THIS WARRANT HAS BEEN ISSUED TO THE HOLDER THEREOF IN RELIANCE UPON ITS
INVESTMENT REPRESENTATIONS TO THE COMPANY AND MAY NOT BE TRANSFERRED TO ANOTHER
PERSON EXCEPT IN ACCORDANCE WITH THE TRANSFER RESTRICTIONS SET FORTH IN SECTION
5.
May 4, 2000
COMMON STOCK WARRANT
To Purchase 25,000 Shares of common stock of
XXXXXXXX.XXX, INC.
THIS CERTIFIES THAT, in consideration for payment of good and valuable
consideration to Xxxxxxxx.xxx, Inc., a Florida corporation (the "Company"),
Mid-America Realty Concepts, Inc. or registered assigns is entitled to subscribe
for and purchase from the Company, subject to the terms and conditions described
below, 25,000 fully-paid and nonassessable shares of the Company's common stock,
$0.01 par value (the "Shares"), at the Exercise Price.
1. Definitions. Capitalized terms used herein but not defined herein
shall have the meanings given to them in the Business Developer Agreement. The
following capitalized terms, as used herein, shall have the meanings set forth
below:
(a) "Closed Loans" means the cumulative total of mortgage loans
closed by Contacts in Kansas, Missouri and Southeast Nebraska who
participate in a Program under the Business Developer Agreement.
(b) "Exercise Price" shall mean $1.94, subject to adjustments
described in Section 8.
(c) "Extraordinary Common Stock Event" shall mean (i) the issue
of additional shares of common stock as a dividend or other
distribution on outstanding shares of capital stock, (ii) a
subdivision of outstanding shares of common stock into a greater
number of shares of common stock (whether by stock split or otherwise
than by payment of a dividend in common stock) or (iii) a subdivision
of outstanding shares of common stock into a smaller number of shares
of the common stock (whether by combination or reverse stock split).
(d) "Business Developer Agreement" shall mean the Outside
Business Developer Agreement dated as of May 4, 2000, between the
Company and Mid-America Realty Concepts, Inc.
2. Term of Warrant and Vesting. The term of this Warrant shall expire
at 11:59 p.m. on May 3, 2002. Notwithstanding the expiration date, unvested
portions of this Warrant expire on the termination date of the Business
Developer Agreement. The holder may exercise vested portions of this Warrant
for a period of 60 days following the termination date of the Business Developer
Agreement; provided that no portion of this Warrant shall be exercisable after
the time it would otherwise have expired.
This Warrant shall vest as set forth in the following table:
Cumulative Number of Shares for which
Vesting Event This Warrant is Exercisable
------------- -------------------------------------
100 Closed Loans.................................20%
200 Closed Loans.................................40%
300 Closed Loans.................................60%
400 Closed Loans.................................80%
500 Closed Loans................................100%
3. Exercise. This Warrant may not be exercised prior to the date it
is vested or after the expiration of its term. The rights represented by this
Warrant may be exercised by the registered holder, in whole or in part (but not
to as to a fractional share of common stock), by the surrender of this Warrant
at the principal office of the Company on the intended date of the exercise,
together with a duly completed form of exercise and a check for the purchase
price for the number of Shares being purchased.
As a condition to the issuance by the Company of the Shares pursuant to
this Warrant, the holder, if requested by the Company, shall provide a letter in
which the holder (a) represents that the Shares are being acquired for
investment and not resale and makes such other representations as may be
necessary or appropriate to qualify the issuance of the Shares as exempt from
the Securities Act of 1933 and any other applicable securities laws, and (b)
represents that the holder shall not dispose of the shares in violation of the
Securities Act of 1933 or any other applicable securities laws. The Company
reserves the right to place a legend on all stock certificates issued pursuant
to the exercise of this Warrant to assure compliance with the foregoing.
The holder is aware that the Company is relying, and presently intends
to continue relying, upon exemptions from the securities registration
requirements of federal and state securities laws in the issuance of this
Warrant and in the issuance of the Shares. If, when this Warrant is exercised,
appropriate exemptions from registration are not available under federal and
state securities laws, the exercise shall not be consummated on the intended
date of exercise specified in the holder's written notice of exercise and no
Shares shall be issued to the holder unless and until such exemptions are
available. The holder agrees to execute such documents and make such
representations, warranties and agreements as may be required in order to comply
with the exemption(s) relied upon by the Company for the issuance of Shares.
4. Issuance of Shares. The Company agrees that the Shares purchased
upon exercise of this Warrant shall be deemed to be issued to the record holder
as of the close of business on the date on which this Warrant shall have been
surrendered with the applicable purchase price. Certificates for the Shares
purchased shall be delivered to the holder within a reasonable time after the
exercise of this Warrant has been consummated, and a new Warrant representing
the number of Shares, if any, with respect to which this Warrant has not been
exercised shall also be delivered to the holder hereof within such time.
5. Investment Representations. By accepting this Warrant, the holder
represents that the Warrants are being acquired for investment purposes only and
not with a view to distribution or resale. The holder further acknowledges that
it has had the opportunity to ask questions of representatives and agents of the
Company and to acquire such additional information about the business and
financial
2
condition of the Company as holder has requested in connection with acquisition
of this Warrant, and all such information has been provided by the Company.
