All such shares shall be duly authorized and, when
issued upon such exercise, shall be validly issued, fully paid and
nonassessable, free and clear of all liens, security interests, charges and
other encumbrances and free and clear of all preemptive rights. After 5:00 p.m.,
Pacific Time, on the Expiration Date, no shares of Common Stock shall be subject
to reservation in respect of this Warrant.
SECTION 5. RESTRICTIONS ON TRANSFER.
Neither this Warrant nor the shares of Common Stock issuable upon
exercise thereof may be sold, transferred or otherwise disposed of, except in
accordance with and subject to (i) the provisions of the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations promulgated
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thereunder and (ii) the applicable requirements of Section 3.2 of the Unit
Purchase Agreement dated as of October 10, 1995 among the Company and the
Purchasers named on the signature pages thereto (as amended, supplemented or
otherwise modified from time to time, the "Unit Purchase Agreement").
SECTION 6. RIGHTS AND LIABILITY OF WARRANT HOLDER.
The holder of this Warrant shall not, by virtue thereof, be (i) entitled
to any rights of a stockholder of the Company, either at law or in equity, and
the rights of such holder are limited to those expressed herein, or (ii) subject
to any liability as a stockholder of the Company.
SECTION 7. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES OF COMMON STOCK.
The Exercise Price and the number and kind of shares of Common Stock
issuable upon the exercise of this Warrant will be subject to change or
adjustment from time to time as follows:
(a) Change in Common Stock. In the event the Company shall, at any time
or from time to time after the date hereof, (i) issue any shares of Common Stock
as a stock dividend to the holders of Common Stock (other than pursuant to
Section 2(b) of the Certificate of Designations and Preferences relating to the
Company's Cumulative Preferred Stock, Series A), (ii) subdivide or combine the
outstanding shares of Common Stock into a greater or lesser number of shares or
(iii) issue any shares of its capital stock in a reclassification or
reorganization of the Common Stock (any such issuance, subdivision, combination,
reclassification or reorganization being herein called a "Change of Shares"),
then (A) in the case of (i) or (ii) above, the number of shares of Common Stock
that may be purchased upon the exercise of this Warrant shall be adjusted to the
number of shares of Common Stock that the Holder of such Warrant would have
owned or have been entitled to receive after the happening of such event had
such Warrant been exercised immediately prior to the record date (or, if there
is no record date, the effective date) for such event, and the Exercise Price
shall be adjusted to the price (calculated to the nearest 1,000th of one cent)
determined by multiplying the Exercise Price immediately prior to such event by
a fraction, the numerator of which shall be the number of shares of Common Stock
purchasable with this Warrant immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock purchasable
with this Warrant after the adjustment referred to above and (B) in the case of
clause (iii) above, paragraph (l) below shall apply. An adjustment made pursuant
to clause (A) of this paragraph (a) shall become effective retroactively
immediately after the record date in the case of such dividend and shall become
effective immediately after the effective date in other cases, but
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any shares of Common Stock issuable solely as a result of such adjustment shall
not be issued prior to the effective date of such event.
(b) Common Stock Distribution. In the event the Company shall, at any
time or from time to time after the date hereof, issue, sell or otherwise
distribute (including by way of deemed distributions pursuant to paragraphs (c)
and (d) below) any shares of Common Stock (other than pursuant to (A) a Change
of Shares, (B) the exercise or conversion, as the case may be, of any Option,
Convertible Security (each as defined in paragraph (c) below) or Warrant) or (C)
Section 6(b) of the Company's Senior Notes due 2002 (any such event, including
any deemed distributions described in paragraphs (c) and (d), being herein
called a "Common Stock Distribution"), for a consideration per share less than
the current market price per share of Common Stock (as defined in paragraph (f)
below), on the date of such Common Stock Distribution, then, effective upon such
Common Stock Distribution, the Exercise Price shall be reduced to the price
(calculated to the nearest 1,000th of one cent) determined by multiplying the
Exercise Price in effect immediately prior to such Common Stock Distribution by
a fraction, the numerator of which shall be the sum of (i) the number of shares
of Common Stock outstanding (exclusive of any treasury shares) immediately prior
to such Common Stock Distribution multiplied by the current market price per
share of Common Stock on the date of such Common Stock Distribution, plus (ii)
the consideration, if any, received by the Company upon such Common Stock
Distribution, and the denominator of which shall be the product of (A) the total
number of shares of Common Stock issued and outstanding immediately after such
Common Stock Distribution multiplied by (B) the current market price per share
of Common Stock on the date of such Common Stock Distribution.
