Form of Warrant
WARRANT
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN
COMPLIANCE WITH THAT ACT AND SUCH LAWS.
No. WR-[__] February 26, 1999
XXXXXXXX.XXX, INC.
COMMON STOCK PURCHASE WARRANT
6,668 shares of Common Stock, $.01 par value per share, subject to
adjustments as set forth herein.
This Common Stock Purchase Warrant certifies that
[______________________] (the "Purchaser") or registered assigns, is entitled at
any time on or after the date hereof and prior to 5:00 p.m. (New York, New York
time) on the Expiration Date, to purchase from Xxxxxxxx.xxx, Inc. (the
"Company"), up to an aggregate of 6,668 fully paid and nonassessable shares of
Common Stock, $.01 par value, of the Company (the "Common Stock"), at a purchase
price of $30.00 per share of Common Stock (the "Exercise Price"); provided that
the initial number of shares in the amount of 6,668 may be reduced by one-half
in accordance with the provisions of Section 3.06 below. The number of shares of
Common Stock that may be purchased upon exercise of this Warrant set forth
above, and the Exercise Price per share of Common Stock set forth above, are
subject to adjustment as hereinafter provided.
This Common Stock Purchase Warrant is issued pursuant to that certain
$8,000,000 Note Purchase Agreement, dated as of February 26, 1999, among the
Company and certain Persons named therein (the "Purchase Agreement"), and it is
subject to all of the terms, provisions and conditions thereof, which Purchase
Agreement is hereby incorporated herein by reference and made a part hereof and
to which Purchase Agreement reference is hereby made for a full description of
the rights, obligations, duties and immunities of the Company and the holder of
this Warrant. Capitalized terms used but not defined herein have the meanings
assigned to them in the Purchase Agreement. Copies of the Purchase Agreement are
on file at the office of the Company as set forth herein.
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1. EXERCISE OF WARRANTS; EXERCISE PRICE
1.01. Exercise of Warrants. At any time on or after the earlier of (x)
February 26, 2001, (y) the effectiveness of the Initial Public Offering (as
hereinafter defined) and (z) a merger of the Company with or into any other
corporation, the conveyance transfer or lease of substantially all of its assets
in a single transaction or series of transactions, or a sale, in one or more
transactions of more than 50% of the Common Stock of the Company on a fully
diluted basis; and prior to the Expiration Date, the holder of this Warrant may
exercise the rights evidenced hereby in whole or in part, by surrender of this
Warrant, with an election to purchase (a form of which is attached hereto in
Exhibit A) attached thereto duly executed, to the Company at its office referred
to in Section 5.03 hereof, together with payment of the Exercise Price (payable
as set forth below) for each share of Common Stock as to which this Warrants is
exercised. The Exercise Price shall be payable (a) in cash or by certified or
official bank check payable to the order of the Company or by wire transfer of
immediately available funds to the account of the Company, (b) by delivery of
Warrants to the Company for cancellation in accordance with the following
formula: in exchange for each share of Common Stock issuable upon exercise of
each Warrant any holder thereof so delivers for cancellation, such holder shall
receive such number of shares of Common Stock as is equal to the product of (i)
the number of shares of Common Stock issuable upon exercise of such Warrant at
such time multiplied by (ii) a fraction, the numerator of which is the Fair
Market Value per share of Common Stock at such time minus the Exercise Price per
share of Common Stock at such time, and the denominator of which is the Fair
Market Value per share of Common Stock at such time, or (c) by cancellation of
amounts outstanding (whether in respect of principal or interest) under the
Notes in an amount equal to the aggregate Exercise Price for the shares of
Common Stock to be purchased on such date upon delivery of such Notes to the
Company for cancellation and reissuance in the appropriate lesser principal
amounts.
1.02. Issuance of Common Stock. Upon timely receipt of this Warrant,
with the form of election to purchase duly executed, accompanied by payment of
the Exercise Price for each of the shares to be purchased in the manner provided
in Section 1.01 and an amount equal to any applicable transfer tax (if not
payable by the Company as provided in Section 2.03 hereof), the Company shall
thereupon promptly cause certificates for the number of shares of Common Stock
then being purchased to be delivered to or upon the order of the registered
holder of this Warrant.
1.03. Unexercised Warrants. In case the registered holder of this
Warrant shall purchase less than all the shares of Common Stock purchasable
thereunder, a new Warrant evidencing the right to purchase the remaining shares
of Common Stock
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thereunder shall be issued by the Company to the registered holder of this
Warrant or to its duly authorized assigns.
