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
2.
THE TRANSFER OF THIS WARRANT IS SUBJECT TO A RIGHT OF FIRST REFUSAL IN FAVOR OF
THE COMPANY SET FORTH IN AN AGREEMENT DATED APRIL 1, 1998 BETWEEN THE COMPANY
AND SUPERIOR BANK, FSB.
April 1, 1998
COMMON STOCK WARRANT
To Purchase 300,000 Shares of Common Stock of
FIRST MORTGAGE NETWORK, INC.
THIS CERTIFIES THAT, in consideration for payment of good and valuable
consideration to First Mortgage Network, Inc., a Florida corporation (the
"Company"), Superior Bank, FSB, a federally chartered savings bank or registered
assigns is entitled to subscribe for and purchase from the Company, subject to
the following terms and conditions, at any time in perpetuity, THREE HUNDRED
THOUSAND (300,000) fully-paid and nonassessable shares (the "Shares") of the
Company's Common Stock, $0.01 par value, at the price of FIVE DOLLARS AND NO/100
($5.00) per share, subject to adjustments described herein.
1. Exercise. The rights represented by this Warrant may be exercised by
the registered holder hereof, in whole or in part (but not 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.
[Subsequent Warrant]
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.
2. Transferability. This Warrant may be transferred or divided into two
or more Warrants of smaller denomination, subject to (a) a right of first
refusal in favor of the Company set forth in an Agreement dated April 1, 1998
between the Company and Superior Bank, FSB, and (b) the following conditions.
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 2 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.
2 [Subsequent Warrant]
3. 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
hereof as of the close of business on the date on which this Warrant shall have
been surrendered and the payment made for such Shares as aforesaid. Subject to
the provisions of Section 4, certificates for the Shares so purchased shall be
delivered to the holder hereof within a reasonable time after the exercise of
this Warrant has been so consummated, and a new Warrant representing the number
of Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be delivered to the holder hereof within such time.
Notwithstanding the foregoing, however, the Company shall not be required
to deliver any certificate for Shares upon exercise of this Warrant, except in
accordance with the provisions, and subject to the limitations, of Section 1
hereof.
4. Covenants of Company. The Company covenants 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 action 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 purchase price per share of the Common Stock
issuable upon exercise of this Warrant. The Company further covenants and agrees
that the Company will at all times have authorized, and reserved for issuance
upon exercise of the subscription 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.
5. Anti-Dilution Adjustments. The above provisions are, however, subject
to the following:
(a) In case the Company shall (i) pay a stock dividend or make a
distribution to holders of its Common Stock in shares of Common Stock or in
securities or debt convertible into Common Stock, (ii) subdivide
outstanding shares of Common Stock into a larger number of shares or (iii)
combine outstanding shares of Common Stock into a smaller number of shares,
the number of Shares purchasable upon exercise of this Warrant immediately
prior thereto shall be adjusted retroactively so that when thereafter
exercised this Warrant shall entitle the holder to receive the number of
Shares which the holder would have owned immediately following such event
had such Warrant been exercised immediately prior to the happening of such
event (or prior to the record date with respect thereto). An adjustment
made pursuant to this subsection (a) shall become effective retroactively
immediately after the record date in the case of a dividend or distribution
and shall become effective immediately after the effective date in the case
of a subdivision or combination.
(b) Whenever the number of Shares purchasable upon the exercise of any
Warrant is adjusted, as provided in subsection (a) above, the exercise
price of this Warrant shall be adjusted by multiplying the exercise price
in effect immediately prior to such adjustment by
3 (Subsequent Warrant]
a fraction, the numerator of which shall be the number of Shares
purchasable upon the exercise of this Warrant immediately prior to such
adjustment, and the denominator of which shall be the number of Shares so
purchasable immediately thereafter.
(c) In case of any recapitalization of the Company or any
reclassification of the capital stock of the Company (other than a
subdivision or combination of outstanding shares or a change in par value
or from par value to no par value), or in case of the consolidation of the
Company with or the merger of the Company with or into any other
corporation or entity, this Warrant shall, after such recapitalization,
reclassification, consolidation or merger be exercisable, upon the terms
and conditions specified in this Warrant and upon payment of the exercise
price in effect immediately prior to such action, for the kind and amount
of shares of stock or other securities or property to which the Shares
issuable (at the time of such recapitalization, reclassification,
consolidation or merger) upon exercise of this Warrant would have been
entitled upon such recapitalization, reclassification, consolidation or
merger if such exercise had taken place immediately prior to such action;
and in any case, if necessary, the provisions set forth in this Section 5
with respect to the rights and interests thereafter of the holders of this
Warrant shall be appropriately adjusted so as to be applicable, as nearly
as may reasonably be, to any shares of stock or other securities or
property thereafter deliverable on the exercise of this Warrant.
In case of any consolidation of the Company with, or merger of the
Company with or into any other corporation or entity (excluding a
consolidation or merger which does not result in any substantive
reclassification or change of the outstanding shares of Common Stock of the
Company), such successor shall, as a condition to such transaction, execute
with the holder a supplemental warrant agreement (i) providing that the
holder of this Warrant shall thereafter have the right to purchase the kind
and amount of shares of stock or other securities or property provided in
this subsection (c), (ii) setting forth the exercise price for the
securities, and property if any, so issuable, which shall be an amount
equal to the exercise price immediately prior to such event and (iii)
providing that such successor or purchasing entity assumes the due and
punctual performance and observance of each and every covenant and
condition of this Agreement to be performed or observed by the Company.
(d) Upon any adjustment provided for in this Section 5, the Company
shall give written notice thereof, by first class mail, postage prepaid,
addressed to the registered holder of this Warrant at the address of such
holder as shown on the books of the Company, which notice shall state the
Warrant exercise price resulting from such adjustment and the increase or
decrease, if any, in the number of Shares purchasable at such price upon
the exercise of this Warrant, and shall set forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
6. 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.
4 [Subsequent Warrant]
IN WITNESS WHEREOF, First Mortgage Network, Inc. has caused this Warrant
to be signed by its duly authorized officer and this Warrant to be dated the
date first above written.
FIRST MORTGAGE NETWORK, INC.
By: /s/ Xxxx X. Xxxxxx, Chairman
---------------------------------
Xxxx X. Xxxxxx, Chairman
and Chief Executive Officer
ATTEST:
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Secretary
5 [Subsequent Warrant]
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 be
delivered to the undersigned.
DATED: , 199 .
-------------- -
----------------------------
Signature
6 [Subsequent Warrant]