6. Transferability. The holder of this Warrant, by acceptance hereof,
agrees to give written notice to the Company before transferring this Warrant,
or transferring any Shares, of such holder's intention to do so, describing
briefly the manner of the proposed transfer. Promptly upon receiving such
written notice, the Company shall present copies thereof to the Company's
counsel. If in the opinion of the Company's counsel the proposed transfer may be
effected without constituting a violation of applicable federal and state
securities laws, then the Company, as promptly as practicable, shall notify such
holder of such opinion, whereupon such holder shall be entitled to transfer this
Warrant or to dispose of any of the Shares received upon the previous exercise
of the Warrant, provided that an appropriate legend may be endorsed on this
Warrant or the certificates for any of the Shares respecting restrictions upon
transfer thereof necessary or advisable in the opinion of the Company's counsel
to prevent further transfers which would be in violation of the securities laws
or adversely affect the exemptions relied upon by the Company. To such effect,
the Company may request that the intended transferee execute an investment
letter reasonably satisfactory to the Company and its counsel.
A register of the issuance and transfer of this Warrant shall be kept
at the offices of the Company, and this Warrant may be transferred only on the
books of the Company maintained at its office. Each transfer shall be in writing
signed by the then-registered holder hereof or the holder's legal
representatives or successors, and no transfer hereof shall be binding upon the
Company unless in writing and duly registered on the register maintained at the
Company's offices. Upon transfer of this Warrant, the transferee, by accepting
the Warrant, agrees to be bound by the terms and conditions of this Warrant and
the investment letter, if any, required by the Company.
If in the opinion of the Company's counsel the proposed transfer or
disposition of the Warrant or the Shares described in the holder's written
notice given pursuant to this Section 5 may not be effected without registration
or without adversely affecting the exemptions relied upon by the Company, the
Company shall promptly give written notice to the holder and the holder will
limit its activities and restrict its transfer accordingly.
7. Covenants of the Company. The Company and agrees that all Shares
which may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be duly authorized and issued, fully paid, nonassessable
and free from all taxes, liens and charges with respect to the issue thereof,
and without limiting the generality of the foregoing, the Company covenants and
agrees that it will from time to time take all such actions as may be required
to assure that the par value per share of the common stock is at all times equal
to or less than the then-effective Exercise Price. The Company further covenants
and agrees that the Company will at all times have authorized, and reserved for
issuance upon exercise of rights evidenced by this Warrant, a sufficient number
of shares of its common stock to provide for the exercise of the rights
represented by this Warrant.
3
8. Anti-Dilution Adjustments. The above provisions are subject to
the following:
(a) Upon Extraordinary Common Stock Event. Upon the happening of
an Extraordinary Common Stock Event, the Exercise Price shall,
simultaneously with the happening of such Extraordinary Common Stock
Event, be adjusted by multiplying the Exercise Price by a fraction,
the numerator of which shall be the number of shares of common stock
outstanding immediately prior to such Extraordinary Common Stock Event
and the denominator of which shall be the number of shares of common
stock outstanding immediately after such Extraordinary Common Stock
Event, and the product so obtained shall thereafter be the Exercise
Price. The Exercise Price, as so adjusted, shall be readjusted in the
same manner upon the happening of any successive Extraordinary Common
Stock Event or Events.
When any adjustment is required to be made in the Exercise
Price pursuant to this subsection (a), the number of Shares
purchasable upon the exercise of this Warrant shall be changed to the
number determined by dividing (i) (A) an amount equal to the number of
shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by (B) the Exercise Price in effect
immediately prior to such adjustment, by (ii) the Exercise Price in
effect immediately after such adjustment.
(b) Mergers, Consolidations, Sales of Assets, Etc. In the event
of any consolidation of the Company with or merger of the Company into
any other corporation (other than a merger in which the Company is the
surviving corporation unless the Company is the surviving target
corporation in a reverse triangular merger) or the conveyance,
transfer or lease of substantially all of the Company's assets or a
recapitalization or reclassification that results in the issuance of
the Company's securities, the holder of this Warrant shall have the
right, after such consolidation, merger, sale, recapitalization or
reclassification to exercise such Warrant and receive the number and
kind of shares of stock or other securities and the amount and kind of
property receivable upon such consolidation, merger, sale,
recapitalization or reclassification as would a holder of the number
of shares of common stock issuable upon exercise of this Warrant
immediately prior to such consolidation, merger or sale. Provisions
shall be made for adjustments in the Exercise Price which shall be as
nearly equivalent as may be practicable to the adjustments provided
for in subsection (a). The provisions of this subsection (b) shall
similarly apply to successive consolidations, mergers, sales,
recapitalizations or reclassifications.
(c) Notice of Certain Transactions. If the Company takes any
action that would require an adjustment in the Exercise Price, the
Company shall mail to the holder of this Warrant a notice stating the
proposed record date for a dividend or distribution or the proposed
effective date of a subdivision, combination, reclassification,
consolidation or merger and a description of the resulting adjustment.
The Company shall mail the notice at least 15 days before such date.
Failure to mail the notice or any defect contained therein shall not
affect the validity of the transaction.
(d) No Impairment. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but
will at all times in good faith assist in the carrying out of all the
provisions of this Section 5 and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the
holder of this Warrant against impairment.
4
9. No Voting or Other Rights. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a stockholder of the
Company.
10. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, Xxxxxxxx.xxx, Inc., has caused this Warrant to be
signed by its duly authorized officer as of the date first above written.
Xxxxxxxx.xxx, Inc.
By: /s/ Xxxx X. Xxxxx
--------------------------------------
Xxxx X. Xxxxx, Senior Executive Vice
President
ATTEST:
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx, Secretary
(Corporate Seal)
5
SUBSCRIPTION FORM TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned registered holder hereby irrevocably elects to
exercise the right of purchase represented by the within Warrant for, and to
purchase thereunder, _________ full Shares of common stock provided for therein,
and, if said number of Shares shall not be all the Shares purchasable
thereunder, that a new Warrant for the unexercised portion of the within Warrant
to be delivered to the undersigned.
Dated _______, _____.
_________________________________________
Signature of Registered Holder
6