1.04. Common Stock Record Date. Each Person in whose name any
certificate for shares of Common Stock is issued upon the exercise of this
Warrant shall for all purposes be deemed to have become the holder of record of
the Common Stock represented thereby on, and such certificate shall be dated the
date upon which this Warrant was duly surrendered with an election to purchase
attached thereto duly executed and payment of the aggregate Exercise Price (and
any applicable transfer taxes, if payable by such Person) was made in accordance
with the terms hereof. Prior to exercise, the holder of this Warrant shall not
be entitled to any rights of a stockholder of the Company with respect to the
shares for which this Warrant shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other distributions
(except as otherwise provided in the Purchase Agreement) and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein or in any other applicable agreement between the Company and
such holder.
2. RESERVATION OF COMMON STOCK; TRANSFER OF WARRANTS; TRANSFER
TAXES
2.01. Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the exercise of the Warrants, such
number of its shares of Common Stock as shall from time to time be the maximum
amount which may be required to effect the exercise of all outstanding Warrants,
and if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the exercise of all then outstanding Warrants,
the Company shall take such action as may be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.
2.02. Common Stock to be Duly Authorized and Issued, Fully Paid and
Nonassessable. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon the exercise of any Warrants, at the time of delivery of the certificates
for such shares, shall be duly and validly authorized and issued and fully paid
and nonassessable and the issuance of such shares will not be subject to
preemptive or other similar contractual rights of any other stockholder of the
Company.
2.03. Transfer, Split Up, etc. This Warrant, with or without any
Warrants, may be transferred, split up, combined or exchanged for another
Warrant or Warrants, entitling the registered holder or transferee thereof to
purchase a like
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number of shares of Common Stock as the Warrant or Warrants surrendered then
entitled such registered holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange this Warrant shall make such request in
writing delivered to the Company, and shall surrender the Warrant or Warrants to
be transferred, split up, combined or exchanged at the office of the Company
referred to in Section 5.03 hereof. Thereupon the Company shall deliver promptly
to the Person entitled thereto (as set forth in the written notice) a Warrant or
Warrants, as the case may be, as so requested.
2.04. Transfer Taxes. The Company covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
that may be payable in respect of the initial issuance or delivery of (a) each
Warrant and (b) each share of Common Stock issued upon the exercise of any
Warrant. The Company shall not, however, be required to (y) pay any transfer tax
that may be payable in respect of the transfer or delivery of Warrants or the
issuance or delivery of certificates for shares of Common Stock in a name other
than that of the registered holder of any Warrant surrendered for exercise or
(z) issue or deliver any such certificates for shares of Common Stock upon the
exercise of any Warrant until any such tax shall have been paid (any such tax
being payable by the holder of such Warrant at the time of surrender).
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES;
FRACTIONAL SHARES
3.01. Mechanical Adjustments. The number of shares of Common Stock
purchasable upon the exercise of this Warrant and the Exercise Price shall be
subject to adjustment as follows:
(a) Dividends, Subdivisions and Combinations. In the event
that the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares or (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, then the Exercise Price
in effect at the time of the record date for such dividend or of the effective
date of such subdivision or combination shall be proportionately adjusted to the
price determined by multiplying the Exercise Price in effect immediately prior
to such event by a fraction, (y) the numerator of which shall be the total
number of outstanding shares of Common Stock immediately prior to such event and
(z) the denominator of which shall be the total number of outstanding shares of
Common Stock immediately after such event. An adjustment made pursuant to this
Section 3.01(a) shall become effective on the effective date of such event.
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(b) Distribution of Property. In the event that the Company
shall distribute to all holders of shares of Common Stock (including, without
limitation, any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) shares of stock
(other than Common Stock), evidences of its indebtedness, other assets
(excluding (i) any distribution or dividend resulting in a distribution pursuant
to Section 3.04 and (ii) dividends referred to in Section 3.01(a)(i) hereof), or
rights, options, warrants or convertible or exchangeable securities (excluding
those referred to in Section 3.01(c) hereof) then in each case, the Exercise
Price to be in effect after the record date in respect of which such stock,
indebtedness, other assets, rights, options, warrants or securities were issued
shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, (y) the numerator of which shall be the
Exercise Price in effect immediately prior to such record date minus the then
fair value (as determined in good faith and on a reasonable basis by the Board
of Directors) of the portion of the shares of stock or assets or evidences of
indebtedness so distributed or of such rights, options or warrants, or of such
convertible or exchangeable securities applicable to one share of Common Stock
and (z) the denominator of which shall be the Exercise Price in effect
immediately prior to such record date. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on the date of such
distribution.
