WARRANT AGREEMENT
WARRANT AGREEMENT dated as of March 18, 1998, between Finet Holdings
Corporation, a Delaware corporation (the "Company"), and X.X. Xxxxx
Securities, Inc., a Georgia corporation (hereinafter referred to as "X.X.
Xxxxx").
W I T N E S S E T H:
WHEREAS, X.X. Xxxxx has assisted the Company in connection with the
Company's offering (the "Offering") of up to $7,000,000 in principal
amount of 3% Convertible Debentures (the "Debentures") for an aggregate
purchase price $7,000,000; and
WHEREAS, the Warrants issued pursuant to this Agreement are being
issued by the Company to X.X. Xxxxx and/or its designees, in consideration
for, and as part of the compensation to be paid in connection with, the
services of X.X. Xxxxx in connection with the Offering;
NOW, THEREFORE, in consideration of the premises, the agreements
herein set forth and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
1. Grant.
X.X. Xxxxx and/or its designees are hereby granted the right to
purchase, at any time from the date of issuance of the aforementioned
Debentures until 5:00 P.M., Pacific Standard Time, on March 18, 2003 (the
"Warrant Exercise Term"), 80,000 shares of the Company's Common Stock, par
value $0.01 per share (the "Shares") at an exercise price (subject to
adjustment as provided in Article 7 hereof) equal to $5.71 (the "Initial
Exercise Price").
2. Warrant Certificates.
The warrant certificates (the "Warrant Certificates) delivered
and to be delivered pursuant to this Agreement shall be in the form set
forth as Exhibit A, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions and other variations as
required or permitted by this Agreement.
3. Exercise of Warrants.
3.1 Cash Exercise. The Exercise Price may be paid in cash or
by check to the order of the Company, or any combination of cash or check,
subject to adjustment as provided in Article 7 hereof. Upon surrender of
the Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter
defined) for the Shares purchased, at the Company's executive offices
(currently located at 0000 Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx 94598)
the registered holder of a Warrant Certificate ("Holder" or "Holders")
shall be entitled to receive a certificate or certificates for the Shares
so purchased. The purchase rights represented by each Warrant Certificate
are exercisable at the option of the Holder hereof, in whole or in part
(but not as to fractional shares of the Common Stock). In the case of the
purchase of less than all the Shares purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate
of like tenor for the balance of the Shares purchasable thereunder.
3.2 Cashless Exercise. At any time during the Warrant Exercise
Term, the Holder may, at its option, exchange this Warrant, in whole or in
part (a "Warrant Exchange"), into the number of Shares determined in
accordance with this Section 3.2, by surrendering this Warrant at the
principal office of the company or at the office of its transfer agent,
accompanied by a notice stating such Holder's intent to effect such
exchange, the number of Shares to be exchanged and the date on which the
Holder requests that such Warrant Exchange occur (the "Notice of
Exchange"). The Warrant Exchange shall take place on the date specified
in the Notice of Exchange or, if later, the date the Notice of Exchange is
received by the Company (the "Exchange Date"). Certificates for the
Shares issuable upon such Warrant Exchange and, if applicable, a new
warrant of like tenor evidencing the balance of the Shares remaining
subject to this Warrant, shall be issued as of the Exchange Date and
delivered to the Holder within seven (7) business days following the
Exchange Date. In connection with any Warrant Exchange, this Warrant
shall represent the right to subscribe for and acquire the number of
Shares (rounded to the next highest integer) equal to (i) the number of
Shares specified by the Holder in its Notice of Exchange (the "Total
Number") less (ii) the number of Shares equal to the quotient obtained by
dividing (A) the product of the Total Number and the then existing
Exercise Price by (B) the current market value of a share of Common Stock.
4. Issuance of Certificates.
Upon the exercise of the Warrants, the issuance of certificates for
the Shares shall be made forthwith (and in any event within five business
days thereafter) without charge to the Holder thereof including, without
limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that
the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the Holder and the Company shall
not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to satisfaction
of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares
shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman or Vice Chairman of the
Board of Directors, Chief Executive officer or President or Vice President
of the Company under its corporate seal reproduced thereon, attested to by
the manual or facsimile signature of the present or any future Secretary
or Assistant Secretary of the Company. Warrant Certificates shall be
dated the date of execution by the Company upon initial issuance,
division, exchange, substitution or transfer.