If any Common Stock Distribution shall require an adjustment to the
Exercise Price pursuant to the foregoing provisions of this paragraph (b),
including by operation of paragraph (c) or (d) below, then, effective at the
time such adjustment is made, the number of shares of Common Stock purchasable
upon the exercise of this Warrant shall be increased to a number determined by
multiplying the number of shares so purchasable immediately prior to such Common
Stock Distribution by a fraction, the numerator of which shall be the Exercise
Price in effect immediately prior to such adjustment and the denominator of
which shall be the Exercise Price in effect immediately after such adjustment.
In computing adjustments under this paragraph, fractional interests in Common
Stock shall be taken into account to the nearest 1,000th of a share.
The provisions of this paragraph (b), including by operation of paragraph
(c) or (d) below, shall not operate to increase the Exercise Price or reduce the
number of shares of Common Stock
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purchasable upon the exercise of this Warrant, except by operation of paragraph
(j) or (k) below.
(c) Issuance of Options. In the event the Company shall, at any time or
from time to time after the date hereof, issue, sell, distribute or otherwise
grant in any manner (including by assumption) any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, Common Stock or any
stock or securities convertible into or exchangeable for Common Stock (any such
rights, warrants or options being herein called "Options" and any such
convertible or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the rights to convert or exchange
such Convertible Securities are immediately exercisable, and the price per share
at which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the aggregate amount, if any, received or receivable by the Company as
consideration for the issuance, sale, distribution or granting of such Options,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of all such Options, plus, in the case of
Options to acquire Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the conversion or exchange of all
such Convertible Securities, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of all such Options) shall be less than
the current market price per share of Common Stock on the date of the issuance,
sale, distribution or granting of such Options, then, for the purposes of
paragraph (b) above, the total maximum number of shares of Common Stock issuable
upon the exercise of all such Options or upon the conversion or exchange of the
total maximum amount of the Convertible Securities issuable upon the exercise of
all such Options shall be deemed to have been issued as of the date of the
issuance, sale, distribution or granting of such Options and thereafter shall be
deemed to be outstanding and the Company shall be deemed to have received as
consideration such price per share, determined as provided above, therefor.
Except as otherwise provided in paragraphs (j) and (k) below, no additional
adjustment of the Exercise Price shall be made upon the actual exercise of such
Options or upon conversion or exchange of the Convertible Securities issuable
upon the exercise of such Options. If the minimum and maximum numbers or amounts
referred to in this paragraph (c) or in paragraph (d) below cannot be calculated
with certainty as of the date of the required adjustment, such numbers and
amounts shall be determined in good faith by the Board of Directors of the
Company.
(d) Issuance of Convertible Securities. In the event the Company shall,
at any time or from time to time after the date hereof, issue, sell or otherwise
distribute (including by assumption) any Convertible Securities (other than upon
the
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exercise of any Option), whether or not the rights to convert or exchange such
Convertible Securities are immediately exercisable, and the price per share at
which Common Stock is issuable upon the conversion or exchange of such
Convertible Securities (determined by dividing (i) the aggregate amount, if any,
received or receivable by the Company as consideration for the issuance, sale or
distribution of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange of all such Convertible Securities, by (ii) the total maximum number
of shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the current market price per share of
Common Stock on the date of such issuance, sale or distribution, then, for the
purposes of paragraph (b) above, the total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities
shall be deemed to have been issued as of the date of the issuance, sale or
distribution of such Convertible Securities and thereafter shall be deemed to be
outstanding and the Company shall be deemed to have received as consideration
such price per share, determined as provided above, therefor. Except as
otherwise provided in paragraphs (j) and (k) below, no additional adjustment of
the Exercise Price shall be made upon the actual conversion or exchange of such
Convertible Securities.