(c) Issuances of Common Stock and Other Securities.
(i) In the event that the Company shall issue or sell
shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock for no consideration or at a "price per share" of Common Stock
lower than the Exercise Price then in effect on the date of such issuance or
sale, then in each case, the Exercise Price to be in effect immediately after
such issuance or sale shall be determined by multiplying the Exercise Price in
effect immediately prior to such issuance or sale by a fraction, (y) the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance or sale plus the number of additional shares
the Aggregate Consideration Receivable (as defined below) would purchase at the
Exercise Price in effect immediately prior to such issuance or sale and (z) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance or sale plus the number of additional shares
of Common Stock so issued or sold (or initially issuable pursuant to such
rights, options, or warrants or into which such convertible or exchangeable
securities are initially convertible or exchangeable).
(ii) In the case of rights, options, warrants or
convertible or exchangeable securities, the "price per share" of Common Stock
referred to above
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shall be determined by dividing (A) the Aggregate Consideration Receivable in
respect of such rights, options, warrants or convertible or exchangeable
securities by (B) the total number of shares of Common Stock covered by such
rights, options, warrants or convertible or exchangeable securities.
(iii) "Aggregate Consideration Receivable", in the
case of a sale of shares of Common Stock, means the aggregate amount paid to the
Company in connection therewith and, in the case of an issuance or sale of
rights, options, warrants, or convertible or exchangeable securities, means the
aggregate amount paid to the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the aggregate consideration or
premiums stated in such rights, options, warrants or convertible or exchangeable
securities to be payable for the shares of Common Stock covered thereby.
(iv) In the event that the Company shall issue and
sell shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock, for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in determining the "price per
share" of Common Stock and the "Aggregate Consideration Receivable", the Board
of Directors shall determine, in good faith and on a reasonable basis, the fair
value of such property.
(d) Consolidation and Merger. In the event that there shall be
(i) any consolidation of the Company with, or merger of the Company with or
into, another corporation (other than a merger in which the Company is the
surviving corporation and that does not result in any reclassification or change
of shares of Common Stock outstanding immediately prior to such merger), (ii)
any sale or conveyance to another corporation of the property of the Company
substantially as an entirety, or (iii) any reclassification of the Common Stock
that results in the issuance of other securities of the Company, then, in
addition to and notwithstanding any other rights provided to the holder this
Warrant upon such occurrence, lawful provision shall be made as a part of the
terms of such transaction so that such holder shall thereafter have the right to
purchase the number and kind of shares of stock (and/or other securities, cash,
property or rights) receivable upon such consolidation, merger, sale, conveyance
or reclassification by a holder of such number of shares of Common Stock as such
holder would have had the right to acquire upon the exercise of this Warrant
immediately prior to such consolidation, merger, sale or conveyance at the
Exercise Price then in effect.
(e) De Minimis Changes in Exercise Price. No adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) of the Exercise Price,
provided, however, that
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any adjustments that, at the time of the calculation thereof, are less than one
percent (1%) of the Exercise Price, at such time and by reason of this Section
3.01(e) are not required to be made at such time shall be carried forward and
added to any subsequent adjustment or adjustments for purposes of determining
whether such subsequent adjustments, as so supplemented, exceed the one percent
(1%) amount set forth herein and, if any such subsequent adjustment, as so
supplemented or otherwise, should exceed such one percent (1%) amount, all
adjustments deferred prior thereto and not previously made shall then be made.
In any case, all such adjustments being carried forward pursuant to this Section
3.01(e) shall be given effect upon the exercise of this Warrant by the holder
hereof for purposes of determining the Exercise Price thereof and the number of
shares of Common Stock then issuable upon such exercise. All calculations shall
be made to the nearest one- millionth of a Dollar ($.000001).