The Warrant Certificates and, upon exercise of the Warrants, in part
or in whole, certificates representing the Shares shall bear a legend
substantially similar to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be offered or sold except (i) pursuant to an
effective registration statement under the Act, (ii) to the
extent applicable, pursuant to Rule 144 under the Act (or any
similar rule under such Act relating to the disposition of
securities), or (iii) upon the delivery by the holder to the
Company of an opinion of counsel, reasonably satisfactory to
counsel to the issuer, stating that an exemption from
registration under such Act is available.
5. Price.
5.1 Adjusted Exercise Price. The adjusted Exercise Price shall
be the price which shall result from time to time from any and all
adjustments of the Initial Exercise Price in accordance with the
provisions of Article 7 hereof.
5.2 Exercise Price. The term "Exercise Price" herein shall
mean the Initial Exercise Price or the adjusted Exercise Price, depending
upon the context.
6. Registration Rights.
6.1 Registration Under the Securities Act of 1993.
The Warrants and the Shares have not been registered for purposes of
public distribution under the Securities Act of 1933, as amended ("the
Act").
6.2 Registrable Securities. As used herein the term
"Registrable Security" means each of the Warrants, the Shares and any
shares of Common Stock issued upon any stock split or stock dividend in
respect of such Shares; provided, however, that with respect to any
particular Registrable Security, such security shall cease to be a
Registrable Security when, as of the date of determination, (i) it has
been effectively registered under the Securities Act and disposed of
pursuant thereto, (ii) registration under the Securities Act is no longer
required for the immediate public distribution of such security or (iii)
it has ceased to be outstanding. The term "Registrable Securities" means
any and/or all of the securities falling within the foregoing definition
of a "Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure
affecting the Common Stock, such adjustment shall be made in the
definition of "Registrable Security" as is appropriate in order to prevent
any dilution or enlargement of the rights granted pursuant to this Article
6.
6.3 Piggyback Registration. If, at any time during the five
years following the date of this Agreement, the Company proposes to
prepare and file any registration statement or post-effective amendments
thereto covering equity or debt securities of the Company, or any such
securities of the Company held by its shareholders (in any such case,
other than in connection with a merger, acquisition or pursuant to Form S-
8 or successor form), (for purposes of this Article 6, collectively, a
"Registration Statement"), it will give written notice of its intention to
do so by registered mail ("Notice"), at ten (10) business days prior to
the filing of each such Registration Statement, to all holders of the
Registrable Securities. Upon the written request of such a holder (a
"Requesting Holder"), made within ten (10) business days after receipt of
the Notice, that the Company include any of the Requesting Holder's
Registrable Securities in the proposed Registration Statement, the Company
shall, as to each such Requesting Holder, use its best efforts to effect
the registration under the Securities Act of the Registrable Securities
which it has been so requested to register ("Piggyback Registration"), at
the Company's sole cost and expense and at no cost or expense to the
Requesting Holders; Notwithstanding the provisions of this Section 6.3,
the Company shall have the right at any time after it shall have given
written notice pursuant to this Section 6.3 (irrespective of whether any
written request for inclusion of such securities shall have already been
made) to elect not to file any such proposed Registration Statement, or to
withdraw the same after the filing but prior to the effective date
thereof.
6.4 Demand Registration.
(a) At any time, commencing 120 days from the date of this
Agreement and during the Warrant Exercise Term, any "Majority Holder" (as
such term is defined in Section 6.4(d) below) of the Registrable
Securities shall have the right (which right is in addition to the
piggyback registration rights provided for under Section 6.3 hereof),
exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Securities and
Exchange Commission (the "Commission"), on one occasion, at the sole
expense of the Company, a Registration Statement and such other documents,
including a prospectus, as may be necessary (in the opinion of both
counsel for the Company and counsel for such Majority Holder), in order to
comply with the provisions of the Act, so as to permit a public offering
and sale of the Registrable Securities by the holders thereof, for nine
(9) consecutive months.