(e) Dividends and Distributions. In the event the Company shall, at any
time or from time to time after the date hereof, distribute to the holders of
Common Stock any dividend or other distribution of cash, evidences of its
indebtedness, other securities or other properties or assets (in each case other
than (i) dividends payable in Common Stock, Options or Convertible Securities
and (ii) any cash dividend declared and paid pursuant to a regular quarterly
dividend policy of the Company), or any options, warrants or other rights to
subscribe for or purchase any of the foregoing, then (A) the Exercise Price
shall be decreased to a price determined by multiplying the Exercise Price then
in effect by a fraction, the numerator of which shall be the current market
price per share of Common Stock on the record date for such distribution less
the sum of (X) the cash portion, if any, of such distribution per share of
Common Stock outstanding (exclusive of any treasury shares) plus (Y) the then
fair market value (as determined in good faith by the Board of Directors of the
Company) per share of Common Stock issued and outstanding on the record date for
such distribution of that portion, if any, of such distribution consisting of
evidences of indebtedness, other securities, properties, assets, options,
warrants or subscription or purchase rights, and the denominator of which shall
be such current market price per share of Common Stock and (B) the number of
shares of Common Stock purchasable upon the exercise of this Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock so purchasable immediately prior to the
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record date for such distribution by a fraction, the numerator of which shall be
the Exercise Price in effect immediately prior to the adjustment required by
clause (A) of this sentence and the denominator of which shall be the Exercise
Price in effect immediately after such adjustment. The adjustments required by
this paragraph (e) shall be made whenever any such distribution is made and
shall be retroactive to the record date for the determination of stockholders
entitled to receive such distribution.
(f) Current Market Price. For the purpose of any computation under
paragraphs (b), (c), (d) and (e) of this Section 7, the current market price per
share of Common Stock at any date shall be the average of the daily closing
prices for the shorter of (i) the 20 consecutive trading days ending on the last
full trading day on the exchange or market specified in the second succeeding
sentence, prior to the Time of Determination and (ii) the period commencing on
the date next succeeding the first public announcement of the issuance, sale,
distribution or granting in question through such last full trading day prior to
the Time of Determination. The term "Time of Determination" as used herein shall
be the time and date of the earlier to occur of (A) the date as of which the
current market price is to be computed and (B) the last full trading day on such
exchange or market before the commencement of "ex-dividend" trading in the
Common Stock relating to the event giving rise to the adjustment required by
paragraph (b), (c), (d) or (e). The closing price for any day shall be the last
reported sale price regular way or, in case no such reported sale takes place on
such day, the average of the closing bid and asked prices regular way for such
day, in each case (1) on the principal national securities exchange on which the
shares of Common Stock are listed or to which such shares are admitted to
trading or (2) if the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or any comparable system or (3) if the Common Stock is not listed on
NASDAQ or a comparable system, as furnished by two members of the National
Association of Securities Dealers, Inc. ("NASD") selected from time to time in
good faith by the Board of Directors of the Company for that purpose. In the
absence of all of the foregoing, or if for any other reason the current market
price per share cannot be determined pursuant to the foregoing provisions of
this paragraph (f), the current market price per share shall be the fair market
value thereof as determined in good faith by the Board of Directors of the
Company.
(g) Certain Distributions. If the Company shall pay a dividend or make
any other distribution payable in Options or Convertible Securities, then, for
purposes of paragraph (b) above (including dividends or distributions by
operation of paragraph (c) or (d) above, as the case may be), such Options or
Convertible
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Securities shall be deemed to have been issued or sold without consideration
except for such amounts of consideration as shall have been deemed to have been
received by the Company pursuant to paragraphs (c) or (d) above, as,
appropriate.
(h) Consideration Received. If any shares of Common Stock shall be issued
and sold in an underwritten public offering, the consideration received by the
Company for such shares of Common Stock shall be deemed to include the
underwriting discounts and commissions realized by the underwriters of such
public offering. If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company in
respect thereof shall be deemed to be the then fair market value of such
consideration (as determined in good faith by the Board of Directors of the
Company). If any Options shall be issued in connection with the issuance and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued, sold or
distributed for such amount of consideration as shall be allocated to such
Options in good faith by the Board of Directors of the Company.