(f) Adjustment of Number of Shares Issuable Pursuant to this
Warrant. Upon each adjustment of the Exercise Price as a result of the
calculations made in this Section 3.01 or as a result of the occurrence of the
Initial Public Offering, this Warrant shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of shares of Common Stock
(calculated to the nearest one-thousandth) obtained by (i) multiplying the
number of shares of Common Stock covered by this Warrant immediately prior to
such adjustment by the Exercise Price in effect immediately prior to such
adjustment and (ii) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment. Subsequent to any adjustment made to
the Exercise Price hereunder, this Warrant shall evidence the right to purchase,
at the adjusted Exercise Price, the number of shares of Common Stock determined
to be purchasable from time to time hereunder upon exercise of this Warrant, all
subject to further adjustment as provided herein. Irrespective of any adjustment
or change in the Exercise Price or the number of shares of Common Stock issuable
upon the exercise of this Warrant, this Warrant and any Warrants theretofore or
thereafter issued in replacement hereof may continue to express the Exercise
Price per share of Common Stock and the number of shares of Common Stock that
were expressed upon the initial issuance of this Warrant under the Purchase
Agreement.
(g) Miscellaneous. Adjustments shall be made pursuant to this
Section 3.01 successively whenever any of the events referred to in Section
3.01(a) through Section 3.01(d) inclusive hereof shall occur. If this Warrant
shall be exercised subsequent to the record date for any of the events referred
to in this Section 3.01, but prior to the effective date thereof, appropriate
adjustments shall be made immediately after such effective date so that the
holder of this Warrant on such record date shall have received, in the
aggregate, the kind and number of shares of Common Stock or other securities or
assets that it would have owned or been entitled to receive on such effective
date had this Warrant been exercised prior to such record
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date. Shares of Common Stock owned by or held for the account of the Company
shall not, for purposes of the adjustments set forth in this Section 3.01 be
deemed outstanding.
(h) Expiration of Rights, Options, etc. Upon the expiration of
any rights, options, warrants or conversion or exchange privileges referred to
above in this Section 3.01, without the full exercise thereof, the Exercise
Price, and the number of shares of Common Stock purchasable upon the exercise of
this Warrant shall, upon such expiration, be readjusted and shall thereafter be
such as such Exercise Price and such number of shares of Common Stock would have
been had they been originally adjusted as if (i) the only shares of Common Stock
available to be purchased upon exercise of such rights, options, warrants or
conversion or exchange privileges were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options, warrants or
conversion or exchange privileges 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 or grant of all such rights, options, warrants or
conversion or exchange privileges whether or not exercised; provided, however,
that no such readjustment shall have the effect of increasing the Exercise Price
by an amount in excess of the amount of the reduction initially made in respect
of the issuance, sale, or grant of such rights, options, warrants or conversion
of exchange privileges.
(i) Other Securities. In the event that at any time, as a
result of an adjustment made pursuant to Section 3.01, the holder of this
Warrant shall become entitled to purchase any securities of the Company other
than shares of Common Stock, the number or amount of such other securities so
purchasable and the purchase price of such securities shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions contained in Section 3.01(a) through Section
3.01(d), inclusive, and all other relevant provisions of this Section 3.01 that
are applicable to shares of Common Stock shall be applicable to such other
securities.
(j) Notice of Adjustment. Whenever the number of shares of
Common Stock issuable upon the exercise of this Warrant or the Exercise Price in
respect thereof is adjusted, as herein provided, the Company shall promptly give
to the holder of this Warrant, notice of such adjustment or adjustments and
shall promptly deliver to such holder a certificate of the Company's chief
financial officer setting forth (i) the number of shares of Common Stock
issuable upon the exercise of this Warrant and the Exercise Price of such shares
after such adjustment, (ii) a brief statement of the facts requiring such
adjustment, and (iii) the computation by which such adjustment was made. So long
as this Warrant is outstanding, within 90 days of the end of each
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fiscal year of the Company, the Company shall deliver to the holder a
certificate of a firm of independent public accountants selected by the Board of
Directors (who may be the regular accountants employed by the Company) setting
forth (i) the number of shares of Common Stock issuable upon the exercise of
this Warrant and the Exercise Price of such shares as of the end of such fiscal
year, (ii) a brief statement of the facts requiring each such adjustment
required to be made in such fiscal year and (iii) the computation by which each
such adjustment was made.
3.02. Elimination of Fractional Interests. The Company shall not be
required upon the exercise of this Warrant to issue stock certificates
representing fractions of shares of Common Stock, but shall instead pay in cash,
in lieu of any fractional shares of Common Stock to which such holder would
otherwise be entitled if such fractional shares were issuable, an amount equal
to the Fair Market Value per share of Common Stock as of the date of such
exercise.