(b) The Company covenants and agrees to give written
notice of any Demand Registration Request to all holders of the
Registrable Securities within ten (10) days from the date of the Company's
receipt of any such Demand Registration Request. After receiving notice
from the Company as provided in this Section 6.4(b), holders of
Registrable Securities may request the Company to include their
Registrable Securities in the Registration Statement to be filed pursuant
to Section 6.4(a) hereof by notifying the Company of their decision to
include such securities within twenty (20) days of their receipt of the
Company's notice.
(c) In addition to the registration rights provided for
under Section 6.3 and subsection (a) of this Section 6.4, at any time
during the Warrant Exercise Term, any Majority Holder (as defined below in
Section 6.4(d)) of Registrable Securities shall have the right,
exercisable by written request to the Company, to have the Company prepare
and file with the Commission, on one occasion in respect of all holders of
Registrable Securities, a Registration Statement so as to permit a public
offering and sale of such Registrable Securities for nine (9) consecutive
months, provided, however, that all costs incident thereto shall be at the
expense of the holders of the Registrable Securities included in such
Registration Statement. If a Majority Holder shall give notice to the
Company at any time of its or their desire to exercise the registration
right granted pursuant to this Section 6.4(c), then within ten (10) days
after the Company's receipt of such notice, the Company shall give notice
to the other holders of Registrable Securities, advising them that the
Company is proceeding with such registration and offering to include
therein the Registrable Securities of such holders, provided they furnish
the Company with such appropriate information in connection therewith as
the Company shall reasonably request in writing.
(d) The term "Majority Holder" as used in this Section 6.4
shall mean any holder or any combination of holders of Registrable
Securities, if included in such holders, Registrable Securities are that
aggregate number of Shares (including Shares already issued and Shares
issuable pursuant to the exercise of outstanding Warrants) as would
constitute a majority of the aggregate number of Shares (including Shares
already issued and Shares issuable pursuant to the exercise of outstanding
Warrants) included in all of the Registrable Securities.
6.5 Covenants of the Company With Respect to Registration. The
Company covenants and agrees as follows:
(a) In connection with any registration under Section 6.4
hereof, the Company shall file the Registration Statement as expeditiously
as possible, but in no event later than forty-five (45) business days
following receipt of any demand therefor, shall use its best efforts to
have any such Registration Statements declared effective at the earliest
possible time, and shall furnish each holder of Registrable Securities
such number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs, fees and expenses
(excluding fees of holders for their counsel, transfer taxes and
underwriting discounts or commissions) in connection with all Registration
Statements filed pursuant to Sections 6.3 and 6.4(a) hereof including,
without limitation, the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses. The holders of Registrable
Securities included in any Registration Statement filed pursuant to
Section 6.4(c) hereof will pay all costs, fees and expenses in connection
with such registration.
(c) The Company will take all necessary action which may
be required in qualifying or registering the Registrable Securities
included in a Registration Statement for offering and sale under the
securities or blue sky laws of such states as are requested by the holders
of such securities.
(d) The Company shall indemnify any holder of the
Registrable Securities to be sold pursuant to any Registration Statement
and any underwriter or person deemed to be an underwriter under the Act
and each person, if any, who controls such holder or underwriter or person
deemed to be an underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become
subject under the Act, the Exchange Act or otherwise, arising from such
Registration Statement to the same extent and with the same effect as the
provisions pursuant to which the Company has agreed to indemnify the
purchasers of the Company's Convertible Debentures contained in the
Registration Rights Agreement dated of even date herewith.
(e) Any holder of Registrable Securities to be sold
pursuant to a Registration Statement, and its successors and assigns,
shall severally, and not jointly, indemnify, the Company, its officers and
directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against all loss, claim, damage or expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject under the
Act, the Exchange Act or otherwise, arising from information furnished in
writing by or on behalf of such holder, or its successors or assigns, for
specific inclusion in such Registration Statement to the same extent and
with the same effect as the provisions pursuant to which purchasers of the
Company's Convertible Debentures have agreed to indemnify the Company
contained in the Registration Rights Agreement dated of even date
herewith.
(f) Nothing contained in this Agreement shall be construed
as requiring any Holder to exercise his Warrants prior to the initial
filing of any Registration Statement or the effectiveness thereof.
(g) If the Company shall fail to comply with the provisions
of this Article 6, the Company shall, in addition to any other equitable or
other relief available to the holders of Registrable Securities, be liable
for any or all incidental, special and consequential damages sustained by
the holders of Registrable Securities, requesting registration of their
Registrable Securities.