(i) Deferral of Certain Adjustments. No adjustments to the Exercise Price
(including the related adjustment to the number of shares of Common Stock
purchasable upon the exercise of this Warrant) shall be required hereunder
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least one percent
of the Exercise Price; provided, however, that any adjustment which by reason of
this paragraph (i) is not required to be made shall be carried forward and taken
into account in any subsequent adjustment.
(j) Changes in Options and Convertible Securities. If the exercise price
provided for in any Options referred to in paragraph (c) above, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraph (c) or (d) above, or the rate at
which any Convertible Securities referred to in paragraph (c) or (d) above are
convertible into or exchangeable for Common Stock shall change at any time
(other than under or by reason of provisions designed to protect against
dilution upon an event which results in a related adjustment pursuant to this
Section 7), the Exercise Price then in effect and the number of shares of Common
Stock purchasable upon the exercise of this Warrant shall forthwith be
readjusted (effective only with respect to any exercise of this Warrant after
such readjustment) to the Exercise Price and number of shares of Common Stock so
purchasable that would then be in effect had the adjustment made upon the
issuance, sale, distribution or granting
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of such Options or Convertible Securities been made based upon such changed
purchase price, additional consideration or conversion rate, as the case may be,
but only with respect to such Options and Convertible Securities as then remain
outstanding.
(k) Expiration of Options and Convertible Securities. If, at any time
after any adjustment to the number of shares of Common Stock purchasable upon
the exercise of this Warrant shall have been made pursuant to paragraph (c), (d)
or (j) above or this paragraph (k), any Options or Convertible Securities shall
have expired unexercised or, solely with respect to Options that are rights
("Rights"), are redeemed, the number of such shares so purchasable shall, upon
such expiration or such redemption, be readjusted and shall thereafter be such
as they would have been had they been originally adjusted (or had the original
adjustment not been required, as the case may be) as if (i) the only shares of
Common Stock deemed to have been issued in connection with such Options or
Convertible Securities were the shares of Common Stock, if any, actually issued
or sold upon the exercise of such Options or Convertible Securities and (ii)
such shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the issuance, sale,
distribution or granting of all such Options or Convertible Securities, whether
or not exercised; provided, however, that (x) no such readjustment shall have
the effect of decreasing the number of shares so purchasable by an amount
(calculated by adjusting such decrease to account for all other adjustments made
pursuant to this Section 7 following the date of the original adjustment
referred to above) in excess of the amount of the adjustment initially made in
respect of the issuance, sale, distribution or granting of such Options or
Convertible Securities and (y) in the case of the redemption of any Rights,
there shall be deemed (for the purposes of paragraph (c) above) to have been
issued as of the date of such redemption for no consideration a number of shares
of Common Stock equal to the aggregate consideration paid to effect such
redemption divided by the current market price of the Common Stock on the date
of such redemption.
(l) Other Adjustments. In the event that at any time the Holder shall
become entitled to receive any securities of the Company other than shares of
Common Stock as constituted on the date of issuance of his Warrant the number of
such other securities so receivable upon exercise of this Warrant and the
Exercise Price applicable to such exercise shall be adjusted at such time, and
shall be subject to further adjustment from time to time thereafter, in a manner
and on terms as nearly equivalent as practicable to the provisions with respect
to the shares of Common Stock contained in this Section 7.
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(m) Excluded Transactions. Notwithstanding any provision in this Section
7 to the contrary, no adjustment shall be made pursuant to this Section 7 in
respect of (i) any change in the par value of the Common Stock, (ii) the
granting of any Options or the issuance of any shares of Common Stock, in either
case, which would otherwise trigger an adjustment under paragraph (b) above,
that may be registered on Form S-8 or any successor form under the Securities
Act, to any directors, officers or employees of the Company, provided that the
granting of Options or the issuance of shares of Common Stock pursuant to this
clause (ii) are in the ordinary course of business and are usual and customary,
or (iii) the issuance of Common Stock pursuant to any dividend reinvestment plan
which provides that the price of the Common Stock purchased for plan
participants from the Company will be no less than 95% of the average of the
high and low sales prices of the Common Stock on the investment date or, if no
trading in the Common Stock occurs on such date, the next preceding date on
which trading occurred (1) on the principal national securities exchange on
which the shares of Common Stock are listed or to which such shares are admitted
to trading or (2) if the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market as reported by
NASDAQ or any comparable system or (3) if the Common Stock is not listed on
NASDAQ or a comparable system, as furnished by two members of the NASD selected
from time to time in good faith by the Board of Directors of the Company for
that purpose. In the absence of all of the foregoing, or if for any other reason
the current market price per share cannot be determined pursuant to the
foregoing provisions of this paragraph, the current market price per share shall
be the fair market value thereof as determined in good faith by the Board of
Directors of the Company.