3.03. Right of Action. All rights of action in respect of the Warrants
are vested in the respective registered holders of the Warrants and any
registered holder of any Warrant, without the consent of the holder of any other
Warrant, may, in its own behalf and for its own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, its right to exercise the Warrants held
by it in the manner provided therein.
3.04. Distributions. In the event that the Company shall distribute to
all holders of shares of Common Stock (including, without limitation, any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) cash or cash equivalents, then in each
case the holders of the Warrants shall be entitled to receive from the Company
the same amount of cash or cash equivalents that would have been distributed to
such holders if such Warrants had been exercised immediately prior to the record
date for such distribution. Such distribution to the holders of the Warrants
shall be made whenever any such distribution is made to the holders of shares of
Common Stock.
3.05. Exceptions to Antidilution Adjustments. Notwithstanding the
foregoing, no adjustments shall be made under Section 3.01 in respect of (a)
shares of Common Stock, or options exercisable therefor, issued or to be issued
under the Stock Option Plan, (b) Series A Preferred Stock issued upon any
subdivision or combination of shares of Series A Preferred Stock, (c) Series B
Preferred Stock issued upon any subdivision or combination of shares of Series B
Preferred Stock, (d) Series C Preferred Stock issued upon any subdivision or
combination of shares of Series C Preferred Stock, (e) Series D Preferred Stock
issued upon any subdivision or combination of shares of Series D Preferred
Stock, (f) Special Preferred Stock (Northern California Division) issued upon
any subdivision or combination of shares
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of Special Preferred Stock (Northern California Division), (g) shares of Common
Stock issuable upon conversion of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Special
Preferred Stock (Northern California Division), (h) 247,500 shares of Common
Stock issuable upon exercise of the warrants held by the former 14% Subordinated
Debenture Holders and any additional shares required to be issued thereunder to
adjust for any stock split, stock dividend or combination of Common Stock, (i)
500,000 shares of Common Stock issuable upon exercise of the warrants held by
Superior Bank, F.S.B., and any additional shares required to be issued
thereunder to adjust for any stock split, stock dividend or combination of
Common Stock, (j) 13,333 shares of Common Stock issuable upon the conversion of
the 12% Subordinated Debentures and any additional shares required to be issued
thereunder to adjust for any stock split, stock dividend or combination of
Common Stock, (k)25,000 shares of Common Stock issuable upon the exercise of the
Buscema Options and any additional shares required to be issued thereunder to
adjust for any stock split, stock dividend or combination of Common Stock, (l)
100,000 shares of Common Stock issuable to Xxxxx Xxxxxx, Xxxx Xxxxx and Xxxxxx
Xxxxxxxx pursuant to the Second Amendment to Agreement for the Operation of the
First Realty Network, Inc., among the Company, Realeads, U.S.A., Inc., First
Realty Network, Inc., Consumer Real Estate Research, Inc., and Xxxx Xxxxx, Xxxxx
Xxxxxx, and Xxxxxx Xxxxxxxx, dated on or about December 5, 1996, and any
additional shares required to be issued thereunder to adjust for any stock
split, stock dividend or combination of Common Stock, (m) 132,455 shares of
Common Stock issuable upon exercise of the warrants held by Xxxxxx X. Xxxxxxx
(other than as a former 14% Subordinated Debenture Holder), and any additional
shares required to be issued thereunder to adjust for any stock split, stock
dividend or combination of Common Stock, (n) 92,436 shares of Common Stock
issuable upon exercise of the warrants held by Xxxxxxx Xxxxx & Associates, Inc.,
and any additional shares required to be issued thereunder to adjust for any
stock split, stock dividend or combination of Common Stock, (o) 50,000 shares of
Common Stock issuable upon exercise of the warrants held by former holders of
12% Senior Subordinated Convertible Notes dated August 31, 1997, and any
additional shares required to be issued thereunder to adjust for any stock
split, stock dividend or combination of Common Stock, (p) 66,667 shares of
Common Stock issuable upon exercise of the warrants held by former holders of
12% Senior Subordinated Convertible Notes dated January 30, 1998, and any
additional shares required to be issued thereunder to adjust for any stock