(h) Except as otherwise provided to the contrary herein,
the Company shall not permit the inclusion of any securities other than the
Registrable Securities to be included in any Registration Statement filed
pursuant to Section 6.4 hereof, or permit any other registration statement
to be or remain effective during the effectiveness of a Registration
Statement filed pursuant to Section 6.4 hereof, without the prior written
consent of the Majority Holders, which consent shall not be unreasonably
withheld.
(i) The Company shall deliver promptly to each holder of
Registrable Securities participating in the offering requesting the corres-
pondence and memoranda described in this Section 6.5(i) and to the managing
underwriter, if any, copies of all correspondence between the Commission
and the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the
Registration Statement and permit each holder of Registrable Securities
and underwriters to do such investigation, upon reasonable advance notice,
with respect to information contained in or omitted from the Registration
Statement as it deems reasonably necessary to comply with applicable
securities laws or rules of the National Association of Securities
Dealers, Inc. Such investigation shall include access to books, records
and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent
and at such reasonable times and as often as any such holder of
Registrable Securities or underwriter shall reasonably request.
(j) If the Company shall enter into an underwriting agreement
with the managing underwriter selected for such underwriting, such agreement
shall be satisfactory in form and substance to the Company, each holder of
Registrable Securities and such managing underwriter, and shall contain
such representations, warranties and covenants by the Company and such
other terms as are customarily contained in agreements of that type used
by the managing underwriter. The holders of Registrable Securities shall
be parties to any underwriting agreement relating to an underwritten sale
of their Registrable Securities and may, at their option, require that any
or all the representations, warranties and covenants of the Company to or
for the benefit of such underwriter shall also be made to and for the
benefit of such holders of Registrable Securities. Such holders of
Registrable Securities shall not be required to make any representations
or warranties to or agreements with the Company or the underwriter except
as they may relate to such holders of Registrable Securities and their
intended methods of distribution.
7. Adjustments of Exercise Price and Number of Shares.
7.1 Subdivision and Combination. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.
7.2 Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Article 7, the
number of Shares issuable upon the exercise of each Warrant shall be
adjusted to the nearest full Share by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the
number of Shares issuable upon exercise of the Warrants immediately prior
to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.
7.3 Reclassification, Consolidation, Merger, etc. In case of
any reclassification or change of the outstanding shares of Common Stock
(other than a change in par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in the case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock,
except a change as a result of a subdivision or combination of such shares
or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of the property of the Company as an
entirety, the Holders shall thereafter have the right to purchase the kind
and number of shares of stock and other securities and property receivable
upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holders were the owners of the shares of Common Stock
underlying the Warrants immediately prior to any such events at a price
equal to the product of (x) the number of shares issuable upon exercise of
the Warrants and (y) the Exercise Price in effect immediately prior to the
record date for such reclassification, change, consolidation, merger, sale
or conveyance as if such Holders had exercised the Warrants.
7.4 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of shares of Common Stock
upon the exercise of the Warrants; or
(b) Upon (i) the issuance of options pursuant to the
Company's employee stock option plan in effect on the date
hereof or the issuance or sale by the Company of any shares of
Common Stock pursuant to the exercise of any such options, or
(ii) the issuance or sale by the Company of any shares of Common
Stock pursuant to the exercise of any options or warrants
previously issued and outstanding on the date hereof; or
(c) Upon the issuance of shares of Common Stock pursuant
to contractual obligations existing on the date hereof; or
(d) If the amount of said adjustment shall be less than 2
cents ($.02) per Share, provided, however, that in such case any
adjustment that would otherwise be required then to be made
shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together
with any adjustment so carried forward, shall amount to at least
2 cents ($.02) per Share.
7.5 Dividends and Other Distributions with Respect to
Outstanding Securities. In the event that the Company shall at any time
prior to the exercise of all Warrants declare a dividend (other than a
dividend consisting solely of shares of Common Stock or a cash dividend or
distribution payable out of current or retained earnings) or otherwise
distribute to its shareholders any monies, assets, property, rights,
evidences of indebtedness, securities (other than shares of Common Stock),
whether issued by the Company or by another person or entity, or any other
thing of value, the Holder or Holders of the unexercised Warrants shall
thereafter be entitled, in addition to the shares of Common Stock or other
securities receivable upon the exercise thereof, to receive, upon the
exercise of such Warrants, the same monies, property, assets, rights,
evidences of indebtedness, securities or any other thing of value that
they would have been entitled to receive at the time of such dividend or
distribution. At the time of any such dividend or distribution, the
Company shall make appropriate reserves to ensure the timely performance
of the provisions of this Subsection 7.5.