SECTION 8. REORGANIZATIONS AND ASSET SALES.
If any capital reorganization or reclassification of the capital stock of
the Company, or consolidation or merger of the Company with another corporation,
or the sale of all or substantially all of its assets to another corporation
shall be effected in such a way that holders of Common Stock shall be entitled
to receive stock, securities or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provision shall be made
whereby the Holder of this Warrant shall thereafter have the right to purchase
and receive, upon the basis and upon the terms and conditions specified in this
Warrant and in lieu of the shares of Common Stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby,
such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the
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rights represented hereby had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of the Holder
of this Warrant to the end that the provisions hereof (including without
limitation provisions for adjustments of the Exercise Price and of the number of
shares purchasable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof. The Company shall not
effect any such consolidation, merger or sale, unless prior to the consummation
thereof the successor corporation (if other than the Company) resulting from
such consolidation or merger or the corporation purchasing such assets shall
assume, by written instrument executed and mailed by first class mail, postage
prepaid, to the Holder hereof at the last address of such Holder appearing on
the register maintained by the Company, the obligation to deliver to such Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.
SECTION 9. NOTICE OF ADJUSTMENT.
9.1 Whenever the number of shares of Common Stock or other stock or
property issuable upon the exercise of this Warrant is adjusted, as herein
provided, the Company shall promptly mail by first class mail, postage prepaid,
to the Holder at the last address of such Holder appearing on the register
maintained by the Company, notice of such adjustment or adjustments. In
addition, the Company at its sole expense shall within 90 calendar days
following the end of each fiscal year of the Company during which this Warrant
remains outstanding and an adjustment has occurred, and promptly upon the
request of the Holder of this Warrant in connection with the exercise thereof,
cause to be delivered to the Holder a certificate of a firm of independent
public accountants selected by the Board of Directors of the Company (which may
be the regular accountants employed by the Company) setting forth the number of
shares of Common Stock or other stock or property issuable upon the exercise of
this Warrant after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made.
9.2 If at any time after the date of issuance of this Warrant and ending
on December __, 1998, the Company enters into an agreement providing for a
Change in Control or otherwise becomes aware of the occurrence of a Change in
Control not directly or indirectly resulting from actions taken by it, then the
Company will cause to be mailed by first class mail, postage prepaid, to the
Holder at the last address of such Holder appearing on the register maintained
by the Company, as soon as practicable and in any event within 20 days
thereafter, a notice describing any such
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agreement or the occurrence of such a Change in Control, and stating the
anticipated effective date of the Change in Control if it has not yet
occurred or, if it has occurred, the effective date thereof.
SECTION 10. STATEMENT OF WARRANTS.
This Warrant may continue to express the same number and kind of shares
which may be purchased upon exercise hereof as are stated in the Warrant
initially issued pursuant to the Unit Purchase Agreement or any substitute
Warrant issued therefor, notwithstanding any adjustment in the Exercise Price
and/or in the number or kind of shares issuable upon exercise of this Warrant.
In the event of any such adjustment, the Company will, at its expense, promptly
upon the Holder's surrender of this Warrant to the Company, execute a new
Warrant or Warrants stating the Exercise Price and the number and kind of shares
issuable upon exercise of this Warrant.
SECTION 11. FRACTIONAL INTEREST.
The Company shall not be required to issue fractional shares of Common
Stock on the exercise of this Warrant. If more than one Warrant shall be
presented for exercise at the same time by the Holder, the number of full shares
of Common Stock which shall be issuable upon such exercise shall be computed on
the basis of the aggregate number of shares of Common Stock acquirable on
exercise of the Warrants so presented. If any fraction of a share of Common
Stock would, except for the provisions of this Section 11, be issuable on the
exercise of any Warrant (or specified portion thereof), the Company shall pay an
amount in cash calculated by it to be equal to the then current market price per
share multiplied by such fraction computed to the nearest whole cent. The Holder
by his acceptance of this Warrant expressly waives any and all rights to receive
any fraction of a share of Common Stock or a stock certificate representing a
fraction of a share of Common Stock.
