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THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS ("STATE SECURITIES LAWS"),
AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE
DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES
ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL IS OBTAINED STATING
THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION.
Expires at 5:00p.m. Eastern Time on April 28, 2000
FINET HOLDINGS CORPORATION
WARRANT FOR THE PURCHASE
OF SHARES OF COMMON STOCK
No. W-97 -xxa xx,000 Warrants
FOR VALUE RECEIVED, FINET HOLDINGS CORPORATION, a Delaware corporation (the
"Company"), hereby certifies that:
or his/her assigns (the "Holder"), is entitled, subject to the provisions
of this Warrant, to purchase from the Company, up to 5,000 fully
paid and non-assessable shares of Common Stock.. The purchase price of one
share of Common Stock (the "Exercise Price") shall be the following:
$1.50 until 5:00p.m. Eastern Time on April 30, 1998
$2.50 until 5:00p.m. Eastern Time on April 30, 1999
$3.50 until 5:00p.m. Eastern Time on April 28, 2000
The term "Common Stock" means the Common Stock, par value $.01 per share,
of the Company as constituted as of March 25, 1997 (the "Issue Date"). The
shares of Common Stock to be received upon the exercise of this Warrant are
hereinafter referred to as "Warrant Stock." The term "Company" means and
includes the corporation named above as well as (i) any immediate or more
remote successor corporation resulting from the merger or consolidation of
such corporation (or any immediate or more remote successor corporation of
such corporation (or any immediate or more remote successor corporation of
such corporation) to which it has transferred its property or assets as an
entirety or substantially as an entirety.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver a new Warrant of like
tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not his Warrant so lost, stolen, destroyed or mutilated shall be
at any time enforceable by anyone.
The Holder agrees with the Company that this Warrant is issued, and all the
rights hereunder shall be held, subject to all of the conditions,
limitations and provisions set forth herein.
178
1. Exercise of Warrant.
(a) This Warrant may be exercised in whole or in part at any time,
or from time to time, during the period commencing on the date hereof and
expiring at 5:00 p.m. Eastern Time on April 28, 2000 (the "Expiration
Date"), by presentation and surrender of this Warrant to the Company at its
principal office with the Warrant Exercise Form attached hereto duly
executed and accompanied by payments (either in cash or by certified or
official bank check, payable to order of the Company) of the Exercise Price
for the number of shares specified in such form and instruments of
transfer, if appropriate, duly executed by the Holder or his or her duly
authorized attorney. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to
purchase the balance of the shares purchasable hereunder. Upon receipt by
the Company of this Warrant, together with the Exercise Price, at its
office in proper form for exercise, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the transfer books of the Company shall then be closed
or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder. The Company shall pay any and
all documentary stamp or similar issue or transfer taxes payable in respect
of the issue or delivery of shares of Common Stock on exercise of this
Warrant.
(b) The Holder hereby acknowledges that neither this Warrant nor any of
the securities that may be acquired upon exercise of this Warrant,
including the Warrant Stock and the Other Securities, have been registered
under the Securities Act or under the State Securities Laws. The Holder
acknowledges that, upon exercise of this Warrant, the securities to be
issued upon such exercise may be subject to applicable federal and state
securities (or other) laws requiring registration, qualification or
approval of governmental authorities before such securities may be validly
issued or delivered upon notice of such exercise. The Company's sole
obligation to any Holder upon exercise hereof shall be to use its best
efforts to obtain exemptions from registration or qualification for the
issuance of such securities under applicable state and federal securities
laws, and the Holder further agrees that the issuance of such securities
shall be deferred until such exemption shall have been obtained; and it is
further agreed that the Company shall have no other obligation to the
Holder for the non-issuance of such securities except to return the Warrant
so rendered and to refund the Holder any consideration tendered in respect
to the Exercise Price. With respect to any such securities, this Warrant
may not be exercised by, and securities shall not be issued, to any Holder
in any state in which such exercise would be unlawful. Any restrictions
imposed by this section upon the exercise of this Warrant shall cease and
terminate as to any particular shares of Common Stock (a) when such
securities shall have been registered under the Securities Act and all
applicable State Securities Laws, or (b) when, in the opinion of Counsel to
the Company, such restrictions are no longer required in order to ensure
compliance with the Securities Act or any applicable State Securities Laws.