7.6 Subscription Rights for Shares of Common Stock or Other
Securities. In the case the Company or an affiliate of the Company shall
at any time after the date hereof and prior to the exercise of all the
Warrants issue any rights to subscribe for shares of Common Stock or any
other securities of the Company or of such affiliate to all the
shareholders of the Company, the Holders of the unexercised Warrants shall
be entitled, in addition to the shares of Common Stock or other securities
receivable upon the exercise of the Warrants, to receive such rights at
the time such rights are distributed to the other shareholders of the
Company.
8. Exchange and Replacement of Warrant Certificates.
Each Warrant Certificate is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive
office of the Company, for a new Warrant Certificate of like tenor and
date representing in the aggregate the right to purchase the same number
of Shares in such denominations as shall be designated by the Holder
thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and
cancellation of the Warrants, if mutilated, the Company will make and
deliver a new Warrant Certificate of like tenor, in lieu thereof.
9. Elimination of Fractional Interests.
The Company shall not be required to issue certificates representing
fractions of shares of Common Stock and shall not be required to issue
scrip or pay cash in lieu of fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding
any fraction up to the nearest whole number of shares of Common Stock.
10. Reservation and Listing of Securities.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon
the exercise of the Warrants, such number of shares of Common Stock as
shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Warrants and payment of the Exercise
Price therefor, all shares of Common Stock issuable upon such exercise
shall be duly and validly issued, fully paid, nonassessable and not
subject to the preemptive rights of any shareholder. As long as the
Warrants shall be outstanding, the Company shall use its best efforts to
cause all shares of Common Stock issuable upon the exercise of the
Warrants to be listed on or quoted by NASDAQ.
11. Notices to Warrant Holders.
Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive
notice as a shareholder in respect of any meetings of shareholders for the
election of directors or any other matter, or as having any rights
whatsoever as a shareholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or
retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale
of all or substantially all of its property, assets and business as
an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written
notice of such event at least fifteen (15) days prior to the date fixed as
a record date or the date of closing the transfer books for the
determination of the shareholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, options or
warrants, or entitled to vote on such proposed dissolution, liquidation,
winding up or sale. Such notice shall specify such record date or the
date of closing the transfer books, as the case may be. Failure to give
such notice or any defect therein shall not affect the validity of any
action taken in connection with the declaration or payment of any such
dividend or distribution, or the issuance of any convertible or
exchangeable securities or subscription rights, options or warrants, or
any proposed dissolution, liquidation, winding up or sale.
12. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt
requested:
(a) If to a registered Holder of the Warrants, to the address
of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 of
this Agreement or to such other address as the Company may designate
by notice to the Holders.
13. Supplements and Amendments.
The Company and the Placement Agent may from time to time supplement
or amend this Agreement without the approval of any Holders of Warrant
Certificates 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 and the Placement Agent may
deem necessary or desirable and which the Company and the Placement Agent
deem not to adversely affect the interests of the Holders of Warrant
Certificates.
14. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
15. Termination.
This Agreement shall terminate at the close of business on March 18,
2003. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date when all Warrants have been exercised and all the Shares
issuable upon exercise of the Warrants have been resold to the public;
provided, however, that the provisions of Article 6 shall survive such
termination until the close of business on March 30, 2002.
16. Governing Law.
This Agreement and each Warrant Certificate hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware without regard to the principles of conflict of laws. Any
dispute or controversy between the parties arising in connection with this
Agreement or the subject matter contemplated by this Agreement shall be
resolved by arbitration before a three-member panel of the American
Arbitration Association in accordance with the commercial arbitration
rules of said forum and the Federal Arbitration Act, 9 U.S.C. 1 et seq.,
with the resulting award being final and conclusive. Said arbitrators
shall be empowered to award all forms of relief and damages claimed,
including, but not limited to, attorney's fees, expenses of litigation and
arbitration, exemplary damages, and prejudgment interest. The parties
further agree that any arbitration action between them shall be heard in
Atlanta, Georgia, and expressly consent to the jurisdiction and venue of
the Superior Court of Xxxxxx County, Georgia, and the United States
District Court for the Northern District of Georgia, Atlanta Division for
the adjudication of any civil action asserted pursuant to this Paragraph.