SECTION 12. ENTIRE AGREEMENT.
This Warrant, the Unit Purchase Agreement and the Related Agreements (as
defined in the Unit Purchase Agreement) constitute the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof and no party shall be liable or bound to any other party in any manner by
any representations, warranties, covenants or agreements except as specifically
set forth herein or therein.
SECTION 13. SUCCESSORS AND ASSIGNS.
13.1 All covenants and provisions of this Warrant by or for the benefit
of the Company or the holder of this Warrant shall bind
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and inure to the benefit of their respective successors, assigns, heirs and
personal representatives.
13.2 Subject to the requirements of Section 6 of this Warrant, this
Warrant is assignable, in whole or in part, without charge to the holder hereof
upon surrender of this Warrant with a properly executed assignment at the
principal office of the Company. Upon any partial assignment, the Company will
at its expense issue and deliver to the holder hereof a new Warrant of like
tenor, in the name of the holder hereof, which shall be exercisable for such
number of shares of Common Stock (or any shares of stock or other securities at
the time issuable upon exercise of this Warrant) which were not so assigned.
Except as provided in this Section 13.2, this Warrant may not be assigned or
transferred.
SECTION 14. TERMINATION.
This Warrant shall terminate at 5:00 p.m., Pacific Time, on the
Expiration Date or upon such earlier date on which all of this Warrant has been
exercised.
SECTION 15. HEADINGS.
The headings of sections of this Warrant have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms or provisions hereof.
SECTION 16. AMENDMENTS.
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the Company and the holder
of this Warrant.
SECTION 17. NOTICES.
All notices, demands and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(a) if to the holder of this Warrant, at the address set forth on
the register of the Warrants maintained by the Company, or at such other
address as the holder of this Warrant shall have furnished to the Company
in writing;
(b) if to the Company, initially at 0000 Xxxxxxxxx Xxxxxx, Xx
Xxxxxxx, Xxxxxxxxxx 00000, and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section 17.
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All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being sent by certified mail, return receipt requested, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day if timely delivered to an air courier guaranteeing
overnight delivery. For purposes of this Warrant, a "Business Day" means any day
except a Saturday, Sunday or other day on which commercial banks in the State of
California are authorized by law to close.
SECTION 18. BENEFITS OF THIS WARRANT.
Nothing in this Warrant shall be construed to give to any person or
corporation, other than the Company and the registered holder of this Warrant,
any legal or equitable right, remedy or claim under this Warrant, it being
intended that this Warrant shall be for the sole and exclusive benefit of the
Company and the registered holder thereof.
SECTION 19. GOVERNING LAW.
This Warrant shall be governed by and construed in accordance with the
laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officers.
Dated: December __, 1995 HAWTHORNE FINANCIAL CORPORATION
By:
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Executive Officer Name: Xxxxx X. Xxxxx
Title: President and Chief
Attest:
By:
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Name: Xxxxx X. Xxxx
Title: Senior Vice President and
Corporate Secretary
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ELECTION TO PURCHASE
DATED: ________
The undersigned hereby irrevocably exercises this Warrant to purchase
_______ shares of Common Stock and herewith makes payment of $_______ in payment
of the Exercise Price thereof on the terms and conditions specified in this
Warrant, surrenders this Warrant and all right, title and interest herein to the
Company and directs that the shares of Common Stock deliverable upon the
exercise of this Warrant be registered in the name and at the address specified
below and delivered thereto.
Name:
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(Please Print)
Address:
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City, State and Zip Code:
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If such number of shares of Common Stock is less than the aggregate number of
shares of Common Stock purchasable hereunder, the undersigned requests that a
new Warrant representing the balance of such shares of Common Stock be
registered in the name and at the address specified below and delivered thereto.
Name:
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(Please Print)
Address:
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City, State and Zip Code:
-------------------------------------------------------
Taxpayer Identification or Social Security Number:
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Signature:
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Note: The above signature must correspond with the name as written upon the face
of this Warrant in every particular, without alteration or enlargement or any
change whatsoever.