split, stock dividend or combination of Common Stock, (q) 100,000 shares of
Common Stock issuable pursuant to the exercise of warrants to be earned under
the Option Agreement dated January 28, 1998, among the Company, Xxxx Xxxxx,
Xxxxxx Xxxxxx, Xxxx X. Xxxxxxx and RM Holdings, Inc., and any additional shares
required to be issued thereunder to adjust for any stock split, stock dividend
or combination of Common Stock, (r) 36,000 shares of Common Stock issuable upon
exercise of warrants held by FMN Associates,
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Ltd., and any additional shares required to be issued thereunder to adjust for
any stock split, stock dividend or combination of Common Stock, (s) 100,000
shares of Common Stock issuable pursuant to the Domain Name Assignment Agreement
dated as of January 1, 1999, between the Company and Xxxxxx.xxx, LLC, and any
additional shares required to be issued thereunder to adjust for any stock
split, stock dividend or combination of Common Stock, (t) 50,000 shares of
Common Stock issuable pursuant to the Technology Member Correspondent Agreement
dated on or about November 1, 1998, between the Company and Mortgage Loan
Specialists, Inc., and any additional shares required to be issued thereunder to
adjust for any stock split, stock dividend or combination of Common Stock, (u)
50,000 shares of Common Stock issuable pursuant to the Technology Member
Correspondent Agreement dated on or about November 1, 1998, between the Company
and First Capital, Inc., and any additional shares required to be issued
thereunder to adjust for any stock split, stock dividend or combination of
Common Stock, (v) 18,650 shares of Series D Preferred Stock issuable upon the
exercise of the warrants held by Dominion Fund III, any Common Stock issuable in
conversion of the Series D Preferred Stock issued thereunder, and any additional
shares required to be issued thereunder to adjust for any stock split, stock
dividend or combination of Series D Preferred Stock or Common Stock, and (w)
6,668 shares of Common Stock issuable upon exercise of the warrants held by the
holders of 12% Senior Subordinated Notes dated February 9, 1999.
3.06. Reduction in Number of Initial Shares. In the event that the
Company shall have redeemed, in full, the Company's 12% Senior Subordinated
Notes, due February 26, 2001, issued to the Purchaser pursuant to the Purchase
Agreement, together with all interest due thereon, on or before February 26,
2000, the initial number of shares set forth in the introductory sentence hereof
shall automatically be reduced from 6,668 to 3,334 (such numbers being subject
to further adjustment in accordance with this Article 3). There shall not be any
adjustment in the Exercise Price in connection with any such reduction.
4. DEFINITIONS AND ACCOUNTING TERMS
As used herein, the following terms shall have the following meanings:
"Aggregate Consideration Receivable" shall have the meaning
assigned to such term in Section 3.01.
"Common Stock" shall have the meaning assigned to such term in
the introductory sentence hereof.
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"Company" shall have the meaning assigned to such term in the
introductory sentence hereof.
"Exercise Price" shall have the meaning assigned to such term
in the introductory sentence hereof. Notwithstanding anything to the contrary
contained herein, in the event that the Company consummates an Initial Public
Offering of its Common Stock on or prior to February 26, 2001, the Exercise
Price shall be equal to the price per share of such Common Stock immediately
prior to the effectiveness of the registration statement filed under the
Securities Act of 1933, as amended, in connection with the Initial Public
Offering.
"Expiration Date" shall mean February 26, 2009.
"Fair Market Value" shall mean the fair market value of the
Company, determined in good faith by the Board of Directors, calculated on a per
share basis.
"Initial Public Offering" shall mean an initial public
offering of the Company's Common Stock pursuant to a registration statement
filed under the Securities Act of 1933, as amended.
"Purchase Agreement" shall mean the $8,000,000 Note Purchase
Agreement dated February 26 , 1999, by and among the Company, the Purchaser and
certain other Persons named therein.
"Purchaser" shall have the meaning assigned to such term in
the introductory sentence hereof.
"Warrants" shall mean this Warrant and all other Warrants
issued by the Company pursuant to the Purchase Agreement, together with all
Warrants issued in exchange, transfer or replacement thereof.
"Warrant Shares" shall mean any shares of Common Stock that
are issuable upon the exercise of any Warrant.