2. Reservation of Shares. The Company shall at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common
Stock from time to time receivable upon exercise of this Warrant. All such
shares (and Other Securities) shall be duly authorized and, when issued
upon such exercise, shall be validly issued, fully paid and non-assessable
and free of all preemptive rights.
3. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but
the Company shall pay the Holder an amount equal to the fair market value
of such fractional share of Common Stock in lieu of each fraction of a
share otherwise called for upon any exercise of this Warrant. For purposes
of this Warrant, the fair market value of a share of Common Stock shall be
determined as follows:
(a) If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange or listed for
trading on the NASDAQ system, the current market value shall be the last
reported sale price of the Common Stock on such exchange or system on the
last business day prior to the date of exercise of this Warrant, or if no
such sale is made on such day, the average of the closing bid and asked
prices for such day on such exchange or system; or
179
(b) If the Common Stock is not listed or admitted to unlisted trading
privileges, the current market value shall be the mean of the last reported
bid and asked prices reported by the National Quotation Bureau, Inc. on the
last business day prior to the date of the exercise of this Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount, not less than book value thereof
as at the end of the most recent fiscal year of the Company ending prior to
the date of the exercise of the Warrant, determined in such reasonable
manner as may be prescribed by the Board of Directors of the Company.
4. Exchange, Transfer. Assignment or Loss of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company for other Warrants of
different denominations, entitling the Holder or Holders thereof to
purchase in the aggregate the same number of shares of Common Stock
purchasable hereunder. Upon surrender of this Warrant to the Company at its
principal office with the Assignment form annexed hereto duly executed and
funds sufficient to pay any transfer tax, the Company shall, without
charge, execute and deliver a new Warrant in the name of the assignee named
in such instrument of assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants that
carry the same rights upon presentation hereof at the office of the Company
together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
6. Redemption. The Company shall have the right, upon the giving of at
least 30 days' prior written notice to the Holders of all the Warrants, to
redeem all of the Warrants at a price of $.05 per Warrant (the "Redemption
Price") commencing one year from the Issue Date, provided that the average
closing bid price per share of the Common Stock in the over-the-counter
market as reported on the American Stock Exchange Emerging Company
Marketplace (or the average closing sales price on the primary exchange or
NASDAQ on which the Common Stock is traded, if the Common Stock is traded
on a national securities exchange or NASDAQ) for 20 consecutive trading
days, ending not more than 15 calendar days prior to the date of the
redemption notice, equals or exceeds at least 200% of the then effective
exercise price of the Warrants. All Warrants issued on this date must be
redeemed if any are redeemed. Such notices of redemption shall (a)
designate the date of redemption which date shall not be less than 30 or
more than 60 days from the date of such notice, (b) state the Redemption
Price and that payment therefor will be made upon surrender of the Warrant
at the offices of the Company and (c) indicate that the right to exercise
the Warrant will terminate at the close of business on the business day
prior to the redemption date. If the giving of notice of redemption shall
be given as aforesaid, the right to exercise the Warrant will terminate at
the close of business on the business day prior to the redemption date, and
the Holder of this Warrant shall thereafter be entitled upon surrender of
this Warrant only to receive the Redemption Price without interest.