17. Benefits of This Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Placement Agent and any other
registered holder or holders of the Warrant Certificates, Warrants or the
Shares any legal or equitable right, remedy or claim under this Agreement;
and this Agreement shall be for the sole and exclusive benefit of the
Company and the Placement Agent and any other holder or holders of the
Warrant Certificates, Warrants or the Shares.
18. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original,
and such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
FINET HOLDINGS CORPORATION
By: /s/ L.
Xxxxxx Xxxxxxx
Name: L.
Xxxxxx Xxxxxxx
Title: CEO
Attest: /s/ D. Xxxxx Xxxxxxx
Name: D. Xxxxx Xxxxxxx
Title: Vice President
X.X. XXXXX SECURITIES, INC.
By: /s/ Xxxx
X. Xxxxxxx
Name: Xxxx
X. Xxxxxxx
Title: Sr. V.P.
Attest: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Admin. Asst
EXHIBIT A
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR
SOLD EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT
(OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER,
STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE
IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., PACIFIC STANDARD TIME, MARCH 18, 2003
No. 98-1 80,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that X.X. Xxxxx Securities, Inc.
("X.X. Xxxxx") or registered assigns, is the registered holder of 80,000
Warrants to purchase, at any time from March 18, 1997, until 5:00 P.M.
Pacific Standard Time on March 18, 2003 ("Expiration Date"), up to 80,000
shares ("Shares") of fully-paid and non-assessable common stock, par value
$0.01 per share ("Common Stock"), of Finet Holdings Corporation, a
Delaware corporation (the "Company"), at the Initial Exercise Price,
subject to adjustment in certain events (the "Exercise Price"), of $5.71
per Share upon surrender of this Warrant Certificate and payment of the
Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the warrant agreement dated as of March
18, 1998, between the Company and X.X. Xxxxx (the "Warrant Agreement").
Payment of the Exercise Price may be made in cash, or by certified or
official bank check in New York Clearing House funds payable to the order
of the Company, or any combination of cash or check.
No Warrant may be exercised after 5:00 P.M., Pacific Standard Time,
on the Expiration Date, at which time all Warrants evidenced hereby,
unless exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a
part of this instrument and is hereby referred to in a description of the
rights, limitation of rights, obligations, duties and immunities
thereunder of the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events, the Exercise Price and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In
such event, the Company will, at the, request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and
the number and/or type of securities issuable upon the exercise of the
Warrants; provided, however, that the failure of the Company to issue such
new Warrant Certificates shall not in any way change, alter, or otherwise
impair, the rights of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferees) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any
tax, or other governmental charge imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s)
hereof, and for all other purposes, and the Company shall not be affected
by any notice to the contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed under its corporate seal.
Dated: _______________, 1998 FINET HOLDINGS CORPORATION
By:__________________________________________
Name:________________________________________
Title:________________________________________
Attest:_____________________
Name:_____________________
Title:______________________
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ____________ Shares
and herewith tenders in payment for such Shares cash or a certified or
official bank check payable in New York Clearing House Funds to the order
of _____________________ in the amount of $_______________, all in
accordance with the terms hereof. The undersigned requests that a
certificate for such Shares be registered in the name of
________________________whose address
is__________________________________________________, and that such
Certificate be delivered to ___________________________________________,
whose address is
_______________________________________________________________.
Dated: Signature:_________________________________
(Signature must
conform in all respects to name of holder as
specified on the face of the Warrant
Certificate.)
____________________________________
____________________________________
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED ___________________________________________
hereby sells, assigns and transfers unto
__________________________________________________________________________
____
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
___________________________________, Attorney, to transfer the within
Warrant Certificate on the books of the within-named Company, with full
power of substitution.
Dated: Signature:_________________________________
(Signature must
conform in all respects to name of holder as
specified on the face of the Warrant
Certificate)
_____________________________________
_____________________________________
(Insert Social Security or Other
Identifying Number of Assignee)