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5. MISCELLANEOUS
5.01. No Waiver; Cumulative Remedies. No failure or delay on the part
of the holder of this Warrant in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
5.02. Amendments, Waivers and Consents. Any provision in this Warrant
to the contrary notwithstanding, and except as hereinafter provided, changes in,
termination or amendments of or additions to the Warrants may be made, and
compliance with any covenant or provision set forth herein may be omitted or
waived, if the Company (a) shall obtain consent thereto in writing from the
holders of at least a majority of the Warrant Shares, and (b) shall deliver
copies of such consent in writing to any holders who did not execute such
consent; provided that no consents shall be effective (i) to amend any of the
provisions of the Warrants pertaining to the Exercise Price or the number of
shares of Common Stock purchasable upon the exercise of any Warrant or (ii) to
reduce the percentage in interest of the Warrant Shares the consent of the
holders of which is required under this Section 5.02. Any waiver or consent may
be given subject to satisfaction of conditions stated therein and any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
5.03. Addresses for Notices. Any notice, demand, request, waiver or
other communication hereunder shall be in writing and shall be deemed to have
been duly given on the date of service if personally served, on the date of
transmission if sent by telecopier (with confirming copy sent by a nationally
recognized express overnight courier service) or on the first business day after
mailing if mailed to the party to whom notice is given, by a nationally
recognized courier service and addressed as follows:
To the Company: Xxxxxxxx.xxx, Inc.
0000 Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
With a copy to: Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
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To any holder: At its address set forth on the
record books of the Company
With a copy to: LeBoeuf, Xxxx, Xxxxxx & XxxXxx, L.L.P.
Xxxxxxx Square
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx., Esq.
5.04. Binding Effect; Assignment. This Warrant shall be binding upon
and inure to the benefit of each of the Company and the holder hereof and their
respective heirs, successors and assigns, except that the Company shall not have
the right to delegate its obligations hereunder or to assign its rights
hereunder or any interest herein.
5.05. Severability. The provisions of this Warrant are severable and,
in the event that any court of competent jurisdiction shall determine that any
one or more of the provisions or part of a provision contained in this Warrant
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Warrant; but the terms of this
Warrant shall be reformed and construed as if such invalid or illegal or
unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible.
5.06. Governing Law. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF FLORIDA, AND WITHOUT
GIVING EFFECT TO CHOICE OF LAW PROVISIONS.
5.07. Headings. Article, section and subsection headings in this
Warrant are included herein for convenience of reference only and shall not
constitute a part of this Warrant for any other purpose.
5.08. Specific Enforcement. The Company acknowledges and agrees that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the holder hereof shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Warrant and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction, this
being in addition to any other remedy to which it may be entitled at law or
equity.
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5.09. Notices of Record Date. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of capital stock of any
class or any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company, any
merger or consolidation of the Company, or any transfer of all or substantially
all of the assets of the Company to any other Company, or any other entity or
person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then and in each such event the Company shall mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right and a
description of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected to
become effective, and (iii) the time, if any, that is to be fixed, as to when
the holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up. Such notice shall be sent by a nationally recognized overnight
courier, hand delivery or facsimile at least twenty (20) days prior to the date
specified in such notice on which such action is to be taken.
15
WITNESS the signature of the proper officer of the Company as of the
date first above written.
XXXXXXXX.XXX, INC.
By ____________________________
Name:
Title:
ATTEST:
___________________________
Secretary
Exhibit A
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if
such holder desires to transfer the Warrant)
FOR VALUE RECEIVED,_____________________________ hereby sells,
assigns and transfers unto
________________________________________________________________________________
the accompanying Warrant, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint attorney, to transfer the
accompanying Warrant on the books of the Company of such Warrant, with full
power of substitution.
Dated:________________________,________.
[HOLDER OF WARRANT]
By ____________________________
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of the accompanying Warrant or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.
[FORM OF ELECTION TO PURCHASE]
(To be executed by the registered holder if
such holder desires to exercise the Warrant)
To XXXXXXXX.XXX, INC.
The undersigned hereby irrevocably elects to exercise the accompanying
Warrant to purchase _____ shares of Common Stock issuable upon the exercise of
such Warrant and requests that certificates for such shares be issued in the
name of:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security number or other identifying number)
If such number of shares of Common Stock shall not be all the shares of Common
Stock purchasable upon the exercise of the accompanying Warrant, a new Warrant
for the balance of such remaining shares of Common Stock shall be registered in
the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security number or other identifying number)
Dated:_____________________,__________.
[HOLDER OF WARRANT]
By_____________________
NOTICE
The signature to the foregoing Election to Purchase must
correspond to the name as written upon the face of the accompanying Warrant or
any prior assignment thereof in every particular, without alteration or
enlargement or any change whatsoever.