7. Transfers to Comply with the Securities Act. The Company shall be
under no obligation to transfer this Warrant, or any of the Common Stock
issued upon exercise of this Warrant, unless and until the Company shall
have received an opinion of counsel, reasonably acceptable to the Company,
that such transfer does not require registration of any such securities
under the Securities Act or any applicable state securities laws. This
Warrant and any Warrant Stock or Other Securities may not be sold,
transferred, pledged, hypothecated or otherwise disposed of except as
follows: (a) to a person who, in the opinion of counsel to the Company, is
a person to whom this Warrant or the Warrant Stock or Other Securities may
legally be transferred without the delivery of a current prospectus under
the Securities Act with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section 7
with respect to any resale or other disposition of such securities; or (b)
to any person upon delivery of a prospectus then meeting the requirements
of the Securities Act relating to such securities and the offering thereof
for such sale or disposition, and thereafter to all successive assignees.
180
8. Legend. Unless the shares of Warrant Stock or Other Securities have
been registered under the Securities Act, upon exercise of any of the
Warrants and the issuance of any of the shares of Warrant Stock, all
certificates representing shares shall bear on the face thereof
substantially the following legend:
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS ("STATE LAWS"), AND MAY NOT
BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF,
UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT AND
APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT
SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION.
9. Supplements and Amendments. The Company may from time to time
supplement or amend this Warrant Certificate without the approval of any
Holder of Warrant Certificate in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which the Company shall not adversely affect the
interests of the Holders of Warrant Certificates.
10. Notices. All notices required hereunder shall be in writing and
shall be deemed given when telegraphed, delivered personally or within two
days after mailing when by certified or registered mail, return receipt
requested, addressed to the Company at the address set forth below or
addressed to the Holder at the address set forth on the first page, as the
case may be, or at such other address of which the Company or the Holder
has been advised by notice hereunder.
Company: Finet Holdings Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Xxx Xxxxxxx, President
11. Applicable Law. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the
State of Delaware.
12. Captions. The caption headings of the Sections of this Warrant
Certificate are for convenience of reference only and are not intended, nor
should they be construed as, a part of this Warrant Certificate and shall
be given no substantive effect.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its
behalf, in its corporate name, by its duly authorized officer, all as of
the day and year first above written.
FINET HOLDINGS CORPORATION
By: ________________________
President
ATTEST:
By: ________________________
181
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _________ shares of Common Stock of Finet Holdings
Corporation, a Delaware corporation, and hereby makes payment of $
________________________ in payment therefor.
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within Warrant)
(f) Name
_______________________________________________________________________
(Please typewrite or print in block letters)
(g)
Address____________________________________________________________________
__
___________________________________________________________________________
__
Social Security or
Taxpayer Identification Number
__________________________________________________
and if such number of Warrants shall not be all Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Holder at the
address stated below.
IMPORTANT: PLEASE COMPLETE THE FOLLOWING PAGE
182
1. The exercise of this Warrant was not solicited unless the following box
is checked. [ ]
2. The exercise of this Warrant was solicited by
_______________________________________________________________________
Dated:_________________, 199__
_____________________________ _____________________________
Signature, if jointly held Signature
_____________________________ _____________________________
Print Name Print Name
_____________________________ _____________________________
_____________________________ _____________________________
Address Address
_____________________________ _____________________________
Social Security Number Social Security Number or
Taxpayer Identification Number Taxpayer Identification Number
_____________________________ _____________________________
Signature Guaranteed Signature Guaranteed
_____________________________ _____________________________
183
ASSIGNMENT FORM
FOR VALUE RECEIVED,_______________________________________________________
hereby sells, assigns and transfers unto
Name_______________________________________________________________________
_
(Please typewrite or print in block letters)
the right to purchase Common Stock of Finet Holdings Corporation, a
Delaware corporation, represented by this Warrant to the extent of shares
as to which such right is exercisable and does hereby irrevocably
constitute and appoint____________________________________________
Attorney, to transfer the same on the books of the Company with full power
of substitution in the premises.
Dated:______________, 199__
__________________________
Signature
__________________________
Signature, if jointly held
__________________________
Print Name
__________________________
Print Name
